US chemical group warns of chaos as EPA CO2 rule nears

12 March 2010 21:14  [Source: ICIS news]

WASHINGTON (ICIS news)--US chemical industry officials on Friday urged Congress to quickly block imminent regulation of greenhouse gases (GHG) by the Environmental Protection Agency (EPA), warning of chaos if the agency proceeds.

Cal Dooley, president of the American Chemistry Council (ACC), said there is a growing sense of urgency for congressional action as the 31 March date draws near for a final rule by EPA on its controversial “endangerment finding” for greenhouse gases.

The endangerment finding, issued by the agency on 7 December last year, holds that EPA has authority under the Clean Air Act to regulate emissions of carbon dioxide and other greenhouse gases because they cause global warming and thereby threaten Americans’ health and the environment.

However, the agency’s endangerment finding is the target of multiple petitions and lawsuits filed by various industries and state governments, challenging the science underlying global warming theories or the EPA’s statutory authority. 

In addition, at least seven resolutions or bills pending in Congress are aimed at shutting down or postponing EPA’s regulation of greenhouse gases.

But the agency has said it plans to issue its first GHG emissions standards in less than three weeks on 31 March.

Dooley and others are concerned that if Congress allows EPA to proceed, those initial emissions rules will trigger a cascade of legal obligations that could bring a halt to new facility construction in the US along with repair or improvement work on existing factories.

The standards that EPA is expected to issue on 31 March technically will apply only to GHG emissions by “mobile sources” such as automobiles and trucks.

But the council and other groups fear that even that limited initial rule will in short order trigger “regulation of GHGs at as many as 6m US industrial facilities, power plants, hospitals and commercial buildings”.

The council contends that EPA’s regulation of mobile source emissions will necessarily establish overall agency regulatory authority for all sources of greenhouse gas emissions, including stationary facilities such as factories, refineries and electric utilities.

Under the Clean Air Act, any new source of regulated pollutants - such as construction of a new factory, office building or shopping centre - must pass an EPA inspection to ensure that the project is planned so as to “prevent significant deterioration” of the environment - commonly known as a PSD permit.

That permit also is required when major modifications are made at existing facilities, such as plant expansions or the installation of new equipment which might alter the facility’s emissions volume.

Industry officials worry that once the EPA formally moves to regulate GHG emissions by mobile sources, that action will necessarily trigger requirements for prevention of significant deterioration permits in general.

“Once EPA triggers the PSD permitting requirements,” according to a chemical sector analysis, “there will be a virtual construction freeze across the nation.”

The agency has also issued a proposed near-term limit on how broadly it will apply the endangerment finding. Known as the “tailoring rule”, EPA said it will limit its regulation of greenhouse gases initially to only major stationary facilities such as power plants.

However, the council contends, “Small sources will not be able to proceed until states adopt local ‘tailoring rules’ and until the litigation uncertainty over the federal tailoring rule is resolved.” 

State and local governments are responsible for enforcing many environmental mandates under the Clean Air Act.

The council argues that state legislatures and regulators may take years to amend local laws, and various legal challenges to EPA’s endangerment finding could consume still more years.

In the meantime, new construction and major improvements to existing facilities may come to a halt, the council says, in part because banks and other investors may be reluctant to make funding commitments due to uncertainty over when - or even if - the necessary environmental permits can be obtained.

In contrast, EPA Administrator Lisa Jackson has said that her agency's regulation of greenhouse gases will instead stimulate US economic growth.

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