Silicon Valley Was Ready for GHG Rule

Over the past decade, many of Silicon Valley's computer chip makers have voluntarily reduced their emissions of a dangerous group of greenhouse gases that are 6,500 to 23,900 times more potent than carbon dioxide.

So when the California Environmental Agency's Air Resources Board adopted groundbreaking regulations yesterday to curb the same potent gases, it wasn't a big shock to the industry. All but 16 of the 85 plants affected were already in compliance.

Still, the Semiconductor Industry Association and some Republicans in the Legislature balked. SIA spokesman John Greenagel said:

"This would make California's regulations the most stringent in the world.

"There hasn't been a new semiconductor facility built in California in at least 15 years, and by having regulations that are out of step with the rest of the world, we're pretty much ensuring there won't be any facilities built in California."

The new regulation from the Air Resources Board will restrict emissions of fluorinated gases starting in 2012. It is one of the first steps in an ambitious state climate plan passed in 2006 to cut California's greenhouse gas emissions to 1990 levels by 2020.

The board estimates the new restrictions will reduce emissions by the equivalent of 180,000 tons of carbon dioxide a year in a state that produces almost 420 million tons of CO2 annually.

The cost to the industry, according to board estimates, will be about $22 million in initial capital expenses, plus recurring annual costs of $850,000 for 10 years. Board Chair Mary Nichols said the rules were developed "in concert with the industries that use them." She calls them "cost-efficient ways of fighting climate change that will promote the use of less damaging alternatives."

Still, the SIA and state Republicans say that's too financially onerous.

NEC Electronics spokesman Gus Ballis told the board that the new rule would have a severe financial impact on his company's California operations. "We're potentially on the chopping block, whether they are going to keep us or pull our production back to Japan," he said.

Republican State Sen. Bob Dutton took a step yesterday to try to stop the board. He proposed legislation to postpone regulations related to the state's greenhouse gas reduction targets until the California economy recovers. The San Francisco Chronicle notes that Dutton's bill has "less of a chance than a polar bear on melting ice" – Gov. Arnold Schwarzenegger would never agree to a delay, a Schwarzenegger spokeswoman says.

The reason so many of California's semiconductor plants already meet the new state standard – 57 of the 85 semiconductor plants in California emit such a small amount of the gases that they will only be required to report on their emissions – is that, since 1996, they have voluntarily participated in agreements with the U.S. Environmental Protection Agency to reduce their emissions. In 1999, the World Semiconductor Council's member associations adopted a similar voluntary agreement.

Although SIA's Greenagel says the costs are too high, he doesn't believe existing plants will relocate.

"You can't pick up a huge facility and move it to another state. What you can do is decide that when that plant reaches its useful life, when it comes time to replace it, rather than keep it in operation, you shut it down and lay off the workers."

Air Resources Board spokesman Stanley Young says the board knows it is setting the standard for the rest of the nation:

"How about I quote something Barack Obama said on December 18th last year:

"'It is very important to look at the history when it comes to the regulation of emissions in California. Consistently, California has hit the bar and then the rest of the country has followed.'"

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