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April 20, 2009

EPA’s GHG Endangerment Ruling Puts Utilities, Manufacturers on Defensive

In the wake of the Environmental Protection Agency’s so-called “endangerment” ruling on greenhouse gases, pundits are in full-spin mode, with advocates, critics and interested observers detailing their own takes on the news.

EPA’s move is a strong signal from the Obama Administration that Congress must act on climate legislation, including a cap-and-trade program for carbon emissions. Indeed, Time.com likened it to “putting a gun to Congress’ head.”

The Christian Science Monitor’s headline was just as succinct: “EPA and CO2: If the right hand don’t get you, the left one might.”

By proposing that certain carbon emissions fall under the Clean Air Act, the EPA is setting in place a series of events that will lead to actions that have been resisted for some time. Those actions include a conversion to cleaner energy sources, the addition of more renewable energy and presumably higher utility prices for consumers and manufacturers alike. Additionally, automobiles are likely to fall under stricter emissions regulations.

Direct from the source of the news, the spin is positive. “This pollution problem has a solution – one that will create millions of green jobs and end our country’s dependence on foreign oil,” said EPA Administrator Lisa Jackson. In proposing the finding, Jackson said she considered the affect of climate change on the health of the poor, the very young, the elderly, those already in poor health, the disabled, those living alone and/or indigenous populations dependent on one or a few resources, according to a press release.

Sen. Barbara Boxer, D-Calif., called the EPA’s endangerment ruling “a wake-up call for Congress.” Boxer,  who chairs the Senate committee dealing with climate legislation, sad that if Congress doesn’t take up the matter, she would encourage EPA to take swifter action, according to the Associated Press.

Industry is reeling from the proclamation, which had been expected for weeks.

Pittsburg coal and energy company Consol Energy Inc. is delaying two large mining projects in Northern Appalachia because it’s unsure how the pending carbon emission regulation will play out, the Wall Street Journal reports.

And American Electric Power, which has more than 5 million customers from Texas to Michigan to Virginia, is pondering closing coal plants, as well as how much it will have to raise rates in order to comply. Depending on the resulting climate legislation, a spokesman said rates may increase 25-50 percent, according to WSJ.

The proposed findings are the first important step towards EPA’s regulation of greenhouse gases, said Rick Horsch, an environmental partner with White & Case and an adjunct professor of Environmental Law at Seton Hall University School of Law. “While the proposed action relates specifically to motor vehicle emissions, if it becomes final, there seems little doubt that regulation of greenhouse gases would expand to other sources, including greenhouse gas emissions from power plants and other industrial sources,” Horsch said.

The EPA is proposing to regulate the following greenhouse gases:

• carbon dioxide (CO₂)
• methane (CH₄)
• nitrous oxide (N₂O)
• hydrofluorocarbons (HFCs)
• perfluorocarbons (PFCs)
• sulfur hexafluoride (SF₆)

To protect the agriculture industry, Sen. Mike Johanns, R.-Neb., has co-sponsored legislation to protect against any possible “cow tax” by amending the Clean Air Act so it precludes regulation of naturally occurring livestock emissions, including methane and carbon dioxide, according to Feedstuffs.com.

Here is EPA’s site on the endangerment proposal.

Once the proposal is published in the Federal Register, there will be a 60-day public comment period. Written comments may be submitted via this form (PDF).

There also will be two public hearings:

• May 18, 2009, at the EPA Potomac Yard Conference Center, Arlington, Va.
• May 21, 2009, at the Bell Harbor International Conference Center in Seattle, Wash.

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