Stakeholders warn expanding DOE authority could jeopardize business

Stakeholders warn expanding DOE authority could jeopardize business
HB 2892 would grant the Department of Ecology the authority to regulate indirect carbon emissions and fully restore parts of the Clean Air Rule earlier invalidated by the Washington State Supreme Court; critics warn the move endangers Washington’s business climate. Photo by freepik.com

The Washington State Supreme Court last year invalidated parts of the state Department of Ecology’s (DOE) Clean Air Rule due to a lack of statutory authority under the state’s Clean Air Act, as DOE had attempted to regulate carbon emissions from indirect sources.  State lawmakers in the House Committee on Environment & Energy will vote today whether to recommend a bill giving DOE the power to do so via HB 2892 sponsored by Rep. Joe Fitzgibbon (D-34) at the request of Governor Jay Inslee.

Representatives of Washington’s business community testifying at a Feb. 3 public hearing warned of the serious consequences such a decision could have for the state’s business climate.

“It would be difficult to overstate the impact this bill will have on Washington’s energy producing and consuming industries, as well as on consumers,” said Greg Hanon with Western States Petroleum Association. “We think the legislature needs to put parameters on this (rule).”

Under the Clean Air Rule, businesses emitting more than 100,000 metric tons of CO2 annually are required to reduce their emissions by an average of 1.7 percent ever year. However, the rule initially applied not only to direct emitters but also to indirect emitters who sell carbon-producing products, such as gas stations.

HB 2892 would grant Ecology the authority to regulate indirect emitters, which compose 85 percent of emissions originally affected by the rule.

Fitzgibbon, Chair of the Committee on Environment & Energy, told colleagues at the public hearing that an ongoing discussion will determine what constitutes “indirect emissions. I think that’s a central question if we’re going to authorize regulation of those things.”

Former Ecology director and Cascadia Law Group partner Jay Manning spoke on behalf of the city of Seattle, saying that the fully implemented rule would also have to coincide with a low carbon fuel standard.

“If this bill doesn’t pass, or something like it, we will have the inequitable situation of the stationary sources shouldering a disproportionate load of (carbon) reductions, and the city is concerned about that,” he said.

Also supporting the bill was Puget Sound Clean Air Agency Executive Director Craig Kenworthy. The agency is considering a regional LCFS proposal, with public comment open until Feb. 10.

“It’s important to clarify the definitions in the act to make it clear that in fact…we can regulate direct emitters or indirect emissions.”

When asked by Rep. Mary Dye (R-9) what costs would be added to fuel distributors, Kenworthy noted that the bill doesn’t create the regulatory structure but does give Ecology the ability to do so.

Stakeholders including Puget Sound Energy State Government Relations Manager Brandon Houskeeper viewed that lack of definition as one of the flaws in the proposal. “The legislation as written gives a broad grant of authority to the Department of Ecology to regulate indirect emissions but does not arm Ecology with the tools required to balance the goals of the state, as well as for us to meet our requirements (to customers).”

Association of Washington Business Government Affairs Environment Director Peter Godlewski raised a similar objection: “We are very concerned that this bill grants the Department of Ecology an incredible amount of authority to complete the process through the rule-making. Should this bill pass, we will still be left with a rule that will impose considerable cost on business in the state that has not been fully vetted by this legislature. The best way to grapple with these issues…with the fairest possible outcome for the state is for the legislature to take the lead – not the Department of Ecology.”

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