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LEGAL UPDATE
Jean M. Mosites
Kevin J. Garber
PIOGA Tech
Air Quality Compliance Training
December 17, 2019
CLIMATE CHANGE CHALLENGES
TO THE FOSSIL FUEL INDUSTRY
Litigation in federal and state courts
Legislation at state and federal levels
Regulation and enforcement
Fossil Fuels on Trial
• Statutory – CAA, ESA, CWA, NEPA, FOIA
• Constitutional – Commerce, 1st, 5th and 14th
Amendments
• State Law
• Common Law
• Public Trust
• Securities Law
• Consumer Protection
NEPA challenges against FERC orders
• Natural Gas Act• Regulates rates and services for interstate natural gas pipeline
transportation
• Certification for new facilities
• Abandonment of existing facilities
• Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017)
– Challenge to single EIS developed for three pipelines
– Reasonably foreseeable that the gas will be burned, which will
release GHG, that contribute to climate change
– Remanded for EIS to consider effect of combustion of gas transported
by the pipelines to power plants in Florida
FERC GHG policy evolves
• Dominion Transmission, Inc. Docket # CP14-497-
001 (May 18, 2018) – 3-2 panel concluded NGA and NEPA do not require FERC to consider
GHG from production or consumption of natural gas that may be
reasonably foreseeable as a result of a certification decision.
– Dissent – must quantify and consider upstream and downstream
impacts, using full-burn calculations
• Distinguished Sierra Club because the end-uses were
known in Sierra Club, but not in Dominion.
Climate Change Litigation
• Juliana v U.S., 217 F.Supp.3d 1224 (D. Or. 2016)– Alleges that the US government violated substantive due process
and public trust doctrine by causing dangerous concentrations of
CO2.
– CEQ, OMB, DOT, DOI, BLM, EPA, DOE, USDA, DOD, Commerce
– Seek order to cease permitting fossil fuels and take action necessary
to restore Earth’s energy balance and stabilize the climate system
– Order denying the Government motion to dismiss
• Petition for Writ to 9th Cir., arguments held 6/2019, Docket No. 18-
36082. Multiple subsequent filings here:
http://climatecasechart.com/case/juliana-v-united-states/
Recent PA EHB Air Case
• West Rockhill Twp. v. DEP, Docket # 2019-039-L
(Sept. 25, 2019)
– Third party appeal of Air Quality Plan for the Adelphia
Gateway compression station in Bucks County.
– Dismissed for lack of jurisdiction. Third Circuit has original
and exclusive jurisdiction to review federally-delegated
permitting decision associated with natural gas pipelines.
Climate Change Litigation
• Native Vill. of Kivalina v. ExxonMobil, 696 F.3d 849
(9th Cir. 2012)
– Coastal Inupiat village north of the Bering Strait sought damages for
rising sea levels and flooding in a nuisance claim against private
sources of GHG.
– 9th Cir. dismissed, holding federal common law nuisance claim was
displaced by EPA regulation of GHG.
Climate Change Cases by State and
Municipalities against Fossil Fuel Producers
Rhode Island v. Chevron Corp., July 2, 2018 (RI Superior Ct.)
• Defendants include: Marathon Petroleum, Phillips 66, ConocoPHillips, Shell Oil Products
Co, Exxon Mobile, BP, and Chevron.
• State claims that defendants caused Rhode Island’s injuries, including impacts to:– Roads and bridges
– Transportation and energy infrastructure
– Dams, Ports and Beaches
– Water Supplies
– Wastewater management
– Storm and flood management
– Residential and commercial properties
– Marshes and wetlands
– Terrestrial natural resources
• Plaintiffs seek abatement of nuisance, punitive damages, and disgorgement of profits for
world wide production of fossil fuels.
• October 2019 emergency appeals to SCOTUS to stay remands to state courts denied.
Climate Change Litigation – Exxon cases
• People of the State of New York v. ExxonMobil Corporation (N.Y. S. Ct.
10/24/2018)
– State fraud claims alleging climate change-related misrepresentations to
investors – Not an SEC case
– Damages, disgorgement, restitution, injunction
– DISMISSED 12/10/19
• Four year investigation, millions of pages of documents, reams of proprietary
information
• Court concluded that ExxonMobil “has a culture of disciplined analysis, planning,
accounting and reporting.”
• No testimony from any investor who claims to have been misled
• Commonwealth of Massachusetts v. ExxonMobil Corporation (Suffolk Cty. Sup.
Ct. 10/24/2019)
– Mass. Consumer Protection Act, G.L. c. 93A, §§1-11
• Complaint
State and Municipal Cases against Fuel Suppliers
• California:
• Cty. of San Mateo v. Chevron Corp, No. 17-cv-4929 (N.D. Cal.); City of Imperial
Beach v. Chevron Corp., No. 17-cv-4934 (N.D. Cal.); Cty. of Marin v. Chevron
Corp., No. 17-cv-4935 (N.D. Cal.); Cty. of Santa Cruz v. Chevron Corp., No. 18-
cv-450 (N.D. Cal.); City of Santa Cruz v. Chevron Corp., No. 18-cv-458 (N.D.
Cal.); City of Richmond v. Chevron Corp., No. 18-cv-732 (N.D. Cal.); City of
Oakland v. BP P.L.C., No. 17-cv-6011 (N.D. Cal.); City and Cty. of San Francisco
v. BP P.L.C., No. 17-cv-6012 (N.D. Cal.); Pacific Coast Fed. of Fishermen’s
Ass’ns v. Chevron Corp., No. 3:18-cv-07477 (N.D. Cal.)
• Mayor and Cty. Council of Baltimore v. B.P. P.L.C., No. 1:18-cv-02357-ELH (D.
Md.);
• King County v. BP P.L.C., No. 2:18-cv-00758-RSL (W.D. Wash.);
• City of New York v. BP P.L.C., No. 18-cv-00182-JFK (S.D.N.Y.);
• Bd. of Cty. Cmm’rs of Boulder Cty. v. Suncor Energy (U.S.A.) Inc., No. 18-cv-
1672 (D. Colo.).
Pennsylvania Updates and Initiatives
PA Alternative Energy Portfolio
Pennsylvania Alternative Energy Portfolio Standards
Act of 2004 -
• By 2021:
– 8% from Tier I including 0.5% solar
– 10% from Tier II
• From 2006 to 2017, renewables rose from 0 to 6%
of electricity sold to utility customers in PA
PA Climate Change Initiatives
• The PA Climate Change Act of 2008 - triennial Climate Change Action
Plan and GHG Inventory:
– 2018 CAP – strategies to reduce GHGs by reducing emissions from
oil and gas systems
– 2018 PA GHG Inventory: natural gas production process emissions
contributed 10.76 million metric tons of carbon dioxide equivalent in
2015; total emissions statewide were 286.78 MMT
• Energy Efficiency and Conservation Law of 2008
– Requires electricity distribution companies to provide energy
efficiency measures, e.g. rebates and retrofits
• 2016 Wolf Methane Reduction Framework
PA Methane Reduction Strategy: Permits
• GP5 and GP5A for compression stations and
unconventional well sites effective 8/2018
– Regulated methane for new sites
• Draft proposed rulemaking: Control of VOC
Emissions from Oil and Natural Gas Sources
– Proposes to regulate VOCs, reducing methane as a co-
benefit, from existing natural gas facilities • 25 Pa Code Chapter 129
• EQB on December 17, 2019 - Approved
PA 2019 Draft GHG Emission Inventory
• Total statewide GHG emissions from 2000-2016
– Down 22%
• Electricity production emissions down 31%
• Transportation emissions down 13%
• Industrial emissions down 4%
• Electricity production by source from 1990-2016:
– Coal from 95% to 65%
– Natural gas from .7% to 34%
November 27, 2018 Clean Air Council et al
PA Cap & Trade Petition
Economy-wide Pennsylvania program
• Initial cap at .97 of 2016 emissions;
– Declines 3% each year for carbon neutrality by 2052
Scope: 14 identified industries that emit 25,000 tpy
• e.g., power plants, petroleum and natural gas systems, chemical plants
• Covered greenhouse gases include carbon dioxide, methane,
hydrofluorocarbons, and others.
• 287 major facilities in Pennsylvania are now reporting their
emissions to EPA.
– Other entities may opt in.
November 27, 2018 Clean Air Council et al
PA Cap & Trade Petition
• DEP auctions or distributes allowances
• Fossil fuel distributors and emission sources
surrender allowances each year for GHG emissions
• Offset project protocols, California based
• Exemptions for product sales with no emissions
• Proceeds to the General Fund
January 2019 Gov. Wolf Executive Order
November 2019 DePasquale special report
Executive Order 2019-01 (1/8/19)
• Reduce GHG emissions by 26% by 2025 and 80% by 2050 from
2005 levels.
• Reestablishes the GreenGov Council
• Chaired by Secretaries of DEP, DCNR and Dept. of General Services and
other appointees
• Reduce agency energy consumption by 3%/year, increase electric and
hybrid state car fleet, and offset at least 40% of agency electric use by
renewables
• No emissions standards for non-agency sources.
• November 2019, PA Auditor General Eugene DePasquale –
Climate Crisis; the Rising Cost of Inaction
October 2019 Gov. Wolf Executive Order
PA to Join RGGI?
Executive Order 2019-07 (10/3/19)
• Proposed Rule by 7/31/20:
– All fossil-fuel-fired EGUs
– Same stringency CO2 budget
as RGGI
– Annual auctions of
CO2 allowances
• Even though:
– GHG emissions decreased 14% 2000-2015
– PA ~ 1% global GHG emissions
RGGI Overview
• Founded 2005, first auction 2008
• 9 member New England states; NJ and VA to join
• Applies >25 MW fossil-fuel-fired plants
• Current allowance = $5.20/ton
• Reduce emissions by 30% below 2020 by 2030
Pennsylvania Performance
Without RGGI
Since 2009:
• PA emissions decrease = RGGI decrease
• Electricity price increase:
– 27% - RGGI states
– 8% average US
– 5% PA
Some Predicted RGGI Consequences
in Pennsylvania
• Emissions decrease
– 80M tpy (2022) 56M tpy (2030)
• Allowance cost increase
– $5/ton $15+/ton (2030)
• Revenue to PA
– $850-900M/yr between 2022-30
• Wholesale power price cost
– Increase $2.50 MWh (7.5%)
Some Predicted RGGI Consequences
in Pennsylvania
• Coal industry
– 5M ton/yr decrease coal burn
– Competitive advantage to OH and WV
– “Leakage”
• Reduced reliability
– by increased reliance on renewables
• More transmission infrastructure
– Decentralized renewables
Carbon Dioxide Cap and Trade Authorization Act
HB 2025 / SB 950
• Declarations:
– DEP has no legal authority to regulate or tax CO2
– Premature retirement of coal plants poses significant
economic hardship and reliability risk
• Limits on DEP:
– May not control CO2 or join RGGI without legislative
approval
Carbon Dioxide Cap and Trade Authorization Act
HB 2025 / SB 950
• DEP Process:
1. 180 days for public comment period
2. 4 public hearings
3. Comprehensive report to General Assembly, re
a) Compliance costs
b) Effect on electricity price
c) Effects on all industry, including forced retirements
d) Statewide economic and fiscal impacts
e) Less costly alternatives
Local Climate Change Action Plans
• Pittsburgh CAP 3.0
– Sets municipal goals by 2030
• City operations: 100% renewable energy, 100% fossil fuel free
• City of Pittsburgh: 50% energy & water use reduction, 50%
emission reduction, zero waste
• Emission reduction: 20% GHG reduction by 2023, 50% by 2030,
80% by 2050
• Other municipalities:
– Wilkins Twp., Allegheny Count (2010)
– Haverford Twp., Delaware County (~2008)
Thank you!