January 2012

Maybe forever! 

On April 30, Sen. John Barrasso (R-WY) placed a hold on the nomination of Regina McCarthy as Assistant Administrator of the EPA Office of Air and Radiation. “The nominee has failed to address serious concerns” about how the EPA would regulate greenhouse gases (GHGs) under the Clean Air Act, once the Agency finalizes its endangerment finding, Barrasso stated. 

The endangerment finding will compel EPA to establish GHG standards for new motor vehicles. This will make carbon dioxide (CO2) a pollutant “subject to regulation” under the Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program. An estimated 1.2 million previously unregulated buildings and facilities emit enough CO2 each year (250 tons) to qualify as “major stationary sources” under the PSD program. All would become vulnerable to new controls, monitoring, paperwork, penalties, and litigation. In 2003, the average PSD permit cost each applicant $125,120 and 866 burden hours to obtain.

Last week, Sen. Barrasso asked Ms. McCarthy how she would protect small businesses from PSD lawuits. The nominee replied that she will “request that I be informed if any such notice is filed with regard to a small source, and I will follow up with the potential litigants.” Barrasso commented: “The solution to this problem is not to have government officials go around asking litigants not to sue. That is not a solution and entirely unrealistic. I expect more.”

Short of amending the Clean Air Act, however, there may be no solution–which means Sen. Barrasso may have to keep the “hold” on for a very long time. The law clearly states that an entity must obtain a PSD permit before it builds or modifies a facility with the potential to emit 250 tons per year (TPY) of a regulated air pollutant, and all kinds of non-industrial facilities–office buildings, big box stores, apartment complexes, enclosed malls, heated warehouses, even commercial kitchens–actually emit 250 TPY of CO2.

In his press release, Barrasso cites a Wall Street Journal article stating that Kassie Siegel, Director of the Center for Biological Diversity’s Climate Law Institute, plans to sue EPA if the Agency does not apply PSD requirements to small sources. Siegel denied this in an email to Greenwire (subscription required): “The Center for Biological Diversity is not going to sue the EPA to regulate small sources of carbon dioxide, nor is anyone else.” But she cannot possibly know that no NIMBY activist somewhere will not file a PSD suit to block or delay construction of new Wal-Mart stores, strip malls, fast food restaurants, etc.

Besides, as Borrasso pointed out in a press release last Friday, in its comment on EPA’s Advanced Notice of Proposed Rulemaking, the Center for Biological Diversity lauds the PSD program as “an effective tool for reducing GHG emissions” precisely because ”it applies to a wide array of sources that will emit in excess of the applicable statutory thresholds of 250 or 100 tons per year.”

The Center further comments that, “the asserted belief of EPA officials that the statutory requirements are burdensome or not ‘efficient’ as they should be simply does not excuse the agency from following the law. The EPA has no authority to weaken the requirements of the statute simply because political appointees don’t like the law’s requirements.”

The Center files lots of lawsuits, and they just established a $17 million litigation fund to ensure that U.S. environmental statutes are “fully implemented” to reduce GHG emissions. In keeping with this, the Center’s ANPR comment argues that EPA “must” establish National Ambient Air Quality Standard (NAAQS) for CO2 of no more than 350 parts per million. Even outright de-industrialization of the United States would likely be insufficient to meet that standard. Maybe that’s why the Center has no plan to sue EPA to regulate small sources. If the Center successfully sues EPA to set NAAQS for CO2 at 350 ppm, there won’t be many businesses left to regulate.

David Bookbinder, chief climate council for the Sierra Club, similarly dismissed Borrasso’s concerns about PSD regulation of small sources. Asked what his response to Borrasso would be, Bookbinder told BNA (subscription required): “Nothing you could print.”

Yet earlier this year, the Sierra Club decided not to put a stay on Bush EPA Administrator Stephen Johnson’s interpretative rule limiting PSD to air pollutants currently subject to emission controls–a category that does not include CO2. Bookbinder acknowledged to Greenwire that if Johnson’s rule were simply overturned, EPA would have to regulate small sources of CO2. He explained: ”The Clean Air Act has language in there that is kind of all or nothing if CO2 gets regulated, and it could be unbelievably complicated and administratively nightmarish for both EPA and the states if they were to yank the Johnson memo and not have something in place that makes it clear that we’re going after only the very large sources.”

The real nightmare would be for the firms regulated, not the regulators. Like Siegel, Bookbinder presumes to speak for all potential litigants. In reality, neither Sierra Club nor Center for Biological Diversity has a monopoly on Clean Air Act litigation. The law is clear–250  tons is the threshold for regulation. And all it takes is one NIMBY activist to file the citizen suit that forces EPA to follow the law.

President Obama could quickly fix the whole problem if he wanted to. All he’d have to do is offer legislation to preclude EPA regulation of greenhouse gases under the Clean Air Act. Nearly all Republicans and many Democrats in Congress would vote for it, because it would protect our ailing economy from litigation-driven regulatory excess.

But Obama will not do this, because he wants to use the threat of EPA regulation under the Clean Air Act as a legislative hammer to beat opponents of the Waxman-Markey cap-and-tax bill into submission. This is too clever by half, however, as I argue here and here. If EPA does bring the might and fury of the Clean Air Act down upon CO2 emitters, Obama will have to take major responsibility for the increase in energy prices, the lost jobs, and the shuttered businesses.