EPA Seeks Comment on Regulation of Greenhouse Gases

August 16, 2008
Client Alert Newsletter August 2008

On July 30, 2008, the U.S. Environmental Protection Agency ("EPA") issued an advance notice of public rulemaking ("ANPR") seeking public comment on issues related to greenhouse gas ("GHG") effects and the regulation of GHGs under the existing provisions of the Clean Air Act ("CAA"). EPA stated that it was issuing the ANPR to respond to the U.S. Supreme Court's decision in Massachusetts v. EPA, as well as other petitions before EPA concerning the regulation of GHGs under the CAA. Notably, however, EPA Administrator Stephen Johnson seemed to undercut the analysis provided by EPA staff by prefacing the ANPR with his belief that the CAA was "ill-suited for the task of regulating global greenhouse gas emissions."

In Massachusetts v. EPA, the Supreme Court found that GHGs meet the definition of "air pollutant" under the CAA, and thus EPA was required to decide whether GHGs cause or contribute to air pollution "which may reasonably be anticipated to endanger public health or welfare," and if so to prescribe regulations for the emission of GHGs from new motor vehicles. The ANPR, however, does not make an "endangerment" finding. Instead, the over-500 page document provides an EPA staff analysis of such a finding on other sections of the CAA that govern other stationary sources. For example, the ANPR asserts that a decision to regulate GHGs from mobile sources could require establishing National Ambient Air Quality Standards for GHGs under Title I of the CAA, which in turn would require GHG sources to be subject to the Prevention of Significant Deterioration ("PSD") or Non-attainment New Source Review ("NNSR") programs. A decision to regulate could also require the establishment of New Source Performance Standards ("NSPS") or Maximum Achievable Control Technology ("MACT") standards for GHG sources. In short, the ANPR outlines how GHGs could be regulated under the CAA, along with the conclusion that a large number of activities would then necessarily become subject to CAA permitting, including modification or construction of office buildings, hotels, residential buildings, retail stores, or other small business operations.

The ANPR has received criticism from all sides. First, in the ANPR itself, a letter from the Office of Management and Budget notes that other federal agencies were not able to reach consensus before publication of the ANPR, and thus the EPA staff analysis provided in the ANPR could not be considered administration policy. The ANPR also took the unusual step of including the comments of these other agencies, which for the most part criticized the approach outlined by the EPA staff. Others, including environmental groups and certain members of Congress, have cited the Administrator's initial statement as further evidence of the Bush administration interfering with the conclusions of EPA staff. Against this backdrop, it is unlikely that any regulation of GHGs will result from this ANPR in the near future, and a comprehensive GHG program will have to wait for a new administration in combination with new stand-alone climate change legislation. Nevertheless, the comments received as a result of this ANPR, and the EPA responses thereto, could shape the upcoming debate on a comprehensive U.S. climate change program.

Any comments on the ANPR must be received by EPA on or before November 28, 2008.