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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.

Attachment:

Original File Name:

Date and Time Comment Was Submitted: 2009-07-14 14:13:22



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