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Finding gives US EPA power to regulate greenhouse-gas emissions

The US government has authorised itself to regulate greenhouse-gas emissions, with potentially costly consequences for the oil and power sectors

CARBON dioxide (CO2) and five other greenhouse gases (GHGs) present a public health hazard, according to a December ruling by the US Environmental Protection Agency (EPA). The organisation "is now authorised and obligated to take reasonable efforts to reduce greenhouse pollutants under the Clean Air Act (CAA)", said EPA head Lisa Jackson. It is "perhaps the most significant decision ever reached in environmental law", she claimed.

The announcement fulfils a mandate established by a 2007 Supreme Court ruling that the EPA has the authority to regulate GHG emissions if they pose a threat to human health and welfare. At the time, it directed the EPA to review the latest scientific data on climate change in order to determine whether these heat-trapping emissions constituted a significant health hazard. The December announcement revealed the results of that review.

The endangerment finding could have a significant and costly effect on the nation's largest GHG emitters, including the power generation, oil-refining and transportation sectors. These industries are already facing the prospect of a legislative crack-down: in June, the US House of Representatives narrowly passed a bill that would limit US carbon emissions at 17% below 2005 levels by 2020. However, the Senate is unlikely to begin a debate on the subject until March or April at the earliest and passage of an emissions cap is far from assured.

Although the EPA and the administration of President Barak Obama have stated their preference that emissions be regulated by Congress in the form of a carbon cap-and-trade bill, the endangerment finding means the EPA can regulate GHG emissions without waiting for federal lawmakers to enact cap-and-trade legislation. And it has started to clamp down on the biggest GHG producers.

From the spring, large emitters with plans to construct or substantially modify facilities will be required to obtain construction and operating permits to demonstrate that they will integrate into their plans the best available control technologies and energy-efficiency measures to minimise GHG emissions. Beginning in 2011, large emitters will, for the first time, have to submit publicly available information that will allow the EPA to track GHG emissions over time.

Under the CAA, an estimated 4m-6m facilities would automatically become subject to emissions regulation. However, recognising that attempting to regulate so many entities would tax the EPA's resources to the point of administrative paralysis, the agency has introduced what it calls the "tailoring rule", which applies these requirements only to industrial facilities that emit more than 25,000 tonnes a year of GHGs, accounting for almost 70% of emissions from stationary sources in the US – about 13,400 facilities altogether. Smaller polluters, such as farms, schools, small office buildings and restaurants, will be exempt.

The ruling also provides legal justification for a national clean-cars programme, proposed by the EPA and the Department of Transportation's National Highway Safety Administration in mid-September 2009; this would limit the combined average emissions level of passenger cars, light-duty trucks and medium-duty passenger vehicles made between 2012 and 2016 to 250 grammes of CO2 per mile and would improve fuel economy for new cars and trucks sold in the US to 35.5 miles per US gallon. The agencies forecast these standards would reduce CO2 emissions by about 0.95bn tonnes over the vehicles' lifetime. The proposal, if enacted, would represent the first domestic limits on GHG emissions from US vehicles.

"These are reasonable, common-sense steps that will allow us to do what the Clean Air Act does best – reduce emissions for better health, drive technology innovation for a better economy and protect the environment for a better future – all without placing an undue burden on the businesses that make up the better part of our economy," the EPA's Jackson said.

A better solution

Officials of the energy industry and states with oil and gas operations see these actions differently. "The Clean Air Act was meant to control traditional air pollution, not GHGs that come from every vehicle, home, factory and farm in America," says the president of the American Petroleum Institute, Jack Gerard. Describing the proposed regulation as "intrusive, inefficient and excessively costly", Gerard says a "fit-for-purpose climate law" would be a better solution. He also points out that the US oil and gas industry invested about $58bn between 2000 and 2008 alone on low-carbon energy technologies to reduce GHG emissions.

The National Petrochemicals and Refiners Association says regulating GHGs under the CAA "represents the largest expansion of the agency's CAA authority since the enactment of the 'modern' CAA in 1970", and has called on the EPA to "stop this rush to judgment and its headlong plunge into increasing the burdens on our economy."

Even before the endangerment finding was released, Alaska senator Lisa Murkowski, ranking member of the Energy and Natural Resources Committee, proposed an amendment to the EPA's fiscal year 2010 spending bill aimed at blocking the agency from regulating GHG emissions from power plants and other stationary sources for one year. However, the amendment never reached the Senate floor. After the EPA declaration in early December, Murkowski said she would introduce a resolution that would retroactively veto the agency's ruling.

Meanwhile, Louisiana governor Bobby Jindal, who heads the second-largest refining state in the country, wrote a letter to Jackson stating that "implementation of the proposed rules will have a dramatic, chilling effect on the refining and production capability of our state." He added: "Any consideration of such a comprehensive regulatory scheme belongs in a thoroughly vetted legislative process. There is no doubt that this change will have profound negative economic effects on the state of Louisiana, as well as the entire country."

The EPA's ruling will likely face legal challenges, which could delay its effective date for years; some sources say the tailoring rule is particularly vulnerable and, if nullified, could exponentially increase the number of facilities covered by the ruling and have disastrous administrative consequences to the EPA. Opponents have until 16 February to file petitions in the US Circuit Court of Appeals for the District of Columbia.

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