Energy Law Update
Greenhouse Gas Emissions: EPA Issues Final GHG Reporting Rule;
Common-Law Nuisance Suit Against GHG Emitters Can Proceed
The U.S. EPA finalized its greenhouse gas (GHG) reporting rule on September 22, 2009, mandating reporting of GHG emissions from all sectors of the U.S. economy. The rule does not impose requirements to control or reduce emissions of GHG; rather, it requires that sources subject to the rule submit annual reports of those emissions to the EPA, for use in future policy making decisions. For purposes of the rule, GHGs are those identified in the United Nations Framework Convention on Climate Change - carbon dioxide (CO
2), methane (CH
4), nitrous oxide (N
2O), hydrofluorocarbons (HFC), perfluorochemicals (PFC), and sulfur hexafluoride (SF
6), as well as other fluorinated gases. For most source categories covered by the rule, a facility must emit, annually, 25,000 metric tons of carbon dioxide or its equivalent before the rule is triggered. (The rule provides a mechanism for converting GHGs other than carbon dioxide to carbon dioxide equivalents. For example, each ton of methane emitted is equivalent to 21 tons of CO
2.) A few source categories are required to report regardless of whether their emissions meet the 25,000 metric ton threshold. The list of source categories is set forth below.
The final rule is narrower in its scope than the original proposal, which would have also included ethanol production, food processing, underground coal mines, suppliers of coal, wastewater treatment, industrial landfills, and oil and natural gas systems, among other source categories. The EPA has decided not to go forward with the reporting requirements for these source categories at this time.
The rule, which becomes effective 60 days after it is published in the Federal Register, requires sources to begin monitoring on January 1, 2010, with the first GHG emission reports due on March 31, 2011, and is expected to cover 85% of total U.S. GHG emissions from approximately 10,000 facilities. In addition to requiring an annual report, the rule imposes monitoring, recordkeeping, and verification requirements to ensure the accuracy of emissions data submitted. The rule includes provisions allowing sources to use the best available data for January through March 2010, in lieu of the required monitoring methods, to give facilities the time necessary to implement the rule's monitoring scheme.
For most sources subject to the rule, the GHGs reported are those actually emitted by a given facility. However, for suppliers of fossil fuels and industrial GHGs that are subject to the reporting rule, the GHG emissions reported are the emissions that would result from combustion or use of the products supplied. This information is reported at the corporate level.
Click here to view a list of potentially regulated categories. Please contact us if you are or may be in one of the categories.
In a related matter, on September 21, 2009, the United States Court of Appeals for the Second Circuit ruled that companies can be sued for their greenhouse gas emissions under common law nuisance theories. The case, Connecticut v. American Electric Power Company, Inc., et al, will now proceed to trial to determine whether the GHG emissions from a group of coal-fired electric utilities in fact constitute a nuisance by contributing to global warming. Depending on the outcome of that case, there is potential that citizens groups may use the data reported under the new GHG reporting rule to identify and target other emitters of GHGs for similar lawsuits.
Kathy Milenkovski
Huntington Center
41 South High St., Suite 2200
Columbus, Ohio 43215
614.458.9792
kathy.milenkovski@steptoe-johnson.com
This alert is a periodic publication of Steptoe & Johnson PLLC and should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The content is intended for general information purposes only, and you are urged to consult your own lawyer concerning your own situation and any specific legal questions that you may have. For further information about these contents, please contact Steptoe & Johnson PLLC.