EPA's effort to regulate greenhouse gases under the Clean Air Act

Americans for Prosperity brief -

The EPA is advancing a three-piece regulatory strategy to implement greenhouse gas regulations (GHG) under the Clean Air Act (CAA.) These actions would have devastating consequences for the economy. Although cap-and-trade appears imperiled in the Senate for 2010, EPA’s actions remain the greatest threat to affordable energy and economic liberty on the horizon.

Regulatory Proceedings

Endangerment Finding: EPA has issued an endangerment finding for GHGS, which must be in place before any final regulations can be issued. EPA issued a Final Agency Action on December 15, 2009, officially classifying GHGs as likely to “endanger the public health and the public welfare of current and future generations.” Carbon dioxide, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride are now officially regarded as pollution by the federal government.

Petitions for judicial review that wish to challenge the agency’s findings are due by February 16, 2010. Several private firms and association groups are expected to file suit. The public comment period for this agency action is closed; however, more than 17,000 AFP activists put comments in the docket.

Light-Duty Vehicle Rule: EPA and the Department of Transportation issued a joint proposed rulemaking on September 28, 2009 to reduce GHG emissions from light-duty vehicles. This action is largely a response to both Massachusetts v. EPA and California’s request for a CAA waiver so it could issue state-level vehicle emission regulations, a petition that was denied by the Bush Administration and subsequently approved by the Obama Administration on July 8, 2009.

The public comment period for this proposed rule is closed. A final rule is expected in March 2010, a date that would allow the new regulations to cover model year 2012. There will still be an opportunity for public comments on the final rule.

Tailoring Rule: The third piece of EPA’s effort is a facilitating action, which is designed to lessen the impact of the endangerment finding on stationary sources that will be required to obtain prevention of significant deterioration (PSD) and title V permits for the first time.

The proposed rule envisions a phased approach wherein during the first six years EPA would raise the applicability threshold for PSD and title V permits from the statutorily mandated 100-250 tons per year (tpy) (depending on source category) to 25,000 tpy carbon dioxide equivalent (CO2e) for GHGs only. Five years later in the next phase, EPA would conduct a second round of rulemaking to issue “revised applicability and significance level thresholds and other streamlining techniques,” lowering the thresholds and regulating more sources as EPA finds “administratively feasible.”

There are serious legal concerns about EPA’s ability to unilaterally rewrite the applicability thresholds. The agency claims “administrative necessity” and “absurd results” allow it to deviate from the clearly expressed statutory language. Legal challenges will most certainly come from both environmental groups seeking a strict application of the CAA and from business groups seeking to vacate the rule.

The period for public comments on the proposed rule is closed. However, AFP activists submitted more than 18,000 public comments. There will be another opportunity for public comments when a final rule is issued, which may coincide with the March 2010 timetable for the light-duty vehicle rule.

Legislative Remedies

At this point in the regulatory process AFP believes that without congressional intervention it is more likely than not that EPA’s efforts to regulate GHGs will become law. The combination of the Court’s ruling in Massachusetts v. EPA and an aggressive Obama Administration will likely provide enough support to enact and sustain the regulations. Congress must step in and exercise its authority to define EPA’s limitations under the CAA.

House of Representatives: There are currently four pieces of legislation that have been introduced that would preempt EPA’s ability to regulate GHGs under the CAA.

• UPDATE: Reps. Collin Peterson (D-Minn.), Ike Skelton ( D-Mo.) and Jo Ann Emerson (R-Mo.) introduced a new piece of legislation, H.R. 4572, on February 3, 2010, which would block EPA from regulating GHGs under the CAA.

However, this significant bipartisan effort to stop EPA is not a clean bill. The bill also includes changes to the way EPA calculates the greenhouse gas footprint of biofuels. Ethanol—and related biofuels—have increasingly come under fire because if you add the impact of land use changes to their greenhouse gas totals, they actually contribute more to GHG emissions than traditional fuels. This new bill would bar EPA from counting the full impact of biofuels. It’s a huge giveaway to the ethanol lobby.

• Blackburn Bill: Rep. Marsha Blackburn (R-Tenn.) introduced H.R. 391, which would both bar EPA from classifying GHGs as pollutants (nullifying the endangerment finding) and clarifying that nothing in the CAA shall be construed as authorizing EPA to regulate climate change or global warming in the future.

The Blackburn Bill currently has 150 cosponsors, including Democrat Dan Boren from Oklahoma. Additionally, 121 representatives have signed a discharge petition to force the bill out of the Committee on Energy and Commerce and get a vote on the House floor; 218 signatures are needed to discharge the bill.

• Pomeroy Bill: Rep. Earl Pomeroy (D-N.D.) introduced H.R. 4396, which would also bar EPA from classifying GHGs as pollutants (nullifying the endangerment finding) and includes a Sense of Congress that the CAA was never intended to handle GHGs. The Pomeroy language is slightly weaker than the Blackburn; however, it would likely succeed in blocking EPA. There are no cosponsors or legislative activities on Pomeroy’s bill.

• Waxman-Markey: The House-passed climate bill also contains language that would bar EPA from expanding its regulatory portfolio. Sections 831-35 restrict EPA by stating in various forms that “no greenhouse gas may be added to the list … on the basis of its effect on global climate change.” However, it appears unlikely that companion legislation will pass the Senate and it is unknown whether this preemption language would survive a conference committee.

Senate: Senator Lisa Murkowski (R-Alaska) introduced a resolution of disapproval under the Congressional Review Act on January 21, 2010. The bill is S.J.Res.26, and it has already attracted 40 cosponsors.

• Congressional Review Act: The CRA was established in 1996 during the Contract with America. It provides a “fast track” method for Congress to invalidate Executive regulations of which Congress does not approve. In order to block a new regulation—such as EPA’s GHG efforts—from taking effect, Congress must take action no later than 60 days after the final rule is filed. The CRA requires a joint resolution from both chambers of Congress. In the Senate, the CRA provides for a 30-signature threshold to discharge it from committee and a simple majority vote (51) to pass once it is on the floor. In the House, a disapproval resolution would require 218 signatures to discharge and 218 votes to pass.

It appears likely that Sen. Murkowski has the 51 votes needed to pass the resolution in the Senate, although if she does not, she will not offer the proposal. Opponents of EPA’s actions still have significant work to do in the House to reach 218 votes.

Additionally, if the resolution does pass both chambers, it would require President Obama’s signature to overturn EPA’s proposed rule. AFP believes it would be very difficult for the president to issue his first veto against his own party’s Congress. If he did so, Obama would politically own any adverse consequences that arise from EPA’s regulations.

Conclusion

There remain several avenues, mainly legislative or judicial, that could stop EPA from regulating GHGs under the CAA. AFP believes that Congress must act swiftly to block EPA. In order for Congress to act, AFP must help continue to create public awareness and political accountability on this issue. The Blackburn Bill in the House, and the disapproval resolution in the Senate are free market advocates best hope for congressional intervention.