Senate energy bill: first skirmish over US greenhouse-gas regulation

This week's Senate battle over the energy bill heralds a longer fight on climate change, some analysts say.

from the December 14, 2007 edition

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An EPA spokeswoman, Jennifer Wood, wrote in an e-mail: "EPA and its federal partners remain on track to take the first regulatory step in addressing greenhouse gas emissions from vehicles."

If the EPA does announce a finding – saying that public health and welfare is endangered by CO2 emissions – the EPA would be required under the Clean Air Act to crack down on "major" emitters, legal experts say. That could be a very broad group indeed, including any stationary emitter in the country that emits 250 tons or more, according to congressional testimony last month by Peter Glaser, a clean-air expert at Troutman Sanders, a Washington law firm.

Apparently concerned about such a prospect, the US Chamber of Commerce and industry groups that represent refineries and manufacturers sent a Dec. 7 letter to the Senate, warning that the bill's "overlapping authorities" could produce the "unintended triggering of an expansive and costly stationary [greenhouse-gas] source control program."

At least some Wall Street analysts appear to be picking up on such issues. "EPA's proposal will probably include an 'endangerment finding' with an August 2008 target date that would classify CO2 as a pollutant," wrote Kevin Book, an energy analyst with FBR Capital Markets, in his newsletter for investors Wednesday. "This could force EPA to review CO2 as a pollutant from stationary sources, too."

Such a finding, he wrote, would probably require that the agency, under the Clean Air Act, require federal clean-air permits from a host of sites, including those emitting as little as 100 tons per year.

"This could paralyze construction sites, not just refineries and coal-fired power plants," he wrote.

While the energy bill failed in a vote early Thursday, environmentalists worry about White House allies within Congress also pushing in the same direction, who might insert a provision in the new stripped-down energy bill. Some question whether many in Congress realize that by eliminating "ambiguity" in regulation authority, it might also eliminate the EPA from CO2 regulation.

Indeed, a slender provision floated this week as a remedy for possible inclusion in the Senate energy bill would not only give DOT authority over fuel economy – but would also strip EPA of authority to regulate greenhouse-gas emissions, environmentalists say.

"It is a poison pill that, in the dark of night, would reverse the landmark decision by the US Supreme Court affirming EPA's power to regulate global-warming pollution," says Ms. Patton of Environmental Defense.

The controversial provision did not appear to be part of the energy bill that failed to pass a procedural vote Thursday morning in the US Senate, but it could be inserted into a new slimmed-down energy bill. That would be unfortunate, she says, given a recent legal ruling in California.

On Wednesday, the entire claim of an agency conflict in regulating auto fuel economy was dealt a blow by US District Judge Anthony Ishii. In a case involving automakers challenging California greenhouse-gas emission standards, he ruled that there was no conflict between the EPA's regulatory duties and DOT's setting of mileage requirements.

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