New Greenhouse gas rules on D.C. agenda

April 22, 2010
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With the federal Environmental Protection Agency’s March decision to set Jan. 1 as the date for companies to acquire greenhouse gas permits, now comes the time to work out the details.

Much is still up in the air regarding the EPA’s plans to regulate stationary sources of greenhouse gases under the Clean Air Act, said Scott Watson, a Warner Norcross & Judd attorney specializing in environmental issues.

The EPA last month issued standards for greenhouse gas emissions from cars and light trucks, with the upshot resulting in a combined average fuel economy of 35.5 miles per gallon by 2016.

Now the EPA’s attention will turn to stationary sources, he said.

“It just doesn’t make intuitive sense to say, ‘Oh, they regulated cars, and so now if I have a smokestack, I need to get a permit.’ It’s like, what? But now, for the first time, with this rule, we will see actual regulation on the emission of greenhouse gases,” Watson said.

The new regulations are the result of a decision by the U.S. Supreme Court in 2007, a case known as Massachusetts v. EPA. The court opened the door for greenhouse gases to be considered air pollutants and for the EPA to determine whether they are sufficient enough hazard to regulate. The agency decided that a mixture of six greenhouse gases are indeed a threat, which led to the tailpipe and stationary source regulations.

The greenhouse gases under the EPA’s scrutiny include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. A certain amount of these gases occurs naturally, but the overproduction of them by human activity is blamed for global warming.

Waston said that, essentially, most businesses that have an emissions permit under the Clean Air Act’s Title V will need to acquire a greenhouse gas permit. Potentially covered activities include electricity generation, commercial and industrial boilers, cement, chemicals, iron and steel production and fertilizers. One-hundred eleven Kent County businesses carried Title V permits in 2007, according to the state Department of Natural Resources and Environment, which administers the program for the EPA. Those were the most recent figures on the Web site.

Yet questions remain along the path, he said.

“The overarching question about this whole business going on right now is, is the Clean Air Act really the weapon of choice for global warming or climate change?” Watson asked. “Should we be using the Clean Air Act to address climate change? It’s not very well suited for it. The Clean Air Act was developed at a time in the ’70s and then amended in the ’90s when we were concerned primarily about local pollutants.”

One problem is that the current emissions threshold in the statute for regulated air pollutants is so low that many, many more businesses would be required to seek a greenhouse gas permit, he said.

“Under the statute, if you have the potential to emit 250 tons or more — and that’s not much, that’s a Dunkin’ Donuts, that’s any sort of commercial-size facility with a boiler — if that’s the standard, it will completely overwhelm the program,” Watson said.

To avoid that problem, the EPA has proposed a rule setting the threshold for greenhouse gases at 25,000 tons (for a new facility), which is the current threshold for reporting greenhouse gases, and another amount, not yet decided, for cases of major modifications.

“If you have to report, then you are regulated,” he said.

The question, according to Watson, is whether the agency can simply change the law.

“To get around that, the EPA is proposing a very novel and untested approach. They’ve released a proposed rule, which will go final in the next month or two, called the tailoring rule. They’re … going to have the threshold be 25,000 tons for greenhouse gas emissions.”

In addition, the EPA is proposing that the regulations be instituted gradually.

“The dust has not yet settled on how this is going to get phased in,” Watson said. “There’s a really good legal question whether they have the authority to do that. Agencies as a general matter don’t get to just say, ‘Well, I know what the statute says, but I’m going to do something different.’”

While the new rules get sorted out, Watson suggested business owners prepare by making sure they are up-to-date and following the current regulations by calculating greenhouse gas emissions and are reporting them if they meet the 25,000-ton threshold.

“Are you a new source and is your new source going to reach that, or are you planning an addition, an improvement, that’s going to reach those thresholds? Then you’re going to have to install Best Available Control Technology, and that’s a whole other can of worms. Nobody knows what that even means for greenhouse gases,” Watson said.

In the meantime, with the Obama Administration pushing forward, the ultimate remedy is in the hands of Congress, he said.

“Your reaction should be talking to your representative in Congress and letting them know that the Clean Air Act, as it’s written, is not the right tool for this kind of regulation — whether you want greenhouse gases to be regulated or not,” Watson said. “This is the sledgehammer to kill the mosquito.

“If you think it’s inevitable, then some sort of tailored regulation that maybe phases in over time from Congress would be a much better deal. Or, if you are really adamant that these things should not be regulated … then you need to share that message with your representative, too. At this point, the administration is moving forward, and so Congress is the solution.”

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