EPA issues tailoring rule guidance for state, local agencies

[Note: This story was updated Nov. 12 with comments from the National Association of Clean Air Agencies.]

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Nov. 11 -- The US Environmental Protection Agency issued guidance and tools on Nov. 10 to help state and local air regulators identify cost-effective options for controlling greenhouse gases under the Clean Air Act. The material is part of the federal agency’s approach to limiting GHG emissions from refineries, chemical plants, and other large industrial sources under a tailoring rule it announced this past spring.

“EPA is working closely with its partners at the state and local levels to ensure permitting for greenhouse gases runs smoothly,” said Gina McCarthy, the agency’s assistant administrator for air and radiation. “To identify GHG options, EPA and the states are now ready to apply the same time-tested process they have used for other pollutants. This shows that the Clean Air Act can be used to reduce these gases in a cost-effective way.”

Concerns expressed
Petroleum, chemical, and other business associations immediately expressed their concern. National Association of Manufacturers Pres. John Engler voiced that EPA is over-reaching and its GHG permitting guidance raises more questions than answers.

“EPA continues to create uncertainty for manufacturers as we move closer to the Jan. 2, 2011, deadline,” which EPA has set for implementing the requirement for large industrial facilities to use best available GHG control technologies at new facilities or with major modifications of existing plants, Engler said, adding, “While the agency has requested public comment, the short time frame will hinder stakeholders’ ability to provide robust feedback.”

It’s also questionable whether state and local agencies have the resources and capacity to issue these new permits expeditiously, Engler added.

Howard Feldman, regulatory and scientific affairs director at the American Petroleum Institute, said, “EPA is railroading job killing regulations onto states, localities, and America’s businesses during a time of uncertain economic recovery without giving those affected adequate time to review, provide comments, or even implement the new regulations. EPA’s regulations take effect Jan. 2, but it’s already November and EPA is just now releasing guidance documents for permitting.”

Feldman said, “There is consensus among many people, including [US President Barack Obama], that EPA’s regulation of greenhouse gases under the Clean Air Act may not be the proper path forward for climate change policy. Many governors around the country have expressed alarm about the consequences of this regulation on the economy and jobs given the current economic environment.”

Supporters applaud
Supporters of federal GHG regulation to address global climate change applauded EPA’s announcement. US Rep. Henry A. Waxman (D-Calif.), who chairs the House Energy and Commerce Committee, said EPA Administrator Lisa P. Jackson again showed that the CAA can work to protect the public without harming industry. Eileen Claussen, president of the Pew Center on Global Climate Change, said EPA’s guidance “goes a long way toward making sure that large new industrial facilities employ state-of-the-art technologies that will deliver long-term economic and environmental benefits.” 

The National Association of Clean Air Agencies, which represents regulators in 53 states and territories and more than 165 major US metropolitan areas, also welcomed EPA’s announcement. “This guidance will allow the process to continue to move full-speed ahead. Come Jan. 2, the doors of state and local regulatory agencies will be open for greenhouse gas permitting business,” NACAA Executive Director S. William Becker said Nov. 10.

“These agencies have put forth an incredible effort to fulfill their permitting obligations on time,” he continued. “EPA’s guidance will provide industry greater certainty and quicker permitting decisions, and a smoother path toward [GHG] implementation. This should put to rest the exaggerated claims of some stakeholders that [GHG] permitting will have disastrous economic consequences.”

EPA said it is recommending that these state and local agencies use the best available control technology (BACT) process to look at all available GHG emissions reduction options. “After taking into account feasibility, cost, and other economic, environmental, and energy considerations, permitting authorities should narrow the options and select the best one,” the federal agency said in its announcement. “EPA anticipates that, in most cases, this process will show that the most cost-effective way for industry to reduce GHG emissions will be through energy efficiency.”

Basic information
EPA said its guidance does not define or require a specific control option for a particular kind of source because BACT is determined on a case-by-case basis. Instead, the guidance and resources provide basic information which permit writers and applicants need to address GHG emissions, as well as examples of how permitting requirements could apply, the agency said.

The American Chemistry Council said in a statement that it found several elements that it could not support in EPA’s guidance. “We agree that it is appropriate to use the same BACT review process for GHG emissions that is used in other programs. Specifically, we share EPA’s view that applicability should be limited to new or modified sources of GHG; that energy efficiency should be stressed, but flexibility on technologies to achieve it should be preserved; and that fuel switching requirements should not be imposed, which would prevent fuel choice and drive up energy costs,” it indicated.

“Because BACT determinations are meant to be site-specific, the discretion being given to states in EPA’s guidance can be helpful, but not if some states misuse that discretion to entirely redesign business projects,” ACC continued. “If states put in place markedly different programs, it could result in competition among states for scarce business investment dollars,” the council said.

It noted, “Finally, this guidance is not a silver bullet that solves the problems with EPA’s proposed stationary source rules. We remain concerned that the risks that chill business investment—from permit delays and costs to legal challenges—remain unresolved. We continue to believe that Congress must impose a ‘time out’ on the regulation of GHG emissions from stationary sources.”

EPA is developing regulations to limit GHGs under the CAA in response to a 2007 US Supreme Court decision which said that the federal environmental regulator has that authority. Congressional Republicans and Democrats, as well as the White House, have said that legislation to address global climate change should be enacted instead. US Sens. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member, and John D. Rockefeller IV (D-W.Va.) each introduced bills earlier this year to restrict or delay EPA’s implementation of its GHG control proposals.

Contact Nick Snow at nicks@pennwell.com.

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