US EPA issues new GHG rules, quickly attacked by industry

23 December 2010 19:12  [Source: ICIS news]

WASHINGTON (ICIS)--The Environmental Protection Agency (EPA) on Thursday announced additional plans to regulate and reduce greenhouse gas (GHG) emissions by refineries and power plants, a proposal that energy industries quickly condemned.

The agency said it would initiate a series of hearings and stakeholder meetings early next year toward formal proposed rules it expects to issue later in 2011 to set greenhouse gas emissions standards for the nation’s roughly 500 coal-fired electric utilities and about 150 oil refineries.

“We are following through on our commitment to proceed in a measured and careful way to reduce GHG pollution that threatens the health and welfare of Americans and contributes to climate change,” said EPA Administrator Lisa Jackson.

The rules plan outlined on Thursday would add greenhouse gases to the pollutants already covered under the agency’s existing new source performance standards (NSPS). Those standards have been in place for decades and are renewed every eight years, and they are currently being reviewed and updated by the EPA.

Earlier this year the EPA issued a separate rulemaking that would impose greenhouse gas emissions on US utilities and major production facilities under the agency’s new source review (NSR) regulations.

Those NSR greenhouse gas rules are already the target of multiple lawsuits by state governments and industry. And members of Congress have said that they would seek to suspend the EPA’s enforcement of those rules - or even revoke the agency’s authority to regulate greenhouse gases - when the 112th Congress convenes in January.

Under the NSR system, beginning 3 January any new construction of electric utilities or factories or major modifications to existing facilities would be required to obtain a Clean Air Act emissions permit to certify that the new plant or modification would not cause additional emissions of standard pollutants and now greenhouse gases as well.

Under the NSPS proposed rules outlined by the EPA on Thursday, the agency would set greenhouse gases emissions standards for refineries and power plants that also would apply to existing facilities even if they were not being modified.

The agency said the proposed addition of greenhouse gases to pollutants covered by the NSPS system was the result of a consent agreement between the EPA and several states and environmental groups that had filed suit in 2008 to force the agency to regulate GHG emissions by refineries and power plants.

The EPA said it would issue detailed proposed GHG emissions standards for refineries by December 2011, with final rules expected by November 2012. Rules proposals for coal-fired electric utilities would be issued by July 2011 and final rules in May 2012.

EPA assistant administrator Gina McCarthy told a press conference that the rules proposals made on Thursday would not constitute a “cap” on greenhouse gas emissions by utilities and refineries.

Instead, she said, the agency plans to set GHG emissions standards for those facilities, with the expectation that plant operators would employ whatever existing and cost-effective technologies are available to meet those standards.

However, the proposed rulemaking drew immediate and heated opposition from both the US refining and power sectors.

Charles Drevna, president of the National Petrochemical & Refiners Association (NPRA), charged that the EPA was beyond its statutory authority and that the regulations, if implemented, would trigger major energy price increases.

“EPA’s proposals would carry tremendous costs but no benefits for the American people, it will be all pain and no gain,” Drevna said, arguing that there is no currently available technology to capture the principal greenhouse gas, carbon dioxide (CO2).

“Regulations can’t create technology that doesn’t exist or change the laws of physics and economics, so the only way to comply with EPA’s proposals would be to inflict massive increases in energy costs and massive unemployment,” he said.

Scott Segal, an attorney with the Washington, DC, law firm of Bracewell & Giuliani representing both utilities and refiners, said that the proposed rulemaking “puts the nation’s fragile economic recovery at risk and stifles job creation”.

Segal also argued that if implemented, the EPA’s plans would have no impact on global environment because major GHG emitters among foreign nations have not agreed to any coordinated and binding climate change action.

The American Petroleum Institute (API) also challenged the EPA proposals, saying that the agency should first complete work on updating the NSPS system before adding greenhouse gases standards.

In addition, said API regulatory and science affairs director Howard Feldman, “The Clean Air Act was never intended to be used to regulate stationary source [factories and utilities] greenhouse gas emissions”.

“Elected members of Congress should chart US climate change policy,” he said.

The NPRA’s Drevna also challenged the EPA’s authority to regulate greenhouse gases under the Clean Air Act and said that his trade group “will urge Congress to vote to stop the EPA from implementing these greenhouse gas regulations”.

“We trust that our elected representatives will listen to the American voters, who showed in November that they oppose jog-destroying regulations,” he said.

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