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Bay Area pollution board to consider first fees on global warming
By Denis Cuff Contra Costa Times
May 16, 2008
Environmentalists and regulators say the Bay Area's air pollution district is a taking a small but important first step toward saving the Earth by proposing to charge businesses for global warming gases they emit.
Oil refineries say the agency is jumping the gun and threatening to set a bad precedent that could lead to a patchwork of local fees and rules that could disrupt state efforts to combat global climate change.
Those conflicting views move to center stage Wednesday when the Bay Area's air pollution board considers what is thought to be the first pollution fee in the nation aimed expressly at global-warming gases from oil refineries, power plants, factories, gas stations, bakeries and other businesses.
The annual fee — up to $190,000 for a large oil refinery, $85 for a large bakery, and $1 for a service station -— would pay for district efforts to estimate and study sources of global warming gases, and consider ways to reduce them.
The biggest fees would be imposed on the biggest emitters of carbon dioxide, a global warming gas from fossil fuel combustion.
"I think the best place to institute strong policy is at the federal level, but we do not have leadership from the Bush administration on global warming," said John Gioia, a Contra Costa County supervisor from Richmond and member of the Bay Area Air Quality Management District board. "The hope here is that we will have a model that can be adopted on the federal level, or by other regions and states."
An industry trade group representing five oil refineries in the region contends that the local intervention could confuse and disrupt the California Air Resources Board's efforts to carry out an historic 2006 state law to reduce global warming gases by 25 percent by 2020.
"We're committed to working with the state on a thoughtful program to address climate change," said Tupper Hall, spokesman for the Western States Petroleum Association. "What's troubling is if (the Bay Area proposal) leads to a patchwork of local programs with their own fees and goals. It's very hard for the state to meet its goals, and this could make it more difficult."
The petroleum association questions whether the Bay Area pollution board — 22 county supervisors and members of city councils — has clear authority to raise the fees.
Hall also said the group worries that any new fee imposed on gasoline refineries could lead to higher prices for gasoline, already near $4 a gallon.
The five refineries in the trade association include Chevron in Richmond, Shell in Martinez, Tesoro between Martinez and north Concord, Conoco-Phillips in Rodeo, and Valero in Benicia.
Jack Broadbent, the air district's chief executive officer, said oil refiners would pay the largest share of the proposed fees because they are the largest carbon dioxide emitters.
The district would collect $1.1 million in greenhouse gas fees annually from 2,500 Bay Area businesses that already have district permits and pay fees for emissions of other pollutants, such as smog-forming reactive gases.
Nearly two-thirds of the businesses would pay less than $1 per year, according to a district report. About 850 would pay $1 or more. Five oil refineries and the two power plants in Antioch and Pittsburg each would pay in excess of $50,000 because of their large carbon dioxide emissions from burning fuel.
"The fees are very modest," Broadbent said. "Tackling climate change is a big challenge. We need the combined efforts of federal, state and local agencies."
Broadbent said the Bay Area air district would be the first to collect fees to recover the costs of regulating global warming gases, but he asserted his agency has authority to do so. His and other pollution agencies commonly collect fees to recover costs of regulating smog and soot, pollutants that have been regulated for decades, he said.
To determine the proposed fees up for a vote Wednesday, the air district divided the $1.1 million it spends annually on global warming studies and regulation by the 4.4 million metric tons of global warming gases emitted annually in the Bay Area. The result is a fee of 4.4 cents per ton.
Motor vehicles account for about half the global warming gases in the Bay Area, but they are regulated by the state rather than local districts.
The Bay Area district already has taken measures to limit global warming gases from home water heaters and industrial boilers, which burn less fuel that oil refineries but still produce global warming gases.
Global warming fees set by the Bay Area board will be integrated into any state fees the California Air Resources Board may adopt to curb global warming gases statewide, said Jerry Hill, chairman of the Bay Area pollution board and also a member of the California Air Resources Board.
Linda Weiner, a spokeswoman for the American Lung Association of California, applauded the proposed fees as a significant first local step toward reining in a worldwide problem.
"We've taken too long to deal with global warming," she said. "There is no time to waste."
Contact Denis Cuff at 925-943-8267 or dcuff@bayareanewsgroup.com .
If you go
The Bay Area Air Quality Management District meets at 9:45 p.m. Wednesday at its headquarters, 939 Ellis St., San Francisco, to hold a hearing and consider approving global warming fees for businesses.
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