Power, Oil, Gas, and Minerals

Increased manufacturing offshoring and industrial activity may prevent China from reaching its commitments, despite a booming renewable energy sector.

By Paul A. Davies, Kimberly Leefatt, and R. Andrew Westgate

China’s carbon emissions increased by 4% in the first quarter of 2018 — marking the biggest hike in carbon emissions in the last seven years, according to an article published by China Economic Review. Increased industrial activity is due in large part to the government’s financial support of furnaces and kilns meant to stimulate the economy. However, industrial growth could prevent China from achieving its Paris Agreement targets, despite the country’s reduction in coal use and commitment to promoting renewable forms of energy.

Increasing Carbon Emissions

China is responsible for approximately 30% of global carbon emissions. In fact, China emits twice the amount of CO2 per dollar of gross domestic product compared with the United States, and more than in the European Union.

Recapping the first year of activity by the Trump administration on key issues.

By Joel C. Beauvais and Steven P. Croley

The Renewable Fuel Standard, or RFS, has been the focus of sustained policy discussion and resulting uncertainty during the first year of the Trump administration. Over the past year, the administration has floated, and then set aside, several proposals for substantial policy change. The administration has also granted RFS exemptions to a substantial number of small refineries, dampening demand

By Winston P. Stromberg, Lucas I. Quass, and Derek Galey

Rodeo Citzens Ass’n v. County of Contra Costa, California Court of Appeal, First Appellate District, Division Three, Case No. A151184 (March 20, 2018).

CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In a published opinion issued March 20, 2018, Rodeo Citizens v. County of Contra Costa, the California Court of Appeal affirmed the trial court’s issuance of a writ of mandate requiring the County of Contra Costa to set aside the certification of the environmental impact report (EIR) and approval of the land use permit for the Propane Recovery Project (Project) at an oil refinery in Rodeo, California. In summary, the court determined:

  • A project description need not address potential changes in the use of a facility that are unrelated to the project under consideration.
  • CEQA does not require speculation regarding downstream greenhouse gas (GHG) emissions that cannot be reasonably feasibly quantified.

The petitioner, Rodeo Citizens Association (Petitioner) had filed a petition for writ of mandate seeking to invalidate the County’s certification of the final EIR and approval of the Project’s land use permit. The trial court found certain deficiencies in the air quality section of the Recirculated Final EIR (RFEIR) and issued a writ of mandate requiring reconsideration of that section, but rejected Petitioner’s remaining arguments. Despite the trial court’s issuance of the writ, Petitioner appealed the trial court’s decision rejecting Petitioner’s additional arguments that the project description and the analysis of GHG emissions and environmental hazards fail to comply with CEQA. The court found no error in the trial court’s conclusions and affirmed the peremptory writ as issued.

The multi-pronged plan will encourage a collaborative national effort to dispose of France’s “consume and discard” model.

By Paul A. Davies

The French Prime Minister recently unveiled the country’s circular economy roadmap. The 50-item scheme, announced on 23 April 2018, is the result of consultation with stakeholders (November 2017 —January 2018) and a two-stage online public participation involving the solicitation of comments and then the submission of draft roadmap (November 2017—February 2018).

The roadmap

Some measures are new and some derive from Law n°2015-992 of 17 August 2015 on energy transition, which was the catalyst for the nation’s circular economy scheme in a variety of respects. By 2019, the roadmap will be followed by a bill and regulatory measures transposing the EU’s Circular Economy Package objectives, which will lead to the amendment of the following directives:

  • Waste
  • Packaging waste
  • Landfill
  • Waste Electrical and Electronic Equipment Directive (WEEE)
  • End-of-life vehicles
  • Waste batteries
  • Accumulators

As China begins to implement its emissions trading system, the country may look around the globe for regulatory guidance.

By Paul A. Davies and R. Andrew Westgate

China established its national emissions trading system (ETS) as a key component of the plan to meet its commitments under the Paris Agreement. The country’s participation in the Paris Agreement is significant not only because it contributes 15% toward total global carbon emissions, but because China was a key proponent of the agreement during its negotiation.

China’s initial hurdle was how to systematically collect the emissions data necessary to design and implement the emissions trading scheme. Accurate and comprehensive emissions data is critical not only for setting the level of the overall cap, but also in determining how free allowances will be allocated to regulated companies. Determining the rate at which the emissions cap declines also requires predicting future emission rates and market demand levels.

By Christopher W. Garrett, Natalie C. Rogers, and Kimberly D. Farbota

CEQA Case Report: Understanding the Judicial Landscape for Development[1]

In a published opinion issued January 12, 2018, Heron Bay Homeowners Assn. v. City of San Leandro, the California Court of Appeal affirmed the trial court’s partial grant of Heron Bay Homeowners Association’s request for attorneys’ fees following its successful CEQA suit against the City of San Leandro (the City). In summary, the court determined:

  • The financial burden of enforcement the homeowners association faced made an award appropriate under California Code of Civil Procedure (CCP) section 1021.5.
  • A successful CEQA litigant is not disqualified from an award of attorneys’ fees if the financial benefit at stake in the litigation was uncertain compared to a substantial financial burden.

The petitioner, the homeowners association, had filed a petition for writ of mandate seeking to invalidate the City’s approval of Halus Power Systems’ (Halus’) proposed project to install a single 100-foot-tall wind turbine on Halus’ property for renewable power generation and on-site research and development (the Project). The petitioner also sought to compel the City to prepare an environmental impact report (EIR) instead of the mitigated negative declaration (MND) the City had initially prepared. The petitioner argued the Project as mitigated would have significant environmental impacts on views, birds and their habitats, aircraft navigational radar, noise and vibration levels, and property values. The trial court found substantial evidence supported a fair argument that the Project as mitigated would have significant environmental impacts and directed the City to set aside its approvals until the City prepared and approved an EIR. Halus ultimately decided not to proceed with the Project.

China cuts fossil fuel consumption to achieve clean energy goal, but must carefully balance the consequences for Chinese citizens.

By Paul Davies and Andrew Westgate

In tandem with China’s significant economic growth over the past three decades, coal emissions have soared, increasing from 446 million tonnes in 1990 to 2.6 billion tonnes in 2017. Coal remains, and for some time likely will remain, an important source of fuel for the Chinese economy. However, the harmful effects of coal consumption are evident in the shortening life expectancies of Chinese citizens, particularly in northern China. An individual in the north apparently has an average life expectancy that is approximately 3.1 years shorter than an individual in the south, which has been linked to the burning of coal.[1]

Achieving President Xi Jinping’s promise to “to make the skies blue again” is by no means an easy feat, and the government’s plan is ambitious. Entitled the “Energy Production and Consumption Revolution Strategy”, the plan aims to ensure that emissions reach their highest level in 2030 and decline thereafter, and that by 2050 coal and other fossil fuels make up less than 50% of the country’s energy mix. China has invested heavily in renewable energy, adding more renewable capacity in recent years than any other country.

The EC is seeking feedback on its roadmap for the next EU Emissions Trading System revision.

By Paul A. Davies, Lars Kjølbye, Elisabetta Righini, and Guendalina Catti De Gasperi

The European Commission (EC) has launched an initiative for the revision of EU-wide rules for the free allocation of emission allowances under the EU Emissions Trading System (EU ETS). Under the initiative released on March 20, 2018, the new rules would be applicable in the fourth trading period of the EU ETS (2021-2030). In particular, the initiative will:

As a first step, the EC has published a roadmap (Roadmap) describing the scope, purpose, and timing of the revision, and the main features of its consultation strategy. Stakeholders can provide their feedback on the Roadmap until April 17, 2018.

China’s new energy ministry demonstrates the country’s continued commitment to environmental protection and renewable energy.

By Paul A. Davies and Andrew Westgate

Recent comments from senior communist party leaders indicate that the Chinese government intends to establish a new Ministry of Energy to streamline and consolidate authority for energy-related issues. The responsibility for these issues is currently dispersed among a variety of other ministries. The new ministry will be responsible for managing sectors including electric power generation, oil and natural gas in a bid to improve the workings of government and policymaking in relation to energy. However, the full extent of the new ministry’s authority remains unclear, including whether it will have oversight of China’s state-owned oil companies.

Plan outlines next steps for procuring 2,400 MW by 2030, with a likely significant benefit for New York’s economic development.

By Tommy Beaudreau, Janice Schneider, Michael Gergen, and David Amerikaner

New York Governor Andrew Cuomo and the New York State Energy Research and Development Authority (NYSERDA) have released the New York State Offshore Wind Master Plan, an extensive document that highlights the state’s progress on offshore wind development while charting an ambitious path forward. The plan is designed to help meet the Governor’s previously announced goal of procuring 2,400 megawatts (MW) of offshore wind energy by 2030. The offshore wind goal is part of an overall strategy to generate at least 50% of New York’s electricity from renewables by 2030, as previously covered in this blog.