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Policy News Update

April 09, 2010

In this issue: [Contract All : Expand All]

OFFSHORE DRILLING: CONGRESS DEMURS AS OBAMA ADMIN PROPOSES OPENING NEW AREAS FOR LEASING; ENVIRO REVIEWS, CONSTRUCTION WILL KEEP DRILLING AT BAY FOR YEARS

On March 31, President Obama and Interior Secretary Ken Salazar announced plans to open new areas—primarily along the Atlantic Coast and in the eastern Gulf of Mexico—for offshore drilling, while placing additional restrictions on other areas. Although Republicans have been pushing the administration to move forward with such a proposal and many Democratic leaders understand offshore drilling to be an area of compromise in the ongoing climate debate, the overall response from Congress was lukewarm.

Many of the proposal’s biggest critics are liberal lawmakers and environmental groups. Obama responded to complaints from these parties by asserting the importance of offshore drilling in weaning the US off of foreign oil and eventually achieving a sustainable and domestically driven clean-energy economy. "The only way this transition will succeed is if it strengthens our economy in the short term and long run," he said. "To fail to recognize this reality would be a mistake.” Still, he underscored the importance of moving beyond oil, particularly since the US, while responsible for 20 percent of global consumption, has less than 2 percent of the world’s oil reserves. "Drilling alone can't come close to meeting our long-term energy needs, and for the sake of our planet and our energy independence, we need to begin the transition to cleaner fuels now."

Obama maintained that all decisions under the plan would be based on science and environmental reviews, and he promised to protect areas that are important to tourism, the environment, and national security. Adding to his message of sustainability, he also announced plans to double the federal fleet of hybrid cars and trucks, and pointed to the new, nationwide auto emissions and fuel economy standards finalized by the US Environmental Protection Agency (EPA) and Department of Transportation. For more information on the new standards, see the “ENDANGERMENT FINDING” article in this edition.

Specifics of the plan:

The move was partly an effort to smooth the path for a climate bill, which the President still hopes to pass this year. But so far, undecided Senators appear largely unmoved.

The most likely votes to be won by the proposal—Virginia's Democratic senators, Mark Warner and Jim Webb—depend on whether the Senate climate bill includes revenue sharing provisions, which would direct millions of dollars from new drilling to their state. But such provisions are themselves quite controversial, and several prominent Senate Democrats are adamantly opposed in spite of their support for offshore drilling. Opponents include Energy and Natural Resources (ENR) Committee Chair Jeff Bingaman (NM) and Energy and Water Appropriations Subcommittee Chair Byron Dorgan (ND), as well as Senator Robert Menendez (NJ), who said that if the Senate climate bill does not protect his state from the impacts of coastal drilling, his vote is “out of the question.” The energy bill that Bingaman ushered through ENR last year expanded offshore drilling but specifically rejected revenue sharing.

But in the meantime, while details about revenues remain undecided, Bingaman has praised the Administration’s proposal, as has House Natural Resources Chair Nick Rahall (D-WV), saying it strikes an important balance between boosting domestic energy and protecting the most sensitive offshore areas. In addition, Alaskan Senators Mark Begich (D) and Lisa Murkowski (R)—both key fence-sitters—released a joint statement praising Obama's action. Still, Murkowski maintains that her vote will ultimately depend on the climate provisions themselves, not additional incentives. (It’s worth noting that Murkowski has said on separate occasions that she would not be on board without additional nuclear provisions and drilling in the Arctic National Wildlife Refuge. Therefore, although she will undoubtedly pay close attention to the potential impacts of any proposal to cap emissions, energy provisions such as those proposed by Interior may indeed factor into her decision.)

The majority of Republicans remain skeptical, however. Most GOP praise for the announcement has been qualified with remarks that the expansions were “too little too late,” and many conservative lawmakers have likened the proposal to a “smokescreen.” Said Representative Mike Pence (R-IN), “Only in Washington, DC can you ban more areas to oil and gas exploration than you open up, delay the date of your new leases, and claim you're going to increase production."

In spite of the stir that the proposal has created on both sides of the debate, in most cases it won’t result in new production until at least 2014. According to the Interior Department, it will take two or more years to decide on specific areas where new leasing would be acceptable—a decision that will depend on the  environmental sensitivity of the areas and whether they are currently being used for other purposes such as shipping or military training. (Further, drilling programs proceed according to five year plans, which means that the new areas could conceivably not be open to development in time for the next program, set to begin July 2012.) Since it takes roughly two years for drilling to begin after a lease sale, most areas would be ready to go no earlier than 2014.

Further, while Interior has set a goal of holding lease sales in the eastern Gulf of Mexico during the 2012-2017 program, much of that area is subject to a congressional moratorium until 2022. In other words, Congress would need to act for leasing to be allowed.

Under the National Environmental Policy Act (NEPA), environmental impact statements will be required for all areas in which leasing is being considered. The impact statements will evaluate environmental issues including the possibility of oil spills and the potential impacts of drilling on ecosystems, climate change, and recreational activities. They will also consider alternative approaches, which may include increased or decreased lease sales, coastal buffers, or the exclusion of part or all of certain planning areas. In addition, the NEPA process will include public meetings in potentially impacted coastal locations to determine where leasing would be appropriate.

Interior will hold meetings in June and early July, and will be accepting public comments through June 30 to help determine the appropriate scope of the impact statements. For more information, visit the Five Year OCS Oil and Gas Program Environmental Impact Statement Information Center at: http://ocs5yeareis.anl.gov

ENDANGERMENT FINDING: EPA, DOT ANNOUNCE FINALIZED AUTO STANDARDS—WILL KICK OFF ON 2012 MODELS

On April 1, the Obama administration finalized a suite of new automobile standards, which represent the first regulations on greenhouse gases to come from the 2007 Supreme Court ruling that found greenhouse gas emissions to be a threat to human health. This “endangerment finding” continues to be a source of dispute, since it effectively tasks the US Environmental Protection Agency (EPA) with lowering emissions.

These first steps officially make greenhouse gases subject to regulation under the Clean Air Act, which will also trigger permitting requirements for industrial sources like refineries and power plants. EPA said it could start regulating such stationary sources as early as January 2011. Meanwhile, the automobile standards will kick in for model year 2012 cars, which are due to become commercially available in the fall of 2011. The two new standards:

Jointly crafted by EPA and the Transportation Department, the standards represent a compromise between the automobile industry and the many states that have been trying to set their own limits on auto emissions. The White House, touting the new rules as a boon for both the economy and the environment, estimates that the regulations will reduce carbon dioxide emissions by almost 1 billion metric tons and conserve roughly 1.8 billion barrels of oil over the lifetime of the vehicles covered.  Although the changes will add nearly $1000 to the price of 2016 cars and trucks, consumers will save roughly $3000 in fuel over the lifetime of the vehicle.

Responding to the new standards, the auto industry has expressed a willingness to cooperate—many groups pushed for federal standards as a way of reducing uncertainty and avoiding the regulatory patchwork that could result from the state-by-state regulations that they have traditionally opposed. "America needs a roadmap to reduced dependence on foreign oil and greenhouse gases, and only the federal government can play this role," said the president of the Alliance of Automobile Manufacturers.

Meanwhile, though, a number of states, lawmakers, and industry groups have been critical of EPA’s endangerment finding, with many planning or taking legal action to have it overturned. The primary concern is the economic impact of the standards, though EPA has been clear that it is under legal obligation to restrict emissions that endanger public wellbeing. Regulatory action is not as flexible as legislatively instituted caps on emissions, and most parties involved—including EPA leadership and President Obama—have repeatedly expressed their preference for a climate bill from Congress. But with a consensus still elusive in the Senate, EPA will continue to move forward with its own efforts.

MOUNTAINTOP MINING: EPA ROLLS OUT NEW WATER QUALITY STANDARDS, SIGNIFICANT IMPACT ON FUTURE OPERATIONS EXPECTED

On April 1, the US Environmental Protection Agency (EPA) announced new water quality standards for mountaintop mining. Effective immediately, the guidelines will bar new permits for mining operations that contribute to downstream water pollution beyond a certain threshold. Existing operations will not be impacted, though few would meet the new standards.

EPA’s decision will significantly limit, if not eliminate, the use of “valley fills”—piles of rubble that result from blasting off the tops of mountains to expose the coal beneath. The excess rock often fills entire ravines, covering a combined surface area of over 175 miles in the Appalachian region. The fills are only one of the many environmentally problematic impacts of the practice, but have recently received a great deal of attention because of their connection to water quality. New studies indicate that rainwater, when filtered through valley fills, collects numerous toxins and can severely contaminate nearby streams.

Industry groups argue that the new restrictions could put an end to mountaintop mining, crippling local economies and eliminating access to roughly 10 percent of the nation’s current coal supply. Still, new mining operations do have options for achieving compliance in some cases, such as storing rock away from streams.

For more information on mountaintop mining, see the November 6, 2009 edition of the ESA Policy News at: www.esa.org/pao/policyNews/pn2009/11062009.php

OCEANS: HOUSE APPROVES EXPANSION OF NOAA EDUCATION PROGRAMS

On March 19, the House voted 244-170 in favor of the Ocean, Coastal, Watershed Education Act (HR 3644).  The bill, sponsored by Representative Lois Capps (D-CA), authorizes and expands two National Oceanic and Atmospheric Administration (NOAA) education programs, with the goal of improving public understanding of the economic, cultural, and environmental benefits of coastal watersheds, and creating a sense of responsibility for coastal and marine resources.

HR 3644 authorizes a total of $235 million over five years for the expansion of the national Environmental Literacy Grants (ELG) program and the regional Bay-Watershed Education and Training (B-WET) program. Educational efforts will focus on human impacts and the effects of climate change.

On March 22, the bill was received in the Senate, where it was referred it to the Committee on Commerce, Science, and Transportation.

NEPA: INTERIOR TO HALT FAST-TRACKING PROCEDURE FOR OIL AND GAS PROJECTS ON PUBLIC LANDS

In a March 31 legal settlement, the Interior Department agreed to place additional restrictions on actions to streamline drilling on public lands. Normally, the National Environmental Policy Act (NEPA) requires federal agencies to submit a report on the environmental impacts of their projects before proceeding, but the Energy Policy Act of 2005 gave the Bureau of Land Management (BLM) the ability to approve certain drilling projects en masse using “categorical exclusions.” NEPA states that federal agencies may use categorical exclusions to expedite groups of projects likely to have negligible environmental impacts—Section 390 of the 2005 expanded the criteria for these exclusions to cover drilling projects that disturb less than 5 acres or take place on sites where drilling has occurred in the past 5 years.  But while NEPA includes a provision to suspend exclusions under “extraordinary circumstances” (e.g. impacts on human health, protected species, or cultural resources), such a caveat had not yet been extended to the language in Section 390.

As part of the recent settlement, BLM effectively closed the loophole by agreeing to issue a national guidance stating that NEPA’s extraordinary circumstances provision applies to the Section 390 categorical exclusions. The settlement resulted from a lawsuit that questioned BLM’s use of exclusions to approve 30 drilling projects near Utah’s Nine Mile Canyon. Plaintiffs alleged that the release of corrosive dust into the air and onto neighboring rock-art panels represented an extraordinary circumstance, thereby necessitating standard environmental reviews.

Industry groups and some lawmakers, such as Senator Robert Bennett (R-UT) argue that the agreement is illegal and will bring an end to the use of all categorical exclusions in fossil fuel development. Noting that the agreement was announced on the same day as Interior’s proposal to open up additional areas for offshore drilling, Bennett summarized the concerns of the opposition, saying, “I find it outrageous and cynical that on the same day that the president is attempting to persuade Americans that he is supportive of new oil and gas development, a secret deal is announced ... that will result in gutting one of the key energy streamlining provisions of the Energy Policy Act of 2005 -- ironically a bipartisan legislative achievement that both he and [Interior] Secretary Salazar supported when in the Senate.”

ESA COMMENTS ON PROPOSED REVISIONS TO WATER PLANNING GUIDELINES

Ecological Society of America (ESA) President Mary Power provided an ecological perspective on the Council on Environmental Quality’s (CEQ) proposed revisions to the nation’s water planning guidelines (www.whitehouse.gov/administration/eop/ceq/initiatives/PandG).  Power praised CEQ for proposing that federal agencies account for ecosystem services and also for the inclusion of watershed and ecosystem based approaches.  Power expressed concern that the guidelines’ stated intent to “protect and restore natural ecosystems and the environment while encouraging sustainable economic development” could result in the continued degradation of the nation’s freshwater ecosystems if read to imply that in certain cases short-term economic development would still take priority over long-term sustainability.  Said Power: “Water delivery systems and other development projects are engineered with life spans and management guidelines of decades to, at most, a century.  In contrast, freshwater ecosystems and the aquifers and watersheds that support them have evolved over many millennia and their sustainability must be considered from a long-term perspective.  We have left behind the era in which we can divert more water for economic development without carefully considering whether we are tapping or over-tapping supplies needed to sustain resilient social-ecological systems over the long term.”  ESA’s letter is available online at: www.esa.org/pao/policyStatements/Letters/water%20principles%20letter.pdf

The Administration sent the new draft Principles and Guidelines to both the Federal Register for public comment and, in accordance with the Water Resources Development Act of 2007, to the National Academy of Sciences (NAS) for its review.  The NAS review is expected to be completed by November 2010. 


Sources: ClimateWire, Environment and Energy Daily, Greenwire, Politico, the Washington Post, the New York Times

Send questions or comments to Piper Corp, Science Policy Analyst, piper@esa.org or Nadine Lymn, ESA Director of Public Affairs, Nadine@esa.org

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