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Alaska has Clean Power Plan options Lawyer suggests that the state should adopt a thoughtful and considered response to its reprieve from participation in the plan ALAN BAILEY Petroleum News
When the Environmental Protection Agency published the final version of its Clean Power Plan on Aug. 2 the agency exempted Alaska, along with Hawaii, Guam and Puerto Rica, from compliance with the terms of the plan. The plan, a centerpiece of President Obama’s greenhouse gas reduction program, sets out to cut carbon dioxide emissions from existing U.S. power generation facilities.
But, with the EPA’s decision with regard to Alaska being a deferral of Alaska’s plan involvement rather than a permanent exemption, Alaska should consider what strategy it wants to adopt, in anticipation of potential future EPA action over power generation emissions in the state, Craig Gannett, partner in Davis Wright Tremaine LLP, told Law Seminar International’s Energy in Alaska conference on Dec. 7. And, although there are legal challenges to the plan, these challenges will likely end up in the Supreme Court, probably around 2017-18, Gannett commented. Regardless of the outcome of a Supreme Court decision, by the time that the decision is issued much will have been done to implement the plan, with the main provisions of the plan already having gone into effect, he said.
Greenhouse gas reductions The objective of the plan is to reduce greenhouse gas emission from power plants by 32 percent of their 2005 levels by 2030. States can develop their own plans for how the emission reductions will be achieved - the federal government will mandate a federal plan for states that fail to develop an approved plan within a required timeframe. Plan implementation is slated to start on Jan. 1, 2022, and there is a provision for early action in renewable energy and energy efficiency implementation, starting in 2020.
The plan allows multiple states to file joint plans, rather than file individually. It is likely that many states will link up, thus leading to a situation akin to a national greenhouse gas cap-and-trade system, Gannett said.
So, what should Alaska do in response? Although EPA said that it was excluding Alaska from the final rule for the plans because it lacked the information and analytical tools needed to quantify the means of achieving carbon dioxide emissions in the state, the state does have several power plants that would otherwise have required regulation under the plan.
Alaska’s options The state can simply take no action, Gannett said. In that case the state would fall further away from an inexorable long-term worldwide trend towards reductions in the use of fossil fuels, he said. And the EPA, seeing the lack of action in Alaska, could become motivated to end the reprieve from the Clean Power Plan sooner, perhaps imposing a more onerous rule on the state. At the same time, a lack of allowances in Alaska from greenhouse gas emission reduction credits could impact investment in Alaska’s electric energy sector, Gannett said.
A second option would be for the state to come up with its own greenhouse gas reduction plan, outside the Clean Power Plan and tuned to fit with Alaska’s unique circumstances. That would reduce EPA’s motivation to end the Alaska reprieve for its plan and could encourage investment in renewable energy and energy efficiency in the state, Gannett said.
A third possibility would be for Alaska to agree to some form of participation in the Clean Power Plan, using arrangements that fit with Alaska’s circumstances. Alaska has some leverage to work with EPA on a plan that differs from EPA’s own concepts but forms part of the larger plan structure. That could meet Alaska’s needs while also, by being part of the larger plan, encourage Alaska renewables and energy efficiency development, and enable the state to participate in emissions trading with other states, Gannett said.
While not proposing one alternative versus another, Gannett suggested that Alaska adopt a thoughtful and intentional strategy in response to the Clean Power Plan, rather than just viewing EPA’s decision in its final version of the plan as “a bullet missed” for the state.
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