InterviewUS EPA likely to pose CO2 rule by mid-year - ACC

04 March 2009 17:29  [Source: ICIS news]

By Joe Kamalick

WASHINGTON (ICIS news)--US officials will likely declare carbon dioxide (CO2) a regulated pollutant by mid year, a top chemical industry official said on Wednesday, an action that could endanger the nation’s already eroded manufacturing base.

Mike Walls, managing director at the American Chemistry Council (ACC), said that he expects the Environmental Protection Agency (EPA) will announce an “endangerment finding” for CO2 under the Clean Air Act (CAA) before the end of the second quarter this year.

Under that law, if the EPA determines that a substance poses a risk to the environment or human health - a decision known as an endangerment finding - then the substance is subject to regulatory controls that could include severe limits or a complete ban on emissions of the substance.

“On the basis of our discussions with EPA, we are anticipating that the agency will at least announce a proposed endangerment finding for CO2 for public comment by the end of this quarter or before the end of the second quarter,” Walls said.

The EPA indicated last month that it is considering regulating carbon dioxide, citing the 2007 US Supreme Court ruling in Massachusetts v. EPA. 

In that ruling, the high court held that EPA not only has authority under the Clean Air Act to regulate CO2 emissions, the agency has an obligation under the law to do so.

The ruling’s only caveat was that EPA need not regulate CO2 as a pollutant if the agency could determine that CO2 does not in fact pose a risk to the environment. 

Given that President Barack Obama and every major environment-related official he has appointed holds that CO2 is the cause of global warming and must be reduced, it is nearly certain that EPA will produce an endangerment finding on carbon dioxide, according to industry sources.

Walls suggested that EPA may elect to limit its anticipated ruling on CO2 to mobile sources. The Massachusetts v. EPA suit involved the state government seeking to regulate automotive emissions, but the Supreme Court’s ruling in the case seemed to give EPA marching orders to regulate all sources of CO2, stationary as well as mobile.

“Certainly from our view at ACC, we believe there are significant concerns raised by an endangerment finding, even if in the first instance EPA were to limit that finding to mobile sources,” Walls said.

“It appears clear to us that if EPA rules that emissions of carbon dioxide from mobile sources, such as automobiles, are a pollutant under the Clean Air Act, then it is hard to imagine that the agency would not also find that CO2 emissions from stationary sources constitute a pollutant,” he said.

The implications for domestic petrochemicals and chemicals production and the broader US manufacturing sector are profound, Walls said.

“It would force companies, chemical companies and many other manufacturers such as steel, aluminium, paper and others, to re-evaluate their presence in the US,” he said.

With an endangerment finding for CO2 on top of other regulatory burdens and restrictions, such as possible renewal of Superfund clean-up taxes and limitations on domestic oil and gas production, Walls said that the economics of maintaining domestic production would change dramatically.

“It would no longer be a question of not being able to attract new manufacturing production capacity to the US,” Walls said.  “It would be a question of the commercial and economic viability of maintaining manufacturing facilities that remain.”

Among many others in industry, Walls argued that instead of having EPA regulate CO2 emissions in every aspect of US commercial and consumer life, Congress should craft a comprehensive approach to greenhouse gas (GHG) regulation in the context of a long-sought national energy policy.

“We believe that because of the wide national implication of CO2 regulation by EPA, it would be better to have a debate in Congress on overall national energy policy, how to make the best of our energy resources - coal as well as offshore oil and gas - in the context of climate regulation,” he said.

Congress is already preparing legislation for a mandatory cap-and-trade emissions control programme on US industry, although some members of the federal legislature argue that imposing what would amount to a major new energy tax is not sound policy in the midst of a recession.

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By: Joe Kamalick
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