Legal Attack On Carbon Cap Brewing?

Legal Attack On Carbon Cap May Be Brewing
Jet-skiers burning hydrocarbons off West Seattle on Puget Sound, on a breathtakingly clear summer evening. Photo: Matt Rosenberg.

There are hints in a recent letter to the Washington Department of Ecology from a state senator and in formal comments submitted to Ecology last week by the Association of Washington Business (AWB) that a legal challenge could develop to a controversial carbon cap rule. It is being advanced by Washington Governor Jay Inslee through an executive order, without legislative participation.

Sen. Warnick: Rule ‘Controverts’ State Law

A letter from State. Sen. Judy Warnick (R-13) to Ecology Director Maia Bellon argues that the rule “controverts the Washington Clean Air Act by bureaucratically expanding the meaning of ‘sources’ of emissions to reach…products dispersed throughout the economy” including natural gas for home heating and gasoline for vehicles, which are used “on a personal basis by individuals who are not sources of emissions that may be regulated.”

According to a footnote in Warnick’s letter, the lack of authority to regulate such personal use of consumer products as a source of greenhouse gas emissions is underscored in the state Clean Air Act definition of terms section RCW 70.94.030, sub-section 22.

Sorry: A Home Or A Car Is Not An Emissions “Source”

It states, “‘Source’ means all of the emissions units…that are located on one or more contiguous or adjacent properties, and are under control of the same person, or persons under common control, whose activities are ancillary,” or related, “to the production of a single product or functionally related group of products.”

Warnick argues in the letter that based on this definition, greenhouse gas emissions under state law would include emissions produced at an industrial site, but would not extend to the use of natural gas or gasoline by individual consumers.

‘Artificially High Prices For Consumers’

Warnick also underscores the pocketbook impacts. “Anyone who uses natural gas or gasoline – virtually everybody in my district and everywhere else in Washington – will also be affected by rising costs for those extremely inelastic goods directly attributable to the rule. This is perhaps the most deceptive aspect of the rule. The department presents” it “as a way to punish corporate ‘polluters,’ but in truth” it “penalizes anyone who uses fossil fuels because it will create artificially high prices for consumers.”

“We assume and expect the local distribution companies will be allowed to pass the cost of acquiring the carbon credits on to consumers, and we expect that cost” of natural gas to home consumers “will go up,” said Dan Kirshner, Executive Director of the Northwest Gas Association.

A related vulnerability for Inslee and Ecology may reside in sub-section 12 of RCW 70.94.030, according to Olympia sources. That defines “emissions standard” as a requirement under the federal or state Clean Air Act “that limits the quantity, rate, or concentration of emissions of air contaminants on a continuous basis.” Unlike the ongoing industrial processes seemingly cited in that language, carbon emissions from consumer use of gasoline and natural gas in private vehicles and private homes, are intermittent.

Comments from the AWB underscore similar concerns. The association writes (pp. 5-7), “Petroleum product producers and importers and natural gas distributors sell commodities into the economy. Ecology cannot regulate the distribution of commodities under a rule described as an “emission standard.” AWB added, “Ecology should withdraw the proposed rule and work with the legislature to develop a (greenhouse gas) management program based upon a statutory framework.”

AWB also takes issue with Ecology’s assertion of authority in the rule framework to proffer to natural gas distributors, and fuel producers and importers, what are called “emission reduction units” or ERUs. The legislature has only authorized something different, called emissions credits, and only with limited application, AWB argues.

“…Ecology invented ERUs out of whole cloth,” AWB states.

Inslee announced last summer he would act unilaterally on the rule after an attempt by House Democrats to enact similar legislation failed. Members including Democrats backed off due partly to concerns that a carbon cap bill would harm the prospects of a big gas tax package for statewide surface transportation improvements. The latter gained approval by the end of the 2015 session. Inslee also tried to advance a costly low-carbon fuel standard but legislators also blocked that.

Governor, Ecology Defend Their Authority

The Office of The Governor, and Ecology have stoutly defended their right to implement the new carbon cap rule without legislative buy-in. Inslee spokesperson Jamie Smith told Lens earlier this year that the Governor was “well within his authority” in advancing the plan.

In testimony last November to the Senate Energy, Environment and Telecommunications Committee, Ecology chief Bellon told lawmakers, “there is strong authority in our statutes to be able to regulate greenhouse gas emissions because it is a pollutant under the clean air law…”

In its cost-benefit analysis of the proposed rule Ecology (pp. 48-49) cites a number of state laws to assert its authority. These include RCW 70.94.151 and RCW 70.94.331.

The former allows the department to establish classifications and reporting for air pollutants, and the latter holds that Ecology “…shall…adopt by rule…emission standards” including for greenhouse gases.

The department also cites RCW 70.235.005 as establishing the intent of the legislature to enforce the specific greenhouse gas emissions reduction goals of the state in 70.235.020.

However, at the request of State Sen. Doug Ericksen (R-42), Washington Attorney General Bob Ferguson issued an informal opinion last year that those goals do not require enforcement action by the state or create state liability.

Endgame: A Legislative Deal Next Year?

An undercurrent is that if the legal waters stay stormy, there may be impetus for compromise legislation on a state carbon cap mechanism in 2017. That possibility was recently floated by the chair of the House Environment Committee, State Rep. Joe Fitzgibbon, in an interview with Lens.

Public comments closed last week, and the Department of Ecology is on track to adopt the rule by mid-September. That’s about seven weeks before November 8, when Inslee faces a re-election challenge from Republican Bill Bryant.

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