GLOBAL CLIMATE DEBATE

EPA's Jackson Says No Endangerment Regulatory Action in 2010

The EPA won't regulate greenhouse gas emissions this year, and will phase in regulation in the five subsequent years, Administrator Lisa Jackson said in a letter to Senators late on Monday.

Responding to coal-state Democrats worried over impacts of Clean Air Act regulation on local industry, Jackson said in her letter that no businesses would be required to address GHG emissions of new construction or modifications before 2011.

She said that for the first half of 2011, only facilities already regulated for other emissions under the Clean Air Act will need to address their greenhouse gas emissions in their permit applications. Starting in the second half of 2011 and continuing in 2012, other large stationary sources would be required to get GHG permits. Jackson said in her letter that EPA doesn't intend to subject smaller facilities to Clean Air Act permitting for greenhouse gas emissions any sooner than 2016.

She said the EPA could raise the regulatory cut-off in the so-called "tailoring rule." That would exempt smaller emitters and is now proposed for 25,000 tons of GHG emissions annually.

Jackson said both the phase-in and the tailoring change are a result of comments submitted by the public, decisions she is in the process of finalizing.  The Clean Air Act, as written, gives the EPA the obligation to regulate pollutants found dangerous in emissions as low as 250 tons a year, or in some cases as little as 100 tons, giving rise to concerns that small businesses could fall under costly EPA regulation.

Jackson responded to eight coal state Democratic Senators, led by West Virgina's Jay Rockefeller, who last Friday wrote seeking her strategy on implementing GHG regulations, based on the GHG endangerment finding which the EPA finalized late last year.  While the House passed a carbon cap and trade plan, a similar measure is stalled in the Senate. Jackson and other administration officials have said EPA will meet its legal obligation to regulate dangerous emissions unless Congress acts to pre-empt it.

Jackson’s letter could address concerns by some who would like the EPA to slow down regulation of stationary sources like factories and power plants but not disrupt the "tailpipe" rule for "mobile sources" such auto emissions, which Jackson said in the letter will be finalized next month. "The timelines Jackson gives in her letter to the Senate moderates indicate a slower track than many Washington insiders have feared," said Christine Tezak, an analyst with R.W. Baird & Co., in a note to clients.

The delay by EPA was welcomed by Senate Republicans like Lisa Murkowski, (R-Alaska), the ranking member on the Senate Energy committee. "While the delay in implementation is a small forced step in the right direction, the Clean Air Act continues to be the wrong tool for the job, and EPA's timeline continues to create significant and ongoing uncertainty for a business community." Murkowski said in a statement after the EPA letter was released.

Murkowski is expected to force a vote on a resolution that would effectively strip the EPA's ability to regulate greenhouse gas emissions for both stationary and mobile sources by negating the endangerment finding. Several House Democrats, including Agriculture Committee Chairman Collin Peterson (D-Minnesota), have also proposed a similar measure.

The resolutions would require a simple majority vote in both houses, and must be signed by the President. Murkowski's resolution has 41 sponsors, not enough to pass the Senate, but enough to force the White House to expend political capital to defeat it, said ClearView Energy Partners analyst Kevin Book in a note to clients. "The White House doesn’t want to win the Murkowski vote, it wants to stop it outright, because even a victory that blocks Murkowski is likely to drain all the political will for comprehensive cap and trade legislation," he said.