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February 2016 California Cap-and-Trade and Québec Cap-and-Trade Joint Auction Notice Released

Tuesday, January 12, 2016

On December 18th, 2015, the California Air Resources Board (ARB) released the official auction notice with detailed requirements and instructions for participation in the greenhouse gas (GHG) allowance auction scheduled to take place on February 17, 2016.  Any California covered entity, opt-in covered entity, and voluntarily associated entity and any Québec emitters and participants are eligible to participate in the auction provided that the entity has a Compliance Instrument Tracking System Service (CITSS) account and has completed other administrative pre-auction requirements.

The auction will feature current auction allowances as well as advance auction allowances.  Auction Exchange Rate (US Dollars to Canadian Dollars) will be established prior to the joint auction in order to manage the two currencies.

The auction will feature the following allowances:

AuctionNumber of Allowances Offered
Current71,555,827
Advance10,078,750

The auction notice document, which describes all pre-auction requirements and instructions in more detail, is available here.  For any additional questions, please contact Steve Walters at (949) 567-9880 ext. 118.

California Aboveground Petroleum Storage Act Program Updates and Applicability Expansion

Tuesday, January 12, 2016

Effective January 1, 2016, an amendment to the Aboveground Petroleum Storage Act (APSA) has updated the requirements for facilities with the potential to store more than 1,320 gallons of petroleum products on site.  Among the most significant changes is the clarified definition for "tanks in underground areas," generally defined as storage tanks located in a structure at least 10 percent below the ground surface.  The APSA is intended to supplement regulations regarding Spill Prevention, Control, and Countermeasure (SPCC) plans as required under 40CFR 112.  The complete bill can be found at here, and a guidance document summarizing these changes can be found here.

In addition to the current changes, the amendment requires aboveground storage tanks to comply with additional regulations set forth by the Office of the State Fire Marshal (OSFM).  It is anticipated that the OSFM will amend their regulations on 1/1/2018.

OPR in Process of Updating the CEQA Guidelines

Tuesday, January 12, 2016

Adopted in 1970, the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et seq) requires state and local government agencies to inform decision makers and the public about the potential environmental impacts of proposed projects, and to reduce those environmental impacts to the extent feasible. Subsequently, the CEQA Guidelines (14 CCR 15000, et. seq.) were promulgated to facilitate the process of evaluating project impacts and CEQA determinations by lead agencies across the state of California.   The CEQA Guidelines incorporate and interpret both the statutory mandates of CEQA and the principles advanced by judicial decisions and new statutes.

The CEQA guidelines are immensely important to California businesses and public agencies, as these regulations affect every sector of the California economy and thousands of "projects" within the state.  A "project" is generally defined to include a vast array of private and public sector actions, including, commercial constructions, industrial facility expansions, modifications to a power plant, highways and other public works, utility projects, residential developments and many others.   Updating the CEQA Guidelines is a multi-year process with the last comprehensive update conducted in the late-1990s.  The California Office of Planning and Research (OPR) and the California Natural Resource Agency (CNRA) seek to make the environmental review process more efficient and meaningful, as well as to conform to statutory changes and case law.  Started in early 2011, OPR and CNRA released a preliminary discussion draft in 2015. The CEQA Guidelines proposed changes include the following key elements:

  • Including thresholds to determine "significant" impacts and CEQA applicability;
  • Updating the requirements to be consistent with recent case law;
  • Adding energy and water supply impact analyses;
  • Updating the CEQA Checklist to remove redundant questions, consolidate related topics and include new key questions; and
  • Clarifying CEQA tiering process.

OPR is currently evaluating 2015 public comments in light of update objectives, underlying statute and case law.  Once OPR completes a final draft, the CNRA will conduct a formal rulemaking process in accordance with the California Administrative Procedure Act.  Additional public review is anticipated in 2016.  Click here to review the proposed CEQA Guidelines changes and here to sign up to receive future notices about these updates.  For more information on the CEQA Guidelines Update and other CEQA requirements, please contact Valerie Rosenkrantz with Trinity's California operations.

California Supreme Court Provides Disruptive CEQA Interpretation

Tuesday, January 12, 2016

On December 17, 2015 the California Supreme Court unanimously ruled that the California Environmental Quality Act (CEQA) generally does not require public agencies to analyze the impact of existing environmental conditions on a project or its future users during the CEQA regulatory process.  The decision is a disruptive interpretation of CEQA brought on by California Building Industry Association v. Bay Area Air Quality Management District (Case No. S213478) and will impact how many agencies prepare environmental documents related to the CEQA process.

CEQA is a California-specific law enacted in 1970 to provide public disclosure and environmental protection from projects requiring discretionary action by a public agency.  The California Natural Resources Agency issues guidelines to provide public agencies with criteria to determine if a project may have a significant impact on the environment, feasible mitigation strategies, and how to conduct the CEQA process.  The disputed CEQA statue, 21083(b)(3), states that a project has a significant effect on the environment if "the environmental effects of a project will cause substantial adverse effects on human beings, either directly or indirectly."  The California Building Industry Association (CBIA) asserted that this statue only applies to the project's effects on the environment, and not the environment's effects on the project.  Conversely, the Bay Area Air Quality Management District (BAAQMD) interpreted the statue to encompass both a project's effect on the environment and the existing environmental effects on future users brought into the project vicinity.  The Supreme Court ruled in favor of CBIA and concluded that the statue does not provide enough basis to extend the term "environmental effects" to include the environment's effect on a project or its future users.

There are several exceptions to this ruling, clearly documented within the CEQA guidelines and noted in the court disposition.  The first exception is when a project presents the possibility to exacerbate existing environmental conditions, an agency must review the impacts such exacerbation would pose to future users.  For example, if a project requires digging that could potentially disrupt isolated hazardous waste, the project would exacerbate the existing environmental conditions by exposing waste that would otherwise remain undisturbed.  The second exception is when a proposed project applies to areas such as airports, schools, or housing developments the agency must review the existing environmental conditions regardless of whether the project will exacerbate existing environmental conditions.

Bay Area AQMD Proposes Revisions to Rule 2-5: New Source Review of Toxic Air Contaminants

Tuesday, January 12, 2016

The Bay Area Air Quality Management District (BAAQMD) is proposing revisions to the Regulation 2, Rule 5, New Source Review of Toxic Air Contaminants (Rule 2-5).  Rule 2-5 implements BAAQMD's New Source Review (NSR) program for sources of Toxic Air Contaminant (TAC) emissions.  The rule requires health risk assessments (HRAs) to be conducted for projects with emissions above certain thresholds and outlines procedures for calculating TAC emissions and preparing HRAs from projects.  Ultimately, the rule reduces potential TAC emissions by requiring best available control technology for toxics (TBACT) for certain projects.  In 2015, California's Office of Environmental Health Hazard Assessment (OEHHA) updated its HRA Guidelines to account for recent advances in science related to air toxic sensitivity in children.  The California Air Resources Board (CARB) and the California Air Pollution Control Officers Association (CAPCOA) adopted an updated Risk Management Guidance Document in response to the changes in OEHHA's HRA Guidelines.  The primary purpose for the proposed revisions to Rule 2-5 is to incorporate the changes from OEHHA's 2015 HRA Guidelines, and CARB and CAPCOA's 2015 Risk Management Guidelines.  Overall, the proposed revisions to Rule 2-5 increase the stringency of BAAQMD's Toxic NSR Program.

Specifically, the following are revisions to Rule 2-5 that BAAQMD is proposing:

  • Relocating the table of TAC emission rate trigger levels to BAAQMD's Permit Handbook to allow for quicker updates of these trigger levels in the future;
  • Lowering the acute and chronic emission rate trigger levels for most TACs.  This will result in more projects requiring HRAs.
  • Incorporating a reference to BAAQMD's HRA guidelines containing the most recent OEHHA and CARB/CAPCOA literature/guidelines.  For most TACs, this will result in an increase in the predicted cancer risk by 40% for the same level of emissions when compared to the cancer risk predicted using BAAQMD's existing HRA guidelines.  For some TACs, the increase in cancer risk could be significantly greater than 40%.
  • Simplify TAC emission calculation procedures for modified sources by using total post-modification emission rates as the basis for the HRA which eliminates the need to calculate baseline TAC emissions in most cases.

BAAQMD is hosting open houses in Late January and early February to discuss revisions to the proposed rule.  More information about the open house schedule can be found here.  BAAQMD is accepting comments on the proposed revisions until March 9, 2015.  If you have any questions on the proposed revisions, or would like assistance with comment preparation, please contact Melissa Hillman at Trinity's Oakland office at (510) 285-6351.

USEPA Proposes Approval of SJVAPCD's Rule 4702

Tuesday, December 22, 2015

On December 2, 2015 the United States Environmental Protection Agency (USEPA) proposed to approve San Joaquin Valley Unified Air Pollution Control District's (SJVAPCD) November 14, 2013 version of Rule 4702 Internal Combustion Engines as part of the California State Implementation Plan (SIP).  An earlier version of this Rule was approved into the California SIP on January 10, 2008.  SJVAPCD Rule 4702 applies to internal combustion (IC) engines and establishes limits on emissions of nitrogen oxides (NOx), carbon monoxide (CO), volatile organic compounds (VOC), and sulfur oxides (SOx) from IC engines.

The proposed changes to Rule 4702 include clarifying the applicability of the rule, establishing lower NOx limits for certain engines, and adding a fee compliance option.  Specifically, the proposed changes clarify that Rule 4702 Section 5.2 requirements for IC engines rated greater than 50 brake horsepower (bhp) apply to both stationary and non-stationary engines.  The proposed changes also establish a NOx emission limit of 65 ppmv for spark-ignited lean burn non-agricultural operation (non-AO) IC engines fueled with waste gas, as seen in Table 2 of the rule.  Additionally, the proposed changes add an option to pay an annual fee in lieu of complying with the NOx emission limit for non-AO spark-ignited engines.

The proposed revisions to the SJVAPCD Rule 4702 portion of the California SIP were submitted to the USEPA on May 13, 2014.  Although the November 14, 2013 version of Rule 4702 has already been adopted by SJVAPCD, the inclusion of this version of the rule in the California SIP would make it federally enforceable.  Comments regarding USEPA’s approval of the rule must be received by the USEPA no later than January 4, 2016.