Appreciating EPA and the Clean Air Act

Nov 30, 2010

On January 2, 2011, state environmental agencies began regulating carbon dioxide emissions from stationary sources, like coal-fired power plants. Those new limits, which require energy efficiency improvements, are the culmination of thirteen years of litigation and are required by the Clean Air Act and an order of the United States Supreme Court. Contrary to the dire predictions of some businesses, the economy did not collapse on January 2, 2011.

When cap and trade legislation failed to reach the floor of the Senate in July of 2010, stricter regulation of greenhouse gasses by EPA became inevitable. It is unlikely that the opponents of climate legislation fully understood that their victory put them in a regulatory vise: they have enough votes to prevent new legislation but not enough to stop EPA. They stopped cap and trade only to face emission limits with no emissions trading program to help them control costs. Republican gains last November did not alter this fundamental dilemma. It is even less likely that opponents understood that EPA regulation of other pollutants will force old coal plants to close anyway. In the fall of 2010, as understanding of the full force of EPA’s initiatives grew, so did attacks on EPA. When the new Congress convened in 2011 the attacks began in earnest.

The collision of these forces – EPA, the Clean Air Act and the federal courts on one side and congressional opponents of climate legislation in on the other – will dominate the debate in the 112th Congress. There will be many attempts to stop EPA and roll back specific regulations, not only those for greenhouse gasses (“GHG’s”), but also those for mercury, acid rain pollutants, ozone and particulates. Defending EPA effectively begins with understanding the benefits the Clean Air Act has already brought us and appreciating the courage and force of EPA’s current regulations.

What is at stake?

Over its forty-year history the Clean Air Act has been a stunning success. In 1990 Congress required EPA to assess the costs and benefits of air pollution control. During its first twenty years the Act delivered benefits – lives saved, illness and absenteeism avoided – worth $42.00 for every dollar spent on pollution control. In more recent years the Act has delivered returns of at least 4:1, still a good investment by any standard.

Coal-fired power plants more than 45 years old account for 92 gigawatts (“GW”) of our total electric generating capacity. That means 45 percent of the electricity generated by burning coal comes from plants built before the Clean Air Act was passed. Coal-fired power plants account for almost half the electric generating capacity in the United States. If you do the math, that means coal plants built before the Clean Air Act account for 20% of our total generating capacity. Because electric grids usually use the cheapest electricity first, we probably get more than 20% of our electricity from these old plants. In the middle of the night when electric demand is low, and wind turbines are turning, it is mostly coal that is providing our electricity. A number of studies and reports – from groups as diverse as the think tank World Resources Institute, the sustainable business organization Ceres, the financial services companies Credit Suisse and Deutsche Bank Climate Change Advisors - have concluded that EPA’s regulations will force many old coal-fired plants to close and many more to reduce all of their pollutants. The recession gives us an opportunity to replace the plants while demand for electricity is down, although some sources question whether we really have excess generating capacity.

The proposed mercury and acid rain regulations alone could reduce emissions of CO2 enough to meet President Obama’s commitment in the Copenhagen Accord to reduce United States emissions by 17% by 2020. Proposed limits on GHG’s from cars, trucks and stationary source could also almost meet that goal. Taken together regulation of these three types of pollutants would almost certainly exceed that 17% goal. EPA is also proposing new rules and standards for coal ash, sulfur dioxide, ozone and particulate matter, all of which will force sources of GHG’s to bear the true environmental cost of their operations and probably reduce their GHG emissions further.

A recent editorial in the Wall Street Journal characterized EPA’s remarkable regulatory energy addressing climate change as a “covert program”, but most of these regulations have a long history of very public rulemaking and litigation.

The Road to January 2, 2011

At the end of President Bill Clinton’s second term, a group of renewable energy businesses, environmental groups and organizations promoting sustainable communities petitioned EPA to regulate GHG emissions from cars and trucks. In 2001, EPA under President George W. Bush requested public comments on the petition and sought advice from the National Research Council. Even though NRC concluded that human activities were causing global warming, in 2003, EPA denied the petition asserting that EPA had no authority under the Clean Air Act to address climate change.

The petitioners appealed. Many states and other organizations joined the litigation. In 2007, the Supreme Court reversed EPA in Massachusetts v. EPA, 549 U.S. 497 and made three equally important holdings: 1) Massachusetts had standing to sue because human-caused global warming was already causing sea levels to rise, affecting its coast; 2) greenhouse gasses – CO2, methane, nitrous oxide, hydrofluorocarbons and others - are pollutants under the Clean Air Act; and 3) EPA had enough information to decide whether GHG’s “endanger” our climate and was required by the Act to make a finding on the issue.

On December 15, 2009 EPA made its formal endangerment finding, concluding that greenhouse gasses do indeed threaten to disrupt our climate system. Given all of the Supreme Court’s findings in Massachusetts v. EPA, it is difficult to see how any other conclusion was possible.

The finding once made, set in motion a chain of events mandated by the Clean Air Act, which led directly to January 2, 2011. Because of the finding, EPA was required to regulate GHG emissions from trucks and cars, which it began doing in May of 2010. Once EPA controlled GHG’s from cars and trucks, they became “regulated pollutants” under the Clean Air Act, which triggered another mandate to regulate them from stationary sources. Since states issue the permits for stationary sources, it is they who must now put GHG limits in permits.

Senator Lisa Murkowski (R Alaska) attempted to stop this mandatory chain of events by proposing a joint resolution (S. J. Res. 26) that would have reversed EPA’s endangerment finding. Fortunately, that resolution was defeated. It is not clear what would happen if Congress blocked a regulation EPA was required to issue by an order of the Supreme Court.

EPA has done everything it can to help states and stationary sources come into compliance by the January deadline. They have interpreted the CAA in a way that delays the start of stationary source permitting as long as possible. In fact, the Obama administration is giving industry more time than the Bush EPA would have. EPA is also phasing in compliance, dealing with the biggest sources first; this timetable is embodied in the “Tailoring Rule”, issued April 2, 2010. In November 2010, EPA issued the “BACT Guidance” which describes control technology already being used, which can meet the new requirements. The Guidance emphasizes energy efficiency.

Of course, there is much litigation about all of these regulations. Industry is arguing that EPA has to regulate all stationary sources immediately, apparently hoping that the whole permitting system would collapse if every source had to be regulated. The argument ignores well-established legal principles that allow an agency to phase in compliance requirements.

Mercury and the MACT Rules

Mercury is a neurotoxin that is particularly damaging to children. Litigation to place effective limits on this hazardous air pollutant dates back to the early 1990’s. On April 15, 2010, the court approved a consent decree which requires EPA to propose mercury regulations for utilities by March 16, 2011 and final utility regulations by November 16, 2011. These rules will affect the largest coal-fired power plants. On June 4, 2010, in response to related litigation, EPA proposed mercury air pollution rules for industrial boilers, a category that includes smaller coal plants and waste incinerators.

The mercury rules for both utilities and industrial boilers define Maximum Achievable Control Technology (MACT), the level of control the Clean Air Act requires for hazardous pollutants. In practice this means these sources will have to reduce emissions to the level emitted by the cleanest 12% of sources in their industry category.

These rules will force old coal-fired boilers and power plants to close and will achieve significant reductions of all coal pollutants - mercury, acid rain pollutants and GHG's. Owners of those old plants and other affected industries are alarmed and have already started lobbying against the Boiler MACT rule. Over 100 members of the House and 40 members of the Senate have written Lisa Jackson, Administrator of the EPA, asking her to delay the rules.

Ratcheting Down Acid Rain Pollutants

On July 6, 2010, EPA proposed new lower limits on the pollutants that cause acid rain. The rule, called the “Transport Rule” or “CATR”, will require power plants to reduce sulfur dioxide (SO2) by 71% and nitrogen oxides (“NOX”) by 52%.

The Transport Rule, like the mercury rules and the endangerment finding, was issued because of a court order. The effort to regulate acid rain pollutants began with the 1990 Clean Air Act Amendments and a memorandum of understanding among eastern states in 1995. That agreement among the states ultimately led to the Clean Air Interstate Rule (“CAIR”) issued in 1997. That regulation was challenged by upwind states led by North Carolina and in 2005 the court ordered EPA to revise CAIR. The Transport Rule is the proposed revision.

New Source Performance Standards Will Clean Up Old Plants

On December 21, 2010, EPA settled two cases, which set timetables for issuing New Source Performance Standards (“NSPS”) for greenhouse gases emitted by utilities and refineries. Section 111(d) of the Clean Air Act lets EPA regulate old sources under the new source program. Once again the litigation originally challenged the failure of the Bush Administration to regulate greenhouse gas emissions.

In the utilities case, New York and many other states challenged EPA; they were joined by environmental groups. Under the settlement EPA agreed to propose rules for electric generating units by July 26, 2011. After a period for comments, the final rule will be issued May 26, 2012.

In the refinery case the American Petroleum Institute, an industry trade group challenged the Bush-era NSPS for GHG emissions from refineries. Again, several states and environmental groups intervened. The timetable agreed to by the parties requires a proposed rule to be issued by December 10, 2011 and a final rule, after a comment period, by November 10, 2012.

Although these timetables may seem long, they are typical for regulations of major industries and ubiquitous pollutants. The NSPS standards will require a far greater level of control than the limits that states began putting in permits January 2, 1011.

And Much More

In 2010 EPA proposed other important regulations that would also contribute to curbing GHG’s, especially from coal-fired power plants. In June of 2010, EPA issued the Coal Ash Rule, which would regulate the residue of burning coal, as a special waste under the Solid Waste Disposal Act. On June 22, 2010, EPA issued a new National Ambient Air Quality Standard (NAAQS) for sulfur dioxide and plans to issue new stricter NAAQS for ozone and particulates next year. These rules represent the next generation of controls on GHG’s, whether directly or as an added benefit of regulating something else.

What Can We Expect From the 112th Congress?

Taken as a whole, EPA’s regulations are delivering the meaningful response to global warming that Congress has not yet provided. The attacks on EPA have already begun. Representative Marsha Blackburn of Tennessee has introduced HR 97, which would reverse the Supreme Court’s decision in Massachusetts v. EPA, the 2007 case which required EPA to address climate change. HR 97 has 107 cosponsors and the number grows every day. It would amend the Clean Air Act to exclude greenhouse gases from the definition of “pollutant” and prohibit EPA from doing anything else about global warming, like adopting fuel efficiency standards. There are other less drastic bills being considered in the House of Representatives. HR 153, which would deny EPA funding for regulating greenhouse gases, has 32 cosponsors; HR 199 would require a two-year delay much like the Rockefeller Stationary Source Regulation Delay Act (S 3072), which was considered by the Senate last year.

As final rules are issued, Congress may try to use the Congressional Review Act, which gives Congress the opportunity to veto specific regulations after they are issued in final. However, because almost all of these regulations are being issued under court orders, it may not be as easy to stop EPA as its opponents think.

Read more about the real effects of air pollution on your health.

Acronyms

BACT= Best Control Technology.

CAA= the Clean Air Act as amended in 1990.

CAIR= Clean Air interstate Rule; the old acid rain rule, which remains in effect until the new rule is final.

CATR= Clear Air Transport Rule; the new acid rain rule.

GHG= greenhouse gas

MACT= Maximum Achievable Control Technology

NAAQS= National Ambient Air Quality Technology

NOX= Oxides of Nitrogen

NSPS= New Source Performance Standards

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