After the divisiveness that marked the Senate Committee on Environment and Public Works (EPW)  mark up of climate legislation last week, the legislation moves to the two other committees with significant climate jurisdiction-Finance and Energy and Natural Resources.  Senator Max Baucus, who last week supplied the only “no” vote among Democrats on EPW, will lead his committee in an examination of the legislation and, in particular, look at the contentious issues surrounding offsets and allocations.  In the Senate Energy Committee, Chairman Bingaman and Ranking Member Murkowski are hoping to forge a moderate consensus on the renewable energy and production titles of the bill.  Many senators are looking at this week’s action as a chance to start fresh, away from the ideological schisms in the EPW Committee. 

Meanwhile, a group of Senators, led by Lindsay Graham, John Kerry and Joe Lieberman, are looking to create their tri-partisan compromise on expanded offshore and nuclear production in exchange for caps on carbon.  This group of three intends to  meet with Administration officials, including Carol Browner.

Tuesday, November 10

At 10 a.m. both the Senate Finance Committee and Senate Energy and Natural Resources Committee will hold hearings in Room 215 and Room 366 of the Dirksen Senate Office Building, respectively, on climate legislation.

For further information about this topic, please contact Akin Gump.

 To view Part 1 in the series, please click here.

To view Part 2 in the series, please click here.

On October 29, the Senate Committee on Environment and Public Works (EPW) held its third and final day of hearings on S. 1733, the Clean Energy Jobs and American Power Act.  The committee took testimony from four panels of witnesses, with each panel providing a broad spectrum of perspectives on the issues.    

First Panel

Preston Chiaro, CEO of Energy Products Group and John Rowe, Chairman and CEO of Exelon Corporation, provided testimony from the industry perspective.  Mr. Chiaro explained that his group supports a strong, global climate agreement for the investment certainty it will bring.  Mr. Rowe highlighted his company’s recently-produced Exelon 2020, which he characterized as the only industry plan to offset carbon emissions by 2020.  Mr. Rowe focused on the need for cost containment mechanisms and advocated the inclusion of a definitive price collar on allowances to remove price uncertainty. 

Bon Winger, President of the International Brotherhood of Boilermakers; Mike Carey, President of the Ohio Coal Association; and Bob Stallman, President of the American Farm Bureau Federation focused on employment impacts of the proposed legislation.  Mr. Winger testified that blue collar jobs are diminishing and expressed the hope that blue collar jobs can flourish under S. 1733.  Mr. Carey, by contrast, warned that S. 1733 will kill jobs in the coal industry and bankrupt the communities that depend upon coal and expressed the view that new jobs created under the legislation would not be as high paying.  Mr. Stallman claimed that, because a cap-and-trade program would put a hole in the energy supply without providing a substitute, the U.S. agriculture sector will shrink “under any scenario.”

Finally, Dr. Willett Kempton, Professor of Marine Policy at the University of Delaware, encouraged the panel to focus on “new technologies that are carbon-free, large and near commercial production today.” Fred Krupp, President of the Environmental Defense Fund, encouraged the U.S. to move beyond technology creation to technology manufacturing.  He claimed that the U.S. currently lags behind other countries and is missing a great economic opportunity. 

Second Panel

Testifying on behalf of the Bipartisan Policy Center, Rep. Sherwood Boehlert (R- NY, retired) endorsed climate change legislation.  He endorsed requirements to establish emissions targets from transportation would provide a framework for performance driven federal transportation policies, linked to a set of clearly articulated goals, and accountable for results.  He stated that while the allowance set asides for the transportation sector are critical, they are still far below what the sector should receive based on the impact that investment in transportation could have on climate change. 

Similarly, American Public Transportation Association (APTA) President William Millar and Mike McKeever, Executive Director, Sacramento Area Council of Governments (SACOG) supported the bill.  Mr. Miller praised the legislation for demonstrating a strong commitment to reducing emissions from the transportation sector and also suggested that the bill can be a major step forward in invigorating transportation infrastructure while drastically reducing its environmental impact.  In concluding his statement, Mr. Miller emphasized that the allowance revenue under the bill must supplement and not replace investments in transit under the surface transportation program and called for the committee to consider the reauthorization.  Mr. McKeever addressed the local planning requirements under the bill that would promote sustainable communities.  He asserted that creating more livable committees would result in a number of benefits, including energy saving, congestion relief, increased productivity, efficient land use, environment and health benefits.

Testifying on behalf of the American Truckers Association, Barbara Windsor, President & Chief Executive Officer, Hahn Transportation, Inc., objected that the legislation would add costs to an already burdened industry.  She commented that while the industry supports the objectives of EPA regulations to control emissions, gains had come at substantial cost to trucking fleets.  She emphasized that the increased fuel prices under the bill, meant to reduce VMTs, would only raise costs for the industry because trucking is not discretionary driving.  She asserted finally that biodiesel and natural gas fuels are not currently viable to replace diesel. 

Third Panel

John Podesta, President and CEO for the Center for American Progress, argued that the U.S. should pass a bill and send a signal to the world that the “U.S. will seize the economic opportunity of the 21^st century.”  He suggested that S. 1733 include a clean energy deployment administration, a “green bank” and additional emphasis on efficiency retrofits.  Mr. Podesta maintained that more can be done to expand the use of natural gas, and suggested the committee look at language in the Nat Gas Act and borrow from that legislation.

Ned Helme, President of the Center for Clean Air Policy, argued that, in contrast to the Kyoto Protocol, developing nations are now committed to taking nationally appropriate mitigation actions funded by developed nations.  He supported the development of international standards to measure, report and verify emission reductions. 

Jonathan Lash, President of the World Resources Institute, maintained that committing to reducing greenhouse gas emissions and developing an international agreement to the same effect is in the economic, environmental and security self interest of the country.   

Iain Murray, Vice-President for Strategy at the Competitive Enterprise Institute, cited the struggle of European countries to meet emission targets, despite reductions resulting from the economic downturn.  He argued that the E.U. emissions trading scheme has been very expensive and has failed to produce emission reductions.   

Fourth Panel

Linda Adams, Secretary of the California Environmental Protection Agency, said that California has experienced an economic gain following the implementation of clean energy technologies, including the addition of 125,000 new jobs.  She argued that state authority to implement climate change measures should be preserved and matched by national policies. 

Dave Johnson, Organizing Director for the Laborer’s International Union of North America, argued for the inclusion of carbon capture and sequestration, natural gas and nuclear technologies as part of the solution to climate change.   

J. Stephan Dolezalek, Managing Director for Vantage Point Venture Partners, explained that Vantage Point has the largest position in the venture capital industry in the country, with stakes in solar, vehicle electrification and other sectors.  He warned that if the U.S. does not commit to strong policies, it will become as dependent in the future on foreign renewable energy as it is dependent now on imported oil.   

Additional witnesses on this panel included David Hawkins; Eugen Trisko, speaking on behalf of the United Mine Workers of America; Director of the Climate Center for the Natural Resources Defense Council Matt Smorch; Vice President of Strategic Planning for CountryMark; and Paul Cicio, Executive Director for the Industrial Energy Consumers of America.  Mr. Hawkins urged the committee to adopt “strong” legislation, while the remaining three witnesses warned of potential dislocations from a cap-and-trade system.

For further information about this topic, please contact Akin Gump.

This week the Senate will officially start legislating.  The Senate Environment and Public Works Committee (EPW) will hold their mark-up of the Kerry-Boxer bill beginning on Tuesday.  As of now, Chairman Boxer’s legislation does not look like it will garner any Republican votes to send it to the floor and even some committee Democrats have expressed reservations about the draft.  Although the EPW’s mark up is a significant step in the legislative process, the real action will come from outside the committee where there are serious efforts to bring in a major revision of America’s nuclear energy policy and possibly increased offshore oil production.

Tuesday, November 3

The EPW Committee, starting at 9 a.m., will begin the markup of the S. 1733, the cap-and-trade bill, in Room 406 of the Dirksen Senate Office Building.

Thursday, November 5

The House Natural Resources Committee will hold a 10 a.m. hearing in Room 1324 of the Longworth House Office Building on “Getting Past Gridlock: Models for Renewable Energy Siting and Transmission.”

For further information about this topic, please contact Akin Gump.

To view Part 1 in the series, please click here.

On October 28, 2009, the Senate Environment and Public Works (EPW) Committee held a hearing on S. 1733, the Clean Energy Jobs and American Power Act.  The Committee heard testimony from three panels of witnesses: a panel on Clean Energy Jobs, a panel on National Security and a panel on Utilities Policy.

The Clean Energy Jobs panel consisted of Peter Brehm, Vice President of Business Development and Government Relations at Infinia Corporation; Dan Reicher, Director of Climate and Energy Initiatives for Google; Dave Foster, Executive Director for the Blue Green Alliance; Philadelphia Mayor Michael Nutter; Kate Gordon, Senior Policy Advisor for the Apollo Alliance; Bill Klesse, Chairman and Chief Executive Officer, Valero Energy Group, testifying on behalf of the National Petrochemical and Refiners Association; and Brett Vassey, President and Chief Executive Officer, Virginia Manufacturers Association. 

• Mr. Brehm stated that the significant growth over the past year in solar and other renewables technologies presents very significant potential for economic growth. He argued that, by putting a price on carbon, the proposed legislation will spur demand for renewable energy technologies and result in the creation of good, high paying energy jobs throughout the country.
• Mr. Reicher agreed that addressing climate change presents an opportunity to build an energy system and to build millions of new jobs. He argued, however, that putting a price on carbon was not, by itself, sufficient to address the problem. He urged the committee to increase public financing of advanced research for clean energy technology, such as advanced smart grid technologies, and the establishment of national standards to promote renewable energy.
• Mr. Foster said the legislative package must be comprehensive and warned against passing “one piece of the puzzle without the rest.” He also argued that the bill must include provisions for strengthening domestic manufacturing and provide sufficient free allowances for energy intensive industries. He also advocated a longer term border adjustment to prevent “carbon leakage.”
• Mayor Nutter gave his “full support” for the legislation, saying that cities can play a key role in addressing climate change. He noted Philadelphia’s use of Energy Efficiency and Conservation Block Grants to install more efficient stop lights and providing loans to businesses for retrofit and efficiency programs.
• Ms. Gordon testified that renewable energy industries will not grow to scale until the government commits to a low carbon future.
• Mr. Klesse described the legislation as “anti-competitive” and warned that the results would be “devastating,” placing American refiners at a competitive disadvantage, moving the refining business overseas, and burdening American consumers with higher costs. He predicted that the bill would impose new costs on consumers, explaining that even with a carbon price at $20 per ton, the annual industry-wide costs for domestic refiners at $4.1 billion and the cost of consumer emissions at $63 billion.
• Mr. Vassey objected to the proposals for allocating emissions allowances, characterizing them as political leaders are picking winners and losers under the climate bill. He expressed concerns that the legislation would cause a “leakage” of manufacturing from the U.S. to manufacturing worldwide.

The National Security consisted of Sen. John Warner (R-VA, retired); Kathleen Hicks, Deputy Undersecretary of Defense for Strategy, Plans and Forces; Vice Admiral Dennis McGinn (retired), Member of the Center for Naval Analyses Military Advisory Committee; Drew Sloan, Fellow, Truman National Security Project; Major General Robert Scales (retired); and Lt. Col. James Carafano, Deputy Director, Heritage Foundation’s Kathryn and Shelby Cullom Davis Institute for International Studies.

• Senator Warner led a panel of military experts that warned that climate change poses a threat to U.S. national security. He predicted that climate change would increase instability in the fragile regions of the world, threatening energy, food and water supply, resulting in social instability and undermining the economy. Ms. Hicks, Vice Admiral McGinn and Mr. Sloan supported Senator Warner’s testimony.
• Major General Scales (retired) disagreed with those conclusions, arguing that it is unlikely that mass migrations triggered by climate change would result in aggression. He warned that the bill to mitigate the impact of climate change might reduce American influence and retard the country’s ability to deter and fight in future conflicts. Lt. Col. Carafano similarly testified that the costs of the bill on the economy will have a deleterious impact on the national security, through a loss of productivity and jobs, and the continuing devaluing of the dollar.

The panel on Utilities Policy consisted of David Crane, President and Chief Executive Officer, NGR Energy; Ralph Izzo, Chairman, Chief Executive Officer and President, Public Service Enterprise Group Incorporated (PSEG); Nathaniel Keohane, Director of Economic Policy and Analysis, Environmental Defense Fund; Joel Bluestein, Senior Vice President, ICF International; Barry Hart, Chief Executive Officer, Association of Missouri Electric Cooperatives; and Dustin Johnson, Chairman, South Dakota Public Utilities Commission. 

• Mr. Crane urged Congress to adopt provisions that would speed the deployment of nuclear power, stating that nuclear, combined with renewable energy and carbon sequestration, could transform the U.S. power sector from high carbon to low carbon in the next 40 years. His other recommendations included: providing additional emission allowances to the utility industry; preventing EPA from regulating greenhouse gas emissions under the Clean Air Act; furthering the early deployment of carbon sequestration; and increasing the availability of offsets.
• Mr. Izzo echoed the call for swift action on the bill to establish a cap-and-trade system to set a price for carbon. He endorsed provisions of the bill that would impose a collar on carbon prices and allocation of the bulk of emission allowances to utilities.
• Mr. Law offered strong support for the bill and summarized his company’s efforts to deploy solar and wind facilities, reduce peak demand, lower consumer bills and avoid building a new power plant.
• Mr. Keohane recommended that the committee rely on three principles to guide the legislation: provide incentives to accelerate the deployment and development of new technologies; prevent carbon leakage; and protect consumers in the course of allocating allowances.
• Mr. Bluestein cautioned that adopting climate change legislation will not cause “a dash to gas.” He predicted that ultimately there would be a diverse mix of clean technologies, including gas, coal with carbon capture and sequestration, nuclear and increased energy efficiency.
• Mr. Hart warned about the price increases he expected for his customers and argued that regional disparities in allocation allowances would unfairly penalize electric cooperatives. He recommended that allowance be awarded based on the carbon content of generators’ fuel mix.
• Mr. Johnson echoed Mr. Hart’s testimony, stating that Midwestern consumers would see substantial increases in their utility bills under the proposed legislation. He argued further that providing a soft collar with a minimum ceiling price at $28, increasing thereafter, coupled with a reserve fund would be insufficient to protect consumers from cost increases.

To view Part 3 in the series, please click here.

For further information about this topic, please contact Akin Gump.

Yesterday, the Senate Environment and Public Works (EPW) Committee held a hearing on S. 1733, the Clean Energy Jobs and American Power Act.  The hearing started with opening remarks by Chairman Boxer and Ranking Member Inhofe.  As expected, they expressed radically different views of the bill.  Senator Boxer (D-CA), who coauthored the bill and released her chairman’s mark on Friday, opened the hearing with a remark that the cap-and-trade legislation will reap many benefits at a small cost to the public.  She referenced the EPA analysis of the bill, which predicted a cost of approximately 22 to 30 cents a day per family.  Senator Inhofe (R-OK) expressed the view that the bill would “fundamentally redesign” the United States’ 14 trillion dollar economy.  He characterized the legislation as a tax that would inflict “economic pain” and lead to fewer jobs, relying on recent CBO testimony to the effect that cap-and-trade legislation would result in a net loss of jobs.   The Committee heard testimony from two panels of witnesses: Senator Kerry (D-MA), the lead sponsor of S. 1733; and a second panel comprised of Energy Secretary Chu, Transportation Secretary LaHood, Interior Secretary Salazar, EPA Administrator Jackson and FERC Chairman Wellingoff. 

Senator Kerry explained that, by actively addressing climate change, we will improve every sector or our energy economy, achieve energy independence and increased national security, and create millions of new jobs and new industries that cannot be exported.  He asserted that cost analyses of cap-and-trade legislation do not factor in the cost of inaction and that the world risks catastrophic consequences if temperatures continue to rise.  He added that only 7,500 entities will be covered by the legislation, representing 2% of businesses, with small business, agriculture and portions of the transportation sector exempt. 

In the second panel, the Obama Administration officials offered strong support for the legislation.  Secretary Chu stressed that addressing climate change presents a significant economic opportunity to capitalize on the development of new energy sources.  He argued that a cap on emissions is the most critical step to drive investment decisions for clean energy.  Additionally, he said sustained commitments to research and development will be necessary for the country to meet its energy goals.  Secretary LaHood noted several promising initiatives in development in his Department to reduce GHG emissions, including improving the understanding of aviation emissions on climate and expanding access to public transportation.  Secretary Salazar emphasized the need for energy efficiency and clean energy jobs. He noted that his Department has moved to fast forward solar energy on 1,000 square miles of public land by fast tracking the application process.  He also noted that the Geological Survey is currently developing protocols for carbon capture and sequestration (CCS) technologies. 

Administrator Jackson explained that EPA did a full economic analysis on the House energy and climate change bill (H.R. 2454, the American Clean Energy and Security Act), upon which S. 1733 is based, and a similar analysis of S. 1733.  Notably, she remarked that the region-to-region cost differences for both bills would be small.  Chairman Wellingoff said that FERC is working to remove barriers to low carbon sources of energy and to reduce emissions from energy generation.  He claimed that the cost of greenhouse gas emissions is currently a market externality, but that S. 1733 would internalize this cost and thereby diversify the fuels used to generate electricity. 

A spirited question and answer session followed with Senators of both parties seeking to score points on issues of perceived importance to their constituents.  Some of the more interesting issues involved the extent to which EPA would have a role in regulating GHG emissions under the Clean Air Act (CAA) if comprehensive cap-and-trade legislation were enacted.  Administrator Jackson expressed the view that the CAA would continue to play an important role, but that is an issue that bears watching.

To view Part 2 in the series, please click here.

For further information about this topic, please contact Akin Gump.

 The big action this week will occur in the Senate Environment and Public Works (EPW) Committee where Chairman Boxer will hold a series of hearings on the Kerry-Boxer climate change bill. Late Friday evening, Senator Boxer released a revised version that fills a number of the blanks, such as the credit allocation levels.  Simultaneously, EPA released its analysis of the bill, concluding that the bill would cost the average household $100 per year.  Senators in both parties continue to express their intent to alter the bill.  EPW will hold three days of hearings, with Administration officials, scientists, former members of Congress, think tank executives and others holding forth.  As with many other climate change hearings before the committee, the debate and questions are expected to break down along party lines.  Ranking Member Inhofe (R-OK) has suggested that Republicans might not attend a future mark up if their concerns about the EPA analysis of the legislation are not met.  A Republican boycott would stop a mark-up by denying the committee of its necessary quorum.

Tuesday, October 27, 2009

At 9:30 a.m., the Senate Environment and Public Works Committee will conduct a hearing entitled “Legislative Hearing on S. 1733, Clean Energy Jobs and American Power Act” in Room 406 of the Dirksen Senate Office Building.  Panelists include Senator John Kerry (D-MA), The Honorable Steven Chu, The Honorable Ray LaHood, The Honorable Ken Salazar, The Honorable Lisa Jackson and The Honorable Jon Wellinghoff.

The House Natural Resources Committee’s Subcommittee on Water and Power will hold a hearing on “Water Management and Climate Variability” at 10 a.m. in Room 1324 of the Longworth House Office Building.

Wednesday, October 28, 2009

At 9:30 a.m., the Senate Environment and Public Works Committee will conduct a hearing entitled “Legislative Hearing on S. 1733, Clean Energy Jobs and American Power Act” in Room 406 of the Dirksen Senate Office Building. 

The Senate Energy and Natural Resources Committee will hold two hearings.  At 10 a.m. the committee will receive testimony on the role of natural gas in mitigating climate change and at 2 p.m. they will  receive testimony on the current and expected impacts of climate change on units of the National Park System.  Both hearings will take place in Room 366 of the Dirksen Senate Office Building. 

Thursday, October 29, 2009

At 9:30 a.m., the Senate Environment and Public Works Committee will conduct a hearing entitled “Legislative Hearing on S. 1733, Clean Energy Jobs and American Power Act” in Room 406 of the Dirksen Senate Office Building. 

The House Agriculture Committee will hold a hearing on next-generation biofuels at 9:30 a.m. in Room 1300 of the Longworth House Office Building.

For further information about this topic, please contact Akin Gump.

The House and Senate are both relatively quiet this week as both chambers remain focused on health insurance reform.  Senator Boxer is still planning a Senate Environment and Public Works mark-up for early November on her recently released cap-and-trade legislation.  Meanwhile, Chairman Bingaman will hold a hearing on cap-and-trade allocations in the Senate Energy and Natural Resources Committee.  The hearing will be more fact finding than legislative, aiming to educate members on various aspects of climate legislation.  It will be instructive to see which Senators attend the hearing and what sort of questions are asked.

Wednesday, October 21

The Senate Energy and Natural Resources Committee will hold a hearing on greenhouse gas emission allowances at 9:45 a.m. in Room 366 of the Dirksen Senate Office Building.

The House Science and Technology Committee will conduct a hearing entitled “Biomass for Thermal Energy and Electricity: A Research and Development Portfolio for the Future” at 2 p.m. in Room 2318 of the Rayburn House Office Building.

Thursday, October 22

At 2:15 p.m. in Room 628 of the Dirksen Senate Office Building, the Senate Committee on Indian Affairs will conduct a hearing on “Indian Energy and Energy Efficiency.”

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With the Congress engaged in all health care all the time, things have quieted down substantially on the climate change front. The House, which passed its legislation before July 4, is waiting patiently for Senate action. Rather than being active on the issue, the Senate is taking a “wait and see” approach to the draft bill released by Sens. Boxer and Kerry.

The only hearing this week, of direct consequence to an eventual cap-and-trade bill, is in the Senate Energy Committee. There, Chairman Bingaman will be holding a hearing on the economic effects of climate change legislation. Experts from the Congressional Budget Office, the Energy Information Administration, the Congressional Research Service and the Environmental Protection Agency will testify.

For further information about this topic, please contact Akin Gump.

With the Senate examining the Boxer-Kerry climate draft and awaiting Senate Finance Committee action on health care legislation not much action is anticipated this week regarding climate policy.  The House Energy and Commerce Committee will have a subcommittee hearing on U.S. efforts to maintain competitive in the global green technology trade.  To that end, the House Science Committee will mark up legislation designed to promote more research and development of algaeal fuel.

Wednesday, October 7, 2009

The House Energy and Commerce Committee will conduct a hearing on “Growing U.S. Trade in Green Technology” at 10 a.m. in Room 2322 of the Rayburn House Office Building.

The House Science and Technology Committee will markup the algae, energy research bills at 10 a.m. in Room 2318 of the Rayburn House Office Building.

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Late last month, EPA released a Notice of Data Availability and Request for Comment related to its 2008 proposed regulatory framework for underground injection and storage of carbon dioxide.  The Notice discusses three DOE-sponsored Regional Carbon Sequestration Partnership projects, reviews the results of recent studies evaluating the potential impacts of geological storage to groundwater integrity and proposes a waiver process that would provide regulators with more flexibility in setting the minimum injection depth for carbon sequestration projects.  The 12-page notice is an important opportunity for stakeholders seeking to supplement the administrative record or position themselves for post-promulgation litigation.  Issues addressed in the Notice include:

• EPA May Widen the Scope of the Rule. The agency received comments regarding the need to consider environmental and regulatory issues outside the scope of the Safe Drinking Water Act (SDWA) and “is currently evaluating the need for a more comprehensive regulatory framework.” EPA has indicated that any effort to expand the rulemaking beyond its SDWA authority will involve an additional notice and comment opportunity, structured within the current regulatory development schedule.

• EPA Considers Granting Local Siting Authorities More Discretion.  EPA is proposing to modify the July 2008 proposed rule, which restricts Class VI Injection Wells (the new class for carbon sequestration projects) to below the lowermost geological formation containing an underground source of drinking water.  The proposed modification would allow project applicants to seek a waiver of the injection depth restriction by demonstrating that a shallower depth would not pose contamination risks.  The state regulatory officials with primary permitting responsibility would make the final waiver determination.

• Update from DOE’s National Energy Technology Laboratory (NETL).  NETL is developing or operating approximately 30 geological sequestration projects to develop working geological sequestration approaches and to identify “the most suitable technologies, regulations and infrastructure needs for carbon capture sequestration and storage.”  The Notice provides examples from several of these projects.

• Update from DOE’s Lawrence Berkeley National Laboratory (LBNL).  LBNL is studying the potential risk to underground drinking water sources from improperly-sited geological sequestration projects.  Areas of study include the potential for changes in ground water quality as a result of CO₂ leakage, the risk that CO₂ will mobilize trace elements and the potential basin-scale hydrological impacts that large-volume underground injection and resulting pressure changes may have on aquifers. 

• CO₂ Transport Modeling will play Critical Role.  EPA researchers see a need for improved CO₂ sequestration modeling tools that can characterize CO₂ transport properties across a large range of temperatures and pressures and couple multiphase flow, reactive transport and geomechanical processes. 

The notice offers several insights into EPA’s ongoing rulemaking process.  First, the likely driver for EPA’s decision to reopen the comment period in this proceeding was EPA’s decision to propose an injection-depth waiver mechanism.  Without the additional notice and comment, a final rule that included a waiver option would have been vulnerable on judicial review.  Second, EPA’s lengthy discussion of the waiver proposal, combined with the mixed results of its ongoing LBNL research into the impacts of carbon sequestration on drinking water quality and basin integrity, illustrates EPA’ difficult balancing act in developing uniform nationwide CCS standards.  While deeper CO₂ sequestration depths may offer greater protection to some local underground drinking water sources, establishing a rigid depth requirement could prevent the adoption of any carbon sequestration project in regions of the country that lack the requisite hydrogeological characteristics to meet the standard.  If CCS is going to be one of the pillars of EPA’s climate change mitigation strategy, EPA will need to find ways to balance the goals of climate policy, energy policy and water policy.  Third, EPA finally acknowledged that it may need to expand the legal basis of its carbon sequestration rulemaking program beyond the SWDA.  If EPA intends to propose any such expansion within the current rulemaking schedule, it must act quickly. 

EPA will hold a public hearing on the Notice of Data Availability on September 17, 2009 in Chicago, Illinois.  Written comments on the Notice are due to EPA by October 15, 2009.  For stakeholders with an interest in shaping federal policy on carbon capture and sequestration, this open comment period provides an important opportunity to supplement the record that EPA (and the courts) will rely upon in the future. 

For further information about this topic, please contact Akin Gump.