DEC chief predicts N.Y. CO2 trading by next year

By MICHAEL VIRTANEN
Associated Press Writer

— ALBANY -- New York's trading market in carbon dioxide emissions, meant to help curb global warming and establish a model for the nation, should start next year, state Department of Environmental Conservation Commissioner Pete Grannis said.
"It's a very aggressive time line but we're on it now," Grannis said last week. "Our plan is to have an auction the end of the second quarter, beginning of the third quarter 2008, barring legal impediments."
The agency has proposed CO2 emissions ceilings for New York power plants at about 64 million tons annually from 2009 through 2014, selling that level of pollution allowances at auction, using proceeds for clean energy projects, then lowering the limit 2.5 percent a year through 2019.
"That's the top priority for the governor, the climate change issue," Grannis said. The rule, part of a collaborative effort now involving 10 Eastern states, is subject to public comment. The state is also seeking bidders to run the auction. "We believe this is a very good model, and our expectation is the next (presidential) administration will pick up a large part of what we're doing as a national program," he said.
Power producers have expressed concerns about access to allowances, means for recovering additional costs under their long-term supply contracts, and retrofit technology that doesn't exist yet.
"We'd like to see more clear prioritization to ensure generators have the first opportunity to secure the allowances they need in the auction," said Radmila Miletich of the Independent Power Producers of New York. "They are ones that have to comply with the rules requirement."
"We as an organization would support a properly constructed program to reduce greenhouse gases and C02 emissions," Miletich said. "We think a federal program is the way to go."
Reviewing his first year heading the DEC for the Spitzer administration, the former Manhattan assemblyman said cracking down on major polluters is also high on the list, an area where he says the Pataki administration was more passive, and that message got filtered down through the agency.
His role is to encourage and back up the DEC staff so they can do their jobs, he said. The agency has reconstituted its former Bureau of Environmental Crimes Investigations.
DEC data show 56 pollution cases referred to the attorney general's office this year, up from 52 last year and only 31 in 2005. The current group include $1.575 million in penalties against Altaire Pharmaceuticals in Riverhead, Suffolk County. The agency also is in federal court against ExxonMobil, which is now at the negotiating table over what Grannis called a huge, centurylong spill of millions of gallons of oil at Greenpoint in Brooklyn by the company and its predecessors.
"My primary objective is cleaning up the environment," Grannis said. "I'm prepared to work with any violator or polluter to achieve that objective as expeditiously as possible," but also willing to enforce against those "dragging their heels."
Among other notable pollution issues are New York City's sewage treatment plants, Grannis said. Other DEC priorities include solid waste reduction, and another attempt to enact broader mandatory bottle recycling is coming. The agency has added inspection staffing for the state's 5,000 dams and large agriculture operations including, those with large manure lagoons that pose serious environmental threats if they burst their banks.
In land acquisition, Pataki announced more than 1 million acres of open space preservation deals during his tenure. Grannis said they are closing the deals -- for 266,000 acres for $50 million so far -- while not yet adding any rangers or conservation officers.
The agency has about 3,600 total staff, having lost about 700 over a decade, and is filling all 109 new civil service positions in its current budget, including 12 at the new office on climate change that's working on Regional Greenhouse Gas Initiative, Grannis said. He declined to discuss any internal proposals to add more.
"There are lots of other properties on our list in the master plan of acquisitions should the money come available," he said.
Other policy items include a 15 percent reduction in state use of electricity by 2015 through alternative energy sources.