On September 13 the Chevron Corporation reached a $42 million (95.2 million Brazilian reals) settlement for a drilling accident in November 2011 that caused an oil spill in the Frade field off the southeast coast of Brazil (see blog posts for Nov. 20, 2011 & Nov. 27, 2011 reporting on the initial spill). Chevron also paid fines of 42.9 million reals ($18.8 million) to IBAMA, Brazil’s environmental agency, and 25.6 million reals ($11.2 million) to SNP, Brazil’s oil regulator. The accident resulted in between 2,400 and 3,700 barrels of oil being released from the seabed. Brazilian authorities initially sought $20 billion in damages from Chevron. They ultimately agreed to settle for far less after concluding that the spill caused far less damage than initially thought. However, based on the size of the spill, the settlement is still more than two and a half times larger that the civil recovery that would be authorized under the U.S. Clean Water Act if Chevron had been “grossly negligent” ($4,300/barrel) for a spill in U.S. waters. The settlement was reached just a week before the Brazilian government auctions off leases to develop another large offshore oil field. Jeff Fick, Chevron Agrees to Settle Oil-Spill Lawsuits in Brazil for $42 Million, Wall Street J., Sept. 13, 2013. Criminal charges that had been brought against 17 executives from Chevron and its contract driller Transocean were dismissed by a Brazilian judge last February.
The American Farm Bureau Federation suffered a huge defeat on September 13 when a federal district judge in Pennsylvania rejected its legal challenges to EPA’s total maximum daily loadings (TMDL) plan to protect the Chesapeake Bay from excessive nutrient loadings. A TMDL is essentially a “pollution diet” that limits the amount of pollutants that various sources can contribute to a body of water that is not meeting its water quality standards. EPA finalized the TMDL for the Chesapeake Bay in December 2010. Joined by other farming groups and pork and poultry producers, the Farm Bureau then filed suit, arguing that EPA had exceeded its authority by mandating specific allocations for future nutrient loadings into the Bay. Oral argument was held on October 4, 2012 before federal district judge Sylvia Ramble in federal district court for the middle district of Pennsylvania. The judge rejected the legal arguments made by the plaintiffs and ruled in EPA’s favor, upholding the TMDL.
On September 12 China’s State Council released its latest plan to control air pollution. The plan calls for limits on the burning of coal and new strategies for removing highly-polluting vehicles from China’s motorways. The plan seeks to reduce concentrations of particulate matter by 25 percent in the Beijing area, 20 percent in the Yangtze Rive Delta, and 15 percent in the Pearl River Delta. The goal is to keep average concentrations of fine particulates (PM 2.5) in Beijing to no more than 60 micrograms per cubic meter of air, five times the legal limit in the U.S. and two and a half times the recommended limit set by the World Health Organization. The plan disappointed environmentalists in China who were hoping for something more aggressive.
On the day the plan was announced levels of PM 2.5 in Beijing were at a very unhealthy 213 micrograms per cubic meter, more than 17 times the legal limit throughout the U.S. The State Council’s plan seeks to reduce coal use to 65% of energy consumption by 2017 from 67% in 2012. Motor vehicles registered before 2005 are to be removed from motorways by 2015 in highly polluted areas and throughout all China by 2017. Edward Wong, China’s Plan to Curb Air Pollution Sets Limits on Coal Use and Vehicles, N.Y. Times, Sept. 13, 2013, at A4. As foreign demand for coal decreases, U.S. coal companies are reducing their export plans. One energy consultant described this as the beginning “of a big structural shift, particularly in the Chinese energy sector.” Clifford Krauss, U.S. Coal Companies Scale Back Export Goals, N.Y. Times, Sept. 13, 2013, at B1.
On September 13 the State of California signed a memorandum of understanding (MOU) with China’s National Development and Reform Commission (NDRC - not to be confused with NRDC, the U.S. environmental NGO). The MOU pledges that California will cooperate with the NDRC to help China reduce its emissions of greenhouse gases. I have been quoted in an Associated Press article about the signing, which was picked up in many newspapers throughout the U.S. and some other countries, as emphasizing that NDRC is the most powerful government agency in China with respect to development and energy policy. The MOU continues the trend of bilateral cooperation between the U.S. and China on climate change issues. As the world’s two largest emitters of greenhouse gases, there is much that can be accomplished by the two countries working together.