Rules Designed to Be Broken

The fallout from the Supreme Court’s April 2, 2007, decision (Massachusetts v. Duke Energy) in which the high court ruled that the EPA does have the right to regulate CO2 emissions as a pollutant under the Clean Air Act (CAA) continues. The court also ruled that the EPA has the authority to regulate carbon emissions from automobiles and other vehicles—and, by extension, power plants (my words, not the court’s).

The high court specifically did not rule that the EPA must take action to regulate CO2 emissions; rather, the agency must now analyze the scientific data to determine if CO2 is a global danger and then base its rules on that analysis, as required by the CAA. From the majority opinion: “We need not and do not reach the question whether on remand EPA must make an endangerment finding, or whether policy concerns can inform EPA’s actions in the event that it makes such a finding. . . . We hold only that EPA must ground its reasons for action or inaction in the statute.”

I may disagree with the court’s findings, but a close reading of its decision shows that it is based on a reasonable, albeit strict, reading of the CAA regulations.

One-Two Punch

The EPA has other seemingly insurmountable problems with its rulemaking stemming from the CAA: The D.C. Circuit Court vacated the Clean Air Mercury Rule on February 8, 2008. It quickly followed up with a July 11 decision to vacate the EPA’s Clean Air Interstate Rule  (CAIR) This second decision was unexpected even by CAIR’s most ardent detractors, was blasted by many environmental groups, and caught utility executives flatfooted after they’d poured billions of dollars into air quality equipment retrofits that are no longer required—at least for the time being.

In essence, the most visible and far-reaching environmental rules and regulations promulgated in the past five years disappeared with a snap of judicial fingers—leaving the EPA holding the bag.

The judges noted that vacating CAIR leaves a regulatory vacuum but threw the EPA a bone by suggesting that the 2003 NOx SIP Call could be resurrected while new regulations are formulated that will meet judicial muster. The agency is now trying to regroup and decide whether to appeal these rulings—decidedly a waste of time given the Supreme Court’s strict reading of the CAA.

Paralysis by Analysis

No doubt a siege mentality is epidemic at the EPA these days, and much of the internal discussion is sure to be over whether the CAA is the proper approach to regulating CO2 and the pollutants CAIR and CAMR were meant to regulate. Given the closeness of the presidential race, President Bush is unlikely to let the EPA develop GHG rules—there is no way he’ll allow such regulations to take effect on his watch.

Blocked at every turn by judicial and political barriers, the only option remaining is to start over from scratch. The first step was the release on July 11 of an Advance Notice of Proposed Rulemaking (ANPR) (PDF) that solicits public input about the effects of GHGs on climate change and “the potential ramification of the CAA in relation to GHG emissions” in response to the Supreme Court ruling last year. The EPA statement notes that the other purpose of the notice is to “evaluate the broader ramifications of the decision throughout the CAA, which cover air pollution from both stationary and mobile sources.” Sounds like a do-over to me.

Not Everyone Is Listening

Down south, a Georgia judge apparently remains undeterred in her bid to become a footnote in the legislative history of GHG regulations. Fulton County Superior Judge Thelma Wyatt Cummings Moore overturned an administrative law judge decision affirming the approval of an air permit for the $2 billion Longleaf Power Plant proposed to be built in Early County, Georgia. The project developer is Longleaf Energy Associates LLC, a joint venture of Houston-based Dynegy Inc. and LS Power Group. The judge decided that the project cannot go forward without a permit that includes an emission standard for CO2. A spokesman for LS Power said the company plans to appeal the decision.

The decision is rooted in a lawsuit brought by Friends of the Chattahoochee Inc. and Sierra Club that contends the project requires best available control technology (BACT) emission controls on all air pollutants, including CO2. The state attorneys properly asserted that CO2 is not a pollutant under the CAA because the EPA has not made such a finding and has established no rules and regulations to limit CO2 emissions. The judge disagreed and ordered the Georgia Environmental Protection Division to rewrite the permit to perform a BACT analysis for CO2 and include BACT-level controls. The judge also said that the state violated the law in failing to consider integrated gasification combined-cycle (IGCC) technology in the Longleaf BACT analysis.

Judge Moore is wrong in so many ways. It’s obvious that without a federal rule on CO2 (or a state rule, for that matter) Longleaf shouldn’t be held responsible for meeting some mythical control measures that have no basis in law or regulation. Remember, the Supreme Court found that the EPA has the authority under the CAA to regulate CO2, not that it must, yet this local court found otherwise. Also, how can a BACT analysis be performed unless there are technologies available to capture and sequester CO2 or demonstration projects in service? Finally, the EPA has long held that BACT is applied to a particular fuel combustion technology selected by the project owner (that is, you pick a gas turbine and then you pick between the BACT alternatives). This judge missed the memo that, by definition, IGCC is not BACT for the combustion of coal.

It’s a Great Country

To sum up all this madness: The EPA can regulate CO2 if it so desires, but it is unable to pen regulations that will pass judicial review. Meanwhile, shell-shocked EPA stalls for time by issuing an ANPR on what will surely be another round of air emissions rules, Congress continues to abdicate its EPA oversight responsibilities, and local judges are divining emissions rules on a whim. SNAFU seems to describe the situation nicely.

—Dr. Robert Peltier, PE

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