As we have done previously in this blog, we will highlight from
time to time U.S. and foreign developments of potential interest in
the regulation of greenhouse gases. While there has been
relatively little activity in recent months at the Canadian federal
government level in the area of climate change policy, such is not
the case south of our border.
On September 20, 2013 the U.S. Environmental Protection Agency
announced newly revised pollution standards for
new power plants. Currently, there are no American limits at the
national level on the amount of carbon pollution new power plants
can emit. The proposed rules seek to address this regulatory
shortfall and replace a contentious 2012 EPA proposal which
received more than 2.5 million comments.
While the proposed rules are somewhat more relaxed than the
existing draft rules, commentators in the press appear to have
largely taken the view that they remain quite stringent. New large
natural gas-fired turbines would need to meet a limit of 1,000
pounds of carbon dioxide per megawatt-hour, new small natural
gas-fired turbines would need to meet a limit of 1,100 pounds of
carbon dioxide per megawatt-hour, and new coal-fired units would
need to meet a limit of 1,100 pounds of carbon dioxide per
megawatt-hour (with an option of adhering to a lower limit if they
choose to average emissions over multiple years instead of meeting
them from the outset). In contrast, the average advanced coal-fired
power plant emits approximately 1,800 pounds of carbon dioxide per
megawatt-hour according to industry estimates.
The proposed rules will now be subject to a 60 day comment period
commencing on the date of publication of the rules in the Federal
Register. This comment period will likely be followed by lobbying
efforts and possible court challenges.
Much of the controversy arises from the fact that in order to meet
the proposed standards, new plants would need to utilize carbon
capture and storage or sequestration (CCS) technology. While the
EPA described CCS technology as a "proven technology",
detractors note that none of the plants cited as examples of the
use of CCS referred to by EPA Administrator Gina McCarthy in order
to support its use are currently in operation. In addition, legal
issues with respect to the underground sequestration of carbon may
present obstacles. Ultimately, it is not certain that in
necessitating the use of CCS technology, the proposed rules will
require technology that has been 'adequately demonstrated'
and 'not exorbitant in cost'. Further, there are likely to
be arguments as to whether the technology can be considered to be
While the proposed EPA rules apply to new plants only, they do set
the stage for future regulatory developments. Proposed rules
dealing with carbon emissions for the existing American power plant
inventory will be coming next June and are likely to provoke fierce
debate south of the border.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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