House Committee Holds Hearing on State,
Regional Climate Efforts

The U.S. House of Representatives’ Select Committee on Energy Independence and Global Warming held a hearing on Wednesday to discuss “State Leadership Toward a Low-Carbon Energy Future.”

Governors Eliot Spitzer (D-N.Y.) and Janet Napolitano (D-Ariz.) both testified at the hearing and discussed their experiences with regional efforts to curb global warming and increase energy efficiency. 

Currently, northeastern states have organized a Regional Greenhouse Gas Initiative (RGGI) program that would require power plants in 10 states, including New York, to cap their carbon emissions from January 1, 2009 through 2015, and then, to cut those emissions by 10 percent between 2015 and 2019.  This regional cap and trade program will auction a substantial portion of tradable emissions credits or allowances which power plants will need to hold per ton of carbon dioxide they emit. 

Some states will auction 25 percent of their emission allowances, and others have proposed the auctioning of 100 percent of their emission credits to raise revenue to offset consumer energy costs. 

Arizona recently joined the Western Climate Initiative to curb greenhouse gas emissions in the region.   This initiative requires states to set a goal of cutting emissions to 15 percent below 2005 levels by 2020.  The participating states, including California, Oregon, Washington, and Utah, as well as the Canadian provinces of Manitoba and British Columbia will use a market based mechanism similar to the RGGI program, according to Governor Napolitano. 

Both governors stressed that any federal cap and trade legislation to reduce emissions should not preempt individual states from taking a more aggressive approach.

Ranking Member Representative James Sensenbrenner (R-Wis.) countered that unless China and India are part of a greenhouse gas emissions reducing program, there would be no reversal of global warming, and thus individual states cannot cut emissions on their own.

Contact Jessica Hogle.

Grant Funding Proposed for Building Codes Officials

Representative Dennis Moore (D-Kan.) has committed to introduce the Community Building Code Administration Grant Act of 2007 in the House of Representatives. 

Senator Mary Landrieu (D-La.) is preparing to introduce the same legislation in the Senate.  This legislation is includes a proposal to create a program that directly assists code enforcement offices in improving their capacity to administer a locally or state adopted building code. 

The Community Building Code Administration Grant program offers local governments a source of funding dedicated to programs that promote effective administration of building and fire codes.

Such a grant could be used to increase staffing, provide staff training, improve staff competence and professional qualifications, support individual certification or departmental accreditation, or for capital expenditures specifically dedicated to the administration of the local building code department.

Contact John Sullivan and Robert Sullivan.

Appeals Court Strikes Down SUV Fuel-Economy Standards

A federal appeals court yesterday tossed out fuel economy standards for SUVs, light trucks, and other larger vehicles, citing the failure of regulators to account for the cost of greenhouse gas emissions when they crafted the policy.

The 9th U.S. Circuit Court of Appeals ruling describes the National Highway Traffic Safety Administration (NHTSA) standards as "arbitrary and capricious" and directs the agency to implement a new policy as "expeditiously as possible."

NHTSA put the standards for the larger class of vehicles in place last year, mandating an increase in corporate average fuel economy (CAFE) standards for light trucks from about 22.2 miles per gallon (mpg) in 2007 models to just under 24 mpg by model year 2011.

The regulations were the first ever issued by the agency that set separate CAFE standards depending on vehicle size rather than the previous "one size fits all" system. The standards quickly came under fire from environmentalists and state officials, who sued the agency on the grounds that the increase was far below what is both economically and technologically feasible.

The 9th Circuit largely agreed, stating in a 90-page opinion that the regulation was inadequate for failing to take into account the monetary value of carbon emissions and not setting a "backstop" to prevent manufacturers from actually decreasing their overall CAFE average by producing more large vehicles.   The Court also stated that NHTSA failed to set regulations for light trucks weighing between 8,500 and 10,000 pounds and did not define clearly what constitutes a light truck.

The Court directed the agency to conduct a new environmental impact statement for the regulation, saying that the current one did not adequately calculate the effect of the policy on the environment.

Contact Deidra Ciriello.

House Passes Transportation Appropriations
............Measure Falls Short of Veto-Proof Margin

The U.S. House of Representatives on Wednesday passed the final House-Senate conference report of FY 2008 transportation and housing appropriations bill (H.R. 3074) by a vote of 270-147.   This was just short of a veto-proof margin. 

A Senate floor vote on the measure could be taken up as early as today; however, some Republican senators may object to the Democratic leadership’s effort to bring up the conference report.

Regarding transportation programs, the conference report provides $40.2 billion for the core Federal-aid highway program; an extra $1 billion for bridge repairs; $195 million for the replacement of the Interstate 35W bridge in Minnesota; and $3.5 billion for airport constructions grants.  

The President has threatened to veto the conference report because the funding levels exceed his budget request by $3.1 billion.

Contact David Hubbard or Robert Sullivan.

Environment, Public Works Committee Holds
Hearings on Lieberman-Warner Climate Legislation

The U.S. Senate’s Environment and Public Works Committee held two legislative hearings this week to discuss America’s Safe Climate Act (S. 2191).

EPW Committee Chairman Barbara Boxer (D. Calif.) added the two hearings in response to concern from the Republican members on the committee that not enough time was given to debate and study economic analysis of the bill.

Such analysis has been requested by bill co-sponsor Senator John Warner (R-Va.) from the Environmental Protection Agency, the Department of Energy, and the Energy Information Administration.  Chairman Boxer is scheduling a full committee mark up on December 5.

Members of the Committee on both sides of the aisle voiced their concerns with the legislation. Republican senators highlighted potential negative impacts on the economy; job loss; lack of provisions for nuclear or coal energy sources; and capping emissions before the appropriate technology is available. 

Democratic senators argued that the bill is not stringent enough; that mercury and other emissions should also be capped; more investment should be made into public transit; and the need for proper governance to ensure the integrity of the market. 

Of particular interest for the cement industry was the opening statement by Senator Christopher
“Kit” Bond (R-Mo.); his comments mostly dealt with blue collar job loss from energy intensive manufacturers. 

Senator Bond, in his remarks on Tuesday, discussed the unique situation that the cement industry occupies through the manufacturing process of burning limestone and resulting dual source of CO2 emissions.  With a roughly 10 dollar per ton of product profit margin, he argued, a carbon price of 15 dollars per ton would force domestic cement manufacturing off shore.  With his statement was a billboard map of the United States that highlighted the 39 states where cement plants exist, and thus could suffer job losses.

American Iron and Steel Institute president Andrew G. Sharkey’s testimony on behalf of the steel industry mirrored many concerns that the domestic cement industry faces under an economy-wide carbon cap.

Contact Jessica Hogle or David Hubbard.

Agency to Reconsider Inclusion of Fugitive Emissions

The U.S. Environmental Protection Agency (EPA) on Tuesday issued a Federal Register notice proposing to revise provisions of the December 2002 final New Source Review (NSR) Improvement Rule. Under this proposal, pollution sources listed at 40 CFR § 52.21(b)(1)(iii), such as cement plants, would be subject to determinations as to whether fugitive emissions may apply to emission increases.

The chronology of events surrounding the move this week include:

• On December 31, 2002, the U.S. Environmental Protection Agency issued its final rule. This required all sources to include "fugitive emissions'' in assessing whether a proposed physical or operational change qualifies as a major modification subject to review under major NSR. (EPA defines fugitive emissions as emissions “that could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening,” e.g., windblown dust from surface mines, volatile organic compounds emitted from leaking pipes, and fittings at petroleum refineries).
• By July 11, 2003, the agency received a petition for reconsideration on behalf of Newmont USA Limited, arguing that the December 31, 2002 final rule failed to comply with the Clean Air Act requirement and that a rulemaking occur to list source categories for which fugitive emissions must be included in computing a source's emissions to determine whether it is a ``major stationary source.''
• In January 2004, the EPA agreed to reconsider this issue.

EPA now will accept public comment on the proposal through January 14, 2008. Comments should be labeled to Docket ID No. EPA-HQ-OAR-2004-0014 and may be submitted online. Click here for more information or to comment on this issue.

Contact Tyrone P. Wilson.

Onerous Truck Size Bill Reintroduced in House

Late last month, the Safe Highways and Infrastructure Preservation Act or SHIPA (H.R. 3929) was introduced in the House by Rep. James McGovern (D-Mass.) and referred to the U.S. House Transportation and Infrastructure (T&I) Committee.  

SHIPA would expand the current truck size-and-weight limits of 53 ft and 80,000 lbs. beyond the Eisenhower Interstate Highway System to the entire National Highway System, regardless of current state laws.   

According to the U.S. Department of Transportation, the National Highway System contains more than 160,000 miles of roads and highways, more than triple the roughly 47,000 miles of interstate highways.

In the wake of the I-35W bridge collapse, T&I Committee Chairman Jim Oberstar (D-Minn.) has expressed concern about truck weight impacts and recently stated that he will hold a hearing on SHIPA next year. Similar legislation has been introduced in prior Congresses, but has failed to gain traction.

Contact Robert Sullivan.

. Questions about this newsletter? For more information or to unsubscribe, send an e-mail to info@washingtonbriefing.com.