Memo to Coal Power Industry: Regulations are Coming

The EPA is poised to yank the strings on another Bush-era loophole for dirty coal.

Environmental Protection Agency Administrator Lisa Jackson announced today that she will officially review a memorandum, scribbled out in the final days of the Bush administration, that protects new coal-fired power plants from having to answer for their future greenhouses gas emissions.

She also issued this warning for officials who are now considering new permits for coal plants:

Permitting authorities should not assume that the memorandum is the final word on the appropriate interpretation of Clean Air Act requirements.

The Clean Air Act clearly states that any proposed “major emitting facility” must obtain a Prevention of Significant Deterioration permit, which requires installing the best available control technology for every pollutant that is “subject to regulation.”

The Bush EPA seized on that last part: "subject to regulation." In a Dec. 18 memorandum, then-EPA Administrator Stephen Johnson put the agency on record stating that CO2 is not a pollutant regulated by the Clean Air Act.

Johnson issued the memo in response to a ruling from the EPA’s Environmental Appeals Board. The board determined that current laws requiring monitoring and reporting of CO2 emissions qualified as regulations; Johnson reject their argument. The Bush administration was already in the practice of ignoring environment-related rulings: It never followed through on a 2007 Supreme Court ruling in Massachusetts v. EPA that said the EPA had the authority and the responsibility to regulate greenhouse gases.

With his lame duck memo, Johnson opened a loophole for new coal-fired power plants to slip in before the Obama administration had a chance to strengthen emissions rules.

The Sierra Club, which has been fighting power plant builders attempting to take advantage of the loophole, urged the Obama EPA to review Johnson's memorandum. When the group's chief climate counsel, David Bookbinder, received the response from Jackson, he was elated:

"Today's announcement should cast significant further doubt on the approximately 100 coal-fired power plants that the industry is trying to rush through the permitting process without any limits on carbon dioxide. New coal plants were already a bad bet for investors and ratepayers, and today's decisions make them an even bigger gamble."

The new EPA, which has so far acted in the best interests of the planet rather than polluters, told the Sierra Club that it would launch an official review of Johnson’s memorandum "to ensure that it is consistent with the Obama administration’s climate change strategy and interpretation of the Clean Air Act." The move increases the administration's pressure on Congress to act on significant climate legislation this year -- if Congress doesn't act, the EPA will.

EPA Administrator Jackson’s review, which will include the standard public comment period for proposed rulemaking, and her warning about the memorandum should make it more difficult now for new coal-fired power plants to get air permits to pollute. The EPA's moves likely will slow the current permitting process as well, says environmental attorney Bobby McKinstry.

With the specter of greenhouse gas regulation on the horizon, new coal plants will also become an investment risk compared to non-polluting alternative energy technology. The Clean Air Act requires polluters to use the “best available control technology.” While modern coal plants tend to be less polluting than older ones, they still will face higher costs once greenhouse gases are regulated. If coal gasification and carbon capture and sequestration technology are developed, for example, they could become costly requirements for dirty coal.