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December 12, 2009

EPA's Proposed Greenhouse Gas Emission Redution Rules

PROGRESS ON CLIMATE RULES HEIGHTENS INDUSTRY CONCERN: Chemical companies in the U.S. are increasingly concerned about EPA's progress toward mandating greenhouse gas (GHG) emission reductions using existing Clean Air Act authority, and ACC is working on several fronts to prevent the agency from extending GHG regulations to stationary sources. "We are developing a strategy that hopefully will result in EPA deferring action to give Congress more time to act," says ACC president and CEO Cal Dooley. The complexity of global warming regulations and the potential impact on the U.S. economy and manufacturing sector "really requires Congress to be involved," Dooley says. "Even our member firms that are part of the U.S. Climate Action Partnership have serious concerns about EPA promulgating GHG regulations under the Clean Air Act." The heightened concern about EPA’s progress on GHG rules is in part because the regulatory "clock is ticking," with EPA moving forward on rules and apparently on track to outpace efforts by Congress to pass climate legislation. EPA finalized its endangerment finding earlier this month and will finalize its rule requiring GHG reductions from mobile sources by March 31, 2010. The combination could trigger GHG permit requirements for new or modified facilities. There are several options available to industry in its bid to stop EPA from regulating GHG emissions using existing authority. Legal challenges to EPA's rule are likely to succeed in overturning it, Dooley says. However, due to the uncertainty that legal challenges would create for industry, ACC advocates an amendment to an upcoming bill that would delay EPA's ability to regulate GHG emissions from factories and other stationary sources. Legal challenges would focus on EPA's proposal to include only larger stationary sources. Industry groups say the agency cannot "pick and choose" the emission sources that would be controlled by the GHG reduction regulations. The Clean Air Act would cover sources that emit more than 250 tons/year, and EPA has proposed a "tailoring rule" that would raise the threshold to 25,000 tons/year. EPA would likely lose a lawsuit challenging the tailoring rule, but it is not clear whether a judge would institute a stay on the regulations while the legal finding is appealed, Dooley says. The uncertainty that would create for industry would stifle short- and long-term investment, Dooley says. Instead, it would be better for industry if Congress passed an amendment that prevents EPA from extending GHG rules to stationary sources, giving Congress more time to pass climate legislation. Senator Harry Reid (D-NV) "has made a commitment to act next year" on climate legislation, and it is in the interest of the U.S. economy and industry that EPA be prevented from implementing burdensome regulations that would be costly and inefficient, Dooley says. Chemical Week, 12/14/09, p. 10.


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