(BN) EPA’s Bid for Carbon-Rule Clarity Fails to Satisfy U.S. Business


EPA's Bid for Carbon-Rule Clarity Fails to Satisfy U.S. Business
2010-11-11 05:00:01.15 GMT

By Kim Chipman and Simon Lomax
Nov. 11 (Bloomberg) -- The Environmental Protection
Agency's effort to give states a leading role in curbing
pollution tied to global warming failed to satisfy the agency's
critics in business and the U.S. Congress.
The agency said yesterday that states can determine what
pollution-cutting technologies factories and other emitters
should use when the first carbon-dioxide emission rules take
effect next year. Environmental activists praised EPA's
flexibility. Opponents said the rules were too vague and would
damage the economy.
"The energy and manufacturing sectors will essentially be
in a construction moratorium that could materially hamper
economic recovery," said Scott Segal, a Washington lawyer at
Bracewell & Giuliani LLP who lobbies for utilities such as
Southern Co. and Duke Energy Corp. that burn coal to make power.
President Barack Obama's EPA is proceeding with rules to
regulate carbon-dioxide pollution, a greenhouse gas blamed for
climate change, after Congress failed to pass legislation. EPA
Administrator Lisa Jackson has said she will pursue modest steps
that will help reduce emissions over time. Critics said
yesterday's guidance for states and companies confused more than
it clarified.
"They may have muddied the waters even more," said
Bernard Weinstein, an economist and associate director of the
Maguire Energy Institute at Southern Methodist University in
Dallas. "My concern is the energy and manufacturing sectors
won't know what to do."

State Requirements

States, which are required under federal law to implement
the EPA rules through a permitting process, will be able to
determine on a case-by-case basis the "best available control
technology" that companies should use to limit carbon-dioxide
pollution that contributes to climate change, EPA Assistant
Administrator Gina McCarthy said yesterday.
The agency is taking "common-sense" actions, according to
McCarthy. "We're confident that this will be a smooth
transition," she said.
The EPA isn't dictating a specific fuel or pollution-
cutting technology, giving states leeway to decide how to
proceed. The agency said increasing energy efficiency probably
will emerge as the most cost-effective solution.
An approach emphasizing energy-efficiency was backed by the
U.S. Chamber of Commerce, the biggest U.S. lobbying group. The
chamber, which opposes carbon regulations and has sued to block
the EPA, is still reviewing the guidelines and doesn't have a
comment, Bryan Goettel, a spokesman for the Washington-based
organization, said yesterday.
The EPA said it's unlikely for now that companies will have
to install costly technologies aimed at capturing and storing
carbon emissions.

Ethanol, Biomass

The guidelines also say that emissions from producing
ethanol or other fuels made from plants will be treated
differently than greenhouse gases from oil refineries or coal-
burning power stations. The agency said it will issue further
guidance in January on how to assess the environmental and
economic benefits of such biomass fuels.
"Certain biomass feedstocks may be considered carbon-
neutral," the agency said. The EPA may "partially or wholly"
exclude emissions from bioenergy and other biogenic sources in
the analysis of best available control technologies.
The EPA's carbon regulations are set to begin Jan. 2 and
will apply to new or modified industrial sources of pollution.
McCarthy rejected comments from companies that the limits
on carbon pollution will hurt businesses and halt new
"The Clean Air Act for 40 years has found a way to issue
permits in a way that allows the economy to grow," she said on
a conference call yesterday with reporters. "We aren't going to
stop that with the greenhouse-gas" process.

'Not the Bogeyman'

"EPA is showing that dealing with greenhouse-gas emissions
is not the bogeyman portrayed by opponents of clean-air
controls," said Frank O'Donnell, president of the Washington-
based environmental group Clean Air Watch.
Lawmakers including Senator Jay Rockefeller, a West
Virginia Democrat, and states such as Texas have sought to delay
or block the EPA's carbon rules as a cost the economy can't
Rockefeller reaffirmed yesterday his call for the Senate to
pass legislation he wrote that would delay the EPA carbon
regulations for two years. He said the agency's case-by-case
approach will make it harder for companies to build or expand
their operations.
"Such an unstable regulatory environment prevents
companies from making long-range investment decisions,"
Rockefeller said in an e-mailed statement.

Businesses Hurt

Howard Feldman, director of regulatory and scientific
affairs for the Washington-based American Petroleum Institute,
which represents oil and gas companies,also said the rules will
hurt business.
"The EPA is railroading job-killing regulations onto
states, localities and America's businesses during a time of
uncertain economic recovery," Feldman said in a statement.
The EPA is moving to regulate carbon emissions after
legislation putting a cap on carbon pollution stalled this year
in the Senate. A "cap-and-trade" measure passed the House in
June 2009. Obama pledged to regulate carbon using the EPA should
Congress fail to act.
"The Obama administration must now carry out its threat to
regulate," Kevin Book, managing director of ClearView Energy
Partners LLC in Washington, said in a research note.
The administration may be rushing to complete rules before
Republicans take control of the House next year, a move likely
to spur hearings questioning the scientific basis for new
regulations, Book said.
Under the Clean Air Act, the EPA's definition of best-
available technology is a guidance document, not a rulemaking,
for the state and local authorities. The Clean Air Act requires
states to implement EPA rules through a permitting process.

For Related News and Information:
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--With assistance from Jim Efstathiou Jr. in New York and Jim
Snyder in Washington. Editors: Steve Geimann, Larry Liebert

To contact the reporters on this story:
Kim Chipman in Washington at +1-202-624-1927 or

To contact the editor responsible for this story:
Larry Liebert at +1-202-624-1936 or