ENV-16-34 Climate Change Regulatory Initiatives in the Pacific Northwest: A Growing Challenge for the Petroleum Industry

Description:

In September 2016 the Washington Department of Ecology adopted a greenhouse gas (“GHG”) cap and reduce program that Ecology calls the Clean Air Rule, aka “the CAR.” The rule mandates annual reductions in GHG emissions from three categories of sources: • Large stationary sources • Petroleum product producers and importers • Natural gas distributors Covered parties must reduce their emissions by 5 percent every three years,1 measured against their average emissions during a five year baseline period between 2012 and 2016. No reduction is required for 2017. Between 2018 and 2035 the rule requires a reduction of 1.7 percent each year. The emissions ceiling achieved by 2035 is permanent. The CAR refers to a covered party’s GHG reduction obligation over time as the party’s “emission reduction pathway.” Ecology must issue a regulatory order by January 30, 2018 to each covered party that will permanently specify that party’s emission reduction pathway.