Category Archives: California Regulation

SF CHRON: Climate bills pass California Legislature, Gov. Brown will sign

Repost from the San Francisco Chronicle

Climate bills pass Legislature, await Brown’s OK

By Melody Gutierrez, August 25, 2016
Gov. Jerry Brown said he plans to sign the bills when they reach his desk. Photo: Lenny Ignelzi, Associated Press
Gov. Jerry Brown said he plans to sign the bills when they reach his desk. Photo: Lenny Ignelzi, Associated Press

SACRAMENTO — The California Legislature passed two bills Wednesday that extend the state’s ambitious goals to reduce the impact of greenhouse gases and provide additional oversight on the agency charged with carrying out climate-change policies.

Gov. Jerry Brown praised lawmakers for passing SB32 and AB197, saying passage was an important milestone after similar efforts failed last year amid intense lobbying by the oil industry. Brown said he plans to sign the bills when they reach his desk.

“Legislation is not like Twitter,” Brown said. “You don’t do it in 140 characters or in a few seconds. It takes months and sometimes years. It takes trying, failing, amending and trying again; negotiation. There are 120 members in the Legislature, and not everyone sees things the same way.”

SB32 calls for the state to reduce its greenhouse gas emissions to 40 percent below 1990 levels by 2030. The bill expands on AB32, the California Global Warming Solutions Act of 2006, which requires the state to reduce greenhouse gases to 1990 levels by 2020. The state is expected to reach that target.

“We have discovered, with these policies, our economy continues to go up, but our emissions are going down,” said termed-out state Sen. Fran Pavley, D-Agoura Hills (Los Angeles County). “It’s not a choice between a healthy environment and sound economy. In California, we can do it both ways.”

AB197 directs the California Air Resources Board to prioritize disadvantaged communities in its climate-change regulations, and to evaluate the cost-effectiveness of the measures it considers. The bill also allows the Legislature to appoint two lawmakers as nonvoting members of the board, a move supporters said will provide more transparency and oversight on the agency.

Lawmakers have criticized the lack of diversity on the board, and Assembly Speaker Anthony Rendon, D-Paramount (Los Angeles County) said the board has a credibility problem.

“Any exercise of authority has to be reviewed,” Brown said when asked about the criticism of the board that is largely appointed by him. “Any time you have the power to say no or reduce your high-carbon fuel, reduce your pollutants, change the way a carbonized society works, it will be felt with some sting. That’s the reality, but we want to make sure we are doing it in a way that advances our goals of equity and inclusion.”

Brown unsuccessfully lobbied to have the cap-and-trade program included in SB32, but lawmakers balked because the bill already faced an uncertain future in the Assembly. On Tuesday, the Assembly narrowly passed the bill with one vote to spare, although several Democratic lawmakers changed their votes to approve of the legislation after it passed.

The Senate passed SB32 on Wednesday in a 25-13 vote.

The future of cap-and-trade remains uncertain due to a legal challenge from the California Chamber of Commerce. That uncertainty, along with some fearing SB32 would not be signed into law, contributed to poor auction results this year.

EDITORIAL On Senate Bill 32

Step ahead on climate

California is doubling down in the fight against climate change. After teetering on defeat, a state bill that expands efforts to curb heat-trapping emissions is in the final stages of approval.

The measure, SB32, builds on the state’s plan in 2006 to cut greenhouse gases by 30 percent by 2020, a goal that’s already within reach. With both the Senate and now the Assembly in support, the bill pushes the state to trim climate-altering emissions by 40 percent by 2030.

An accompanying bill would give the state Air Resources Board more power to regulate industrial and refinery emissions in a bow to lawmakers from low-income areas who want more out of climate change ideas. That bill, AB197, is hanging, a target for business lobbyists who want to sink the overall effort. Passing this second measure is essential to complete a comprehensive effort.

Still, the success so far is worth notice. California isn’t budging from its course. White House aides and Gov. Jerry Brown called wavering moderate Democrats for their votes, which the same lawmakers had withheld last year. With the nation stalled on climate change steps, California has a chance to move forward and demonstrate the effects, costs and benefits of its aggressive steps. The ability to add pollution controls to a roaring economy is making the state a globally watched experiment.

The rules need attention. One key mechanism is the cap and trade exchange that obliges polluting industries to purchase credits from cleaner operations. The sales aren’t netting the expected amounts with less than $10 million spent in the latest auction. The money is due to go to pollution-limiting programs such as transit and the struggling high speed rail project.

Defenders of the cap and trade plan say that uncertainty over the legislative outcome is to blame for the weak revenue. Now that the state’s direction is emphatically decided, the value of pollution credits should stabilize, they argue. That’s a claim that needs testing.

On balance, Brown has been a good advocate for climate action, though he does have one notable blind spot: his continued silence on a plan to ship major quantities of coal through a new Oakland port facility for overseas combustion. That project just happens to belong to Phil Tagami, a buddy and political donor to the governor. May we remind the governor of his own words from last year: “It doesn’t make sense to be shutting down coal plants (in the U.S.) and then export it for somebody else to burn in a more dirty way,” he said.

Let the record be clear: Brown’s climate commitment is incomplete until he takes a stand, one way or another, on that Oakland coal train.

 

Please share!

Demand sags for California credits aimed at greenhouse gases

Repost from Associated Press

Demand sags for California credits aimed at greenhouse gases

By Ellen Knickmeyer, Aug. 23, 2016 6:46 PM EDT

SAN FRANCISCO (AP) — California’s latest carbon auction brought disappointing results Tuesday as litigation and lagging support by lawmakers weigh down the state’s landmark programs combating climate change.

State officials said only 34 percent of the available carbon pollution credits were sold in the latest auction under the program, which requires companies that emit climate-changing gases to buy the pollution permits.

It was a slight rebound from this spring, when investors bought just 10 percent of the pollution credits offered, signaling a rocky period for the state’s overall campaign against climate-changing pollution from fossil fuels.

The cap-and-trade program is a keystone of Gov. Jerry Brown’s efforts to reduce climate-changing pollution in California and is being watched closely around the world as other governments put together efforts to fight climate change.

Dave Clegern, spokesman for the state air board that runs the effort, said the program is adapting as it should to shifts in the market.

“The California cap-and-trade program is first and foremost a greenhouse gas reduction program, and it is working” to bring down carbon pollution from fossil fuels, Clegern said in an email.

Pollution credits consistently sold out after the cap-and-trade program began in 2012, bringing in hundreds of millions of dollars quarterly for initiatives that reduce greenhouse gases. The proceeds are used to fund a high-speed rail project pushed by Brown, along with other transit construction and energy conservation efforts.

This year, demand plummeted amid uncertainty about the program’s viability. The result was the steep decline in revenue at a spring auction, prompting concerns that funding won’t be available long-term to continue the programs.

Brown, backed by environmental groups and some Democratic lawmakers, is struggling to win support for extending the state’s landmark global warming law amid opposition from oil companies, Republicans and moderate Democrats in the Legislature.

Republican lawmakers called the latest middling auction results a failure and a flop, and called again for the state to abandon the cap-and-trade program.

However, the state Assembly took a critical step Tuesday when it advanced the latest global warming legislation to the state Senate, where it is also expected to pass before next week. Both chambers are dominated by Democrats.

The California Chamber of Commerce is fighting cap-and-trade in court, claiming it is an illegal tax that did not go through the proper legislative approval process.

The lawsuit in particular is scaring away some potential investors, said Dan McGraw, a Houston-based carbon analyst with the ICIS trade publication.

“Potentially there’s a lot to lose if the California Chamber of Commerce wins that case,” McGraw said.

The growing backlog of unsold carbon credits also is weighing on the cap-and-trade program, he said.

“They’re going through something every carbon market has gone through,” the analyst said. “The question is: What do you do now?”

The latest auction results show that the market needs certainty about the state’s long-term cap and trade program, through either the Legislature or state voters vouching for its future in a ballot initiative, Nancy McFadden, Brown’s chief of staff, said in a statement.

Please share!

BNSF, Union Pacific lawsuit: claims California’s new rail hazmat fee illegal

Repost from Hazmat Magazine
[Note: The complaint is available at http://src.bna.com/hm1. – RS]

California’s new Rail Hazmat Fee Illegal Claims Railroads

By J Nicholson, August 11, 2016

As reported in Bloomberg BNA, California’s new fee on rail deliveries of crude oil and certain other hazardous materials is illegal, the nation’s two largest railroad companies said in a lawsuit ( BNSF Railway Co. v. California State Board of Equalization, N.D. Cal., No. 16-cv-04311-JCS, 7/29/16 ).

Filed in federal court in San Francisco, the complaint challenges a newly approved regulation requiring railroad companies to collect from their customers $45 for each rail car carrying 25 specified hazardous materials into the state. To be paid to the state’s Board of Equalization, the fee is earmarked to help the state prepare for hazardous material incidents.

The federal ICC Termination Act of 1995, the Hazardous Materials Transportation Act and the Railroad Revitalization and Regulatory Reform Act of 1976 preempt the fee implemented under S.B. 84, a budget bill enacted in 2015, the complaint said.

Plaintiffs want an order blocking the state from collecting the fee.

RAILWAY-TRACK

“This hazmat charge defies federal law and economic logic,” the complaint filed July 29 by BNSF Railway Co. and Union Pacific Railroad Co. said. “If exclusive federal jurisdiction over the economic relationship between railroads and their customers means anything, it means that a State cannot establish the charges to be collected for rail transportation, order a railroad to collect them from its customers, and depress rail revenues and customer demand in the process.”

Chemicals Covered by Fee

California’s Office of Emergency Services adopted the fee regulation in June.  Expected to take effect later this year, the fee applies to rail cars containing acetonitrile, certain alcohols, anhydrous ammonia, ammonium hydroxide and calcium hypochlorite.  It also applies to chlorine, certain corrosive liquids, diesel fuel, environmentally hazardous substances, ethanol, gasoline, hydrogen peroxide, liquefied petroleum gas, liquefied gas, methanol, methyl ethyl ketone, nitric acid, petroleum crude oil, phenol, phosphoric acid, potassium hydroxide, propylene, sodium hydroxide, sulfuric acid, toluene and vinyl acetate.

California’s fee only applies to rail deliveries, no other type of delivery of hazardous materials.  The Interstate Commerce Clause and the federal hazardous materials law forbid states from discriminating against interstate commerce, the complaint said.

Benjamin J. Horwich of Munger, Tolles & Olson LLP is representing BNSF Railway.  Union Pacific’s counsel are from Sidley Austin LLP and include Carol Lynn Thompson and in-house attorney Melissa B. Hagan.

A copy of the complaint is available at http://src.bna.com/hm1.

Please share!