ASHRAE CTTC Issues Update

Tom Werkema

June, 2010

Climate International

Climate Change2010

• “Copenhagen Accord” agreed– 155 countries voluntarily committed = 85.05% of global emissions– $30b financing over 3 years

• Somewhat unclear how “fund” will be managed• US contribute 1/3rd

– Agreement on forests, reforestation• 2010: 5 meetings plus COP/MOP (Mexico)

– Meetings early June in Bonn, Germany• HFCs

– [“Urges Parties, without prejudice to the scope of the Convention and its related instruments, to pursue, under the Montreal Protocol on Substances that Deplete the Ozone Layer, the adoption of appropriate measures to progressively reduce the production and consumption of hydrofluorocarbons”, ]

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Climate US

EPA Sector Emissions Profile 1990-2008(million metric tons CO2e)

Source: EPA Industrial Energy Consumers of America

Total CO2e Emissions

1990 2008 Difference

Residential 927.2 1,177.1 +27.0%

Commercial 749.9 1,037.6 +38.4%

Industrial 1,525.2 1,505.1 -1.3%

Transportation 1,488.8 1,789.9 +20.2%

Electricity 1,804.6 2,342.0 +29.8%

Direct Emissions

1990 2008 Difference

Residential 339.4 343.0 +1.0%

Commercial 216.7 219.7 +1.4%

Industrial 844.5 819.8 -2.9%

Transportation

1,485.8 1,785.3 +20.2%

Indirect Emissions

1990 2008 Difference

Residential 587.7 834.1 +41.9%

Commercial 533.2 817.9 +53.4%

Industrial 680.6 685.3 +.6%

Transportation

3.0 4.6 +53.3%

US Climate Change – 2009 emissions

• Total emissions up about 5% since 1990, preliminary– KP – 7% decrease

• Average 2008-2012

– Down 2.9% in 2008, 7% down in 2009

The American Power Act -2010(introduced by Senators Kerry,

Lieberman – no Graham)• Title I Domestic Clean Energy

Development– Domestic Nuclear (regulatory efficiency, loan

guarantees, spent fuel)– Offshore Oil and Gas (States may block up to

75 miles)– Coal (capture and sequestration)– Renewables– Transportation (electric vehicles)

The American Power Act -2010

• Title II – Global Warming Pollution Reduction– Amends Clean Air Act– Allowance Program(s)– Fast Mitigation

• HFCs – 15% of baseline by 2032• Black Carbon, International measures

– GHG Market Regulation

The American Power Act -2010

• Title III – Consumer Protection– Allowances to local distribution companies– Natural gas– Consumer Relief – up to 250% of poverty level,

Universal refund

• Title IV – Job Protection and Growth– Industrial emissions reductions support– Clean Energy jobs– Grants for clean cars, agriculture, new technology

The American Power Act -2010

• Title V – International Climate Change

• Title VI – Community Protection from Climate Change

• Title VII – Budgetary Impacts

Kerry-Lieberman Bill: Carbon Pricing Effect on Average Wellhead Price of Natural Gas

Industrial Energy Consumers of AmericaSource: EIA, IECA

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$/th

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ubic

feet

Price Ceiling Price Floor EIA Forecasted Price

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Calculate Your Cost Increase CO2 Allowance Price $40 $50 $75 $100

Gasoline/gallon.35 .44 .67 .89

Natural Gas/MCF2.19 2.74 4.10 5.47

Short Ton

Bituminous Coal89.44 111.80 167.70 223.60

Sub-bituminous

Coal67.40 84.25 126.38 168.50

Anthracite Coal69.88 87.35 131.03 174.70

CO2 Allowance Price $40 $50 $75 $100

Gasoline/gallon.35 .44 .67 .89

Natural Gas/MCF2.19 2.74 4.10 5.47

Short Ton

Bituminous Coal89.44 111.80 167.70 223.60

Sub-bituminous

Coal67.40 84.25 126.38 168.50

Anthracite Coal69.88 87.35 131.03 174.70

Source: EIA Industrial Energy Consumers of America

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US EPA• Published “endangerment” Final Rule

– Potentially affects many major NA Plants, using Clean Air Act standards (NSR, PSD, TRI, etc.) to regulate emissions

– 25,000 MT CO2e, not 250 MT hazardous pollutant – 16 Lawsuits filed from 25+ Parties, 3 from States, none by ENGOs– 18 States support, 11 States against– EPA will not regulate stationary sources until 2011

• Tayloring rule published– 75,000 MT CO2e/year stationary sources in 2011– Add currently non-permitted 100,000 MT CO2e/year July, 2011

• GHG Reporting Rule Final – – Still negotiating on some in-process HFC flows– Monitoring plans must be on file by March 31, 2010– Reports due first quarter 2011, for 2010 data

• Opened comment period on Clean Water Act impact from GHG emissions

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Europe

• Review of Fgas Regulation 842/2006– Commission proposal by 4/7/2011– Consultant Technical Study underway including on HFO

availability– Expected Considerations

• Policy scenarios• International consumption reduction arrangement (& scenarios)• Further use prohibitions

– Expected Outcomes• Revised regulation: 2013/14 implementation, earliest July 2013• Further HFC bans

– Foam blowing, domestic refrigeration???

• Overall phase-down and quota system with 30% reduction by 2020

– Base year 2005-2007?

State/Regional Activity

ASHRAE Issue UpdateWinter, 2009

• RGGI – Regional Greenhouse Gas Initiative – Northeastern States– Utilities only– Continue quarterly auctions

• WCI – Western Climate Initiative– Several states have w/d– Oregon, California still committed

Assembly Bill 32: The California Global Warming Solutions Act of 2006

•September 2006: “The Time for Action is Now!”•Sets in statute 2020 emission limit at 1990 level•Now up for November Referendum vote

Montreal Protocol International

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Montreal Protocol

• HFC Amendment – 2009 – proposed by Canada, US, Mexico– Blocked by China/India

• China strongest– Ultimately, no decision– 2010 – discussions mid year in Geneva, November-Kampala

• US reintroduced early May, supported by Canada, Mexico• Micronesia also introduced• Expect EU to not object• Expect China/India to object• HFC Industry fundamentally supports• 2014 earliest implementation

Miscellaneous

• First HCFC-22 smuggling case completed–Over 400,000 Kgs–30 month prison term, $1.3 M penalty–Several other cases pending

• Second sentence in April – related to above, but further down the commerce

chain–100,000 Kgs–36 month prison term, fine