Category Archives: Cap-and-trade

Air pollution, California Air Resources Board (CARB), California Regulation, Cap-and-trade, Pollution credits

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.

Biofuels, California Air Resources Board (CARB), California Energy Commission, California Regulation, Cap-and-trade, Clean fuel standard, Climate Change, Ethanol, Global warming, Low carbon fuel standard, Oil Industry, Oil industry lobby

Sacramento: Oil firms challenge state over clean fuel

Repost from SFGate

Clean fuels shaping up as fight of the year in Sacramento

New battle lines drawn in fight over low-carbon policy
By Laurel Rosenhall, CALmatters, Mar 5, 2016 Updated: 3/6/16 3:33pm
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP

A Harvard economist known globally for his work on climate change policy sat in the Sacramento office of the oil industry’s lobbying firm recently, making the case that California is fighting global warming the wrong way.

The state has a good cap and trade system, Robert Stavins said, but some of its other environmental policies are weakening it. He pointed to a rule known as the low carbon fuel standard, which is supposed to increase production of clean fuels.

Environmental advocates consider it a complement to the cap and trade program that makes industry pay for emitting carbon; Stavins had other words.

“It’s contradictory. It’s counter-productive. It’s perverse,” he said. “I would recommend eliminating it.”

California’s low carbon fuel policy is shaping up as a major fight this year for the state’s oil industry, an influential behemoth that spent more than $10.9 million lobbying Sacramento last year, more than any other interest group.

“There’s a storm coming,” biofuels lobbyist Chris Hessler told a roomful of clean energy advocates at a recent conference on low carbon fuels. “If we don’t meet this attack vigorously, we’re all going to be in a lot of trouble.”

NEW BATTLE LINES

The oil industry was front and center in the biggest fight to hit the state Capitol last year: a proposal to cut California’s petroleum consumption in half over the next 15 years to slow the pace of climate change. The industry won its battle when lawmakers stripped the oil provision from Senate Bill 350.

But California’s larger oil war is far from over, and the newest battle lines are beginning to emerge.

Gov. Jerry Brown is plowing ahead with plans to cut vehicle oil use in half through executive orders and regulations like the low carbon fuel standard. The standard requires producers to cut the carbon intensity of their fuels 10 percent by 2020. To reach the standard, refineries will have to make a blend that uses more alternative fuels — like ethanol — and less oil.

The program was adopted in 2009 but was locked in a court battle for years. California regulators prevailed, and took action last year to resume the program. Now producers must start changing the way they formulate their fuel or buy credits if their product is over the limit.

That’s led to higher costs for fuel makers, which they are passing on to consumers at a rate of about 4 cents per gallon, according to the California Energy Commission. But the price is likely to keep increasing, the oil industry warns, as it gets tougher to meet the standard that increases over time.

Which is where Stavins’ argument comes in. It goes like this: the cleaner fuels required by the low carbon fuel standard will emit less greenhouse gas. That will reduce the need for fuel producers to buy permits in the cap and trade system (which makes industry pay for emitting climate-warming pollution) and create additional emissions by allowing other manufacturers to buy the pollution permits.

Less demand will also depress prices on the cap and trade market.

Stavins is the director of Harvard’s Environmental Economics Program and part of the Intergovernmental Panel on Climate Change, a prestigious group of experts who review research for the United Nations.

He’s also an advisor to the Western States Petroleum Association, which paid him to make the trip to Sacramento, where he talked with reporters before a day of meetings with lawmakers and business leaders.

Environmental advocates and California clean air regulators reject his view. They say the fuel standard works in harmony with other carbon-reducing programs and it’s an important piece of California’s effort to achieve its climate change goals.

“One of the major goals of the low carbon fuel standard… is to drive innovation of new and alternative low carbon fuels,” said Stanley Young, spokesman for the California Air Resources Board. “The cap and trade program on its own cannot do that.”

Alternative fuel producers gathered in a ballroom near the Capitol days after Stavins’ visit to Sacramento. During a presentation on the rising price of low carbon fuel credits, Hessler, the biofuels lobbyist, warned that the program is coming under “political attack.”

He defended the fuel standard by saying the regulation limits the price of the credits, and the cost to consumers will be kept down as some fuel producers make money by selling credits to others. He urged conference participants to share his information with California policymakers to counter opposition to the low carbon fuel standard.

“We’ve got to be ready for this,” Hessler said.

HOW THINGS COULD GO DOWN

A fight last year over a low carbon fuel standard in the state of Washington may provide some clues about how things could go down here.

There, Democratic Gov. Jay Inslee proposed a low carbon fuel standard but failed to earn enough support for it in the Legislature. The fuel standard became a bargaining chip for Republicans in negotiations about funding for transportation infrastructure.

Here in California, lawmakers and Gov. Brown are also negotiating a plan to pay for a backlog of repairs to state roads and highways. Brown has pitched spending $36 billion over the next decade with a mix of taxes and other revenue sources.

Republican votes are necessary to reach the two-thirds threshold for approving new taxes. So far, Republicans have balked at the plan, with some suggesting that the fuel standard should be included in the negotiations.

“As we’re having the discussions about transportation funding in general in California, and transportation taxes in particular, this ought to be part of the discussion,” said Assemblyman Jay Obernolte, R-Hesperia.

It’s a message echoed by the president of the Western States Petroleum Association, which advocated against the low carbon fuel standard in Washington.

Catherine Reheis-Boyd said she wants California lawmakers to “take a very hard look” at the low carbon fuel standard as they consider the future of climate change policies and the desire to repair the state’s roads.

“All those things interplay,” Reheis-Boyd said. “That’s a big conversation. I think people across the state are willing to have it, and I think we’re at a pivotal point to have it this year.”

CALmatters is a nonprofit journalism venture dedicated to explaining state policies and politics. For more news analysis by Laurel Rosenhall go to https://calmatters.org/newsanalysis/.
Air Quality, Benicia Climate Action Plan, California Environmental Quality Act (CEQA), Cap-and-trade, Crude By Rail, Derailment, Explosion, Greenhouse gas emissions, Oil spill, Rail accidents, Valero Benicia Refinery, Valero Crude By Rail, Valero Energy Corporation

VALLEJO TIMES-HERALD LETTER: Valero is NOT good neighbor!

Repost from the Vallejo Times-Herald

Valero is NOT a good neighbor!

By Rebekah Ramos, September 25, 2015

Valero’s self-proclaimed “Good Neighbor” status is laughable when you begin to peel back the onion and remove the layers of misinformation (or missing information) and reveal the same flavor of corporate propaganda and fearmongering that is used to hold small communities hostage.

There are hidden costs to having Valero as a neighbor that you may not be aware of.

Valero says the City of Benicia is losing more than $360K per year in revenue because of delays in approving their crude by rail project, which could get us 4 new police officers.

Valero DOESN’T say…

    • CEQA (California Environmental Quality Act) is a law that requires due diligence to properly evaluate environmental impacts and most importantly, inform the public of those impacts. City staff initially attempted to push this project through, under the radar, and without LITTLE public notification – skirting the law. Had it not been for a group of alert citizens bringing this to the public’s attention Valero would have gotten away with implementing a project that would have enormous ramifications to our health, safety, and economic viability, not only in our community, but every community along the rails.
    • Our personal safety is NOT at risk because we are short on police officers, it’s at risk because transporting highly volatile crude oil by rail is extremely risky business. More than 17 major oil train accidents have occurred in the last 24 months resulting in explosions, spills, and derailments.

Valero says they contribute 25% to Benicia’s general fund.

Valero DOESN’T say…

  • That number is actually 20% AND it doesn’t reflect the millions that Valero has taken away from the city’s coffers in recent years.
  • The City of Benicia was forced to pay Valero $2.3 million because Valero filed an appeal for a reduction in its property value from $1.02 billion to $230 million and $964 million to $100 million in 2012 and 2013 respectively despite climbing profits and gas prices since 2010. Benicia loses $2.3 million AND any on-going revenue generated from Valero’s property taxes. How many police officers do you think $2.3 million get us?

Valero says the crude by rail project will reduce air emissions and decrease greenhouse gases. In addition, they say they are entitled to $57million in emission reduction credits because of improvements made to the refinery.

Valero DOESN’T say…

  • The recirculated EIR for their crude by rail project specifically states that there will be significant increases in air emissions and greenhouse gases.
  • Valero has received dozens of notices of emissions violations nearly every single month of 2014 and 2015 including a violation for Benzene.
  • Valero has failed to install any publically accessible emissions monitoring equipment despite their pledge to do so since 2008.
  • Emission reduction credits would allow Valero to increase their emissions for new projects, sell or trade their credits to other polluters. Because of Cap and Trade legislation, big polluters in our own backyards get to pollute even more.
  • According to the EPA, Valero is the biggest polluter in Solano County, contributing 82% of all toxic releases in 2013. Data for 2014 and 15 is not available.

Valero is desperate to turn a profit and will use whatever means is necessary – squeeze money from the city coffers, pollute our environment, and put our lives at risk – to satisfy the short-term interests of their shareholders. They even threaten to lay people off or sell the refinery if the city doesn’t comply.

We can’t let one business keep our community in such an economically vulnerable situation. The City of Benicia has adopted a Climate Action Plan, but can’t seem to address THE REAL CLIMATE ELEPHANT IN THE ROOM, which is Valero. It’s time that serious action be taken to seek out and invite other, more sustainable industries to our city because Valero is NOT a Good Neighbor!

Air Quality, Bay Area Air Quality Management District (BAAQMD), Bay Area Refineries, Cap-and-trade, Carbon emissions, Emissions caps, Greenhouse gas emissions, Local Regulation, Public Health, San Francisco Bay Area

Letter to the Bay Area Air District: require strict emissions caps on refineries

Posted with permission

Benicia Resident Marilyn Bardet’s letter to the Chair of the Board, Bay Area Air Quality Management District (BAAQMD)

Direct staff to require numerical emissions caps on all refinery emissons
By Marilyn Bardet, Sept 16, 2015

Dear Chair Groom,

Marilyn Bardet
Marilyn Bardet, Benicia CA

In response to the overwhelming testimony the District has received from all corners of the Bay Area, as chair of the BAAQMD board of directors, you, with your board, have the authority to direct District staff to revise DRAFT Rules 12-15 and 12-16 as currently released, to require strict numerical emissions caps on all refinery emissions, including GHG.

By all means of public testimony over a two-year period, you have heard from concerned and affected members of the public, respected regional and national organizations (including Sierra Club, NRDC, CBE, 350 Bay Area, APEN, Sunflower Alliance) and other experts in the field who have recommended and put forward well-defined revisions that would impose strict numerical emissions caps on refinery emissions tied to current emissions baselines for TAC, VOCs, heavy metals and PM2.5, including GHG.

You know that oil companies in the region aim to acquire and process the most dangerously polluting crude in the world — tar sands. Refineries processing changed crude slates whose blends have increasing amounts of heavy crude, unconventional crudes such as Bakken oil, and/or tar sands will adversely impact regional and local air quality, especially affecting front-line communities and those “downwind communities.” Allowing emissions to “go up to” long ago established permitting levels (Valero Benicia’s permit was established in 2003) is tantamount to the District “giving in” to benefit the oil industries’ profit, not public health.

The District’s mandate is to clean up the air for the benefit of public health, and, in accordance with state mandates, to protect the climate by drastically reducing GHG. Oil refining is the biggest industrial source of GHG. Carbon trading by refineries will simply send “pollution credits” elsewhere and keep toxic emissions “at home” that kill thousands of people in the Bay Area each year. GHG emissions from fossil fuel combustion threaten to destroy our global climate and way of life.

Strong refinery rules that set numerical limits on toxic emissions tied to current baselines and limit GHGs are our best chance to protect public health and protect the climate.

We need your leadership more than ever now! I am writing to ask that you make it clear to your directors that the “highest good” must be done by BAAQMD in the name of public health and climate protection, such that, until revisions to Rules 12-15 and 12-16 are adopted that set refinery emission caps at today’s levels, including for GHG, the agency will suspend permitting for refinery projects.

This is a bold request, but these are very uncertain times that require every precaution and concerted action by leadership to create policies that protect people and the planet.

Thank you for your public service, and for you attention to my comments.

Respectfully,

Marilyn Bardet
Benicia