Monthly Archives: June 2009

Greenhouse Gas bill passed!

Breaking News: The House of Representatives passed the Greenhouse Gas Bill tonight by a very close vote of 219 for and 212 against. Now it is the Senate’s turn to enact a similar bill.

Stay tuned.

Watch your emails!

When I do my seminars on environmental liability and enforcement, I always caution the audience to be careful with their emails. Never write any emails unless you feel comfortable reading about them in the New York Times the next day.

There is no such thing as a secret, confidential or personal email.

If there is more convincing proof, here is today’s headline from AOL:

Paper Reveals Governor’s Steamy E-Mails

posted: 7 HOURS 55 MINUTES AGO

COLUMBIA, S.C. (June 24) — Just after South Carolina Gov. Mark Sanford admitted to a yearlong extramarital affair, his state’s largest newspaper posted online romantic, suggestive e-mails that it says were exchanged between the chief executive and his Argentinian lover.

Greenhouse Gas Bill to go before the House of Representatives

The full House of Representatives is expected to vote on the Greenhouse Gas bill this week and it is expected to pass. The US Department of Agriculture will be involved in the management of greenhouse gas from farmlands.

The Senate is expected to take up similar measures. The two senate committees involved are the Energy and Natural Resources Committee chaired by Senator Jeff Bingaman D-NM and the Environment and Public Works Committee chaired by Senator Barbara Boxer D-Calif. It is not certain that a greenhouse bill will get passed in the Senate. It will be close.

It is official now – Marijuana smoke is now on the Prop 65 list!

On March 21, 2009, I reported that California was considering adding marijuana smoke to the Prop 65 list. Well – it is official now.

The Office of Environmental Health Hazard Assessment (OEHHA) of the California Environmental Protection Agency is adding marijuana smoke to the Proposition 65 list1, effective June 19, 2009.

Marijuana smoke was considered by the Carcinogen Identification Committee (CIC) of the OEHHA Science Advisory Board2 at a public meeting held on May 29, 2009. The CIC determined that marijuana smoke was clearly shown, through scientifically valid testing according to generally accepted principles, to cause cancer. Consequently, marijuana smoke is being added to the Proposition 65 list, pursuant to Title 27, California Code of Regulations, section 25305(a)(1) (formerly Title 22, California Code of Regulations, section 12305(a)(1)).

The photos below are those of a car I came across in Washington State. It obviously belongs to a person who has very strongly held views about the aforementioned botanical plant recently regulated by California’s OEHHA.





EPA did it again! another extension for SPCC.

alum-tanksOn April 1, 2009, EPA extended the deadline for SPCC (Spill Prevention and Control Countermeasures) to January 14, 201o.

Last week (June 11, 2009) EPA extended the deadline for SPCC again. The new deadline is now November 11, 2010. Click here for details.

Cap-and-trade 101

What are greenhouse gases?

 Three forms of naturally occurring greenhouse gases are being affected by industrial activities. These are carbon dioxide, methane and nitrogen oxide. Of these three, carbon dioxide is by far the most prevalent – coming primarily from man-made incineration of fossil fuels. 

 changes in CO2The accompanying chart from EPA shows the changes in greenhouse gas emission since 1990 in absolute terms. The unit MMTCE refers to million of metric tons of carbon equivalent.  

 The idea of regulating carbon dioxide was given a push by the Supreme Court in its 2007 decision (Massachusetts v. EPA) where it affirmed (once again) that EPA has the authority under the Clean Air Act to regulate any pollutant that is found by the agency to be harmful to human health.

 So just what exactly is cap-and-trade?

 First of all, cap-and-trade is not a new concept. It was used in the 80s to control the emission of sulfur dioxide as part of the legislation to reduce acid rain. Cap-and-trade is also being used in California by the South Coast Air Quality Management District to reduce the emission of nitrogen oxides and sulfur dioxide from industries under its Regional Clean Air Incentives Market (RECLAIM) program.

Here is how cap-and-trade works. The regulatory agency places a maximum amount of emission that a facility can emit for a particular pollutant – say carbon dioxide. That’s the cap part. Once this cap is in place, the agency provides an emission allowance to industries that can be applied against the cap. The allowance may be as large as the cap during the first few years of the program. It then decreases gradually over time. This decrease in allowance has the effect of reducing the amount of carbon dioxide that can be emitted each year.

The whole idea of cap-and-trade is to provide a disincentive to industry to continue to emit harmful pollutants such as greenhouse gas (primarily carbon dioxide from coal power plant).

Faced with this decreasing allowance – which is in effect a more restrictive limit on emission over time – the regulated industry has two options to comply with the cap. It can install pollution control equipment to reduce its emission to make up for the decreasing allowance in order to meet the cap. Or it can purchase credit in an open market to make up for any short fall. That’s the trading part of cap-and-trade. Conversely, if a facility comes in below the cap as a result of installing pollution control devices, it may have “surplus allowance” that it can sell in the open market and make money.

That’s the whole idea of cap-and-trade. If you cannot meet the emission limit, you have to go to the open market and purchase emission credits. For those companies that choose to install pollution control equipment, they would not have to pay millions to purchase emission credits. They may even have unused allowances that they can sell in an open market. The underlying intent of the bill is to control emission by creating an incentive to the development and installation of pollution control technology.

There have been a lot of complaints from opponents of the proposed bill that cap-and-trade is a “tax” on industries.

Cap-and-trade is a pollution “tax” in much the same way that regulations that control the disposal of toxic wastes constitute a “tax” because they impose additional costs on industry. Companies that generate hazardous wastes will have to pay more to have them disposed of properly. The incentive there is to either change the manufacturing process to reduce the amount of toxic wastes generated or pay to have the wastes disposed of properly.

Another example of pollution tax is tailpipe emission control from automobiles. The cost of the catalytic converter increases the manufacturing cost of a car and is passed on to the consumers. So are the costs of seat belts and air bags. 

Why should carbon emission control be treated any differently?

To fight or not to fight …that is the question

In my last post, I noted the efforts by industry to work with government to forge a solution to the global warming problem. It dawned on me later today that I have a compelling story from my previous life to tell. 

I joined StarKist Seafood in 1989 as its one and only corporate environmental manager. The H.J. Heinz Company owned StarKist at that time. The day after I joined the company, I found out that EPA’s Region 2 (New York) and Region 9 (California) had issued orders to the company to comply with its wastewater discharge permit conditions at its tuna canneries in Puerto Rico and American Samoa – the world’s two largest tuna canneries at that time.

Tuna wastes are very high in organics and nutrients (phosphorus and nitrogen). The wastes comes mainly from the thawing of frozen tuna and they contain high concentrations of blood an dfat. These wastes were discharged into the Caribbean Sea in Puerto Rico and Pago Pago Harbor in American Samoa after primary treatment. EPA in both regions – particularly Region 9 –  were very concerned about entrophication of the receiving waters.

pago pago harborRegion 9 came to StarKist and strongly suggested that the company construct a 2-mile long pipeline in the Pago Pago Harbor in order to carry the tuna waste water to a much deeper portion of the harbor to allow for diffusion and dilution.

The  General Manager at StarKist -prior to my joining – was a British engineer who believed that the company should always fight with EPA and delay the process for as long as possible. His philosophy was that for every year delayed, the company would save so much money by avoiding the expenditure. He came up with all kinds of reasons for not extending the outfall: (1) It was too costly. (2) It would cost the company $7 million and the company simply could not afford it. (3) The company might have to close the plant in Samoa and throw thousands of people out of work on the small island.

While he was making such argument to EPA, the CEO of Heinz was flying around the world in his opulent private corporate jet. The CEO at that time was also ranked as the highest paid CEO in America – pulling in over $60 million a year.

So it was not hard to understand why EPA was not buying this British engineer’s financial hardship case. EPA finally issued Administrative Orders to StarKist and threatened to take the company to court to compell its compliance.

The British engineer was fired by his boss for talking back to him (in an unrelated case) just before I joined the company.

Faced with EPA’s enforcement order, I contacted several pipeline contractors in America and New Zealand and obtained bids on constructing a 2 mile long pipeline to carry our tuna waste away from the shallow harbor. The cost turned out not to be $7 million as claimed. It was more like $1.5 million. I also hired a competent ocean engineering firm in Hawaii and conducted an engineering feasibility study that demonstrated that the pipeline would meet EPA’s objectives.

With this information, I went to our Vice President of Operations and told him that he had two options: He could continue to fight with EPA and delay the construction and face severe penalties from EPA and a court-ordered construction project that would be much more expensive than $1.5 million. Or we could go ahead and build the pipeline and begin to comply with the law of the land.

Much to his credit, the Vice President went along and we began construction of the outfall.  We completed the pipeline 3 months ahead of EPA’s schedule despite losing two weeks of construction time due to a typhoon.

The moral of this story is that we did not let EPA dictate the details of the pipeline. We did not fight and try to prolong the inevitable. We simply did it our way but in such a way that met EPA’s objectives.

Everyone was happy at the end.

A new partnership between industry and Congress?

Handshake and teamworkOne of the most striking aspects of the greenhoyse gas bill before the House of Representatives is that it has the support of some of the largest corporations in America such as General Electric, Duke Energy, Dow, Shell, DuPont, ConocoPhillips, BP America and Pepsico.

Twenty three major corporations and 5 environmental groups had formed a coalition known as the U.S. Climate Action Partnership (USCAP) several years ago to provide input in the drafting of the greenhouse gas bill. The corporation that started USCAP is General Electric whose CEO wrote in an op-ed piece in 2005 that environmental “polices that commit to market-based approaches will drive innovation and lead to environmental improvements.”

Membership in USCAP includes the following companies and environmental groups: Alcoa, Boston Scientific,  BP America, Caterpillar, Chrysler, ConocoPhillips, Dow, Duke Energy, DuPont, Environmental Defense Fund,  Exelon,  Ford,  FPL Group, GE,  GM, John Deere, Johnson & Johnson,  Natural Resources Defense Council,  The Nature Conservancy, NRG Energy, PepsiCo, Pew Center on Global Climate Change, PG&E, PNM Resources, RioTinto, Shell, Siemens, World Resources Institute.

Instead of opposing any new laws from Congress, these companies decided to work with major environmental groups to forge a consesus in the drafting of a greenhouse gas bill. In fact, the pending cap-and-trade legislation before the House is based in large part on the recommendations of the USCAP Blueprint for Legislative Action that was issued on January15, 2009.

Corporate America learned its lessions some 20 years ago. When congress proposed regulating a dozen or so hazardous air pollutants (HAPs) back in the 80s, the chemical industry fought back very hard to oppose any changes. The end result was the 1990 Clean Air Act Amendments that mandated much more stringent regulations on 189 HAPs. The program is known as National Emission Standards on Hazardous Air Pollutants (NESHAP) which imposes stringent and costly “maximum achievable control technologies” (MACT) on major industries that emit HAPs.

To prevent history from repeatingitself, industries decided this time around to actively engage in the process to affect a more favorable outcome.