First, DEC proposed carbon dioxide emissions limits for new and expanded power plants (so long as the expansion adds at least 25 megawatts of capacity).  These limits are measured on the basis of a 12-month rolling average by dividing the total emissions of CO₂ by the total megawatts generated or fuel input into the plant.

The limits are:

• 925 pounds of CO₂ per megawatt-hour of electrical output, or 120 pounds of CO₂ per million Btu of input for combined cycle combustion turbines, stationary internal combustion engines firing only gaseous fuel, or boilers firing over 70% fossil fuel, and
• 1450 pounds of CO₂  per megawatt-hour, or 160 pounds of CO₂ per million Btu of input for simple cycle combustion turbines or stationary internal combustion engines firing either liquid fuel or a combination of liquid and gaseous fuel.

Second, DEC proposed regulations governing analysis of environmental justice issues when power plants are sited under the reauthorized Article X of the Public Service Law.  According to DEC Commissioner Joe Martens, these are the first such regulations in the country.

The proposed environmental justice regulations require an initial analysis of the area immediately surrounding the proposed facility to determine whether that area includes an “environmental justice area” containing a minority or low-income community that may already bear a disproportionate share of environmental impacts.  If so, an application to site a power plant must include an analysis of any significant adverse environmental impacts to the environmental justice area resulting from the plant’s operation or construction.  Such an assessment must include:

• An analysis of the plant’s cumulative impact on air quality,
• A comprehensive analysis of the environmental justice area, and
• A comparison of that area to the county or other adjacent communities (for facilities proposed within New York City, this includes the entire city) to determine if the impacts to the environmental justice area are disproportionate.

The regulations also require the applicant to identify, analyze, and implement mitigation measures that will avoid any disproportionate significant adverse environmental impacts to the maximum extent possible.  If the impacts cannot be avoided or minimized, the applicant must offset the impacts.

The proposed environmental justice regulations state that they are “not intended to … create any right to judicial review involving the compliance or noncompliance of any person with this Part.”  DEC also acknowledges, however, that the Power NY Act “expressly provides for judicial review” of power plant siting determinations.  Thus, it is unclear to what extent, if any, the proposed regulations’ disclaimer precludes judicial review of the Act’s mandatory environmental justice analysis, or whether such limitation would be deemed consistent with the underlying statute.

Comments on both sets of proposed regulations are due by 5 p.m. on March 15, 2012.  Information on filing comments is available here.

For more information, contact Jeffrey Gracer.

To attain that goal, the RPS provides production incentives for renewable electricity generation, funded through a surcharge on ratepayers’ electricity bills and administered by the New York State Energy Research and Development Authority (“NYSERDA”).  Eligible renewable electricity generators participate in a competitive solicitation process for the incentives, which are provided based on the megawatt-hours of renewable electricity delivered toNew York ratepayers or used on site. Additionally, the generator transfers all rights to the “RPS attributes” to NYSERDA, so the generator cannot benefit from the resulting pollution reductions under other emissions trading programs.

Most of the incentives to date have gone to wind, hydroelectric, biomass, and landfill gas projects, though a range of other sources – from solar, tidal and wave energy to anaerobic digesters converting agricultural biogas into electricity and heat – are also eligible. Covanta’s prior requests to include waste-to-energy facilities in the RPS, in 2004 and 2010, were both denied by the PSC.

Covanta’s petition presents a controversial question, as waste-to-energy plants provide an alternative to fossil fuels, but simultaneously present a number of environmental issues that are different from those associated with traditional renewable energy sources.  Environmentalists and the New York Attorney General’s Environmental Protection Bureau have opposed the petition, citing, among other things, concerns regarding mercury emissions.

Proponents of waste-to-energy facilities argue that incineration for power production is better for the environment than transporting the waste to landfills.  Covanta submitted a letter to the PSC on December 6th clarifying its position and highlighting the greenhouse gas benefits of waste-to-energy facilities. Covanta reasons that environmental benefits from waste-to-energy production make waste-to-energy a more environmentally-attractive option than landfill gas recovery, a method which is currently RPS-eligible.

A middle ground approach has been adopted in other states, including Connecticut, New Jersey, Massachusettsand Pennsylvania, whereby waste-to-energy facilities may receive subsidies, but not to the same degree as their zero emissions renewable generator counterparts.  DEC officials have supported this compromise as an appropriate measure in the event that the PSC decides to allow waste-to-energy plants in the RPS.

For more information on the firm’s practice in the areas of energy and waste-management, contact Jeff Gracer and Paul Casowitz.

Update (December 14, 2011):  In a recent letter to the PSC, Covanta withdrew its petition to classify waste-to-energy power as renewable under the New York RPS.

In order to continue operating over the long term, Indian Point needs to be re-licensed by the U.S. Nuclear Regulatory Commission and needs a new water quality certificate from the New York State Department of Environment Conservation.  New York Governor Andrew Cuomo’s longstanding position is that Indian Point should be shut down because of the risks that it may pose to nearby populations, including those in New York City.

Gov. Cuomo recently signed legislation that reinstates Article X of the Public Service Law.  Article X centralizes and streamlines the siting approval process for new power plants in New York.  Part of the justification for this legislation was that streamlining siting approval would make it easier to replace Indian Point.

Entergy, the owner of Indian Point, continues its campaign to re-license the plant; notable public relations efforts include maintaining a dedicated twitter feed and reportedly attempting to hire former Mayor Rudolph Giuliani to be a spokesman for the safety of the plant.

Sive, Paget & Riesel represents the Town of Cortlandt in the ongoing state and federal proceedings relating to Indian Point’s proposed relicensing.

Mark Lebel is a Summer Associate at Sive, Paget & Riesel

Tidal power represents an often-overlooked but growing renewable energy source, more predicable than wind or solar power, but often encumbered by high start-up costs.  The strong, fluctuating currents in the East River – which is actually a tidal strait between the New York Harbor and the Long Island Sound – make this water body an ideal location for the generation of tidal energy.  Verdant previously tested six tidal turbines in the proposed project location; they were used to power a Gristedes supermarket and a parking garage on Roosevelt Island.

The need for FERC licensing and other federal approvals triggered the National Environmental Policy Act (“NEPA”), requiring an analysis of the project’s significant, adverse environmental impacts.  On May 3, FERC released an Environmental Assessment reporting no such impacts, thereby allowing the project to move forward without a more intensive Environmental Impact Statement.  In particular, with respect to local fisheries, FERC based its Finding of No Significant Impact on its finding of only “minimal impacts on aquatic resources” from Verdant’s prior turbines, and on the company’s plans to conduct additional monitoring throughout the phase-in of its new plant.  The results of this monitoring, however, could affect analysis under NEPA for future tidal projects.

At a news conference announcing his decision, Governor Christie stated that a review of RGGI showed that “this program is not effective in reducing greenhouse gases and is unlikely to be in the future. . . . [T]he whole system is not working as it was intended to work.”  He stated further that the reduction of greenhouse gases in New Jersey was due to the state’s increased use of natural gas and decreased use of coal, which were driven by “the market and not RGGI.”  Governor Christie also stated that RGGI “does nothing more than tax electricity and tax our citizens and tax our businesses with no discernible or measurable impact upon our environment.”    

In response to Governor Christie’s announcement, the remaining 9 states issued a statement affirming their commitment to RGGI and confirming that the next carbon allowance auction, scheduled for June 8, will take place.  However, the states will have to evaluate how the withdrawal will affect those of New Jersey’s allowances that are currently in circulation. 

Several of the member-states issued individual statements reiterating their support for RGGI.  For example, New York Department of Environmental Conservation Commissioner Joseph Martens stated that “[t]he RGGI program has been extremely successful in supporting clean energy, reducing electricity bills and lowering greenhouse gas emissions throughout the region,” and that it has led “to savings for thousands of New York residents and businesses and to the creation of thousands of high quality jobs.”

The following are the current member-states of RGGI: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont.

The study, by three Cornell University researchers, reported that the primary GHG emissions from hydraulic fracturing are not carbon dioxide from the burning of natural gas, but methane released during the fracturing process, the operation of the wells, and the transportation and storage of the fuel.  Because methane is a far more potent greenhouse gas than carbon dioxide, the study concluded that over a 20 year time frame “the GHG footprint for shale gas is at least 20% greater than and perhaps more than twice as great as that for coal.”  Carbon dioxide remains in the atmosphere for longer than methane, but even over a 100-year period the study found that shale gas emissions were “comparable” to coal emissions.  The study’s data and methodology have already been disputed by the oil and gas industry, principally because the assumed rate of fugitive emissions is at odds with industry standards and practices.  The report’s authors acknowledge that better data is needed on the amount of methane emissions that leak or are otherwise lost during and after hydraulic fracturing operations, which is now likely to become a focus of increased attention.

Additional obstacles for fracturing proponents surfaced during a Senate Environment and Public Works Committee hearing yesterday, as an Environmental Protection Agency (“EPA”) official affirmed that drilling companies that use diesel fuel in hydraulic fracturing operations without a permit are in violation of Safe Drinking Water Act.  A 2010 report revealed inconsistent positions among state environmental regulators concerning the use of diesel as a fracturing fluid, and last year EPA posted a statement on its website that: “Any service company that performs hydraulic fracturing using diesel fuel must receive prior authorization …”  The Independent Petroleum Association of America and U.S. Oil & Gas Association are challenging that posting in the D.C. Circuit Court of Appeals, alleging that EPA imposed new substantive requirements without undertaking the rulemaking procedures required by the Administrative Procedures Act (“APA”).

In New York, a bill that would have required the disclosure of hydraulic fracturing chemicals was rejected in the Senate Environmental Conservation Committee yesterday.  The legislation, S. 425, drew support from a majority of Committee members voting, but fell one vote short of the eight required to bring it to the Senate floor.  Fracturing disclosure legislation is also pending in the United States Congress.  While such disclosure is not currently required nationwide, a new website from the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission, funded in part by the Department of Energy, has collected chemical data voluntarily submitted by participating oil and gas companies and published it in a searchable database.

• Read more on hydrofracking

The Governor’s Executive Order requires the New York State Department of Environmental Conservation (“NYSDEC”) to finish its review of public comments submitted to a Draft Supplemental Generic Environmental Impact Statement (“SGEIS”) analyzing the impacts of fracking, and make any necessary revisions. The NYSDEC must also publish a revised Draft SGEIS by June 1, 2011, accept public comments on that document for at least thirty days, and issue a report to the Governor identifying any regulatory conditions that must be included in fracking permits to protect public health and the environment.

In a press release issued December 11, Governor Paterson stated that he vetoed the legislation because, although it “was well intentioned, [it] would have a serious impact on our State if signed into law. Enacting this legislation would put people out of work – work that is permitted by [NYSDEC] and causes no demonstrated environmental harm, in order to effectuate a moratorium that is principally symbolic.”

Representatives of the oil and gas industry applauded Governor Paterson’s veto of the bill. While praising the Executive Order’s moratorium on horizontal fracking and its requirement of additional public review, some environmental groups expressed concern that the Order includes a loophole for vertical drilling by oil and gas companies.  The Natural Resources Defense Counsel (“NRDC”) stated that oil and gas companies may drill vertical wells now, with the intention of converting them to horizontal wells later, which could potentially circumvent the on-going environmental review process. NRDC also expressed concern that the industry could drill a number of closely spaced vertical wells in lieu of one horizontal well, creating “significant additional surface disturbance and environmental impacts.”

NYSDEC reviewed over 14,000 comments to the Draft SGEIS over the course of several months.  Because the Draft SGEIS must now be revised and re-released for public comment, which NYSDEC must review, the issuance of the Final SGEIS will most likely be delayed until at least the fall of 2011.

• Read more on hydraulic fracturing and the Marcellus Shale.

In the motion for a stay, coalitions of industry, state, and other challengers argued that the climate rules were unlawful and would cause irreparable injury if not enjoined.  Without addressing the merits of the regulations themselves, the D.C. Circuit Court of Appeals found that the challengers had not shown that “certain” harm would “directly result” from the rules’ implementation, as required for a stay.

This ruling means that EPA’s rules are likely to take effect as scheduled, as legislation that would delay or freeze funding for EPA’s stationary source GHG regulations is not expected to pass before Congress adjourns this month.  The incoming Congress may take up similar legislation next year, either as a stand-alone measure or an amendment to a spending bill.  In the meantime, EPA is in the process of finalizing rules to ensure that its forthcoming stationary source GHG controls only affect certain new and modified facilities emitting at least 75,000 tons of GHGs annually.  These implementing rules are currently being reviewed by the White House Office of Management and Budget, and are scheduled to take effect before EPA’s January 2 regulatory deadline.

The suits against EPA’s suite of greenhouse gas regulations will be heard by a single three-judge panel on the D.C. Circuit, with briefing scheduled to begin next year.  While that litigation is pending, the Supreme Court will hear arguments on whether EPA’s challenged climate rules displace federal common law remedies aimed at addressing global warming.

For more information on climate-related litigation and regulations, contact Jeffrey Gracer.

Hydraulic fracturing uses high-pressured water, combined with chemicals, to release natural gas present underground in shale formations. The use or proposed use of this process has raised concerns across the country that this process has contaminated, or will contaminate, drinking water supplies. Both the New York State Department of Environmental Conservation (“DEC”) and the federal Environmental Protection Agency (“EPA”) are currently undertaking studies of the environmental impacts of hydraulic fracturing.  However, the EPA study will not be complete by the end of the moratorium, and the DEC study may not be complete by then either.

DEC is reviewing the environmental impacts of hydraulic fracturing in New York through the preparation of a Supplemental Generic Environmental Impact Statement (“SGEIS”) pursuant to the State Environmental Quality Review Act (“SEQRA”).  DEC released a Draft SGEIS on September 30, 2009.  The Final SGEIS has not yet been released.  In April 2010, the DEC announced that the watersheds supplying drinking water to New York City and Syracuse would be excluded from the final study, placing these areas in a regulatory limbo that some have characterized as a de-facto ban on drilling in those areas.

The EPA’s study, the initial results of which are expected to be released in late 2012, focuses on effects of hydraulic fracturing on public drinking water supplies.  The agency has recently sought information from natural gas companies through information requests and a subpoena about the chemical composition of fluids used in the hydraulic fracturing process, data on the impacts of the chemicals on human health and the environment, standard operating procedures at their hydraulic fracturing sites, and the locations of sites where fracturing has been conducted.

As might be expected, several environmental advocacy groups praised the moratorium, while representatives from the natural gas industry criticized it, stating that it would jeopardize jobs and state tax revenue and noting that natural gas companies would first seek to drill in states that could offer a more “hospitable” regulatory environment.

• Read more on hydraulic fracturing and the Marcellus Shale.

In conjunction with public meetings held from July to September, EPA issued information requests in September to nine hydraulic fracturing service providers for information regarding their hydraulic fracturing processes.  Except for Halliburton, every company timely complied with EPA’s information request or agreed to submit the information by December.

As a result of Halliburton’s failure to respond, and because EPA’s plan is to have initial results by the end of 2012, EPA subpoenaed Halliburton to submit information by December 1, 2010 regarding the hydraulic fracturing fluid it uses; data and studies in the company’s possession regarding: impacts of its hydraulic fracturing products on human health and the environment; process of hydraulic fracturing operations for natural gas extraction; and sites that use its fracturing fluid.

On November 15, less than one week after being issued the subpoena, Halliburton announced that it will publicly disclose information about the chemicals used in its fracturing fluids on a portion of its website it is calling a “microsite.”  The company stated as follows:

Halliburton has just made available new web pages to emphasize our forthright disclosure of the additives and constituents that are used for several typical wells in Pennsylvania. We believe this effort represents an important and substantive contribution to the broader long-term imperative of transparency.

While the initial focus of the additive disclosure pages is limited to activities taking place in Pennsylvania, where development of the Marcellus Shale is already well-underway, the Company is committed to continuing to provide hydraulic fracturing fluid disclosure information for every U.S. state in which Halliburton’s fracture stimulation services are in use.

The New York Times has reported the new website shows that many of the fracturing chemicals are benign, such as the food additive guar gum, which is used in as a thickener in ice cream.  However,  several hazardous chemicals, such as microbiocide agents, are also listed.    Some environmental groups, such as the Natural Resource Defense Council, believe that the website is insufficient because it does not fully disclose information on a site-by-site basis.  Id. As of the date of this post, the website only included information on water and foam fracturing formulations in Pennsylvania and foam fracturing formulations in the Northeast.  The site does not include most of the information required by EPA’s subpoena.

• Read more on hydraulic fracturing issues