Here in Louisiana, many citizens have made lots of money on oil and natural gas. Our state lies above two very profitable and prolific natural gas shales – Haynesville and Tuscaloosa.

Haynesville is located in Northwest to Central Louisiana and has made millionaires overnight. The Tuscaloosa shale is one located North of Baton Rouge into central Louisiana, Mississippi and Alabama; it is being tapped for the enormous reserves, reports Baton Rouge’s Advocate news paper in a recent article.

Natual gas is being sold by the industry to the public as a safe and green alternative to other reusable energy sources. In a new study from Cornell University, researchers say that Natual gas has as negative a carbon foot print as coal, or worse! Coal has constantly been chastised as the anti-green fuel. Time Magazine has a in depth analysis at this study and its impact on the energy industry.

New York Times reports that the gas industry “fiercely” disputes the finding of the Cornell Study. Natural gas has always been reported to the public to be plentiful, clean and green. The revolutionary process whereby the gas is extracted from depths of over 10,000 feet below the surface is called hydraulic fracturing. Apparently this process releases enough methane gas to negate all of the benefits of gas production.

In the end what could this mean for Louisiana? This reminds me of the old saying, “if is sounds too good to be true, then it probably is.” Many Louisiana citizens who live in areas encompassed by the underground shales are looking to get rich quick. Unfortunately this may come at a high price to our environment and our landscape. See picture. Louisiana citizens need to make sure they tread lightly when selling or leasing mineral rights to land. Always seek the advice of trusted independent counsel when dealing with prospecting companies.

Started in the green revolution’s holy land, Berkley, California, PACE financing is shorthand for Property-Assessed Clean Energy Financing (Wikipedia entry).

The concept is simple: cities loan money to property owners to install clean energy equipment. The loans are then repaid to the city through annual property tax assessments.

As originally conceived, it’s a win/win/win situation really. Property owners get funds to improve their property, paying back the loan with money saved in the the property’s reduced operating expenses. Cities and communities benefit by upgrading its overall energy efficiency. Businesses and efficient energy investors benefit because the market grows for its products.

All was going very well for PACE Financing. PACE legislation was passing across the country, and President Obama’s administration wholeheartedly supported PACE programs.

This progress came to an abrupt halt in June 2010, when the Federal Housing Financing Authority (FHFA) dropped this news: Properties with PACE loans cannot be purchased by mortgage giants Fannie Mae and Freddie Mac.

Why not?

Well, PACE loans create a lien against properties similar to a tax lien, meaning that the lien has priority over all other debts (including mortgages). The value of these loans can be between $10,000 and $100,000, and sometimes more. The problem for these mortgage holders is obvious, as they are losing priority on their collateral.

The news from the FHFA caused more than $150m in funding to get yanked by the US Department of Energy, and has some predicting the demise of PACE Financing as we know it. And they may be right.

Can PACE Be Saved?

The question now is whether these PACE Programs can be saved. While I believe they can be, I don’t think the programs will be unaffected by the FHFA determination. Here is a few things that are happening to help PACE stage a comeback, and a glimpse at how this might affect the PACE Programs:

1) California is Fighting It: First, Sonoma County and the California Attorney General have both separately filed suit against the FHFA claiming that the determination is wrong, or that FHFA lacks jurisdiction to make the determination on behalf of states and counties.

2) Legislation is Being Proposed: The US Congress (as well as local reps and senators) are introducing bills aiming to protect PACE financing programs. One such bill is the PACE Assessment Protection Act of 2010.

3) Re-Thinking PACE: States may be ready to re-think the way they structure these PACE programs, and provide some protections for mortgage companies. While not passed in response to the FHFA announcement, Louisiana’s new PACE egislation may have predicted these problems, as it greatly accommodated mortgage holders. The PACE legislation from the 2010 session, for example, requires enough equity in the house to support the loan, and requires permission from the mortgage holder for commercial loans greater than $100k (talked about in this post)

4) Commercial Focus: The FHFA restriction really affects the residential markets only. As such, many states and municipalities may be re-focusing their PACE programs on the commercial market. One example of this is New Orleans, who anticipated launching a PACE district with the help of funding from the US Department of Energy’s America’s Solar Cities program. The city says they plan on moving forward with the district, except it will only be for commercial PACE loans.

Hey, What Does This Have To Do With Construction?

The PACE Financing Programs has a lot to do with construction and construction law. You may or may not know, but our firm publishes two blogs that focuses on green building laws: The Louisiana Green Building Law Blog and the Northwest Green Building Law Blog. I am also a LEEP AP, and focus part of my practice on green building issues.

I recently wrote a blog post called: Think Green Building is Irrelevant? Think Again. The post discussed a report published by NPR saying that green building accounts for 33% of new construction in the United States. That’s a remarkable number. And if these PACE Programs get off the ground, the existing construction green building numbers will be driven up significantly.

Stay tuned.

I was alerted to an article in the Orlando Sentential about a Florida couple fighting their homeowner’s association for the right to convert their roof to an energy-efficient white roof. It presents an interesting problem for the green building movement. Solar equipment, white roofs, green roofs, and similar “green” installations are…let’s be honest…sometimes bulky. But even the sleekish (that a word?) and stylish green installations are this: different. And people fight different.

So, how is the battle between solar installations and the status quo going to end?

Interestingly, the 2010 Louisiana legislature passed a bill speaking directly to this, affirmatively setting forth the right for a property owner to install solar equipment on their homes or businesses.

It’s good news for folks in Louisiana, but doesn’t much help the folks in Florida.

What do you think? How should zoning ordinances and associations handle green installations?

By the way the city is feverishly writing parking tickets, it seems like Orleans Parish is in need of some new revenue streams. One possible green solution would be to mimic the actions of Maryland’s Montgomery County Council, who just a few weeks ago passed a Carbon Tax.

Montgomery County is the first in the nation to pass such a forward thinking tax. Although, this tax will only apply to one coal powered energy plant, it is a step in the right direction. A Carbon Tax defined as a “tax on carbon dioxide emissions from burning fossil fuels.”

This action may be viewed as anti-business, it places a value on carbon emissions and will encourage big business spend less by polluting less. Keith Harrington was present at the counsel vote in Maryland and his blog post describes a riot like atmosphere.

South Louisiana is not a beacon for its green initiatives, but we have many polluters with deep pockets. Ideas like the one in Montgomery County could spur much needed income for cash strapped, cities, parishes, and the state government.

This innovative idea by the Maryland County has caught the eye of green leaders like former Vice-President, Al Gore in a recent post. According to Gore, other cities have passed similar taxes but Montgomery is the first County. Who will be the first State?

With all of the talk in South Louisiana being focused on the oil spill and cleaning up the damage to our environment, government leaders should be looking for proactive means to put Louisiana back in a positive light. Passage of similar types of litigation is good for the air we breathe and our pocketbook.

For more information on Carbon Taxes visit the Carbon Tax Center.

Green building continues to gain momentum nationwide. But developments surrounding a landmark piece of green legislation continue to have major implications for communities across the country.

At issue is Washington D.C.’s Green Building Act, which passed in 2006. The law requires builders in the nation’s capital to meet new energy efficiency standards by 2012. But the act’s language has proved problematic with the surety industry, which is responsible for issuing the construction bonds that guarantee work and protect taxpayer investments.

To dig deeper into the issue, the Surety Bonds Education Center recently interviewed Chris Cheatham, a Washington, D.C., construction attorney and an expert in the green building issues facing the surety industry. His blog, Green Building Law Update, has become a hub for information and insight into the future of green building in the nation’s capital and beyond.

Chris has closely followed the Green Building Act and the subsequent uproar from the surety industry. You can listen to the full interview at the Surety Bonds Sit-down.

At the end of 2009, the U.S. Environmental Protection Agency (EPA) published effluent limitations guidelines (EGLS) and new source performance standards (NSPS) to control storm water runoff and the discharge of pollutants from construction sites. The new regulations took effect on February 1, 2010, requiring all permits issued by the EPA to incorporate the new requirements.

New Maximum Numeric Turbidity Limitations

For the first time, the EPA has set numeric limits for the discharge of storm water from construction sites. The EPA has set a maximum daily average numeric limit of 280 NTU (a turbidity measurement) for covered sites.

In case you don’t know, Wikipedia defines Turbidity as:

Turbidity is the cloudiness or haziness of a fluid caused by individual particles (suspended solids) that are generally invisible to the naked eye, similar to smoke in air. The measurement of turbidity is a key test of water quality.

The turbidity limitations will effect construction sites on a phase-in schedule. Construction sites with 20 or more acres of earth disturbance must comply starting August 2, 2011, and those sites with 5 or more acres of earth disturbance must comply starting February 2, 2014.

Covered sites must monitor the storm water discharge for turbidity, report the results of the monitoring and use control technologies (which are not defined) to ensure that the maximum levels are not exceed.

Other Changes (Non-Numeric BMPs)

The EPA has identified other mandatory Best Management Practices (BMPs) relating to: (i) Erosion and Sediment Controls (40 CFR § 450.21(a)); (ii) Soil Stabilization (40 CFR § 450.21(b)); (iii) Dewatering (40 CFR § 451.21(c)); (iv) Pollution Prevention Measures (40 CFR § 450.21(d)); and (v) Prohibited Discharges (40 CFR §450.21(e)).

Additional Resources

• Environmental Protection Agency Web Release of Regulations
• Full Text of Regulations
• Article by Barnes & Thornburg, LLP
• Article by Vinson & Elkins, LLP

A draft of the International Green Construction Code (IGCC) is scheduled for release in March 2010. Developed in partnership with the American Institute of Architects and ASTM International, and supported by the United States Green Building Council, the code is expected to perform as a “model code” for jurisdictions across the country looking to draft and enforce green construction codes in their areas.

There’s a key difference between the proposed “code” and rating systems such as the LEED Rating system. Unlike rating systems like LEED, the IGCC is a regulatory framework.

A great article explaining the IGCC and its potential uses and challenges was written by Harvey Berman, a LEED AP lawyer in Ann Arbor, Michigan. Read it here: “ICC makes rapid progress on International Green Construction Code.”

It will be interesting to see which jurisdictions adopt the IGCC, and which go further to make it mandatory.

As many in the green building sector know, California has already adopted a “California Green Building Standards.” While code compliance is currently voluntary, it becomes mandatory this year. Other cities and states have introduced and passed legislation that will require commercial projects to meet certain sustainable performance benchmarks, although not always in the form of a code.

In Washington state, and the City of Seattle, new laws require commercial property owners to report its energy performance, and disclose it to future tenants and purchasers. Seattle, Washington, Portland and the entire Pacific Northwest is likely to be among the early adaptors of the IGCC.

Louisiana certainly hasn’t remained dormant in the green building sector, and perhaps the state and its parishes will look closely at the IGCC when its released.

Energy Inspectors – Is this an idea or reality for municipalities? Well, to all those installing solar panels, insulation products and other green appliances and products, in some areas the use of energy inspectors is reality.

In cities like Austin, TX, an Energy Inspector is now a required position. His or her job is to inspect new residential dwellings and make sure they are up to the city’s strict code.

Austin is not the only place in the US with such a position, states such as California have similar positions. I came across this interesting bit of green construction knowledge when reading this New York Times Article “A New Enforcer in Buildings, the Energy Inspector”

The article reports that we lose or waste more energy in our homes than necessary. Old homes that were build to outdated codes are just throwing money and energy literally out the window. States like Florida, Texas and California are being proactive in the fight to save energy and costs for consumers.

We’ve reported in the past that Louisiana is leading the country in some areas related to green building, and so it shouldn’t be surprising that New Orleans has an engery inspector positions as well. Heck, the New Orleans energy inspector has even been quoted by the New York Times in a piece they ran about the green movement in Louisiana. (A Sustainable New Orleans Slowly Rises in Katrina’s Wake). In the article the energy inspector, Zach Embry, is referred to as the city’s “renewable energy permitting specialist.”

It’s important for contractors, suppliers and others in the industry to think the energy inspector position, not only because of what it means for the green movement in general, but also because it will affect your ability to provide green products and services to clients.

And of course, in this area, the laws, regulations and inspections can be a moving target. So, be careful.

A few weeks ago, we posted an article about the tax credits available to homeowners, property owners and developers for installing solar energy equipment in Louisiana (Louisiana the Greenest? It’s Certainly The Brightest). Therein, we explained that Louisiana has some of the most impressive incentives in the nation for solar energy installations.

Let’s look at this issue from another angle: Those who are supplying and installing the solar energy equipment.

The available tax incentives and market demand has increased competition in these installations, and still more organizations are wondering how they can offer solar installation services to their clients. Since the real advantage to installing solar panels or solar energy equipment is the available tax credits, we’ll focus this blog post on what qualifications the installer must have for its clients to be eligible for state and federal tax credits.

The Louisiana Board of Contractor’s Study Reference Guide for the Electrical Work examination has this within it, giving insight on the certification requirement for those interested in installing this equipment:

Electrical contractors who intend to do photovoltaic panel and windmill installations must, in addition to getting their Electrical Work classification, also obtain independently the classification of “Solar Energy Equipment” and meet other requirements in order for their customers to be eligible for certain state tax credits.For more information about eligibility for the credits, please contact the Louisiana Department of Revenue and Taxation.

In addition to this “Solar Energy Equipment” classification, the Department of Revenue’s Notice of Intent on Income Tax Credits for Wind or Solar Energy Systems (LAC: 61:I:1907) requires the installing contractor to have “a certificate of training in the design and installation of solar energy systems from an industry recognized training entity, Louisiana technical college, or the owner of the residence.”

Who are some industry recognized training entities? Well, I suppose this is a matter for interpretation, but the following programs should be worthy:

• La Clean Tech
• NABCEP (North American Board of Certified Energy Practitioners)
• Boots on the Roof
• Ontility Training

Related articles by Zemanta

• Installed cost of solar photovoltaic systems in the US fell in 2008 (scienceblog.com)
• Internet Intercedes to Make Solar Cheaper (wired.com)
• Solar panel prices: Signs point to rebound as a supply glut may be ending (dailyfinance.com)
• “Green Building” Senate Bill 91 Pending in Louisiana Legislature (lagreenlaw.com)