EPA annnounces it will set Greenhouse Gas standards

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PHOTO COURTESY OF BLUNT OBJECT

by Cynthia Price
Legal News

As a settlement in response to two lawsuits, New York v. EPA and American Petroleum Institute v. EPA, the United States Environmental Protection Agency has agreed to begin a process to generate New Source Performance Standards (NSPS) for regulating greenhouse gas emissions.

According to Gina McCarthy, the EPA Assistant Administrator for Air and Radiation who spoke to reporters at a Dec. 23 press teleconference, the NSPS approach is a kinder and gentler way of determining standards.

In accordance with the Clean Air Act of 1970, EPA may set industry-specific standards for new sources that emit  significant quantities of harmful pollutants, referred to as NSPS. The standard-setting process allows flexibility in determining the standards, which may take into account cost, health impacts, and energy requirements.

McCarthy said that one of the most important tools at the agency’s disposal is the inclusion of what may be achieved by Best Available Control Technology (BACT), which is in part the reason that the Clean Air Act requires periodic updates of NSPS.

Power plants, or Electric Generating Units, and petroleum refineries generate just short of 40% of the GHG emissions in the United States. These are the two industries which EPA will address first.

The EPA states, “[T]hese standards will give power plants and refineries a clear and sensible path for addressing GHG pollution.”

It has been a long and arduous legal road for EPA to reach this point.

The history of Greenhouse Gas (GHG) regulation is related to the history of the Clean Air Act of 1970. When the CAA was amended in 1977, Congress included provisions for New Source Review, which required companies to obtain a permit prior to building a new power plant or modifying an existing one.  Modification is defined as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.”

However, the background for the suits which have recently been settled basically started in 1998, according to an April 2009  Congressional Research Service report Climate Change Litigation: A Survey by Legislative Attorney Robert Meltz.

In that year, EPA General Counsel Jonathan Cannon issued an opinion that Carbon Dioxide does meet the Clean Air Act definition of an air pollutant. His memorandum further advised EPA Administrator Carol Browner that the agency must conclude that CO2 poses harm to public health, welfare or the environment before it can regulate the substance.

The EPA declined at the time to investigate whether that was the case.

The decision not to regulate resulted in a 2003 petition by Massachusetts, Connecticut and Maine demanding that the EPA list GHGs as a criteria pollutant and begin the regulatory process. When the EPA, effectively reversing the 1998 General Counsel memorandum, refused to do so, the plaintiffs transferred their energy to Massachusetts v. EPA, challenging the petition denial.

The result was the now-famous 2007 decision by the U.S. Supreme Court that the Clean Air Act does indeed grant EPA authority to regulate GHGs. The Supreme Court justices decided that on a 5-4 split.
That decision is limited to mobile sources of GHG emissions, so there was still some doubt about EPA’s authority to regulate stationary sources.

After some convoluted legal maneuverings, cases were consolidated into two filed in the District of Columbia. New York v. EPA saw that state along with California, Connecticut, Delaware, Maine, Massachusetts, New Mexico, Oregon, Rhode Island, Vermont and Washington; the District of Columbia, City of New York; plus “Environmental Petitioners” including Natural Resources Defense Council, Sierra Club, and the Environmental Defense Fund suing to require EPA to regulate the power plants. American Petroleum Institute v. EPA involved regulation of petroleum refineries.

The first case was originally much broader than GHG emissions, but the GHG concerns were severed from the original suit, and after the Massachusetts v. EPA decision, the case was remanded back to EPA.
The second case was broadly consolidated and wound up including as plaintiffs the refinery industry association American Petroleum Institute, several refinery companies, states, and environmental groups. The EPA’s final agreement, though separate, is with all the same groups as in New York v. EPA, plus the state of New Hampshire; and with the Environmental Integrity Project instead of the Environmental Defense Fund.

On Dec. 23 the EPA officially announced that it would develop GHG pollution standards under the following schedule: for electric power plants, the standards must be proposed by July 26, 2011 and finalized by May 26, 2012. For refineries, the EPA must propose revisions by Dec. 15, 2011 and finalize them by Nov. 15, 2012.

States must give EPA their corresponding plans within nine months of the publication of the new guidelines as the schedule now stands.

The EPA’s McCarthy repeatedly stressed that this will not establish any kind of cap or ceiling for GHG emissions, although the NSPS process does set a “floor” below which regulated entities may not go.
States may modify the standards and/or the implementation timeline if they can make a case that “following the federal guidelines is unreasonably cost-prohibitive, physically impossible, or that there are other factors that reasonably preclude meeting the guidelines.”

There is still time for comment on the settlement agreements themselves, due 30 days from their publication in the Federal Register, which was Dec. 13, 2010.

More information is available at http://www.epa.gov/NSR/actions.html by clicking on the “new” Clean Air Act Permitting for Greenhouse Gas Emissions documents.

The EPA’s intent is to host a series of listening sessions in early 2011, allowing the business community and members of the general public to give feedback, as well as through the normally-scheduled comment periods as part of the process.

Said EPA Administrator Lisa Jackson,  “These standards will help American companies attract private investment to the clean energy upgrades that make our companies more competitive and create good jobs here at home.”

And Sierra Club Executive Director Michael Brune stated, “Carbon pollution poses serious threats to Americans’ health, our economy and our future. We’re pleased that EPA is working to deliberately bring this dangerous pollution under control, focusing on the biggest polluters first. This is a major endeavor and the timeline laid out in today’s announcement balances the need for public input with the urgency to act quickly.”

At the same time, Michigan’s Congressional Representative Fred Upton has suggested in a Wall Street Journal op-ed that Congress should block the EPA from issuing the standards, calling it “an unconstitutional power grab that will kill millions of jobs – unless Congress steps in.”