Washington State Announces Plan to Cap Carbon Emissions

By Paul Shukovsky

Sept. 21 — Washington businesses annually emitting more than 100,000 metric tons of carbon dioxide-equivalent—foundries like Alcoa Inc. and refineries like BP Plc, Shell, Phillips 66 Co. and Tesoro Corp.—will face a new regulation capping their carbon emissions, the state's ecology director said Sept. 21.

A draft of the rule has yet to be produced, but it would set caps on about 35 facilities that account for about 60 percent of the greenhouse gas emissions in the state, Washington Department of Ecology Director Maia Bellon said at a Sept. 21 briefing.

Regulated businesses will be required to gradually reduce their carbon pollution. And while the rule does not contemplate a state-operated system to trade carbon emission credits, businesses could conduct such trading on their own and also fund projects that cut carbon pollution, Bellon said.

The types of business that will be subjected to the regulation include:

• distributors of natural gas consumed in Washington,

• petroleum fuel producers,

• factories,

• power plants,

• waste facilities, and

• metal manufacturers.


Governor Takes Executive Action

The move to regulate emerges from the failure of legislative proposals this year by Gov. Jay Inslee (D) to institute a cap-and-trade program and set low-carbon fuel standards. Those proposals were stymied by the Republican-controlled Senate.

On July 28, Inslee ordered the Ecology Department to promulgate rules capping carbon emissions.

“This is not the comprehensive approach we could have had with legislative action. But Senate Republicans and the oil industry have made it clear that they will not accede to any meaningful action on carbon pollution, so I will use my authority under the state Clean Air Act to take these meaningful steps,” he said at the time.

In announcing the start of a rulemaking process, Bellon said Sept. 21 the rule is intended to help meet emission-reduction requirements passed by the Legislature in 2008 “and would require the state's largest polluters to reduce their greenhouse gas emissions.”

Clarification on Natural Gas 

Stu Clark, the Ecology Department air quality program manager, in response to a question from Bloomberg BNA, clarified that natural gas distributors that deliver a product for export—such as a newly proposed facility that would turn gas into methanol for export to China for use as plastics feedstock—would be exempt from the regulation.

In determining greenhouse gas emissions, Clark said petroleum fuel producers would be required to count the end-use combustion of their products.

Bellon said the department anticipates adopting a rule by next summer and enforcing it by 2017. There will be a series of public meetings and webinars as well as direct engagement by the department with affected businesses, environmental groups and tribes, she said.

To contact the reporter on this story: Paul Shukovsky in Seattle at pshukovsky@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com