Bills That Would Limit the U.S. EPA's Clean Air Act Authorities

table table tbody { border:none; } table table tr { border:none; } While the Senate recently defeated four bills or amendments that would restrict EPA’s authority, it remains to be seen if additional anti-EPA bills will be introduced in the U.S. Congress or in state governments. As this debate continues, it is important to understand the likely practical impacts of each proposal, how legislation would change the regulatory timetable, and how the EPA’s ability to reduce pollution would be affected. A companion piece sets the record straight on common myths relating to this debate. The following legislative summaries provide an overview of the range of federal proposals that remain part of the ongoing debate over EPA’s authority and actions. The Current Scope of EPA Regulatory Authorities US GHG Emissions and the Clean Air Act GHG sources subject to existing or expected CAA regulations GHG sources not subject to CAA regulations Figure 1 The pie chart in Figure 1 illustrates the major source categories for greenhouse gas emissions (GHG) from across the U.S. economy. The broad categories highlighted by shades of green represent the main sources of emissions that EPA is regulating, or is expected to regulate, through existing Clean Air Act (CAA) authorities, as an ultimate consequence of the Massachusetts v. EPA, Supreme Court decisioni and the subsequent Endangerment Findingii. In addition, the FY08 Omnibus Appropriations bill included a provision that requires annual mandatory GHG reporting to EPA by more than 10,000 major sources across the economy, representing about 85% of total U.S. GHG emissionsiii. Taking their first concrete steps to regulate GHG emissions, EPA finalized vehicle emissions standards for cars and light trucks in May, 2010iv. This action automatically triggered a Clean Air Act requirement – which went into effect in January 2011 – for state and local regulators to conduct a preconstruction review process to ensure that “best available control technologies” (BACT)v are used, to limit greenhouse gas emissions, prior to issuing air permits. The BACT standard only applies to new facilities or facilities undergoing major modifications that would lead to increases in annual emissions above a certain threshold, as defined by the “Tailoring Rulevi.” Most recently, EPA has opened the docket on an extended comment period for how best to set GHG emissions performance standards – under section 111 of the Clean Air Actvii – for existing facilities within the two biggest stationary source categories in the U.S.: electric generators and refineries. In early April, both the House and the Senate debated and then voted on a number of bills that would restrict these EPA regulations. The following discussion briefly summarizes four bills from the perspective of how (and for how long) they would affect the scope, or coverage, of EPA’s authorities, with respect to the major source categories highlighted by the above pie chart. Energy Tax Prevention Act of 2011 (Upton-Inhofe) Clean Air Act authorities for GHGs: completely prohibited prohibited (with short-term exception for existing rules) prohibited for 2 years remain in place with limitations unchanged Figure 2

• Regulatory prohibitions would be economy-wide and permanent.
• Prohibition on any new vehicle standards, effective 2016.

The “Energy Tax Prevention Act of 2011” (H.R. 910 and S. 482), introduced by Representative Upton (R-MI) and Senator Inhofe (R-OK), would create very broad regulatory exemptions for GHG emissions, under the Clean Air Act (see Figure 2). Although there are a few notable exceptions (listed below), effective immediately, this bill would prohibit EPA from using the authorities of the Clean Air Act to promulgate, implement or enforce GHG regulations from any U.S. source category for the purpose of addressing climate change (this includes all source categories in Figure 1). This means that several prior EPA actions and rules would no longer have any legal effect, including the Endangerment Finding, the mandatory greenhouse gas reporting rule and the preconstruction permitting for new or modified sources to meet BACT standards, which took legal effect with respect to GHG emissions in January, 2011. With respect to vehicles, the EPA would be prohibited from setting any new, more stringent GHG emissions standards for light-duty or heavy-duty vehicles and engines after current and proposed standards have run their course, by 2016 and 2018, respectively. However, because this bill would overturn the Endangerment Finding, there is concern that even existing vehicle standards would be undermined and subject to legal challengeviii. States: Though states would still be allowed to enact and implement laws to limit stationary-source (i.e., power plant and major industrial) greenhouse gas emissions within their own borders, the bill would exclude GHGs from states’ Clean Air Act “waiver authority,” after model year 2016; meaning that states would be prevented from promulgating or enforcing any new, more stringent vehicle GHG emissions standards. Exceptions: The scope of the regulatory prohibitions covered by this bill would not apply to:

1. The existing light-duty vehicle ruleix; joint standards for passenger cars, light-duty trucks, and medium-duty passenger vehicles, covering model years 2012 through 2016;
2. Proposed GHG emissions standards for medium and heavy-duty enginesx, covering model years 2014 through 2018; and
3. Implementation and enforcement of the Renewable Fuel Standard.

Comment: This bill takes the aggressive step of legislatively overturning EPA’s scientific finding that GHG emissions are a threat to public health and welfare. Though existing vehicle and renewable fuel standards would be left untouched by this bill, it would otherwise eliminate virtually all of EPA’s authority to regulate – or even monitor – GHG emissions (including by preventing EPA from setting new standards for cars and trucks, effective in 2016). Also, this bill’s limitation on state authority would remove a key point of leverage that California has used to encourage more stringent national vehicle GHG emissions standardsxi. Championed by the GOP leadership in both chambers of Congress, this bill passed through the U.S. House Committee on Energy and Commerce in March and then through the full House on April 7th, 2011 (final vote was 255-172). This bill did not meet the 60-vote threshold in the U.S. Senate, failing on a 50 to 50 vote (April 6, 2011). EPA Stationary Source Regulations Suspension Act (Rockefeller) Figure 3

• Regulatory prohibitions on stationary sources would last for 2 years.

The “EPA stationary Source Regulations Suspension Act” (S. 231), introduced by Senator Rockefeller (D-WV), would prevent the EPA Administrator from taking any actions under the Clean Air Act to regulate stationary source emissions of carbon dioxide or methane for two years (see Figure 3). This means that any regulations of all such stationary source emissions (i.e., from electric generation, industry, non-agricultural methane) could not be developed, implemented or have any legal effect for a full two years. The bill explicitly prevents EPA from moving forward with the development of performance standards for new and existing units under section 111 of the Clean Air Act, and would also put on hold regulations that currently require evaluation of GHG control activities for new and modified facilities under the preconstruction permitting/BACT program. States: This bill would not affect the ability of states to regulate GHG emissions within their own jurisdictions. Exceptions: As the scope of this bill is limited to EPA regulations of stationary sources, the following EPA authorities would remain untouched by this bill:

1. Mandatory GHG reporting; and
2. Authority to develop, implement and enforce any new rules to reduce GHG emissions from vehicles sold in the United States.

Comment: This bill was also introduced by Senator Rockefeller during the last Congress and has the support of several moderate Democrats. It was defeated in a Senate floor vote (12-88; April 6, 2011). In addition to the harm caused to public health and the environment by delaying EPA regulation of dangerous GHG pollution and preventing EPA from moving forward with the development of future regulations for a 2-year period, based on precedents set by previous congressesxii, there is a valid concern that a seemingly harmless 2-year delay would be repeatedly extendedxiii, making regulatory prohibitions effectively permanent. Senate Amendment #277 (Stabenow-Brown) Figure 4

• Regulatory prohibitions on stationary sources would last for 2 years.
• Permanently exempts from stationary source CAA regulations GHG emissions from land use and agriculture.

Senate amendment #277, introduced on March 29th by Senators Stabenow (D-MI) and Brown (D-OH), would generally be similar to the EPA Stationary Source Regulations Suspension Act (S. 231); however, this amendment would have long-term impacts on the ability of EPA to regulate GHG emissions from land-use practices (see Figure 4). Specifically, the amendment would make no stationary source greenhouse gas pollution requirements “legally effective” for two years. This would take away the EPA’s authority to enforce the mandatory GHG reporting rule. In other ways, this approach could be slightly less restrictive than S. 231, in that EPA would still be allowed to study and develop regulations, even if they would be prohibited from implementing any new rules. Meanwhile, the amendment would also permanently block EPA from accounting for GHG emissions associated with agriculture or land-use change (e.g., including forestry and land-conversion) when regulating emissions from stationary sources. For the next two years, the biggest practical impacts of this two year delay would be to temporarily eliminate EPA’s regulatory authority with respect to the following:

1. Mandatory GHG reporting rule
2. Implementing GHG performance standards for the new and existing electricity generators and petroleum refineries (under CAA section 111), which are scheduled to be issued in 2012;
3. Enforcing BACT standards for GHG emissions through the preconstruction permitting process for new and modified facilities, which went into effect in January of this year.

States: This bill would not affect the ability of states to regulate GHG emissions within their own jurisdictions. Comment: This amendment was defeated in a Senate floor vote of 7-93 (April 6, 2011.), As with the EPA Stationary Source Regulations Suspension Act, based on precedents set by previous congressesxiv, there is a valid concern that a seemingly harmless 2-year delay would be repeatedly extendedxv, making regulatory prohibitions effectively permanent. Also, by not allowing EPA to account for emissions associated with land-use change, this effectively makes the assumption that all bioenergy sources have zero emissions, despite abundant evidence to the contraryxvi. Senate Amendment #236 (Baucus) Figure 5

• Would limit stationary source regulations to large emitters.
• Permanently exempts from all CAA regulations GHG emissions from land-use change.

Senate amendment #236, introduced by Senator Baucus (D-MT) on March 16th, 2011 would codify aspects of the EPA’s “Tailoring Rule,” while also permanently exempting GHG emissions from agriculture and land-use from Clean Air Act regulations (see Figure 5). Specifically, this amendment would write into the Act emissions thresholds from EPA’s Tailoring Rule, limiting the application of BACT standards only to very large GHG emissions sourcesxvii. Meanwhile, the amendment would also permanently block EPA from accounting for GHG emissions associated with agriculture or land-use change (e.g., including forestry and land-conversion) for all CAA regulationsxviii. States: This bill would not affect the ability of states to regulate GHG emissions within their own jurisdictions. Comment: This amendment was defeated on the Senate floor by a vote of 7 to 93 (April 6, 2011). As with Senate amendment #277, by not allowing EPA to account for emissions associated with land-use change, this amendment effectively makes the assumption that all bioenergy sources have zero emissions, despite abundant evidence to the contraryxix.

1. Massachusetts v. EPA, 549 U.S. 497 (2007).
2. The Endangerment Finding is a scientific finding by the EPA Administrator that greenhouse gases threaten the public health and welfare of current and future generations. See: Endangerment and Cause or Contribute Findings for GHGs Under Section 202(a), 74 Fed. Reg. 66,496 (Dec. 15, 2009).
3. EPA has been collecting multi-pollutant emissions data (including carbon dioxide) from electric generation units for many years, but this rule extends GHG reporting requirement to other sectors of the economy, including manufacturers and oil-and-gas industry sources. Having well-established and transparent system for collecting high quality emissions data is a critical prerequisite for effective regulation, particularly for any market-based compliance strategies. See: Mandatory Reporting of Greenhouse Gases, 74 Fed. Reg. 56,373 (Sept. 30, 2009).
4. Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010).
5. Under the Clean Air Act, the determination of BACT explicitly takes costs into account, ensuring that regulation does not impose costs that are excessive and it does not require the adoption of technologies or processes that are not available.
6. To limit the number of affected sources, the EPA issued a so-called “Tailoring Rule”, which sets the specific terms for phasing in the regulation of GHG emissions under this preconstruction permitting process, including by establishing annual GHG emissions thresholds. See: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31,514 (May 13, 2010).
7. U.S. EPA, Fact Sheet, Settlement Agreements to Address Greenhouse Gas Emissions from Electric Generation Units and Refineries (2010), http://www.epa.gov/airquality/pdfs/settlementfactsheet.pdf.
8. While the bill includes a savings clause to preserve vehicle standards for model years 2012 to 2016 and proposed standards for heavy-duty engines for model years 2014 to 2018, there is concern that by overturning the endangerment finding, this bill would remove the legal basis for both rules, creating uncertainty and increasing the likelihood of legal challenges. Find a copy of the letter from UAW here: http://www.cleancarscampaign.org/web-content/cleanairact/docs/UAW-oppose-Upton.pdf
9. Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed. Reg. 25,324 (May 7, 2010).
10. Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles, 75 Fed. Reg. 74,152 (proposed Nov. 30, 2010).
11. Under the CAA, California has the ability to establish its own vehicle emissions standards for vehicles and other states have the ability to impose those standards, provided that the EPA grants a waiver. California used this authority to establish the first GHG emissions standards for vehicles in 2004. After the Obama administration granted the waiver necessary to enforce these standards, the federal government, the auto industry, and California and other states reached agreement in 2010 on implementation of federal vehicle standards that matched California’s in stringency by 2016. California is currently working on the next set of standards that would take effect starting with model year 2017 vehicles, and is coordinating with the federal government in this effort.
12. http://www.pewclimate.org/blog/tubmanm/long-term-impacts-one-year-riders
13. For example, in 1995 congress passed a one-year delay to updating vehicle fuel economy standards and the delay was extended five times. As the Department of Transportation was already behind schedule when the delay provision first passed and the prohibition barred DOT from developing rules for future updates, this 1-year policy rider resulted in roughly two decades of delay
14. See footnote xii.
15. See footnote xiii.
16. Houghton, R.A. 2008. Carbon Flux to the Atmosphere from Land-Use Changes: 1850-2005. In TRENDS: A Compendium of Data on Global Change. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tenn., U.S.A.
17. The only affected facilities would be those for which CAA preconstruction permitting requirements would have been triggered anyway – based on conventional pollutant emissions – and the construction would also lead to a significant increase in GHG emissions (more than 75,000 tons of CO2 per year).
18. As drafted, this amendment’s prohibition on accounting for GHG emissions resulting from agriculture and land-use change is not very clear and could be interpreted to apply to all programs under the Clean Air Act. A Clean Air Act-wide prohibition would not only affect stationary sources emissions accounting – under BACT and section 111 – (as is the case with Senate Amendment #277), but also from the Title II Renewable Fuels Standard, which sets volumetric targets and requires qualifying biofuels to meet certain lifecycle emissions standards.
19. See footnote xvi (Houghton et al).