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Stay up to date with the latest stories, insights, and announcements.Twin Challenges to LCFS Advance in California Courts, With Potential Implications for State’s Overall Climate Stabilization Strategy
By Latham & Watkins LLP.
Two related cases, advancing in parallel, have the potential to upend California’s Low Carbon Fuel Standard (LCFS), whether via full suspension of the LCFS or carving out diesel fuels from the deficit and crediting regime.[1]
Both cases involve challenges by POET, LLC (POET), a South Dakota-based ethanol producer, against the LCFS rules adopted by the California Air Resources Board (ARB). ARB first adopted LCFS rules in 2009 and amended them in 2011, but these rules successfully were challenged by POET, leading the California Court of Appeal for the Fifth Appellate District (Court of Appeal) on July 15, 2013, to find deficiencies in ARB’s California Environmental Quality Act (CEQA) review process. The Court of Appeal issued a peremptory writ of mandate (Writ) in this case (POET I), requiring ARB to remedy legal defects in the initial adoption of the regulation, but opting to leave the LCFS in place while ARB reworked its analysis and repeated the necessary procedural steps and substantive analysis. Over the next two years, ARB reviewed and revised the LCFS, before re-adopting the regulation on September 25, 2015. Shortly thereafter, on October 30, 2015, POET once again brought suit in Fresno County Superior Court (Superior Court) to challenge the re-adopted regulations (POET II), arguing that ARB both failed to comply with the Writ issued in POET I and that it violated CEQA, the California Administrative Procedure Act (APA), and the Health & Safety Code.
By Latham & Watkins LLP.
Two related cases, advancing in parallel, have the potential to upend California’s Low Carbon Fuel Standard (LCFS), whether via full suspension of the LCFS or carving out diesel fuels from the deficit and crediting regime.[1]
Both cases involve challenges by POET, LLC (POET), a South Dakota-based ethanol producer, against the LCFS rules adopted by the California Air Resources Board (ARB). ARB first adopted LCFS rules in 2009 and amended them in 2011, but these rules successfully were challenged by POET, leading the California Court of Appeal for the Fifth Appellate District (Court of Appeal) on July 15, 2013, to find deficiencies in ARB’s California Environmental Quality Act (CEQA) review process. The Court of Appeal issued a peremptory writ of mandate (Writ) in this case (POET I), requiring ARB to remedy legal defects in the initial adoption of the regulation, but opting to leave the LCFS in place while ARB reworked its analysis and repeated the necessary procedural steps and substantive analysis. Over the next two years, ARB reviewed and revised the LCFS, before re-adopting the regulation on September 25, 2015. Shortly thereafter, on October 30, 2015, POET once again brought suit in Fresno County Superior Court (Superior Court) to challenge the re-adopted regulations (POET II), arguing that ARB both failed to comply with the Writ issued in POET I and that it violated CEQA, the California Administrative Procedure Act (APA), and the Health & Safety Code.
Upon re-adoption of the LCFS, the Superior Court in POET I issued an order discharging the Writ on January 5, 2016. POET filed a motion to stay that order on February 5, 2015, which was denied by the Superior Court on February 25, 2016. POET challenged the Superior Court’s discharge of the Writ in POET I as improper because ARB allegedly had not strictly complied with its terms. POET argued, among other things, that ARB had failed to comply with the Writ by declining to analyze or mitigate nitrogen oxide (NOx) emissions caused by the original LCFS, opting instead to include those emissions in the CEQA baseline for the re-adopted LCFS, which ARB deemed to be a new regulation distinct from its predecessor. On March 9, 2016, POET appealed the discharge of the Writ to the Court of Appeal and on March 14, 2016, POET filed a writ of supersedeas seeking the extraordinary relief of staying the Superior Court’s order that discharged the Writ. On March 23, 2016, the Court of Appeal denied POET’s writ of supersedeas, but the appeal otherwise proceeded. As the outcome of POET I could impact POET II, the parties stipulated on February 22, 2017 that the Superior Court hearing on the merits of the POET II claims will be postponed until July 26, 2017. Meanwhile, the POET I case is advancing in the Court of Appeal, with oral argument scheduled for March 23, 2017.
White House Debates Icahn Plan Revamping Ethanol Rule
By Jennifer A Dlouhy, Bloomberg Markets.
White House officials have spent the past two days in deliberations with billionaire refinery owner Carl Icahn about his proposal to modify federal policy on renewable fuels and with ethanol producers who oppose it, according to three people familiar with the talks.
The flurry of meetings and phone calls came after Bloomberg News reported Monday that Icahn had helped broker a compromise with a leading biofuel group on reworking the program. The report led to a surge of more than $100 million in the value of Icahn’s refinery investments.
By Jennifer A Dlouhy, Bloomberg Markets.
White House officials have spent the past two days in deliberations with billionaire refinery owner Carl Icahn about his proposal to modify federal policy on renewable fuels and with ethanol producers who oppose it, according to three people familiar with the talks.
The flurry of meetings and phone calls came after Bloomberg News reported Monday that Icahn had helped broker a compromise with a leading biofuel group on reworking the program. The report led to a surge of more than $100 million in the value of Icahn’s refinery investments.
Icahn, who is also an unpaid adviser on regulations to President Donald Trump, predicted the modifications he is seeking would be made soon. He described it as "a matter of extreme urgency" that must be addressed "to avoid potential bankruptcies."
This "is the quintessential example of the type of insane regulations throttling our economy that Donald Trump said all throughout his campaign he wanted to see changed," Icahn said in an email to Bloomberg. "It is within the White House’s power to move quickly on this issue."
Senior administration officials spoke with Icahn at length about his plan on Tuesday and held in-person meetings Wednesday with representatives of the Fuels America coalition of biofuel producers that opposes the proposed restructuring. Representatives of the American Petroleum Institute, which is lobbying against changes, also discussed the issue with White House and Environmental Protection Agency officials.
Oil, biofuels groups urge U.S. EPA deny refiner requests to tweak RFS program
By Chris Prentice, Reuters.
A coalition of trade groups representing oil, biofuels and other interests pressed the U.S. government on Thursday to deny requests to tweak the country's biofuels program, the latest in a series of political maneuvers that have roiled markets.
Some 15 trade groups including the American Petroleum Institute (API), Biotechnology Innovation Organization and the Association of American Railroads wrote a letter urging the U.S. Environmental Protection Agency's (EPA) new chief Scott Pruitt to deny requests to tweak the program. Those requests came from groups including Valero Energy Corp and Delta Air Lines Inc's Monroe Energy LLC.
By Chris Prentice, Reuters.
A coalition of trade groups representing oil, biofuels and other interests pressed the U.S. government on Thursday to deny requests to tweak the country's biofuels program, the latest in a series of political maneuvers that have roiled markets.
Some 15 trade groups including the American Petroleum Institute (API), Biotechnology Innovation Organization and the Association of American Railroads wrote a letter urging the U.S. Environmental Protection Agency's (EPA) new chief Scott Pruitt to deny requests to tweak the program. Those requests came from groups including Valero Energy Corp and Delta Air Lines Inc's Monroe Energy LLC.
Some industry groups have been concerned that the Trump administration may be reviewing potential changes in the program to shift the onus of blending biofuels into gasoline away from refiners further down the supply chain to gasoline marketers.
The change could require companies such as retailers who sell gasoline to shoulder that load, which would provide relief to refiners including Valero and CVR Energy Inc. The change is opposed by biofuels companies and integrated oil companies, which say it will complicate the program.
Poll says Two-thirds of Canadians approve of Ottawa’s climate regulations
By Shawn McCarthy, The Globe and Mail.
OTTAWA - Nearly two-thirds of Canadians want the Liberal government to proceed with climate regulations, including carbon pricing, regardless of a new direction on the environment from U.S. President Donald Trump, a new Nanos Research poll says.
Environment and Climate Change Minister Catherine McKenna met this week with the European climate commissioner Miguel Arias Canete, and the two ministers said they remain committed to meeting the targets of the Paris climate agreement, even as Mr. Trump lays plans to reverse greenhouse-gas-reduction regulations passed by his predecessor Barack Obama.
By Shawn McCarthy, The Globe and Mail.
OTTAWA - Nearly two-thirds of Canadians want the Liberal government to proceed with climate regulations, including carbon pricing, regardless of a new direction on the environment from U.S. President Donald Trump, a new Nanos Research poll says.
Environment and Climate Change Minister Catherine McKenna met this week with the European climate commissioner Miguel Arias Canete, and the two ministers said they remain committed to meeting the targets of the Paris climate agreement, even as Mr. Trump lays plans to reverse greenhouse-gas-reduction regulations passed by his predecessor Barack Obama.
Some Canadian business leaders and conservative politicians have urged the governments to slow or stop the implementation of the federal-provincial climate plan reached in December, arguing additional costs from environmental regulations will erode Canada’s ability to compete with U.S. companies that benefit from the Republican administration’s approach.
In a poll of 1,000 Canadians conducted for The Globe and Mail this week, Nanos Research found 48 per cent “support” and 17 per cent “somewhat support” the government of Canada’s plan to institute new climate regulations even if it is out of step with Mr. Trump’s approach. One-third of respondents said they are opposed (22 per cent) or somewhat opposed (11 per cent).
The margin of error for the survey is 3.1 percentage points, 19 times out of 20.
More broadly, some 77 per cent of those responding to the survey said it would be unacceptable or somewhat unacceptable for the Canadian government to align its policies with the Trump administration in cases where the two countries diverge, Nanos said.
New EPA Chief Scott Pruitt Is Balking at Trump’s Big Budget Cuts
By Eric Pianin, via Yahoo Finance.
It was no surprise that former Environmental Protection Agency director Gina McCarthy reacted with shock and outrage to reports that the Trump administration budget office had proposed slashing her former agency’s budget by 25 per cent, jettisoning scores of vital environmental quality programs and climate change research in the process.
“I think people have to realize that this budget proposal that is being put on the table would take staffing levels at EPA down to where they were 40 years ago,” she said Wednesday on MSNBC. “This is really not about [Trump administration disagreement] on climate anymore. This is an attack on the agency.”
By Eric Pianin, via Yahoo Finance.
It was no surprise that former Environmental Protection Agency director Gina McCarthy reacted with shock and outrage to reports that the Trump administration budget office had proposed slashing her former agency’s budget by 25 per cent, jettisoning scores of vital environmental quality programs and climate change research in the process.
“I think people have to realize that this budget proposal that is being put on the table would take staffing levels at EPA down to where they were 40 years ago,” she said Wednesday on MSNBC. “This is really not about [Trump administration disagreement] on climate anymore. This is an attack on the agency.”
As state attorney general, Pruitt was closely aligned with the oil and gas industry and sued the EPA at least 14 times in recent years, challenging the agencies legal authority to regulate mercury pollution, smog and carbon emissions. A cache of 6,000 emails released last week as part of a law suit in Oklahoma showed that Pruitt carefully coordinated his efforts to thwart the Obama administration’s climate change initiatives with high level energy and utility company officials. In some cases, industry lawyers drafted letters for him to send to federal regulators.
Pruitt said during his Senate confirmation hearings that he did not believe climate change was a "hoax,” as Trump once insisted. However, he did argue that climate change needed more study and more debate, despite the huge body of existing research linking greenhouse gas emissions to global warming and rising sea levels.
EU Patent Obtained on Super Single-Celled Organisms for Biomethane Production
By Alexander Stark, Process Worldwide.
Electrochaea has successfully patented a strain of microorganisms specially developed for efficient biocatalytic methane production. The patent for the EU was recently validated in Denmark, where Electrochaea has been operating the world's first biological methanation plant with a power uptake of one megawatt, since 2016.
EPA set to reconsider car emissions standards set under the Obama administration
By Mike Spector and Amy Harder, MarketWatch.
The U.S. Environmental Protection Agency is near reversing an Obama administration decision to lock in future stringent vehicle fuel-economy and emission standards after auto makers lobbied the agency’s new chief to reopen a review of the regulations, said people familiar with the matter.
Because of an all-time high waiver credit value paired with strong advanced RIN prices, renewable natural gas could fetch $35/MMBtu in 2017.
By Susan Olson, BioCycle Magazine.
Since 2009, the U.S. Environmental Protection Agency has mandated the blending of renewable fuels into the motor vehicle transportation supply under the Renewable Fuel Standard (RFS). Renewable natural gas to compressed natural gas (CNG) or liquefied natural gas (LNG) is playing a growing role in satisfying the fuels mandate. This article explores how renewable natural gas (RNG) works within the RFS from a demand and economic viewpoint.
By Susan Olson, BioCycle Magazine.
Since 2009, the U.S. Environmental Protection Agency has mandated the blending of renewable fuels into the motor vehicle transportation supply under the Renewable Fuel Standard (RFS). Renewable natural gas to compressed natural gas (CNG) or liquefied natural gas (LNG) is playing a growing role in satisfying the fuels mandate. This article explores how renewable natural gas (RNG) works within the RFS from a demand and economic viewpoint.
The RFS is a part of the Clean Air Act, specifically the Energy Independence and Security Act (EISA), which was congressionally enacted under the Bush administration in 2007. Refiners and importers of petroleum-based fuels are obligated parties under RFS, which requires a percentage of refined transportation fuels to be blended with renewable fuels. These obligated parties are regulated entities that must demonstrate compliance with the blending requirements.
Each year, the EPA sets the renewable volume obligations (RVOs) for specific types of renewable fuels for obligated parties to meet. There is an overall renewable fuel RVO, and nested within that is a specific carve out for advanced biofuels as shown in Figure 1. Within that advanced biofuel RVO are further sub-requirements for volumes of biomass-based diesel and cellulosic-based biofuels.
Corn ethanol qualifies for D6 RIN generation, which may be used for the total renewable fuel mandate but not the advanced categories. Some refiners comply with the total renewable fuel mandate by blending ethanol with gasoline and retaining the RIN while others comply by purchasing separated RINs rather than blending. Some refiners use a mix of those activities.
The currency of RFS compliance is the Renewable Identification Number (RIN), which is a credit generated for one ethanol equivalent gallon of renewable fuel. RINs are generated by renewable fuel producers and importers based on production, import or sale of renewable fuels. RINs travel with the physical fuel until it is blended into the transportation supply. A RIN may then be retired by its obligated party owner, or separated and sold as its own environmental credit commodity, ultimately being purchased by an obligated party who needs it to prove that it is meeting its mandate. For 2017, the mandate for total renewable fuel is 15 billion gallons more than the advanced mandate. The 15 billion gallons will be fulfilled mostly by ethanol. There is a daily RIN trade although some days are more active than others.
Senate votes to confirm former Texas governor Rick Perry as energy secretary
By Steven Mufson, The Washington Post.
Former Texas governor Rick Perry won confirmation Thursday as President Trump’s energy secretary. Now comes the hard part.
The Senate voted 62 to 37 Thursday afternoon to confirm Perry as energy secretary, brushing aside his onetime vow to abolish the department.
By Steven Mufson, The Washington Post.
Former Texas governor Rick Perry won confirmation Thursday as President Trump’s energy secretary. Now comes the hard part.
The Senate voted 62 to 37 Thursday afternoon to confirm Perry as energy secretary, brushing aside his onetime vow to abolish the department.
The genial Republican drew less fire from Democrats during his confirmation process than other Trump nominees, but Perry now faces many of the same tough issues over regulations, the department’s activities to slow climate change and potentially deep cuts in manpower and spending.
As Texas governor, Perry presided over a boom in all kinds of energy production, including wind power and shale drilling. Many of his supporters cited that record as evidence that he could help a similarly wide variety of energy interests.
But Perry’s foes criticized his tepid acknowledgment of climate change, his strong ties to his state’s oil and gas industry, and his lack of experience with the department’s main budgetary area, the maintenance of the nation’s nuclear stockpile. And they wondered whether he will be able to protect the department’s national laboratories and other scientific research against those who would slash the budget.
Walden & Upton Urge President Trump to Swiftly Fill FERC Vacancies
WASHINGTON, DC – Energy and Commerce Committee Chairman Greg Walden (R-OR) and Subcommittee on Energy Chairman Fred Upton (R-MI) today sent a letter to President Donald Trump urging him to fill the existing vacancies at the Federal Energy Regulatory Commission (FERC).
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