U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
PRO'S
Catalyst for Improving the Environment
Evaluation Report
EPA's Plan to Reduce Agency
Greenhouse Gas Emissions
Is on Track to Meet Executive
Order 13514 Requirements
Report No. 11-P-0209
April 12, 2011
-------
Report Contributors: Dan Carroll
Jerri Dorsey
Natalie Hanson
Jeffrey Harris
Kalpana Ramakrishnan
Olga Stein
Abbreviations
EO Executive Order
EPA U.S. Environmental Protection Agency
GHG Greenhouse gas
OIG Office of Inspector General
Cover photos: Three types of GHG reduction projects, from left: solar photovoltaic panels,
a plug-in hybrid electric vehicle, and a geothermal plant.
(U.S. Department of Energy photos)
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail: OIGJHotline@epa.gov write: EPA Inspector General Hotline
phone: 1-888-546-8740 1200 Pennsylvania Avenue NW
fax: 703-347-8330 Mailcode 8431P (Room N-4330)
online: http://www.epa.gov/oig/hotline.htm Washington, DC 20460
-------
U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
11-P-0209
April 12,2011
Catalyst for Improving the Environment
Why We Did This Review
We performed this review to
evaluate the U.S.
Environmental Protection
Agency's (EPA's) progress
toward meeting the
requirements of Executive
Order 13514, "Federal
Leadership in Environmental,
Energy, and Economic
Performance." Specifically, we
sought to determine EPA's
status in planning and
measuring reductions of its
greenhouse gas (GHG)
emissions at Agency facilities.
Background
.
On October 5, 2009, President
Obama signed Executive Order
13514 to establish an integrated
strategy toward Sustainability in
the federal government. The
executive order introduced new
GHG emissions management
requirements. It also prioritized
the reduction of GHG
emissions for all federal
agencies and required them to
measure, report, and reduce
their GHG emissions.
EPA's Plan to Reduce Agency
Greenhouse Gas Emissions Is on Track to
Meet Executive Order 13514 Requirements
What We Found
We found that EPA has completed its plan to reduce GHG emissions as
required by Executive Order 13514. However, projected GHG reductions are
contingent on the full funding and implementation of the plan's energy
efficiency projects.
EPA established a 25 percent GHG emission reduction target by fiscal year
2020. To reach this target, the Agency's primary strategy is to reduce its
facility energy intensity by 3 percent annually through fiscal year 2020. EPA's
Strategic Sustainability Performance Plan outlines specific projects that the
Agency will undertake to reduce GHG emissions. Funding for some of the
projects in the plan has not been authorized or appropriated, and delays or
deficits in plan funding may adversely impact the Agency's ability to meet its
GHG reduction goals.
What We Recommend
We recommend that EPA's annual update of its Strategic Sustainability
Performance Plan report describe changes to GHG emission reductions and/or
reduction goals based on actual funding and status of projects, and make
adjustments to the overall reduction goal as needed.
The Agency found the report to be factually accurate and concurred with the
findings and recommendation.
For further information,
contact our Office of
Congressional, Public Affairs
and Management at
(202)566-2391.
The full report is at:
www.epa.gov/oiq/reports/2011/
20110412-11-P-0209.pdf
-------
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
S WASHINGTON, D.C. 20460
^t PRO^
THE INSPECTOR GENERAL
April 12,2011
MEMORANDUM
SUBJECT: EPA's Plan to Reduce Agency Greenhouse Gas Emissions
Is on Track to Meet Executive Order 13514 Requirements
Report No. ll-P-0209
FROM: Arthur A Elkins, Jr.
Inspector General
TO: Craig Hooks
Assistant Administrator for Administration and Resources Management
This is our report on EPA's plans to reduce the Agency's greenhouse gas emissions conducted
by the Office of Inspector General (OIG) of the U.S. Environmental Protection Agency (EPA).
This report contains findings that describe the problems the OIG has identified and corrective
actions the OIG recommends. This report represents the opinion of the OIG and does not
necessarily represent the final EPA position. Final determinations on matters in this report will
be made by EPA managers in accordance with established audit resolution procedures.
The estimated direct labor and travel costs for this report are $133,497.
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response to this
report within 90 calendar days. You should include a corrective actions plan for agreed-upon
actions, including milestone dates. Your response will be posted on the OIG's public website,
along with our memorandum commenting on your response. Your response should be provided
as an Adobe PDF file that complies with the accessibility requirements of Section 508 of the
Rehabilitation Act of 1973, as amended. The final response should not contain data that you do
not want to be released to the public; if your response contains such data, you should identify the
data for redaction or removal. We have no objections to the further release of this report to the
public. We will post this report to our website at http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact Wade Najjum at
202-566-0832 or najjum.wade@epa.gov. or Jeffrey Harris at 202-566-0831 or
harris.ieffrev@epa.gov.
-------
EPA's Plan to Reduce Agency Greenhouse Gas Emissions 11-P-0209
Is on Track to Meet Executive Order 13514 Requirements
Table of Contents
Purpose 1
Background 1
Scope and Methodology 2
Results of Review 3
GHG Reduction Planning Milestones Met 3
Implementation of GHG Reduction Plan Contingent on Funding 4
Recommendation 4
Agency Comments and OIG Evaluation 5
Status of Recommendations and Potential Monetary Benefits 6
Appendices
A Agency Response 7
B Distribution 8
-------
Purpose
The purpose of this review was to evaluate the U.S. Environmental Protection
Agency's (EPA's) progress toward meeting the requirements of Executive Order
(EO) 13514, "Federal Leadership in Environmental, Energy, and Economic
Performance." Specifically, we sought to determine EPA's status in planning and
measuring greenhouse gas (GHG) reductions at Agency facilities.
Background
On October 5, 2009, President Obama signed EO 13514 to establish an integrated
strategy toward sustainability in the federal government. EO 13514 enhances
requirements from several existing federal statuary and EO requirements related
to energy and environment, including EO 134231 and the Energy Independence
and Security Act of 2007. The EO requires all federal agencies to make
improvements in several areas, including GHG emissions.
Gases that trap heat in the atmosphere are often called GHGs. GHGs targeted in
EO 13514 include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride. Some GHGs, such as carbon dioxide,
occur naturally and are emitted into the atmosphere through natural processes and
human activities. Other GHGs are created and emitted solely through human
activities. Many, but not all, human-activity sources of GHG emissions are
expected to rise in the future. The increase in GHG emissions may be mitigated
through the use of newer, cleaner technologies and other measures. Additionally,
everyday choices about such things as commuting, housing, electricity use, and
recycling can influence the amount of GHGs emitted.
EO 13514 also introduces new GHG emissions management requirements and
prioritizes the reduction of GHG emissions for all federal agencies. The EO
requires agencies to measure, report, and reduce their GHG emissions. All federal
agencies, including EPA, must establish and report a GHG inventory to the Chair
of the Council on Environmental Quality and the Director of the Office of
Management and Budget. This inventory encompasses Scope 1, 2, and 3 GHG
emissions, based on the source of emissions, as shown in table 1.
1 EO 13423, "Strengthening Federal Environmental, Energy, and Transportation Management," was signed by
President Bush on January 24, 2007.
11-P-0209
-------
Table 1: Three scopes of GHG emissions
Scope 1 Direct GHG emissions from sources owned or controlled by a federal
agency
Scope 2 Indirect GHG emissions resulting from the generation of electricity, heat,
or steam purchased by a federal agency
Scope 3 GHG emissions from sources not owned or directly controlled by a
federal agency but related to Agency activities, such as vendor supply
chains, delivery services, and employee travel and commuting
Source: Review of Council of Environmental Quality Guidance.
Each agency chose a percentage reduction target for agency-wide reductions for
Scope 1 and 2 GHG emissions in absolute terms by fiscal year 2020.2 On
January 29, 2010, President Obama announced a cumulative target (compiled
from the individual agency targets) for the federal government to reduce its GHG
emissions 28 percent by 2020.
All federal agencies must develop and submit an annual Strategic Sustainability
Performance Plan that prioritizes agency actions to achieve the goals of the EO.
For EPA, the Assistant Administrator for Administration and Resources
Management is the Senior Sustainability Officer for EO 13514. EPA will inform
senior managers, including assistant administrators, regional administrators, and
laboratory directors, of their responsibilities in implementing the plan.
The U.S. Department of Energy's Federal Energy Management Program is
responsible for reporting the actual GHG reduction data for the federal
government. EPA is responsible for reporting Scope 1 and 2 emissions on 34 of
its facilities across the United States. The first submission of GHG emissions data
was due to the Council of Environmental Quality and Office of Management and
Budget in January 2011.
Scope and Methodology
We conducted this evaluation in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the
evaluation to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our objectives. We believe that the
evidence obtained provides a reasonable basis for our findings and conclusions
based upon our objectives. We performed our evaluation from September 2010
through February 2011.
To complete our review, we met with staff from EPA's Office of Administration
and Resources Management, the U.S. Department of Energy, and the U.S.
General Services Administration, in Washington, DC. We analyzed EPA planning
and implementation documents. We reviewed applicable laws and regulations, as
2 Relative to a fiscal year 2008 baseline of the agency's Scope 1 and 2 GHG emissions.
11-P-0209
-------
well as guidance documents. Specifically, we reviewed EO 13514, EO 13423, the
Energy Independence and Security Act of 2007, the Energy Policy Act of 2005,
Office of Management and Budget and Council on Environmental Quality
Technical Guidance, EPA Energy Management and Conservation Program
Reports, and EPA's Strategic Sustainability Performance Plan. We also reviewed
EPA's plan for reporting GHG reduction measurement. We focused our review on
Scope 1 and 2 GHG emissions because they represent the majority of GHG
emissions.3 Our analysis also included a review of the GHG measurement
guidance.
Results of Review
EPA completed its plan to reduce GHG emissions as required by EO 13514.
However, projected GHG reductions are contingent on the full funding and
implementation of the plan's energy efficiency projects. EPA established a
25 percent GHG emission reduction target for Scope 1 and Scope 2 emissions by
fiscal year 2020. To reach this target, the Agency's primary strategy is to reduce
its facility energy intensity by 3 percent annually through fiscal year 2020. EPA's
Strategic Sustainability Performance Plan outlines specific projects that the
Agency will undertake to reduce GHG emissions. Funding for some of the
projects in the plan has not been authorized or appropriated, and delays or deficits
in plan funding may adversely impact the Agency's ability to meet its GHG
reduction goals.
GHG Reduction Planning Milestones Met
We found that EPA completed its plan for GHG emission reductions as required
by the EO. On January 4, 2010, the Agency submitted its Scope 1 and 2 emissions
reduction targets. The Agency's goal is to reduce its combined Scope 1 and 2
GHG emissions by 25 percent by 2020, from a 2008 established GHG baseline.
The Agency completed its Strategic Sustainability Performance Plan as required
by the EO within the established timeframe, and the plan was approved by the
Council on Environmental Quality. The plan outlines specific projects that EPA
will undertake to reduce GHG emissions.
The Office of Administration and Resources Management considered several
options to reduce emissions. These options were reviewed in its Energy
Management and Conservation Program, and included energy conservation, green
power transitioning to offsets, and on-site renewable energy. After review of costs
and options, the office chose to focus on energy conservation. The Agency
decided to focus efforts and resources on maximizing energy conservation by
reducing energy use and other conservation options to achieve the 3 percent
reductions annually. Some of EPA's energy conservation strategies include:
1 Scope 1 and 2 emissions represented approximately 68 percent of EPA's 2008 GHG emissions.
11-P-0209
-------
• Mandatory Commissioning: Since fiscal year 2003, EPA has required
mandatory commissioning on all projects that include laboratory
mechanical systems. Commissioning is a process to check the proper
installation, function, and operation of building systems.
• Infrastructure Replacement Projects and Mechanical System
Upgrades: EPA is pursuing major mechanical system replacement
projects as well as operating efficiency projects at all of its facilities.
• Energy Assessments and Re-Commissioning: EPA conducts energy
assessments, often at high-energy-intensity and large laboratories, and
then conducts re-commissioning at each EPA facility every 4 years as
required under Energy Independence and Security Act.
Implementation of GHG Reduction Plan Contingent on Funding
While the Agency has developed a plan to reduce GHG emissions and thereby
meet the requirements of the EO, the planned GHG reductions are contingent
upon availability of funding. Funding for implementation of EPA's plan to meet
the EO requirements generally comes from the EPA's Building and Facilities
budget. The Office of Administration and Resources Management estimates a
$20 million shortfall for planned projects for the period FY 2010 through
FY 2015. If funding is not received, EPA will have to revise its dates or goals for
planned GHG emission reductions.
Section 8 in the EO states that the Strategic Sustainability Performance Plan will
be updated annually. This annual update offers the Agency an opportunity to
revise planned dates and goals based on actual funding received and project
status. Office of Administration and Resources Management staff stated that,
based on future funding challenges, planned reductions may need to be moved out
to future years; otherwise, adjustments to reduction percentages may be
necessary.
Recommendation
We recommend that the Assistant Administrator for Administration and
Resources Management:
1. Make adjustments to the GHG emission reductions and/or reduction
goals based on actual funding and status of projects, and revise EPA's
overall reduction goal if needed during the annual update of the
Strategic Sustainability Performance Plan.
11-P-0209
-------
Agency Comments and OIG Evaluation
The Agency found the report to be factually accurate and concurred with the
findings and recommendation. In the annual update of the Strategic Sustainability
Performance Plan report, EPA agreed to describe changes to GHG emission
reductions and/or reduction goals based upon actual funding and status of
projects, and make adjustments to the overall reduction goal as needed.
11-P-0209
-------
Status of Recommendations and
Potential Monetary Benefits
POTENTIAL MONETARY
RECOMMENDATIONS BENEFITS (in SOOOs)
Planned
Rec. Page Completion Claimed Agreed-To
No. No. Subject Status1 Action Official Date Amount Amount
Make adjustments to the GHG emission reductions 0 Assistant Administrator for
and/or reduction goals based on actual funding and Administration and
status of projects, and revise EPA's overall Resources Management
reduction goal if needed during the annual update
of the Strategic Sustainability Performance Plan.
0 = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is undecided with resolution efforts in progress
11-P-0209
-------
Appendix A
Agency Response
March 17, 2011
MEMORANDUM
SUBJECT: Response to Draft Report:
EPA's Plans to Reduce Agency Greenhouse Gas Emissions
Is on Track to Meet Executive Order 13514 Requirements
Project No. OPE-FY10-0025
FROM: Craig E. Hooks /S/
Assistant Administrator
TO: Jeffrey Harris
Director for Program Evaluation, Cross-Media Issues
Office of Inspector General
OARM appreciates the opportunity to provide this response to the above report, dated
February 25, 2011. We find the report to be factually accurate and concur with the proposed
findings and recommendation. In the annual update of the Strategic Sustainability Performance
Plan report, EPA will describe changes to greenhouse gas emission reductions and/or reduction
goals based upon actual funding and status of projects, and make adjustments to the overall
reduction goal as needed.
We thank the OIG team for their thoughtful and comprehensive approach to development
of the report. Any additional questions regarding our response should be directed to Renee Page,
Director of the Office of Administration, at (202) 564-8400 or page.renee@epa.gov.
cc: Renee Page
11-P-0209
-------
Appendix B
Distribution
Office of the Administrator
Assistant Administrator for Administration and Resources Management
Assistant Administrator for Air and Radiation
Agency Followup Official (the CFO)
Agency Followup Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Audit Followup Coordinator, Office of Administration and Resources Management
11-P-0209
------- |