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California Environmental News

SCAQMD RECLAIM Emissions Compliance Advisory: Fuel Usage Correction to Standard Conditions

Thursday, June 26, 2014

On April 4, 2014, the South Coast Air Quality Management District (SCAQMD) issued a compliance advisory to remind all RECLAIM operators that SCAQMD Rules 2011 and 2012 require monitoring of gaseous fuels be expressed in scf (standard cubic feet). Standard gas conditions are, as defined in the rules, a temperature of 68 °F and a pressure of 1 atm. To meet standard conditions, fuel usage meters must have built-in temperature and pressure corrections. Alternatively, operators can make manual corrections based on pressure and temperature gauges installed at the fuel meter.

The provisions of this SCAQMD compliance advisory will go into effect and be enforced July 1, 2014. For any questions, contact Dr. Charles Lee at (949) 567-9880.

California Air Resources Board’s (ARB’s) New Compliance Offset Protocol for Mine Methane Capture Projects

Friday, April 25, 2014

ARB’s Cap-and-Trade regulation allows each covered entities under this program to use offset compliance instrument generated from an Offset Project in order to fulfill up to 8% for their compliance obligation. Currently, the Board approves the offset instruments that are generated from the offset projects pursuant to the following four protocols:

  • Compliance Offset Protocol Ozone Depleting Substances Projects, October 20, 2011;
  • Compliance Offset Protocol Livestock Projects, October 20, 2011;
  • Compliance Offset Protocol U.S. Forest Projects, October 20, 2011; and
  • Compliance Offset Protocol Urban Forest Projects, October 20, 2011.

Each of these protocols explains the required methodologies that need to be followed in order to quantify the greenhouse gas reduction credits associated to each type of project. ARB has issued about 7.6 million offset credits from the first three project types above (i.e. no credit has been issued for Urban Forest Projects as of now). Comparison of these offset credits brokerage prices with ARB’s most recent greenhouse gas allowances auction results concludes that these offset credits are roughly 15 to 20 percent cheaper than ARB’s allowances recently auctioned (February 19, 2014).

As part of the proposed recent amendments to the Cap-and-Trade regulations, ARB has proposed adopting new compliance offset projects for Mine Methane Capture (MMC) projects. These proposed offset projects will result in reductions in methane emissions from the following key sources of methane emissions in an active mine:

  • Ventilation air methane (dilute methane that is vented through mine ventilation shafts)
  • Drainage systems (serve to remove and collect methane through vertical and horizontal wells before, during, and after mining)

The proposed amendments to the regulation including the new compliance offset protocol for Mine Methane Capture (MMC) projects are scheduled to be considered for final adoption during ARB’s final Board hearing on April 25, 2014.

The proposed protocol for Mine Methane Capture Offset Projects can be found here.

California Air Resources Board’s (ARB’s) Greenhouse Gas Reporting Deadline Extension:

Friday, April 25, 2014

ARB has recently extended the greenhouse gas emission reporting deadline for operators and suppliers subject to new or updated product data reporting requirements under the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions (MRR). A list of the reporters subject to this extension and the regulatory advisory can be found here.

The extended deadline is May 9, 2014. This extended deadline only pertains to the reporting of 2013 data submitted to ARB in 2014, and is being made to provide additional time for these reporters to implement the new and updated reporting and for ARB to provide additional guidance to those reporters. The verification deadline remains unchanged (September 2, 2014).

California Air Resources Board’s (ARB’s) Revised Cap-and-Trade Regulations

Friday, April 25, 2014

ARB’s Cap-and-Trade Regulation provides a fixed limit on greenhouse gas (GHG) emissions from the sources responsible for about 85 percent of the State’s total GHG emissions. It also reduces GHG emissions by applying a declining aggregate cap on GHG emissions, and creates a flexible compliance system through the use of tradable compliance instruments (allowances and offset credits). It became effective in the beginning of 2012 and has been amended few times since then.

On September 2013, the board proposed a series of amendments to the California cap on greenhouse gas emissions and market-based compliance mechanisms in the regulation. The regulation has been further modified based on the results of the board’s October 25, 2013 public hearing and recently gone through 15 day-s comment period. Currently, it is scheduled to be considered for final adoption during ARB’s final board hearing on April 25, 2014. A list of the proposed modification and the details regarding the rule making processes can be found here.

The proposed revisions include but are not limited to:

  • New definitions most of which are the related to the new product-base emission efficiency benchmarks
  • Additional applicability categories in order to address the new reporting sectors added under ARB’s Mandatory Reporting Regulation (MRR)
  • Revised Allowance Disposition requirements
  • New product-base emission efficiency benchmarks
  • Revised Industry Assistance Factors
  • Revised equations for product output-base allocation calculations which addresses the true-up calculations for the facilities that will switch their allocation calculation methodology from energy-based to product-based in second and third compliance periods.

Please refer to the marked up version of the Cap-and-Trade regulation here for more details regarding the recent revisions.

Antelope Valley Attains Federal Ozone Standard

Friday, April 25, 2014

Based on a letter received from the California Air Resources Board (ARB) dated February 25, 2014, the air quality in the Antelope Valley has met the federal one-hour national ambient air quality standard (NAAQS) for ozone. ARB has requested that the United States Environmental Protection Agency (USEPA) make the “attainment” designation for the Antelope Valley area. Previously, this area had been considered in “non-attainment” of the one-hour ozone NAAQS. Volatile organic compounds and nitrous oxides are consider precursors to ozone.

This designation is significant as it affects air pollution permitting requirements as stated in the Clean Air Act. All new or modified stationary sources of air pollution must obtain a permit under the New Source Review (NSR) program. Since volatile organic compounds and nitrous oxides are considered precursors to ozone, NSR requirements for these criteria pollutants may also be changed. Criteria pollutants that are considered non-attainment are required to follow non-attainment NSR, or Antelope Valley Air Quality Management District’s (AVAQMD) Regulation XIII NSR program. If the designation of certain pollutants are reclassified as attainment, stationary sources that emit pollutants (attained) may need to review and determine applicability with the USEPA’s Prevention of Significant Deterioration (PSD) program. Once the USEPA has made the final determination that the Antelope Valley is in attainment of the one-hour ozone NAAQS, new or modified stationary sources of ozone may need to comply with new PSD permitting requirements. Currently, AVAQMD has a PSD Program under Regulation XVII; however, USEPA has not delegated authority of the PSD program to AVAQMD. It is important to note that AVAQMD’s NSR rule is still in effect until the district decides to amend the current rule.

For additional information, please refer to the AVAQMD Ozone Attainment Press Release and AVAQMD's PSD Rule. Contact our office at (949) 567-9880 to discuss further permitting implications of this upcoming new attainment determination.

May 2014 Cap-and-Trade GHG Allowance Auction Details Released

Friday, April 25, 2014

On March 17, 2014, California Air Resources Board (ARB) released the official auction notice with detailed requirements and instructions pertaining to participation in the greenhouse gas (GHG) allowance auction scheduled to take place on May 16, 2014 (the May 2014 Auction). Any California covered entity, opt-in covered entity, and voluntarily associated entity is eligible to participate in the May 2014 Auction provided that the entity has a Compliance Instrument Tracking System Service (CITSS) account and has completed other administrative pre-auction requirements. The May 2014 Auction will be conducted in the same manner as the previous GHG allowance auctions held by ARB. The auction will feature 2014 (current) vintage allowances as well as 2017 (advance) vintage allowances. Bidding will take place during a 3-hour window on May 16, 2014. The table below shows the results of ARB’s previous GHG allowance auctions to date.

May 2014 Cap-and-Trade GHG Allowance Auction Details Released chart

As shown by the table above, prior auctions have sold out for both current and future vintages.

The following list identifies important upcoming activities associated with the November 2013 Auction:

  • April 16 , 2014 – Auction applications due in to the auction Platform
  • May 5, 2014 – Bid guarantees due to Financial Services Administrator
  • May 14, 2014 – CARB issues final approval and notification of auction participants
  • May 16, 2014 – GHG allowance auction held
  • May 21, 2014 – Public notice of auction results released
  • May 28, 2014 – Financial settlement due to Financial Services Administrator
  • June 5, 2014 – Transfer of allowances into CITSS accounts

There are two auctions remaining in 2014 before the second Cap-and-Trade compliance period begins on January 1, 2015. After this date, the program cap will increase and transportation fuels sectors will enter the market.

The auction notice document, which describes all pre-auction requirements and instructions in more detail, is available here.