The Environmental Protection Agency (EPA) last week proposed a rule that would limit future regulation of greenhouse gas (GHG) emissions under the Clean Air Act to industrial facilities that emit 25,000 tons or more of carbon dioxide annually. The announcement was made on the same day as Senate Democrats unveiled the “Clean Energy Jobs and American Power Act,” indicating increased pressure on Congress to pass comprehensive climate legislation.

The legislation had been expected by the time talks began in December to finalize a new international climate treaty in Copenhagen. But last week, Carol Browner, the top White House energy adviser, told reporters that President Barack Obama did not expect it would be signed by then.

“I think we’d all agree the likelihood that you’d have a bill signed by the president on comprehensive energy by the time we go in December is not likely,” she said, according to The New York Times. “We could be out of committee. Certainly, in the Senate we could perhaps be headed to the floor. There could be a leadership bill out there. We will go to Copenhagen with whatever we have.”

The newspaper reported, however, that Browner—a former U.S. EPA administrator during the Clinton years—thought it possible that the agency could set up a cap-and-trade system. According to the Times, “she cited EPA’s effort in the 1990s in issuing a model rule to help states set up a cap-and-trade system for smog-forming nitrogen oxides. EPA did that even though it didn’t think it had the federal authority to set up a cap-and-trade system on its own, she said.”

As well a limiting future GHGs, the rule proposed by the EPA last week will require a permit when major emitters of GHGs make modifications that increase their GHG emissions. That permit requirement will be triggered with emissions increase equivalent to somewhere between 10,000 and 25,000 tons of carbon dioxide. The EPA isn’t sure where exactly to set this “significance level” for modifications, and it is seeking comments on the best value to use. The proposed rule will limit GHG regulation to facilities such as power plants, refineries, and factories, which produce nearly 70% of U.S. GHGs, the agency said.

Currently, the agency is also proposing to regulate GHGs from cars and light trucks under the Clean Air Act, as part of a joint rule on fuel economy with the National Highway Traffic Safety Administration. The EPA intends to finalize that regulation in the spring of 2010, and once that happens, GHGs will be treated as pollutants under the Clean Air Act.

But that would automatically trigger regulations for relatively small GHG emitters, a situation that the EPA had intended to avoid. Under the proposed rule, small and midsize businesses such as farms and restaurants, as well as many other facilities, would not be subject to GHG regulations. As noted in the proposed EPA rule, allowing GHG regulations to apply to relatively small emitters would cause state permitting authorities to be “paralyzed by permit application in numbers that are orders of magnitude greater than their current administrative resources could accommodate.”

The proposed “tailoring” rule addresses six greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. With the proposed industrial emissions thresholds, the EPA estimates that 14,000 large sources would need to obtain operating permits that include GHG emissions because they exceed the 25,000 ton threshold. Most of these sources are already subject to clean air permitting requirements because they emit other pollutants.

In addition, 400 new sources or modified sources would be subject to review each year for GHG emissions. Under the Clean Air Act, the EPA will ensure that these new or modified sources are using the best available control technologies and energy efficiency systems to minimize GHG emissions. The EPA plans to develop sector- and source-specific guidance that will help permitting authorities and industrial facilities better understand GHG emissions for each type of facility, methods for estimating those emissions, available GHG measurement and monitoring techniques, and strategies to minimize GHG emissions. The EPA also plans to revisit its thresholds after five years to see if they can be lowered.

The EPA estimates that about 3,000 GHG emitters will be newly subject to Clean Air Act permit requirements under the proposed rule, and most of those will be municipal landfills. According to the agency, landfills account for about 23% of human-caused methane emissions in the U.S., and the new regulations are likely to encourage the capture of landfill methane emissions and their use as a renewable energy source.

The proposed rule, announced by the EPA on Sept. 30, will be open for public comment for 60 days once it has been published in the Federal Register.

Sources: EPA, EERE, The New York Times, POWERnews