EPA Issues Final Greenhouse-Gas Emissions Rules

The U.S. Environmental Protection Agency issued final rules today to regulate greenhouse-gas emissions as an alternative if Congress fails to act.

The EPA plans to regulate about 70 percent of U.S. greenhouse gases from stationary sources such as power plants, refineries and factories, the agency said today in a statement. Millions of businesses such as restaurants, shops and apartment buildings would be exempt, according to the agency.

“EPA has set common-sense thresholds for greenhouse gases that will spark clean technology innovation and protect small businesses and farms,” Administrator Lisa Jackson said in the statement.

Climate-change legislation introduced in the Senate yesterday would block the EPA’s proposed rules and substitute a law to curb the growth of greenhouse gases. Democratic Senator John Kerry, who crafted the compromise measure with Senator Joe Lieberman, a Connecticut independent, prodded opponents of EPA action to back his alternative.

“The Obama administration has again reminded Washington that if Congress won’t legislate, the EPA will regulate,” Kerry said today in a statement. “Those who have spent years stalling need to understand: killing a Senate bill is no longer success.”

The administration has said legislation would be the preferred way to establish U.S. limits on greenhouse-gas emissions while asserting the EPA’s authority to impose restrictions under the Clean Air Act.

The rules presented today are designed to deflect criticism that small businesses would be forced to comply with emissions limits, EPA assistant administrator Gina McCarthy said on a conference call with reporters. Under the Clean Air Act, sources that emit 250 tons annually are subject to restrictions.

100,000 Tons

Starting next year, the EPA will regulate greenhouse gases from new power plants, oil refineries and factories that emit more than 100,000 tons per year, and from existing plants that increase emissions by more than 75,000 tons per year.

“The EPA is trying to be careful to limit these requirements to the biggest sources of greenhouse gases,” said Frank O’Donnell, president of the Washington-based environment group Clean Air Watch.

Next year, the EPA will begin consideration of a rule to extend the restrictions to smaller emitters. If the limits are expanded, they won’t cover businesses that emit less than 50,000 tons per year, McCarthy said.

“EPA’s legal basis for the rule rings hollow,” Senator James Inhofe, an Oklahoma Republican who once called manmade global warming a hoax, said today in a statement. “Even if the courts uphold the rule, EPA makes absolutely clear that commercial buildings eventually will find themselves caught in the web of EPA’s global warming regime.”

Legal Challenges

McCarthy said she expects legal challenges from groups such as the Washington-based National Petrochemical & Refiners Association, a trade group.

“Every rule that we write, we write with full intent and expectation that someone will challenge it,” McCarthy said. “We took great care to ensure that it was legally defensible.”

Today’s rules would rewrite the Clean Air Act, which only Congress can do, according to Gregory Scott, executive vice president of the refiner’s group.

“EPA has adopted a tortured and legally unsupportable interpretation of the plain wording of the Clean Air Act in an effort to escape a regulatory train wreck of its own creation,” Scott said in a statement. “If EPA is allowed to get away with this, it sets a dangerous precedent for unelected officials in federal agencies to change laws approved by the elected representatives of the American people.”

Supreme Court

In 2007, the Supreme Court ruled that the EPA didn’t have to wait for climate-change legislation to pass Congress and could start regulating greenhouse gases under the Clean Air Act. The agency concluded in December that greenhouse gases pose a threat to public health, a finding that opened the way for EPA regulation of cars, trucks and industrial sources of carbon dioxide and other heat-trapping emissions.

In April, the EPA set the first standards for emissions from passenger cars and light trucks. Those limits go into effect in January 2011.

Senator Jay Rockefeller, a West Virginia Democrat, has proposed a two-year suspension of the EPA’s efforts to give Congress time to pass climate-change legislation. Alaska Senator Lisa Murkowski is leading Senate Republican efforts to block the EPA.

The House passed legislation last year to establish a “cap-and-trade” system to limit carbon emissions and establish a market for the trading of pollution allowances. Efforts stalled in the Senate, leading to the compromise proposed this week by Kerry and Lieberman. Their proposal would create a cap- and-trade program for utility companies in 2013, expanding to factories and other “industrial sources” in 2016.

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

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