US climate rules may block industry expansion in Jan - EPA

12 August 2010 23:58  [Source: ICIS news]

WASHINGTON (ICIS)--The Obama administration warned on Thursday that new construction of - or major modifications to - US power plants, refineries and other industrial facilities may be blocked beginning 2 January 2011 because of new greenhouse gas rules.

To avoid that, the Environmental Protection Agency (EPA) said on Thursday that it was proposing a rule to require state governments to quickly update their inspection and permitting plans to meet the 2 January start date for the EPA’s policy limiting greenhouse gas (GHG) emissions from major facilities.

In a second proposed rule, the agency said it would take over the emissions permitting responsibilities of state governments in January for states that were unable to update their environmental regulations by that time.

The EPA said that unless the two rules were made final before the end of this year, electric utilities, refineries and other major industrial facilities would not be able to proceed with plans to build new capacity or expand existing plants.

The agency said that Thursday’s two-rule proposal was needed to ensure implementation of its December 2009 “endangerment finding”.

In that controversial ruling, EPA said it has authority under the 1970 Clean Air Act (CAA) to regulate emissions of carbon dioxide (CO2) and other gases because they cause global warming and threaten the nation’s environment and human health.

In a related decision in May this year, the EPA issued its so-called tailoring rule, limiting the application of its greenhouse gases endangerment finding to only large facilities such as power plants and refineries.

It is state governments that have responsibility under the national Clean Air Act for issuing permits to businesses seeking to build or expand facilities, once their plans have been shown to meet the federal law’s provisions for environmental protection.

However, most state laws or regulations enacted pursuant to the Clean Air Act - known as state implementation plans (SIPs) - apparently do not cover carbon dioxide and other greenhouse gases.

As a result, the agency said, in most states “neither EPA nor the state currently has authority to issue ... a permit to sources of GHG emissions”.

In the first proposed rule issued on Thursday, EPA would require 13 states to revise their state implementation plans to cover greenhouse gases. 

The emissions rules of those 13 states are known to lack statutory authority to regulate greenhouse gases.

Apparently the legal authority of the remaining 37 states to regulate greenhouse gases is uncertain, so under the first proposed rule they would be required to determine whether their emissions regulations can be applied to greenhouse gases and inform EPA of the result.

The agency indicated, however, that many states might not be able to amend their own statutes and regulations in time to meet the 2 January 2011 deadline for regulating greenhouse gases.

“EPA, states and the regulated community recognise that there may be circumstances in which states are unable to develop and submit those SIP revisions by 2 January 2011 or for some period of time beyond that date,” the agency said.

Consequently, EPA’s second proposed rule would have the agency take over, on 2 January, the states’ function in issuing emissions permits in any state that cannot revise its regulations by that time.

The agency said it will accept public comment for 30 days on both proposed rules, and it will hold a public hearing in Arlington, Virginia, on the second, take-over rule on 25 August.

There is certain to be public comment and very likely lawsuits by states governments and industry groups challenging both proposed rules.

EPA’s controversial 2009 “endangerment finding” on greenhouse gases and its later “tailoring rule” already have been challenged in federal courts by state governments and trade groups.

In addition, many in the US Congress want to force a two-year delay for any EPA enforcement of its greenhouse gas emissions rules.  US Senate and House consideration of those blocking bills may come in September or October.

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By: Joe Kamalick
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