Facing a quartet of lawsuits and mounting concerns from a group of Senate Democrats, the Environmental Protection Agency has pushed back until 2011 its ambitious timetable to regulate greenhouse gas emissions from stationary sources and create a de facto climate change policy. The EPA originally had planned to put its plan into place this month.
But the revised strategy isn't winning any plaudits from manufacturers.
“We believe [EPA] administrator [Lisa] Jackson's response … is incomplete and unacceptable,” said the American Chemistry Council in a prepared statement. “It does not address the significant concerns that have been raised by members of Congress and the business community about the impact of the regulations on investment in new facilities, business expansion, and job creation.”
In a letter that Jackson sent to Congress on Feb. 22, she said:
* Regulations and permits for greenhouse gas emissions from new construction or modification of existing facilities will not go into effect until 2011.
* For the first six months of 2011, only facilities that already must apply for Clean Air Act permits as a result of their non-greenhouse-gas emissions will need to address greenhouse gas emissions in their permit applications.
Her letter also said EPA may modify a proposal that would require large facilities emitting more than 25,000 tons of greenhouse gases a year to obtain permits that show they are using best practices and technologies to minimize greenhouse gas emissions.
Jackson's letter said that EPA might consider raising that 25,000-ton threshold, depending on the information it receives during the public comment period, and that it does not intend to require smaller facilities to obtain permits for greenhouse gas emissions.
The state of Texas, the U.S. Chamber of Commerce, several conservative think tanks and a coalition of 17 associations and businesses — including the National Association of Manufacturers — and 12 Republican congressmen filed separate Feb. 16 lawsuits in the U.S. Court of Appeals for the District of Columbia Circuit challenging EPA's authority to regulate greenhouse gases from stationary sources.
“Regulation of greenhouse gases from stationary sources goes to the heart of our economic recovery and America's competitiveness, yet EPA's proposal fails to provide the protection needed,” said Arlington, Va.-based ACC.
“Congress should step in immediately to postpone EPA's proposed regulation of stationary sources, and take time to develop an effective solution that specifies clear and achievable objectives for greenhouse gas emissions reductions,” ACC said.
How Congress or EPA ultimately decides to regulate greenhouse gases could impact the price and availability of feedstocks and fuel for chemicals and plastic firms.
Eight Democratic senators, led by Sen. John Rockefeller, D-W.Va., had sent a letter to EPA's Jackson on Feb. 19, saying the agency's planned regulation of greenhouse gases from stationary sources under the Clean Air Act would jeopardize economic recovery and investments in energy-efficient technology, and make it more difficult for Congress to move forward on a reasonable climate policy.
“Ill-timed or imprudent regulation of greenhouse gas emissions may squander critical opportunities for our nation, impeding the investment necessary to create jobs and position our nation to develop and produce its own clean energy,” the eight senators said in their letter to Jackson.
“We couldn't agree more,” ACC said. “American chemistry is among the many U.S. industries where premature stationary-source regulations will delay, curtail or cancel investments. EPA's response makes clear the agency's intention to expand stationary-source permit requirements to many small sources — and glosses over the fact that the state agencies that will implement the requirements do not have the resources to implement the program.”
ACC added that EPA regulation of greenhouse gas emissions at stationary sources could cause utility “fuel switching” to natural gas, “a vital fuel and feedstock for American chemistry.”
“In the absence of 'Best Available Control Technology' (BACT) standards for controlling greenhouse gas emissions from stationary sources, EPA may define natural gas as BACT for construction or major modification of facilities,” ACC said. “The effect of the EPA regulation would be to mandate fuel switching that in turn will raise domestic natural gas costs at a time when our economic situation is imposing considerable challenges on U.S. manufacturing and jobs.”
The EPA took that position Dec. 7 when it issued an endangerment finding that said six greenhouse gases threaten the public health and welfare of current and future generations, and thus needed to be regulated under the Clean Air Act.
Regulations stemming from EPA's endangerment finding could trigger new permitting requirements on more than 6 million stationary sources, including 200,000 manufacturing facilities.
Copyright 2010 Crain Communications Inc. All Rights Reserved.
