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Comment 6 for Cap & Trade Public Meeting (june5-reporting-ws) - 1st Workshop.
First Name: Mark
Last Name: Pawlicki
Email Address: mpawlicki@spi-ind.com
Affiliation: Sierra Pacific Industries
Subject: Comments on Cap and Trade Reporting and Verification
Comment:
To: Air Board These are the comments of Sierra Pacific Industries (SPI) regarding the Reporting and Verification Requirements for California’s Cap-and-Trade Program. Sierra Pacific is a large forest landowner in California and has a number of manufacturing facilities and biomass-fueled electric generation plants. The ARB’s decisions on various elements of the cap and trade program under AB 32 could have a significant impact on our ability to operate our businesses in this state. We offer the following specific comments which we believe will result in a more efficient and effective cap and trade program. General As a major industrial forest landowner, SPI’s forests sequester a significant amount of carbon from the atmosphere. Our forests are part of the five million metric ton net carbon sink that is outlined in the ARB’s Climate Change Scoping Plan – the only sector that is actively improving the air in California. At the same time, our five operating biomass electric power plants are helping to offset the emissions that would have been produced by fossil-fuel plants. These plants are carbon-neutral. That is, by using woody biomass for their fuel source they play a role in not only offsetting fossil fuel use, but also have a positive impact on air quality through avoided burning in the field. Studies have shown that the controlled combustion of wood in a power plant reduces criteria air pollutants by 60 to 99%. In addition, the thinning effect that occurs on forests which produces the raw material for our power plants reduces the threat of wildfires – further improving air quality. In our view, the ARB should follow the approach of the Western Climate Initiative which does not require the reporting of emissions from biomass power plants. This does not mean that co-generation facilities aren’t being counted. We will report the emissions from forest activities as part of our net carbon sequestration report that will be provided under protocols approved by the ARB. As carbon-neutral facilities, requiring these plants to report would in essence be double-reporting the same emissions. Double-reporting of emissions would produce a disincentive toward more biomass energy development, and would adversely impact the state’s renewable energy requirements. Liability for Offsets As a forest landowner, we will be in a position to sell emission offsets to other manufacturing facilities or utilities. The forestry protocol has rigorous reporting and verification standards which assure the state that any forestry offset sold here will be real, verifiable, and long-term. The purchaser, on the other hand, may or may not be required to verify the offsets that are purchased. We feel it is important for the ARB to require the purchaser to be liable for the efficacy of the offsets that are purchased and reported to limit disputes between the state and the purchaser. Verification The ARB has proposed that beginning in 2010 air emissions must be reported and verified by an independent third-party verifier that contracts with emitters. Independent verification of reported activities is a critical element of the program to assure that standards are being met. Verifiers would need to be approved by the ARB and have to clear a stringent conflict of interest screening and companies would not be allowed to use an individual verifier for more than six years. We agree with this concept, and stress that individual companies should be allowed to draw from a pool of certified verifiers rather than being assigned specifically by the state. There will be firms who have particular expertise in certain industries with significant background in those businesses as well as the regulatory environment in which they operate. Since they will all be approved by the ARB, it only makes sense that the individual reporting companies are allowed to choose those that would operate in the most efficient manner. On-Site Fuel Usage The ARB appears to want reporting done at the facilities for on-site use of fuels such as diesel, natural gas, and propane for processes (e.g. gas burners) and mobile equipment (e.g. forklifts). However, we view this as double counting since the producers of these fuels are already accounting for them in their production reports. Reporting of these fuels should be assigned to the upstream producers and distributors to avoid double counting.
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Date and Time Comment Was Submitted: 2009-07-14 14:13:22
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