On September 28, 2012, the US Environmental Protection Agency stated that Frederick W. Hertrich, III and Charles Ernesto, Hertrich’s project manager, were ordered to pay a $100,000 fine jointly after violating the Clean Water Act.  The violation occurred in Federalsburg, Maryland in Caroline County.  

On Tuesday, November 27, President Obama signed a bill that exempts airlines in the United States from carbon fees imposed by the European Union for every ton of carbon emitted from planes flying in and out of Europe. 

The passage of the bill was commended by Airlines for America (A4A), the trade organization represented the leading airlines in the United States. 

On November 13, 2012, the Senate passed the S. 1956 bill that allows the Transportation Secretary to exempt U.S. airlines flying in and out of Europe from the European Union Emission Trading Scheme (EU ETS).  The bill was passed unanimously by the Senate and by voice vote in the House. 

The bill was passed by Congress and signed by President Obama because Congress claimed the EU ETS violates international law and U.S. sovereignty.  Additionally, the U.S. claimed that the measure by the EU would counterproductive to current U.S. investments into technology and infrastructure that increases fuel efficiency and reduces emissions. 

Nicholas E. Calio, the A4A President and CEO, stated: “The message could not be any clearer — overwhelming bipartisan majorities in the House and Senate have spoken:  EU ETS violates U.S. sovereignty and will not do what it purports to as the funds do not have to be used for environmental protection.  There is a better way to improve the environmental efficiency of the airline industry, and U.S.-based carriers are already leading those efforts.” 

The bill was passed by the Senate even though the EU announced it would suspend the requirements on November 12, 2012.  The EU announced it would suspend the carbon enforcement so an international agreement on reducing emissions could be developed by the International Civil Aviation Organization (ICAO), but A4A stated the EU’s decision did not remove the threat of implementing the carbon pricing in the near future. 

A4A reported that the EU law would cost U.S. airlines about $3.1 billion from 2012 to 2020. 

A4A reports that U.S. airlines have led initiatives to reduce emissions compared to other countries, and the trade union also states that U.S. airlines strongly supported policies adopted by the ICAO in 2010.  The new framework called for an annual fuel-efficiency improvement of 1.5 percent ever year up to 2020.  Additionally, the United States has improved fuel efficiency for its airlines 120 percent in the last 30 years.  The fuel efficiency is equivalent to taking 22 million cars off the road. 

Source: Airlines for America

According to the Potsdam Institute for Climate Impact Research and Climate Analytics, the world may become 4 degrees Celsius (7.2 degrees Fahrenheit) warmer by 2100 if current greenhouse gas emissions and future pledges remain the same.  In an effort to spur the development of green technologies in developing countries, the World Bank lent $7.1 billion for mitigating climate change and $4.6 billion for adaptation in 2012. 

Additionally, Climate Investment Funds (CIFs) have pledged $7.2 billion to 48 counties (mostly the least developed), and CIFs have helped leverage $43 billion of investment funds into clean energy sources in low income countries. 

The Dangers of Rising Temperatures

An increase of 4 degrees Celsius would mean devastation and hardship around the world.  Developing countries are the most affected by climate change because they lack resources, lack government policies to regulate emissions, and/or lack funds to construct or install alternative energy projects. 

The Potsdam Institute for Climate Impact Research and Climate Analytics states the following can occur from the rise in temperatures (some of which we’ve already begun to see):

·  more flooding to cities along the coast

·  higher malnutrition rates and damages to crop production

·  dryer areas becoming dryer and wetter areas becoming wetter

·  heat waves, especially in tropical areas

·  widespread water shortages

·  increase in number an intensity of hurricanes and typhoons

·  decreasing biodiversity, including reef systems

How World Bank Investment and CIF Funding are Helping

CIFs have helped Algeria, Jordan, Morocco, and Tunisia begin construction on what will become the largest Concentrated Solar Power plant in the world.  The plant is capable of producing 1 gigawatt of electricity.  Another example includes pilot studies that address flood risks in Ho Chi Minh City, Vietnam, and seek to improve agriculture practices and irrigation systems. 

The World Bank has issued more than $3.3 billion in Green Bonds in a total of 17 currencies.  The Green Bonds encourage the development of green projects while providing a substantial return on investment.  Financing toward green energy accounted for 44% ($3.6 billion) of the World Bank Group’s total amount of energy lending in 2012, which was $8.2 billion.

The World Bank President, Jim Yong Kim, stated: “Lack of action on climate change threatens to make the world our children inherit a completely different world than we are living in today.  Climate change is one of the single biggest challenges facing development, and we need to assume the moral responsibility to take action on behalf of future generations, especially the poorest.”

Source: World Bank Group

On November 29, 2012, a group of historic preservation, labor history, and environmental protection organizations decided to file an appeal in order to protect the Blair Mountain Battlefield and restore the historic site with the National Register of Historic Places. 

Blair Mountain was home to one of the most historic labor struggles in United States history.  Thousands of coal miners stood up against the coal industry and fought with law enforcement in 1921 at the site and asked for greater labor rights and the right to unionize. 

Kenny King, a lifelong resident of Blair and member of the Board of Friends of Blair Mountain, stated: “Never before, nor since have so many American workers taken up arms to fight for their constitutional rights.  Blair Mountain, West Virginia stands not only as a reminder of our proud history, but also as a living symbol of hope for all who seek justice.” 

The site was listed on the National Register of Historic Places in 2009 after numerous revisions were made to nominations over the years.  The site was de-listed just nine months later, but the group of petitioners believes the de-listing was unlawful. 

The National Park Service decided to de-list Blair Mountain in December of 2009, and a U.S. District Court ruled on October 2, 2012 that the groups filing for the re-enlistment did not have legal standing because there was a lack of proof concerning threats to the coal mining site’s preservation. 

The groups involved in the appeal argue that the court ignored a large amount of evidence stating coal mining companies still seek permits to mine the battlefield.  They argue the coal mining companies tried to block the listing of Blair Mountain on the National Register as well. 

Regina Hendrix with the West Virginia Chapter of the Sierra Club, stated: “With the exception of the Civil War, the Blair battle is the largest insurrection in U.S. history.  We cannot let this rich, undisturbed, site be wiped away forever.  The area is a vital part of U.S. labor history.  The archaeological record waiting to be explored will clearly show the places where the battle occurred, as well as the intensity of the battle at different sites.” 

The groups appealing the de-listing of Blair Mountain include the Sierra Club, the Ohio Valley Environmental Coalition, Friends of Blair Mountain, West Virginia Highlands Conservancy, the West Virginia Labor History Association, and the National Trust for Historic Preservation.” 

Source: Sierra Club

On October 17, 2012, the Environmental Protection Agency (EPA) awarded $6.5 million to 10 different state and local agencies and non-profit organizations.  The funds will be used to restore water quality in the San Francisco Bay watershed and surrounding wetlands.  

Jared Blumenfeld, the EPA Regional Administrator for the Pacific Southwest, stated: “San Francisco Bay is a magnificent treasure that supports more than 500 species of wildlife, including 128 threatened or endangered species, and the economies of Bay shoreline communities.  It is critical to safeguard this productive natural resource, and these projects with our state and local partners will make great strides to achieve that goal.”

The agencies and awards are listed below:

The San Francisco Estuary Partnership and the Association of Bay Area Governments receives $1.55 million to redesign flood control channels to help protect wetlands.

The Napa County Flood Control District receives $1.5 million for stream restoration at the Rutherford Reach and reduce sediment into the Napa River.  

The Golden Gate National Parks Conservancy receives $1 million to fix 1,050 feet of creek channel and restore wetlands and natural habitats.  

The Sonoma Land Trust receives $941,000 for restoration of 960 acres of tidal Marsh throughout the San Pablo Bay National Wildlife Refuge.  

The California State Coastal Conservancy receives $500,000 to form programs for reducing food containers in the bay area.  

The San Francisco Estuary Partnership and the Association of Bay Area Governments receives $250,000 to address citizens through social media and promote the reduction of pesticide use.  

Audubon California receives $235,000 to improve 300 acres of tidal marsh of the Sonoma Creek.  

The Alameda County Resource Conservation District receives $181,000 to form stream buffers, repair stream channels, and improve rural roads along the Alameda Creek watershed.  

The San Mateo Resource Conservation District receives $75,000 to improve creek channels and open 40 miles of upstream habitat to let steelhead breed in the San Francisquito Creek.  

Source: U.S. Environmental Protection Agency
 

On November 14, 2012, California became the first state to initiate a cap-and-trade program throughout the state’s entire economy.  The program hopes to significantly reduce the amount of carbon emissions by requiring heavy polluters to purchase and sell carbon emission permits. 

According to the Union of Concerned Scientists (UCS)—a leading non-profit science organization—putting prices on certain amounts of carbon pollution will, hopefully, inspire new technology for alternative energy and lower global emissions. 

UCS climate economist Jasmin Ansar stated, “If successful, California’s cap-and-trade program will serve as a model for other states, particularly now that federal efforts to address climate change have stalled.  What we have at stake here is much larger than just one state’s efforts to control carbon emissions.” 

The new program, featured in the California Global Warming Solutions Act, allows the state to place a cap on carbon dioxide and greenhouse gases emitted by heavy polluters in the state.  Examples of heavy polluters include oil refineries and cement producers.  The businesses are required to buy allowances to the caps, but companies that reduce emissions can sell or trade their allowances at auctions. 

The auctions allow companies to increase profits by reducing pollution if they can introduce the green policies more efficiently than other companies. 

Ansar noted, “Cap and trade provides financial incentives for polluters to reduce emissions through greater use of energy efficiency, renewable energy and alternative technologies. . . . This program will make it more economically attractive for technology developers to invest in the tools that carbon-intensive industries can use to curb their emissions.” 

California’s initiatives are now the second-largest in the world behind regulations under the European Union.  The state’s goal is to reduce emissions to 1990 levels by 2020.  The UCS reports that since California passed the California Global Warming Solutions Act in 2006, more state capital has moved into the green industry than all other 49 states combined. 

Some allowances will be provided to certain industries to encourage them to stay in the state of California—particularly oil refineries.  UCS opposed the decision for the allowances because it estimated that the allowances will give free credits worth $2 billion to the heaviest polluters from 2013 to 2020. 

Ansar paraphrased the UCS’s opposition to the allowances: “California oil refineries produce more carbon emissions per barrel than those in any other part of the country.  If they are exempt from paying for the costs of their pollution, they will have less incentive to reduce the environmental damage associated with their production methods.”

Source: Union of Concerned Scientists

On November 20, 2012, the Centers for Disease Control and Prevention (CDC) announced that airports only allowing smoking in designated areas still have huge levels of air pollution—about five times higher than smoke-free airports.  The air pollution level inside the designated smoking areas was 23 times higher than smoke-free airports. 

The CDC’s study analyzed air quality data outside of designated smoking areas as well as inside designated smoking areas like restaurants, bars, and ventilated smoking rooms.  Only five of the country’s largest airports allow smoking: Hartsfield-Jackson Atlanta International Airport, Washington Dulles International Airport, McCarran International Airport in Las Vegas, Denver International Airport, and Salt Lake City International Airport. 

Over 110 million boardings occurred in these airports in 2011 alone—nearly 15 percent of all air travel in the U.S.—potentially exposing millions of people to secondhand smoke. 

Tim McAfee, M.D., M.P.H., the director of CDC’s Office on Smoking and Health, stated: “The findings in today’s report further confirm that ventilated smoking rooms and designated smoking areas are not effective. Prohibiting smoking in all indoor areas is the only effective way to fully eliminate exposure to secondhand smoke.”

Smoking has been banned on all U.S. domestic and international commercial airline flights as federal laws were passed from 1987 to 2000.  For example, § 252.3 of 14 C.F.R. (Smoking Aboard Aircraft) bans smoking on all scheduled flights.  14 C.F.R. § 252.5 bans smoking on all foreign flights entering and exiting the United States. 

Secondhand smoke can cause heart disease and lung cancer in nonsmoking adults, and even brief exposure to secondhand smoke can induce a heart attack.  Secondhand smoke is especially dangerous for small children because it can cause sudden infant death syndrome (SIDS), respiratory problems, ear infections, asthmas attacks, and more.  No amount of secondhand smoke is safe for children or adults either.  A Surgeon General’s Report in 2006 stated there is no level of secondhand smoke that is risk-free.

According to the CDC, cigarettes kill about 443,000 Americans every single year.  It is estimated that secondhand smoke exposure by nonsmokers causes 46,000 deaths from heart disease and 3,400 from lung cancer each year. 

Brian King, Ph.D., the co-author of the report, stated: “Instead of going entirely smoke-free, five airports continue to allow smoking in restaurants, bars or ventilated smoking rooms.  However, research shows that separating smokers from nonsmokers, cleaning the air and ventilating buildings cannot fully eliminate secondhand smoke exposure.”

Source: Centers for Disease Control and Prevention

On November 19, 2012, the Federal Energy Regulatory Commission (FERC) approved a settlement between its Office and Gila River Power LLC located in California.  It’s the first time a participant in the energy market has ever admitted to violating the anti-manipulation rule imposed by the FERC in energy trading cases. 

Gila River is a subsidiary of Entegra Power Group LLC, and the company admitted to operating “wheeling-through transactions” from July 2009 to October 2010.  The wheeling-through manipulated markets in the California Independent System Operator (CA ISO), and Gila supplied CA ISO with false submissions.  Gila River generated electricity at its 2,200 megawatt plant in Phoenix and sold the power to California ISO markets through the Palo Verde intertie (the line that directs most of the high voltage energy from Arizona to California). 

The Adjustment Wheel Strategy

Gila River imported the majority of its power into the CA ISO in Palo Verde.  If imported energy became congested, the price would lower and reduce the overall amount of power Gila River was allowed to import into the CA ISO. 

During the Adjustment Wheel strategy, the power generating company used Wheeling-Through transactions within the Day Ahead market in order to increase the amount of power imported to the CA ISO and increase the amount paid for the imports.  Gila River was therefore able to import the preferred amount of energy without causing any congestion and receive a higher price for energy imports. 

The Adjustment Wheel was ultimately canceled out because Gila River bought back import and export sections of the Adjustment Wheel.

The Violations

Gila River admitted to violating 18 C.F.R. § 35.41(b) which is similar to CA ISO Tariff § 37.5.  The FERC’s regulations under § 35.41(b) state that a market participant such as Gila River must:

“provide accurate and factual information and not submit false or misleading information, or omit material information, in any communication with. . . .Commission-approved regional transmission organizations, Commission-approved independent system operators, or jurisdictional transmission providers, unless Seller exercises due diligence to prevent such occurrences.” 

Gila River therefore violated the FERC’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2.

Gila River has agreed to pay a $2.5 million fine and forfeit $911,553 of unearned profits.  The unearned profits will lower prices for ratepayers, although the differences may appear small. 

Employees and Gila River participated with the FERC throughout the entire investigation.  The employees provided testimony, and Gila River accepted full responsibility for committing the violations. 

Source: Federal Energy Regulatory Commission

On November 27, 2012, Ken Salazar, the Secretary of the Interior, and Kevin K Washburn, the Assistant Secretary for Indian Affairs, announced new regulations that will remove older regulations that slowed residential, commercial, and renewable energy development on American Indian Trust Land.  The new regulations are expected to speed up the leasing process on the Native American land. 

Before the new regulations were passed, the Bureau of Indian Affairs (BIA) used a process that made it harder for surface leases to move forward on land the federal government holds in trust for Native Americans.  The Department of the Interior manages about 56 million acres of land for Native Americans around the United States. 

The new rules add to the recent Helping Expedite and Advance Responsible Tribal Homeownership (HEARTH) Act.  The Act was signed by President Obama on July 30, 2012. 

Secretary Salazar stated: “This final step caps the most comprehensive reforms of Indian land leasing regulations in more than 50 years and will have a lasting impact on individuals and families who want to own a home or build a business on Indian land.”  

The older BIA regulations were formed in 1961.  The Department of the Interior states that the old regulations developed no clear deadline for reviews, such as mortgage applications that remained untouched for years as they waited for approval under the federal government. 

The new BIA regulations, which become effective 30 days after they are published in the Federal Register, sets a 30-day limit for the BIA to make decisions or leases, subleases, and mortgages.  The BIA has 60 days to make decisions on leases and subleases for commercial and industrial development.  The timeframe includes leases for renewable energy development. 

Assistant Secretary Washburn stated: “This reform is about supporting self-determination for Indian Nations and was developed in close consultation with tribal leaders.  The streamlined, commonsense rule replaces a process ill-suited for economic development of Indian lands and provides flexibility and certainty to tribal communities and individuals regarding decisions on the use of their land.” 

The “flexibility” that Washburn refers to concerns land valuations.  The BIA is now allowed to choose no a negotiated value for a lease of tribal land instead of going through expensive appraisals.  Additionally, the BIA does not need to approve permits for short-term activities on tribal lands. 

Source: Department of the Interior