The Nickel Report

Just before President Trump announced his decision to withdraw from the Paris Agreement on Climate Change, California is moving ahead with new greenhouse gas (GHG) regulations, making good on its commitment to continue its path regardless of what goes on in Washington, DC. This week, the Board of the Bay Area Air Quality Management District (BAAQMD) held a special meeting to consider a controversial new regulation targeting oil refineries. If adopted, as planned at the June 21, 2017, Board public hearing, Regulation 12, Rule 16:  Petroleum Refining Facility-Wide Emissions Limits (Rule 12-16) would establish first-of-its-kind, refinery-specific, facility-wide caps on emissions of greenhouse gases (GHG). The proposed caps limit refinery emissions to seven percent above recent operating levels.

Part of a suite of refinery-specific regulatory proposals, including Regulation 13, Rule 1:  Refinery Carbon Intensity Caps and Regulation 11, Rule 18:  Reduction of Risk from Air Toxic Emissions at Existing Facilities, Rule 12-16 is the progeny of a concept developed by a professional environmental advocacy group, Communities for a Better Environment (CBE). Under the direction of the Board, BAAQMD staff took CBE’s concept and developed proposed Rule 12-16 which, in its first draft, established facility-wide caps not only for GHGs, but also for criteria pollutants such as particulate matter, nitrogen oxide and sulfur dioxide. Though the criteria pollutant cap provisions were dropped at the May 31 meeting, consistent with staff recommendations, the proposed GHG cap remains and will be considered for adoption later this month.

Like many environmental regulatory proposals, Rule 12-16 is not without controversy. The proposed regulation received significant attention, with numerous industry representatives as well as individual members of the public providing comment. An uncommon scenario occurred in that the BAAQMD’s staff included pointed language in its staff report raising concerns regarding the Board’s legal authority, and cited potential inconsistencies with the Federal Clean Air Act and the California Health and Safety Code (primarily aimed at the caps for criteria pollutants). The staff also raised concerns that such action could affect California’s regulation of GHGs. Despite the district staff’s concerns, California Air Resource Board’s Executive Director, Richard Corey, sent a letter to BAAQMD’s Board voicing support for the proposed cap. Mr. Corey reiterated this support at this week’s Board meeting. This signals the significance of this proposal on a statewide level and potentially opens the door for other air districts to propose similar industry-specific caps. Another unusual and surprising aspect of the May 31 Board meeting was the personal nature of the commentary by Board members to one another, including one member accusing another of being an industry lobbyist. This departure from the typical respectful dialogue that occurs among Board members signals the controversial nature of the proposal.

Rule 12-16 will be considered for adoption at the BAAQMD’s upcoming June 21, 2017, hearing.