VSRA News

Environmental News
January 16, 2008
EPA to Establish Nationwide, Mandatory Greenhouse Gas Reporting Scheme by 2009
By Michael Lufkin

Tucked into the massive $500 billion omnibus budget package signed into law by President Bush last month is a provision that requires the Environmental Protection Agency (“EPA”) to establish a mandatory program that will require U.S. companies by mid-2009 to report their greenhouse gas (“GHG”) emissions. The GHG reporting provision, which was inserted into the budget package in the final days of Congressional negotiations, directs the EPA Administrator to publish a draft GHG reporting rule nine months following enactment of the law, and a final rule within 18 months, which would be June 2009.[1] The law does not specify which industries must report or how often reporting must occur, but leaves those details to EPA. It also does not specifically preempt state reporting laws.[2]

Over the past few years, there have been numerous proposals in Congress to create a national GHG reporting program as a first step to support comprehensive climate change legislation. This past year, more emphasis has focused on enacting a national emissions trading scheme, such as the one contemplated by the Lieberman-Warner Climate Security Act of 2007 (“Lieberman-Warner Act”). See previous Environmental News article entitled, Congress Takes First Step Toward Enacting Federal Climate Change Legislation. Most observers assumed that a national GHG reporting program would be passed as part of more comprehensive federal emissions trading legislation (e.g., that the Lieberman-Warner Act would require EPA to create a reporting program). Instead, the reporting mandate has been inserted into law ahead of comprehensive climate legislation, leaving EPA in the position of having to develop a reporting program without knowing the details of the regulatory program it will ultimately be supporting. The enactment of the law also comes at a time when many states are adopting their own GHG emission reporting laws, which the new federal law does not expressly preempt. This potentially dual system of emissions reporting creates further challenges for EPA, and for companies trying to prepare for new reporting obligations.

Purpose of GHG Reporting
Reporting of GHG emissions is viewed by many as a first step to support comprehensive emission reduction programs such as those being contemplated both in Congress and by many states. In order to craft policies to achieve the emission reductions required by the law, policymakers need up-to-date and accurate information relative to the source, size and growth of GHG emissions. This is particularly true for market-oriented approaches to reduce GHGs such as a cap-and-trade program, where reliable and transparent emissions data would be the foundation for developing allocation systems, reduction targets, and enforcement provisions. Currently, only coal-fired power plants are required to report their GHG emissions to the federal government. EPA regulations have required monitoring and reporting of CO2 emissions since 1993 under Section 821 of the 1990 Clean Air Act amendments. 40 C.F.R. § 75.l0(3)(i). Some companies voluntarily report their GHG emissions through a number of different voluntary registries.

Summary of the Federal Reporting Mandate The provision directing EPA to establish a federal GHG reporting program was inserted into the appropriations bill by Senator Amy Klobuchar

(D-MN) and Senator Dianne Feinstein, the California Democrat who chairs the Senate Appropriations Subcommittee on Interior, Environment and Related Agencies, which sets EPA's annual budget. The new law directs EPA to use its existing authority under the Clean Air Act to create a mandatory GHG reporting program that would cover businesses across all sectors of the U.S. economy. The one-paragraph directive does not provide details as to how the agency must structure the reporting program. Rather, the EPA Administrator is granted the discretion to determine such significant design details as the types of sources that will be covered by the program, thresholds of emissions above which reporting will be required, the frequency of reporting, and other important features of the program.[3] The law appropriates to EPA $3.5 million for conducting the rulemaking.

Coordination with Other GHG Reporting Schemes A significant issue for EPA in designing the new reporting program will be the extent to which it tries to harmonize its program with reporting regimes being developed by states or by voluntary registration programs such as the Climate Registry.

A number of states have already or are currently in the process of developing mandatory reporting schemes to support their GHG reduction efforts. The State of California’s reporting rules will require reporting of GHG emissions beginning in 2009. California will require more than 800 industrial and commercial sources in that state to annually measure and report their GHG emissions to the California Air Resources Board. The regulations also require third-party verification of emission reports submitted by regulated sources. New Mexico’s reporting program, which also went into effect on January 1, 2008, shares some design elements with California’s, but differs with respect to the GHGs initially covered, the scope of industrial sectors covered, and the verification process.[4] A number of other western states, including Washington and Oregon, have committed to adopt reporting programs so that they may take part in the Western Climate Initiative (“WCI”). The WCI is a regional collaboration among western states and several Canadian Provinces for reducing GHG emissions.[5] As more states develop reporting programs, the differences in program design have the potential to become a serious challenge for businesses operating in multiple states.

To try to avoid regulatory inconsistency, an independent organization called the Climate Registry was formed last year and is supported by 39 states, as well as by several Canadian provinces and Mexican states.[6] The Climate Registry aims to standardize GHG accounting and reporting rules across multiple jurisdictions and to provide businesses with a means of publicly recording their emissions in a single consistent and comparable report. The Climate Registry is currently in the process of developing general reporting protocols which are expected to be adopted in January 2008. The reporting protocol will be based on the internationally recognized Greenhouse Gas Protocol Corporate Accounting and Reporting Standard authored by the World Resources Institute and World Business Council for Sustainable Development (WRI/WBCSD). Members of the Climate Registry hope that mandatory GHG reporting, whether at the state or the federal level, will in the future be closely linked or even coordinated through the Climate Registry’s program to ensure consistent and harmonized reporting standards.

Whether EPA will utilize the reporting protocols being developed by the Climate Registry is unclear at this time. Also unclear at this time is the fate of the federal government’s existing voluntary GHG registry, known as the 1605(b) program within the Department of Energy. This program was designed to track progress towards achieving the President’s goal of reducing the U.S. GHG emission intensity by 18 percent. The

1605(b) program has been criticized for being inconsistent with international GHG accounting standards and unnecessarily complicated.

The program has also been criticized for its failure to require third-party verification of emissions data and its inability to support multiple policy objectives.

Conclusion
The requirement that EPA create a national mandatory GHG reporting program is viewed by many as a necessary first step before federal regulation of GHG emissions. In creating the reporting program, the challenge for EPA will be to avoid a program design that is inconsistent with similar programs that have already been adopted or are in the process of being adopted by states and/or the Climate Registry.

For more information on national and state GHG emissions reporting requirements, and how they will affect your business or agency, please contact Michael Lufkin or any member of Marten Law Group’s Climate Change/Sustainability Practice Group.

[1] HR 2764 (Public Law No. 110-161) provides in pertinent part that, “Of the funds provided in the Environmental Programs and Management account, not less than $3,500,000 shall be provided for activities to develop and publish a draft rule not later than 9 months after the date of enactment of this Act, and a final rule not later than 18 months after the date of enactment of this Act, to require mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy of the United States.”

[2] Id.

[3] Id.

[4] Information on New Mexico’s GHG reporting rulemaking can be found at http://www.nmenv.state.nm.us/aqb/GHG/ghgrr_index.html.

[5] See press release, Five Western Governors Announce Regional Greenhouse Gas Reduction Agreement, copy available at http://www.governor.wa.gov/news/2007-02-26_WesternClimateAgreementRelease.pdf

.

[6] Information about the Climate Registry can be found at http://www.theclimateregistry.org/.

Marten Law Group provides the materials and information contained in this web site for its clients and non-client internet users for informational purposes only. This website is not a substitute for legal advice. Please consult with your legal counsel for specific advice and/or information. Using or accessing this web site does not create an attorney-client relationship between Marten Law Group and the accessing user or browser.

Mike Lufkin has practiced environmental law for nearly ten years in the State of Washington with a focus on environmental and natural resource litigation and climate change issues. During the course of his career, Mike has represented both public and private clients in matters involving project permitting, hazardous waste cleanup, development of environmental impact statements, and energy facility siting.

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Late Monday afternoon, a serious family emergency forced Congressman Randy Forbes to postpone his address to the VSRA members.  He is committed to speak to the membership at a future date.

On very short notice, Jim Babcock, Chief Planner for the Future of Hampton Roads, agreed step in and address the membership.  Jim has been the energy and vision of the Hampton Roads Regional Structure Project.  An important piece of that study has been regional transportation. 

Jim's topic will be "The Hampton Roads Regional Structure Project: Approaching the Third Rail Without Actually Touching It."  Our members will be informed of the significant progress in the project over the last 18 months since Jim addressed VSRA.  He will also discuss the various transportation bills before the current session of the state legislature, some which have their roots in the structure project.

VSRA is grateful to Jim for agreeing on such short notice to speak.

VSRA Member Exclusive - The Virginia Ship Repair Association invites it members only to attend the first Legislative Strategy Seminar.  This important seminar will be held on Thursday, January 10th, just in time to utilize your new learning to impact the FY09 Defense Budget.   Most VSRA members are either directly or indirectly dependent upon federal funding as their primary source of revenue.  This is your opportunity to get an insiders look at how the federal legislative and appropriations processes work. 

Learn the critical points when you can impact the federal budget.  When is the best time to effectively inject your opinions and suggestions with your legislators?  How can you use House and Senate staffers to your advantage?  When are the critical hearings and committee meetings?

Take advantage of hearing from an expert - Kenneth Panos, Manager of Financial Strategies and Legislative Consulting with the Washington, DC consulting firm of Whitney, Bradley, and Brown, Inc.  The seminar is limited to 50 attendees and is open to VSRA Members ONLY.

About Whitney, Bradley, & Brown - The WBB Training Team is comprised of senior ex-military officers who have significant experience in key service and or DoD offices working requirements generation, budgeting and/or acquisition program management.  The team remains fully engaged with service counterparts as the WBB product areas work DoD programmatic and process issues year round. 

See the Legislative Seminar Announcement for more details.  To register, click on the Legislative Seminar Registration page on the website.  This is a valuable seminar for anyone in your company in senior positions of contracting and business development strategy for your company.  Seats are limited, so REGISTER NOW.

Congressman Randy Forbes has accepted our invitation to speak to VSRA at our annual Holiday membership luncheon Tuesday, December 18th, subject to his legislative schedule.  The members look forward each year to receiving an update of the federal accomplishments and challenges.  Congressman Forbes will speak IF his legislative schedule permits.  As you are aware, vital appropriations bills for FY 08 have NOT been approved to date.  Congress is poised to act on these bills next week.  This may result in Congressman Forbes not being able to leave Washington to speak to us.

Bert Schmidt, President/CEO, WHRO/WHRV Public Radio and Television, has agreed to address the membership should Congressman Forbes be unable to attend.  We a grateful to have Mr. Schmidt agree to step in.  WHRO is undergoing a revolutionary change to digital broadcasting.  Bert will address that transformation, as well as the opportunities for VSRA to partner with public radio and television in critical workforce development efforts.

Of important interest is that our regional public broadcasting stations are owned principally by the regional school districts.  Partnering with WHRO in the future can greatly enhance our current outreach efforts in our area schools.

We look forward to seeing you next Tuesday to celebrate the season at the Portsmouth Renaissance Hotel, beginning at NOON.

The Environmental Protection Agency (EPA) issued an advance notice of proposed rulemaking (ANPRM) inviting comment on its plan to propose new air emission standards and other related provisions for new compression-ignition (diesel) marine engines with per cylinder displacement at or above 30 liters per cylinder.  The agency is considering standards for achieving large reductions in oxides of nitrogen (NOx) and particulate matter (PM) through use of technologies such as in-cylinder controls, aftertreatment, and low sulfur fuel, starting as early as 2011.  Comments should be submitted by March 6, 2008.  72 Fed. Reg. 69521  (December 10, 2007).

In December 2007, the Semi-Annual Regulatory Agenda of the Department of Labor (DOL) was published.  The agenda includes a number of issues that directly affect member shipyards. 

Title: Occupational Exposure to Crystalline Silica

Abstract: Crystalline silica is a significant component of the earth's crust, and many workers in a wide range of industries are exposed to it, usually in the form of respirable quartz or, less frequently, cristobalite. Chronic silicosis is a uniquely occupational disease resulting from exposure of employees over long periods of time (10 years or more). Exposure to high levels of respirable crystalline silica causes acute or accelerated forms of silicosis that are ultimately fatal. The current OSHA permissible exposure limit (PEL) for general industry is based on a formula recommended by the American Conference of Governmental Industrial Hygienists (ACGIH) in 1971 (PEL=10mg/cubic meter/(% silica + 2), as respirable dust). The current PEL for construction and maritime (derived from ACGIH's 1962 Threshold Limit Value) is based on particle counting technology, which is considered obsolete. NIOSH and ACGIH recommend a 50?g/m3 exposure limit for respirable crystalline silica. Both industry and worker groups have recognized that a comprehensive standard for crystalline silica is needed to provide for exposure monitoring, medical surveillance, and worker training. The American Society for Testing and Materials (ASTM) has published a recommended standard for addressing the hazards of crystalline silica. The Building Construction Trades Department of the AFL-CIO has also developed a recommended comprehensive program standard. These standards include provisions for methods of compliance, exposure monitoring, training, and medical surveillance. 

Agenda Stage of Rulemaking: Prerule Stage

CFR Citation: 29 CFR 1910; 29 CFR 1915; 29 CFR 1917; 29 CFR 1918; 29 CFR 1926

Status: Complete Peer Review of Health Effects and Risk Assessment 01/00/08

Title: Occupational Exposure to Beryllium

Abstract: In 1999 and 2001, OSHA was petitioned to issue an emergency temporary standard by the Paper Allied-Industrial, Chemical, and Energy Workers Union, Public Citizen Health Research Group and others. The Agency denied the petitions but stated its intent to begin data gathering to collect needed information on beryllium's toxicity, risks, and patterns of usage. On November 26, 2002, OSHA published a Request for Information (RFI) (67 FR 70707) to solicit information pertinent to occupational exposure to beryllium including: current exposures to beryllium; the relationship between exposure to beryllium and the development of adverse health effects; exposure assessment and monitoring methods; exposure control methods; and medical surveillance. In addition, the Agency conducted field surveys of selected work sites to assess current exposures and control methods being used to reduce employee exposures to beryllium. OSHA is planning to use this information to develop a proposed rule addressing occupational exposure to beryllium.

Agenda Stage of Rulemaking: Prerule Stage

CFR Citation: 29 CFR 1910

Status: Complete SBREFA Report 01/00/2008

Title: General Working Conditions for Shipyard Employment

Abstract: During the 1980s, OSHA initiated a project to update and consolidate the various OSHA shipyard standards that were applied in the shipbuilding, ship repair, and shipbreaking industries. Publication of a proposal addressing general working conditions in shipyards is part of this project. The operations addressed in this rulemaking relate to general working conditions such as housekeeping, illumination, sanitation, first aid, and lockout/tagout. About 100,000 workers are potentially exposed to these hazards annually.

Agenda Stage of Rulemaking: Proposed Rule Stage

CFR Citation: 29 CFR 1915 subpart F

Status: NPRM 11/00/07, Proposed Rule Expected to be Published in December 2007

Title: Walking Working Surfaces and Personal Fall Protection Systems (1910) (Slips, Trips, and Fall Prevention)

Abstract: In 1990, OSHA proposed a rule (55 FR 13360) addressing slip, trip, and fall hazards and establishing requirements for personal fall protection systems. Since that time, new technologies and procedures have become available to protect employees from these hazards. The Agency has been working to update these rules to reflect current technology. OSHA published a notice to re-open the rulemaking for comment on a number of issues raised in the record for the NPRM. As a result of the comments received on that notice, OSHA has determined that the rule proposed in 1990 is out-of-date and does not reflect current industry practice or technology. The Agency will develop a new proposal, modified to reflect current information, as well as re-assess the impact.

Agenda Stage of Rulemaking: Proposed Rule Stage

CFR Citation: 29 CFR 1910 subparts D and I

Status: NPRM 04/00/08

Title: Cranes and Derricks

Abstract: A number of industry stakeholders asked OSHA to update the cranes and derricks portion of subpart N (29 CFR 1926.550), specifically requesting that negotiated rulemaking be used. In 2002 OSHA published a notice of intent to establish a negotiated rulemaking committee. A year later, in 2003, committee members were announced and the Cranes and Derricks Negotiated Rulemaking Committee was established and held its first meeting. In July 2004, the committee reached consensus on all issues resulting in a final consensus document. 

Agenda Stage of Rulemaking: Proposed Rule Stage

CFR Citation: 29 CFR 1926

Status: NPRM 01/00/08

Title: Hazard Communication

Abstract: OSHA's Hazard Communication Standard (HCS) requires chemical manufacturers and importers to evaluate the hazards of the chemicals they produce or import, and prepare labels and material safety data sheets to convey the hazards and associated protective measures to users of the chemicals. All employers with hazardous chemicals in their workplaces are required to have a hazard communication program, including labels on containers, material safety data sheets (MSDS), and training for employees. Within the United States (US), there are other Federal agencies that also have requirements for classification and labeling of chemicals at different stages of the life cycle. Internationally, there are a number of countries that have developed similar laws that require information about chemicals to be prepared and transmitted to affected parties. These laws vary with regard to the scope of substances covered, definitions of hazards, the specificity of requirements (e.g., specification of a format for MSDSs), and the use of symbols and pictograms. The inconsistencies between the various laws are substantial enough that different labels and safety data sheets must often be used for the same product when it is marketed in different nations. The diverse and sometimes conflicting national and international requirements can create confusion among those who seek to use hazard information. Labels and safety data sheets may include symbols and hazard statements that are unfamiliar to readers or not well understood. Containers may be labeled with such a large volume of information that important statements are not easily recognized. Development of multiple sets of labels and safety data sheets is a major compliance burden for chemical manufacturers, distributors, and transporters involved in international trade. Small businesses may have particular difficulty in coping with the complexities and costs involved. As a result of this situation, and in recognition of the extensive international trade in chemicals, there has been a longstanding effort to harmonize these requirements and develop a system that can be used around the world. In 2003, the United Nations adopted the Globally Harmonized System of Classification and Labeling of Chemicals (GHS). Countries are now considering adoption of the GHS into their national regulatory systems. There is an international goal to have as many countries as possible implement the GHS by 2008. OSHA is considering modifying its HCS to make it consistent with the GHS. This would involve changing the criteria for classifying health and physical hazards, adopting standardized labeling requirements, and requiring a standardized order of information for safety data sheets. 

Agenda Stage of Rulemaking: Proposed Rule Stage

CFR Citation: 29 CFR 1910.1200; 29 CFR 1915.1200; 29 CFR 1917.28; 29 CFR 1918.90; 29 CFR 1926.59; 29 CFR 1928.21

Status: Complete Peer Review of Economic Analysis 11/00/07