EPA Sets Timetable on Carbon-Cutting Regs for Coal and Oil

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The U.S. EPA unveiled a new approach on Thursday for how it plans to slash greenhouse gas emissions from new and existing power plants and refineries as part of its mandate to control climate pollution under the Clean Air Act.

The agency will use the statute’s New Source Performance Standards (NSPS) to impose limits in 2012 on the amount of CO2 the biggest polluters can emit. The EPA said it would cover 40 percent of U.S. emissions.

In the 40-year history of the Clean Air Act, the agency has used new performance standards 75 times across 90 industries.

“Although these will be the first NSPS to address greenhouse gases, EPA, states and industry have extensive experience in implementing these types of new source performance standards,” Gina McCarthy, EPA assistant administrator for air and radiation, told reporters on a conference call.

The rules were hashed out by EPA officials, several state attorneys general and environmental groups.

The agreement comes at time when Congress is increasingly ready to quash efforts by the White House to reign in greenhouse gases. It exemplifies a growing schism in the country: the increasing push by the Obama administration and states to promote renewable energy and curtail CO2 while climate-regulation opponents on Capitol Hill dominate much of federal energy policy.

‘Not a Cap-and-Trade Program’

Under the plan, EPA will issue draft standards by July 26, 2011, for power plants, with final regulations slated for May 26, 2012. Refineries will see proposed limits by Dec. 15, 2011, and a final rule by Nov. 15, 2012.

EPA said the new program won’t amount to a cap on carbon.

“This is not a cap-and-trade program,” McCarthy said. “It’s not in any way trying to get into the area in which Congress will be establishing law at some point in the future, we hope.”

“This is about taking a look at what technologies are available that can cost-effectively achieve reductions in greenhouse gases,” she continued. “It’s a sector approach, and it will be applied to each facility.”

EPA said it’s too early to gauge the greenhouse gas impact of the rules.

For new and upgraded utilities and refineries, the administration will establish firm standards. But for existing facilities, EPA will set flexible emissions “guidelines” that states won’t have to follow until 2015 or 2016, McCarthy said. “States will play a key role.”

The onus will be on industry to come up with the green technology solutions.

“The agency does not mandate any particular technology … We set the standards and the industries themselves figure out the most cost-effective way to achieve those standards,” McCarthy said.

The new program is the result of lawsuits against the EPA by a group of states, local governments and environmental organizations. They sued the Bush Administration for refusing to update standards to include heat-trapping gases from fossil fuel sectors, even though the Supreme Court ruled in Mass. v. EPA that it has the power to do so.

Green Groups Applaud, Industry Objects

In an August letter, attorneys for the Sierra Club, the Natural Resources Defense Council (NRDC) and the Environmental Defense Fund, threatened further legal action if EPA failed to set standards by September 15.

Despite the delay, the groups praised today’s announcement.

“By setting timetables for issuing standards to cut dangerous carbon pollution from power plants and oil refineries, EPA is doing precisely what is needed to protect our health and welfare and provide businesses certainty at a time when some would prefer to roll back the clock,” said David Doniger, policy director in NRDC’s climate center.

Big industry said the standards would be too arduous to meet and would destroy jobs.

“Today, the EPA commits the country to an unrealistic timetable for the regulation of global greenhouse gases from refineries and power plants,” said Bracewell & Giuliani’s Scott Segal, an attorney that represents both utilities and refiners. “By singling out the energy sector, the Agency puts the nation’s fragile economic recovery at risk and stifles job creation. Small businesses, schools, hospitals, and energy-intensive manufacturers are particularly at risk from high energy prices.”

The rules are part of EPA’s broader effort to regulate climate-altering emissions.

Starting on Jan. 2, 2011, the agency will require air quality permits for new and upgraded power plants, factories and refineries that emit at least 75,000 metric tons of carbon dioxide equivalent. To qualify, polluters will have to show they have installed the “best available control technology” to reduce emissions.