Professional Development: Greenhouse Gas Audits

By Deborah Sweeney
Published in the January 2012 issue of Today’s Facility Manager

Greenhouse gas emissions auditing is a fairly new concept, but it is likely going to become something every major industry will need to address. Back in December 2010, the U.S. Environmental Protection Agency (EPA) made it a requirement for certain large facilities to begin tracking and reporting their GHG emissions. The EPA and its affiliates will soon begin auditing these reports to make sure emission levels are kept low in an effort to cut down on the GHGs in the atmosphere.

Currently, not every industry is required to report GHG emissions. In fact, the EPA extended the deadline from the end of March 2011 to the end of September 2011. Right now, the only facilities required to report to the EPA are those creating combustible products that result in the emission of GHG, directly emit sources of GHG, or inject CO2 directly into the ground. If a facility emits 25,000 metric tons or more of GHGs per year, the facility will also be required to report to the EPA.

As of January 2012, certain industries are not yet required to adhere to this law; power plants, for example, will not see finalized standards until July 2012, and refineries will have to wait until December 2012. Dates and deadlines may continue to change as the EPA has been inundated with requests to analyze the impact these rules have on businesses. However, direct suppliers of GHGs are unlikely to receive any reprieve, so it is best for any facilities in those industries to prepare for EPA audits.

If facility managers (fms) have any doubts as to whether or not these laws apply to their industries, they can access an applicability tool offered by EPA to determine this. (The tool can be found at this link.) If the new rules do apply, fms should begin to take the following steps to ensure compliance.

First, they should work to establish a well funded and transparent internal monitoring service for their facility’s emissions. Even if the deadline for facility transparency is years down the road, fms should make this a priority. Managers should be doing everything they possibly can to make their compliance obvious.

University graduates are becoming well trained in collecting and analyzing GHG emission reports, which are typically complicated and time consuming processes. Fms should look to hire employees recently trained in the technology and systems required to carry out emissions analysis. Though goodwill compliance attempts are likely to be noted, submitting incorrect data will bring EPA contractors to the facility’s doorstep.

Secondly, managers should look into hiring a third-party service to verify their internal reports. The last thing an fm needs is a black mark in EPA records. The first few years of self reporting will be the most important to determine which industries and facilities are going to be more compliant and which ones will be trouble in the future and thus will require heavier monitoring. While hiring an outside service can be pricey, doing so will mean that much more protection and confidence when it comes time to submit emissions reports.

Managers should make sure the firm they choose for verification is accredited at the state or federal level for auditing emissions. Hiring an unaccredited firm may cost less, but recommendations they give or standards they use may not be the ones EPA expects. At the end of this process, managers will want to have a clear map laid out on how to meet national emissions standards which they can then give to their internal emissions team.

Lastly, facilities should try and remain as flexible as possible. There have been challenges against these new laws drawn up in Congress, and deadlines fluctuate. There are a few active campaigns trying to stop these audits from taking place, but the likely scenario is that they will happen. The most important thing is for managers to remain as flexible as they can. If they have an internal team drawing up GHG inventories and a clear plan, this will be much easier.

Fms know the importance of having confident employees who feel secure in their jobs, so they should take steps to calm any fear their GHG accounting team has about job security as the EPA fights off challenges. The last thing a manager needs is for them to represent a facility’s emissions inventory falsely in an attempt to prove they are worth their paychecks. Managers should take the necessary steps to build a confident team willing to grow and evolve with requirements placed on the facility.

An fm’s job has never been an easy one, and the new requirements placed on various industries by the EPA are not going to make it any easier. However, many still have quite a few years to prepare to meet these new emissions requirements.

As CEO of MyCorporation Business Services, Inc. in Calabasas, CA, Sweeney has experience in the field of corporate and intellectual property law as well as the start-up and entrepreneurial industries. She joined MyCorporation in 2003 after serving as outside general counsel for five years. Sweeney has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the area of corporate and intellectual property law.