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Though AB 32’s insanity was relatively contained to screwing only private enterprise in California, the fact that it may now be compromising our national security and promoting a less effective energy procurement process with the Marine base in SoCal is very troubling.  This may be of serious consequence and should be a focus on board hearings on the implementation of cap and trade.
Lance Christensen
Senate Republican Policy Consultant, Environmental Quality

The New York Times - Online

Energy-Savvy Military Base Bumps Up Against Calif. Cap-And-Trade Law

September 13, 2011

ANNIE SNIDER of Greenwire

TWENTYNINE PALMS, Calif. -- With fields of solar panels and a pilot microgrid project, the sprawling Marine base here is at the forefront of U.S. military efforts to lessen its reliance on the vulnerable civilian power grid.

But a key component of the energy-conscious base has been ensnared by California's global warming law.

At issue is the Air Ground Combat Center's cogeneration plant that produces electricity and hot water primarily from natural gas. Built eight years ago, the 7.2-megawatt plant provides at least 57 percent of power used by the base's 16,000 or so Marines, sailors and civilians.

The power plant's numbers wow the Pentagon, which is striving to make its bases energy-independent. But California regulators are focused on another number -- 36,000 tons of carbon dioxide equivalent that the plant emits each year.

Those emissions are enough to subject the plant to the state law for curbing heat-trapping CO2 and other greenhouse gases. The law is set to take effect in 2013.

The Marine Corps argues that the plant is good for the environment. The cogen operation emits half as much greenhouse gases as power the base buys from off-site generators, said Erin Adams, the base's air resources manager. But California's law does not allow the base to take credit for such savings.

"We're producing the least amount of [CO2 equivalent] possible at this plant. We really can't get better," Adams said. "So we're going to be stuck with either shutting down the cogen to meet the requirements, or purchasing allowances, which the federal government really isn't in the business of doing."

The problem is not just that the military is not used to buying and selling emissions allowances, Defense Department officials say. It is that the base might not be allowed to do so under federal law.

In comments filed last December with the California Air Resources Board (ARB), the Pentagon argued that the law may amount to an unconstitutional tax by a state on the federal government.

Moreover, federal law could prevent DOD from participating in the trading portion of cap-and-trade scheme, the military argued. Being unable to buy allowances, DOD said, the base may be forced to produce less electricity from the plant in order to meet emission requirements.

That might force the Marines to buy dirtier power from off-base suppliers, thus making the base more reliant on the civilian grid and possibly affecting power supplies to nearby towns, said Jon Costantino, a former climate change manager at ARB and now a senior adviser with the Sacramento law firm Manatt, Phelps & Phillips.

"I would argue that by requiring the military to comply, you're actually causing more harm to the environment," Constantino said.

And while the Combat Center's cogeneration plant is the only military facility that falls under the state's climate law, DOD is worried that other base facilities and activities -- say, the movement of fuel between ships and land and between major military hubs -- could eventually fall under the law as well.

Military representatives have been pleading their case to California regulators since the climate law, A.B. 32, was signed in 2006, and ARB has made exceptions for the military on other issues in the past.

But Costantino cautions that ARB must be careful in making exceptions if it is going to reach state-mandated pollution-reduction goals.

"Everybody and their mother is trying to get out of cap and trade -- whether it's interstate commerce, whether it's small business -- they're trying every [argument] in the book to get out of it, but the only way cap and trade works is if everyone is included," he said.

Ryan McCarthy, science and technology policy adviser to the ARB's chairman, said the agency understands the military's predicament and is interested in reaching an agreement that goes beyond solving the Twentynine Palms base's problem and addresses the military as a whole.