A nimbler version of Calif. Gov. Jerry Brown’s (D) landmark climate change package is expected on the state Assembly floor today, but firm emissions targets for 2030 and 2050 eluded lawmakers in the final hours of the legislative session.
S.B. 350 made it through an Assembly Natural Resources Committee hearing yesterday evening after Brown and legislative leaders said Wednesday that they would remove one of the bill’s three planks: a requirement to reduce petroleum consumption 50 percent by 2030 (ClimateWire, Sept. 10).
The bill that would have enshrined the state’s greenhouse gas goals for 2030 and 2050 — currently set only by gubernatorial executive order — was shelved yesterday evening ahead of the hearing, however. S.B. 32, by Sen. Fran Pavley (D), was made a two-year bill, meaning it can be taken up again in January. It will also be amended to remove the 2050 target, leaving only the goal of 40 percent below 1990 emissions by 2030.
Assembly Speaker Toni Atkins (D), who is termed out next year, was unable to corral her members, despite having nearly a two-thirds Democratic majority in her house. In a test vote on Tuesday that proved conclusive, the Assembly voted 35-30 against S.B. 32, with eight Democrats voting against it and 14 abstaining (Greenwire, Sept. 9).
Opportunity for oil lobby to weaken regulations
"Unfortunately, the state Assembly and the administration were not supportive, for now, and we could not pass this important proposal," Pavley said. "I’m looking forward to working with lawmakers and the governor’s office to win passage later in this 2015-2016 session."
S.B. 32 had been seen as something of a formality, given that Brown and former Gov. Arnold Schwarzenegger (R) have already set targets for 2030 and 2050 via executive orders. But its withdrawal could be significant, as it would have served as backstop authority for the petroleum goals originally contained in S.B. 350.
Brown has maintained that the state has authority to pursue petroleum reductions just by virtue of his April executive order setting 2030 emissions targets. But without legislative support, any regulations instituting the reductions will be more vulnerable to continuing political battles, one legal observer pointed out.
"Now a new administration could force changes to how the Air Resources Board regulates fuels, and the Western States Petroleum Association can use their influence during the regulatory process to water down or gut new rules on fuels," Ethan Elkind, associate director of the climate change and business program at the University of California, Berkeley, School of Law and University of California, Los Angeles, School of Law, wrote yesterday in a blog post. "Plus, the oil companies can more easily turn to the courts to challenge regulations, resulting in delays and extra costs for the agency."
Brown vowed Wednesday to continue pursuing emissions reductions through the state’s low-carbon fuel standard, in place since 2007, which has a goal of reducing the carbon intensity of fuels 10 percent by 2020 but has been frozen at 1 percent since a 2013 state appeals court decision. The rule is expected to be amended to reach the 2020 target despite the delay at a California Air Resources Board (ARB) hearing later this month.
Environmental groups are licking their wounds and at the same time cheering S.B. 350’s remaining goals of a 50 percent renewable portfolio standard and a doubling of efficiency in existing buildings by 2030 — significant victories in themselves. They pointed to Brown’s defense of ARB’s regulatory authority and the low-carbon fuel standard against attacks by oil companies.
"The LCFS is their white whale, but unlike Captain Ahab, they’re not going to get it," said Alex Jackson, legal director of the Natural Resources Defense Council’s California Climate Project.
Regional electricity cooperation gets boost
S.B. 350 was also amended in committee last night to broaden the authority of state electricity market regulators, a move aimed at encouraging electricity trading across the West. It would change the governance of the California Independent System Operator, the state-founded nonprofit that administers the electricity grid, and would allow other transmission-owning organizations to join it.
"It is the intent of the Legislature to provide for the transformation of the Independent System Operator into a regional organization to promote the development of regional electricity transmission markets in the western states," the bill says. "The preferred means by which the voluntary evolution … should occur is through the adoption of a regional compact or other comparable agreement among cooperating party states."
The language came from Brown’s office and is aimed at connecting California’s market more closely with its neighbors, said one source who was privy to the negotiations. The process began last year with a seven-state energy imbalance market, which allows members to purchase electricity from each other in five-minute increments and is intended to allow electricity schedulers to better manage increasing amounts of intermittent renewable generation (EnergyWire, Sept. 30, 2014).
"I think there’s a desire to send a signal to the rest of the West that we are prepared to work with them in preparing a regional governance system for the ISO," said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies.
Coal divestment, climate adaptation bills proceed to governor’s desk
Meanwhile, other bills in state Senate President Pro Tem Kevin de León’s climate package have gotten through the Legislature with little controversy. The Senate yesterday passed Sen. Bob Wieckowski’s (D) S.B. 246, which would coordinate climate adaptation planning within the state’s Office of Planning and Research.
And de León’s S.B. 185, which would require the state’s massive pension funds for state employees and teachers to divest from coal companies, passed the Assembly on Sept. 2 and is awaiting Brown’s signature. On Wednesday, the University of California announced it had gone further by starting to divest its coal and oil sands holdings.
The UC system divested $200 million in all in recent months, the system’s top investment manager said Wednesday.
Environmental advocates praised the decision, which Jagdeep Bachher, the system’s chief investment officer, announced at a board of regents meeting. But the move also comes at a gloomy time for commodity markets (EnergyWire, Sept. 5). International coal prices are half or less of what they had been just a few years ago, and oil sands crude is among the highest-margin oil types to produce.
"Slowing global demand, an increasingly unfavorable regulatory environment and a high threat of substitution pose insurmountable challenges to coal mining," Bachher said, according to a meeting transcript.
The university investments in all, including retirement assets, cash and the endowment, add up to $91 billion. August financial filings show the universitywide system closed out positions in Halliburton Co., Noble Energy Inc. and Pioneer Natural Resources, among other fossil energy firms. More recent federal filings show positions in Anadarko Petroleum Corp. and Exxon Mobil Corp.
Reporter Benjamin Hulac contributed.