US chemical firms, others warn against new emissions rule

18 November 2009 22:02  [Source: ICIS news]

WASHINGTON (ICIS news)--US manufacturing, energy and farming officials warned on Wednesday that plans by the Environmental Protection Agency (EPA) to regulate greenhouse gas (GHG) emissions by major facilities could cripple the nation’s industries.

Rick Krause, director of congressional relations for the American Farm Bureau Federation (AFBF), told EPA officials that their plans to limit GHG emissions by major US utilities and factories will cause “catastrophic economic impacts” even to small farms and businesses.

He warned that if EPA proceeds with its plan, it could bring a halt to construction of new facilities and improvement of existing factories or farms.

Krause and others spoke at a day-long EPA hearing on the issue in Arlington, Virginia. Another hearing is scheduled for Thursday in Rosemont, Illinois.

Both hearings concern EPA’s announced plan to use its authority under the Clean Air Act (CAA) to require large industrial facilities - those that emit 25,000 tonnes or more of GHG annually - to obtain new construction or modification permits from the EPA.

The agency expects the new rules to take effect by the second quarter of next year.

In order to obtain those permits to proceed with new construction or major improvements, facilities such as electric power stations, factories and refineries would have to demonstrate to the EPA that they are installing the best available emissions-control and energy-efficiency technologies.

If the agency did not approve a permit application, new facility construction or existing plant improvements would not be allowed to proceed.

The EPA said it estimates that its anticipated rulemaking on GHG emissions by major facilities likely will apply to 14,000 US power stations, refineries and factories.

The agency said it set the emissions threshold at 25,000 tonnes/year in order to exempt farms, restaurants, other small businesses and facilities such as hospitals, schools and office buildings from the planned regulations.

But Krause and other witnesses argued that those low-level sources of greenhouse gases will in fact be “unwittingly swept into the regulatory nightmare” even though the agency does not intend that result.

David Friedman, director of environmental affairs for the National Petrochemical & Refiners Association (NPRA), joined Krause in contending that EPA’s effort to “tailor” its planned emissions requirement to large facilities will fail.

The EPA’s tailoring rule, Friedman said, “does not have a statutory basis in the Clean Air Act” and is “a fundamentally flawed legal position”.

“The Clean Air Act stipulates unequivocally that the threshold to permit major stationary sources is 250 tonnes,” Friedman said, adding that “EPA lacks the legal authority to categorically exempt sources that exceed the Clean Air Act’s major source threshold [250 tonnes/year] from permitting requirements.”

As did Krause, Friedman said that the EPA action, if implemented, will impose major costs on an untold number of small facilities nationwide.  According to EPA, a new construction or major improvement emissions permit costs $125,000 (€83,750) and about 850 man-hours to complete.

Howard Feldman, director of regulatory and scientific affairs at the American Petroleum Institute (API), told the hearing that the proposed rule is a “clearly unlawful attempt to change the statutorily mandated threshold” for emissions permits. He termed the EPA effort a “costly, ill-suited regulatory approach”.

Bryan Brendle, director of energy and resources policy at the National Association of Manufacturers (NAM), charged that in seeking to regulate greenhouse gas emissions at major utilities and production sites, EPA is “laying the groundwork for even greater expansion of its regulatory power”.

The so-called tailoring rule, Brendle said, “will result in the inability of the manufacturing industry to plan and expand their operations and facilities and subsequently result in a continued loss of potential revenue, jobs and improvement of the US economy”.

“New mandates from EPA, especially establishing permitting requirements on GHG emissions, ... will further erode US industrial competitiveness and eliminate jobs by limiting energy sources available to consumers,” Brendle added.

After today's hearing and the session to be held on Thursday in Illinois, the EPA will accept written comments on its proposed rule until 28 December. A final decision on the rule-making is expected early in the new year.

($1 = €0.67)

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