Regulatory Drivers

In July 7, 2009 testimony before the U.S. Senate Committee on Environment and Public Works, Secretary of Energy Steven Chu made the following statements:1

"...Overwhelming scientific evidence shows that carbon dioxide from human activity has increased the atmospheric level of CO2 by roughly 40 percent, a level one- third higher than any time in the last 800,000 years.  There is also a consensus that CO2 and other greenhouse gas emissions have caused our planet to change. Already, we have seen the loss of about half of the summer arctic polar ice cap since the 1950s, a dramatically accelerating rise in sea level, and the loss of over two thousand cubic miles of glacial ice, not on geological time scales but over a mere hundred years.

The Intergovernmental Panel on Climate Change (IPCC) projected in 2007 that, if we continued on this course, there was a 50 percent chance of global average air temperature increasing by more than 7 degrees Fahrenheit in this century.  A 2009 MIT study found a fifty percent chance of a 9 degree rise in this century and a 17 percent chance of a nearly 11 degree increase. 11 degrees may not sound like much, but, during the last ice age, when Canada and much of the United States were covered all year in a glacier, the world was only about 11 degrees colder.  A world 11 degrees warmer will be very different as well.  Is this the legacy we want to leave our children and grandchildren?

Denial of the climate change problem will not change our destiny; a comprehensive energy and climate bill that caps and then reduces carbon emissions will.

...Climate experts, such as the IPCC, tell us we must reduce our carbon emissions by 80 percent by mid-century to stabilize atmospheric greenhouse gas concentrations at a level that may avoid the worst consequences of climate change."

Given these types of concerns regarding the influence of greenhouse gases (GHGs) on changes in global climate, regulation of emissions has been initiated and is on-going. The information presented below summarizes these regulatory efforts.

Global carbon dioxide emissions 1800 - 2008
Global carbon dioxide emissions 1800 - 20082

Current Regulatory Obligations
In response to the FY2008 Consolidated Appropriations Act EPA issued the Mandatory Reporting of Greenhouse Gases Rule which requires reporting of greenhouse gas (GHG) data and other relevant information from large sources and suppliers in the United States. The purpose of the rule is to collect accurate and timely GHG data to inform future policy decisions. This GHG reporting rule requires any source which emits in excess of 25,000 tons per year of carbon dioxide equivalents (CO2e) to prepare and submit annual GHG emissions reports. CO2e is a unit of measurement that allows the effect of different greenhouse gases to be represented using carbon dioxide as a standard unit for reference.3 

March 30, 2011 was the original deadline for submitting the first annual GHG report, but on March 18, 2011 the deadline for the first report was extended until September 30, 2011. This extension was provided to allow EPA additional time to further test the system that reporters will use to submit data, and give industry the opportunity to test the tool, provide feedback and have sufficient time to become familiar with it prior to reporting.3

Global Warming Potential of Primary Greenhouse Gases
Global-warming potential (GWP) is a relative measure of how much heat a greenhouse gas traps in the atmosphere compared to carbon dioxide. For example, the 20 year GWP of methane is 42-70, which means that each ton of methane introduced into the atmosphere will trap 42-70 times as much heat as each ton of carbon dioxide over the next 20 years. Variations in GWP over time reflect the decay/removal characteristics of GHGs in the atmosphere, which are often uncertain. Increasing GWP over time suggests that the gas decays or is removed-from the atmosphere more slowly than CO2Source: World Coal Council4

As of January 2, 2011, emissions of GHGs from new or modified stationary sources are regulated under the Prevention of Significant Deterioration (PSD) provisions of New Source Review (NSR). New sources are defined as new facilities that emit 75,000 tons per year of CO2e. Modified sources are defined as existing facilities that increase GHG emissions by 75,000 tons per year of CO2e and trigger NSR for another pollutant. Both categories of facilities are obligated to implement Best Available Control Technology (BACT). BACT is a dynamic standard that is implemented through a “top-down” analysis. This requirement takes into account the cost, availability and commercial status of control methods and technologies such that as newer and more effective controls and advancements are implemented, they become the obligations under BACT. Initial guidance indicated that energy efficiency measures will qualify as BACT until more effective control methods are developed and successfully implemented. The actions that led to these regulatory obligations as well as additional regulatory obligations under development are described below.

Global anthropogenic GHG emissions segregated into 8 different sectors for the year 2000
Global anthropogenic GHG emissions segregated into 8 different sectors for the year 20006

The Legislative/Judicial/Regulatory Process Leading to Current Regulations

The Clean Air Act Amendments of 1990 require the EPA Administrator to set emission standards for "any air pollutant" from motor vehicles or motor vehicle engines "which in his judgment cause[s], or contribute[s] to, air pollution which may reasonably be anticipated to endanger public health or welfare."7

In 2003, the EPA made two determinations:

  1. It lacked authority under the Clean Air Act to regulate carbon dioxide and other GHGs for climate change purposes and
  2. Even if it did have such authority, it would decline to set GHG emissions standards for vehicles.8

In response to those determinations, the Commonwealth of Massachusetts filed a federal lawsuit maintaining that EPA had the authority and responsibility to regulate GHG emissions. The U.S. Court of Appeals for the District of Columbia Circuit decided on September 13, 2005, to uphold the 2003 EPA decision.9 The Commonwealth appealed this ruling, and on June 26, 2006, the Supreme Court agreed to review the case.10 Upon review, the Supreme Court determined that the rationale for not regulating GHGs was inadequate, and that the Clean Air Act does authorize EPA to regulate tailpipe GHG emissions if EPA determines they cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare.11

One of the steps EPA took in response to the Supreme Court's decision was the preparation of an Advance Notice of Proposed Rulemaking (ANPR).12 The ANPR reflected the complexity and magnitude of the question of whether and how GHGs could be effectively controlled under the Clean Air Act. The document summarized much of EPA's work and identified concerns raised by other federal agencies during their review of the ANPR.

Key issues discussed in the ANPR include:

  • Descriptions of key provisions and programs in the CAA, and advantages and disadvantages of regulating GHGs under those provisions;
  • How a decision to regulate GHG emissions under one section of the CAA could or would lead to regulation of GHG emissions under other sections of the Act, including sections establishing permitting requirements for major stationary sources of air pollutants;
  • Issues relevant for Congress to consider for possible future climate legislation and the potential for overlap between future legislation and regulation under the existing CAA; and,
  • Scientific information relevant to, and the issues raised by, an endangerment analysis.

While regulation of GHGs was being considered, in response to the FY2008 Consolidated Appropriations Act, on October 20, 2009, EPA published a rule which requires reporting of GHG emissions from large sources and suppliers in the United States. This rule was intended to collect accurate and timely emissions data to inform future policy decisions.13

On December 7, 2009, the Administrator signed two distinct findings regarding GHGs under section 202(a) of the Clean Air Act:

  • Endangerment Finding: The Administrator finds that the current and projected concentrations of the six key well-mixed greenhouse gases — carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) — in the atmosphere threaten the public health and welfare of current and future generations.
  • Cause or Contribute Finding: The Administrator finds that the combined emissions of these well-mixed greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare.

These findings do not themselves impose any GHG restrictions. However, publication of the findings was a prerequisite to finalizing the EPA's GHG emission standards for light-duty vehicles, which were included in a joint proposal with the Department of Transportation's proposed CAFE standards on September 15, 2009.14

These standards do not apply to stationary sources. However, on March 29, 2010 EPA completed an analysis that confirmed that any new pollutant that EPA regulates becomes covered under the NSR PSD and Title V Operating Permit programs for new and existing industrial facilities on the date when the EPA rule regulating that new pollutant takes effect. It then clarified that for GHGs that date was January 2, 2011 when the vehicles rule took effect.15

GHG Emissions in the U.S. by Economic Sector 1990 - 2008
GHG Emissions in the U.S. by Economic Sector 1990 - 200816

On February 16, 2010, the states of Alabama, Texas and Virginia filed an appeal with the United States Court of Appeals for the DC Circuit to remand the "endangerment finding and the cause or contribute finding" back to EPA in order to provide more evidence to substantiate these findings.17 As of June 2011, the appeal is pending.

On May 13, 2010, EPA issued a final rule that establishes thresholds for GHG emissions that define when permits are required for new and existing industrial facilities. This final rule "tailors" the requirements of these CAA permitting programs to limit which facilities will be required to obtain PSD and Title V permits. The rule has come to be known as the "tailoring rule" and establishes that new or modified sources that have an emission increase of 75,000 tons/year of CO2e will be subject to the PSD control obligations of NSR which are identified as BACT. Existing sources which do not have a Title V permit already and which emit 100,000 tons/year of GHGs will not be required to obtain a Title V permit. The tailoring rule covers facilities responsible for nearly 70 percent of the national GHG emissions from stationary sources. This includes the nation's largest GHG emitters — power plants, refineries, and cement production facilities. Emissions from small farms, restaurants, and all but the very largest commercial facilities will not be covered by these programs at this time.18 The tailoring rule defines which facilities will be required to obtain permits, but does not establish GHG emission limits.

On December 21, 2010 EPA entered into a settlement that required proposed GHG standards of performance for new or modified sources and GHG emissions guidelines for existing sources. On December 23, 2010, EPA issued a proposed schedule for establishing these standards under Section 111 of the Clean Air Act for fossil fuel fired power plants and petroleum refineries. Under the proposed schedule, the new standards were to be signed by July 26, 2011, and final regulations are to be signed by May 26, 2012. On June 13, 2011, the settlement was amended to allow until September 30, 2011 for proposed regulations to be signed. There is no change to the date for final regulations to be signed by EPA.19 This schedule provides a path forward that will allow the EPA to establish GHG emission limits from sources that make up nearly 40 percent of the nation's GHG emissions.20

Carbon Storage Regulation

In order to facilitate the regulation of GHG emissions, provisions were needed for permitting the ultimate storage of captured GHGs. In July 2008, EPA published the Federal Requirements under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO2) Geologic Sequestration (GS) Wells Proposed Rule for public review and comment. Geologic sequestration (GS) is the process of injecting carbon dioxide (CO2) from a source, such as a coal-fired electric generating power plant, through a well, thousands of feet underground. With proper site selection and management, geologic sequestration could play a major role in the control of CO2.21

In August 2010, President Obama's Interagency Task Force on Carbon Capture and Storage, co-chaired by the EPA, delivered a series of recommendations to the president on overcoming the barriers to the widespread, cost-effective deployment of CCS within 10 years. The task force concluded that the rules were an important part of the strategy to promote development of this technology. CCS can play an important role in domestic greenhouse gas emissions reductions while preserving the option of using coal and other abundant domestic fossil energy resources. On November 22, 2010 two rules were finalized to allow the capture and sequestration of carbon dioxide.22

Drinking Water Protection:
EPA finalized a rule that sets requirements for geologic sequestration of carbon dioxide, including the development of a new class of injection well called Class VI, established under EPA's Underground Injection Control (UIC) Program. The rule requirements are designed to ensure that wells used for geologic sequestration of carbon dioxide are appropriately sited, constructed, tested, monitored, and closed. The UIC Program was established under the authority of the Safe Drinking Water Act.

Greenhouse Gas Reporting:
EPA also finalized a rule on the greenhouse gas reporting requirements for facilities that carry out geologic sequestration. Information gathered under the Greenhouse Gas Reporting Program will enable EPA to track the amount of carbon dioxide sequestered by these facilities. The program was established in 2009 under authority of the Clean Air Act and requires reporting of greenhouse gases from various source categories in the United States.

Illustration of carbon capture and storage (CCS) process showing major pathways for geologic storage and terrestrial storage
Illustration of carbon capture and storage (CCS) process showing major pathways for geologic storage and terrestrial storage.23 (click to enlarge)

1Statement of Steven Chu, Secretary of Energy, Before the Committee on Environment and Public Works, United States Senate, Washington, D.C.
2Data is from the Carbon Dioxide Information Analysis Center, DOE Oak Ridge National Laboratory 
3USEPA Greenhouse Gas Reporting Program
4NETL Key Issues & Mandates, Climate Change - Market and Policy Drivers
5USEPA PSD and Title v Permitting Guidance for Greenhouse Gases
6NETL Coal-Fired Power Plants (CFPPs), Causes of greenhouse gases, Including NOx
7§7521. Emission standards for new motor vehicles or new motor vehicle engines
8EPA Denies Petition to Regulate Greenhouse Gas Emissions from Motor Vehicles
9United States Court of Appeals for the District of Columbia Circuit, No. 03-1361, Commonwealth of Massachusetts, et al., Petitioners v. Environmental Protection Agency, Respondent
1005-1120 Massachusetts v. EPA, Decision Below:415 F3d 50, Lower Court Case Number: 03-1361,
11Supreme Court Of The United States, Massachusetts et al. v. Environmental Protection Agency et al., Certiorari to the United States Court of Appeals for the District of Columbia Circuit
No. 05.1120. Argued November 29, 2006.Decided April 2, 2007

12Advance Notice of Proposed Rulemaking: Regulating Greenhouse Gas Emissions under the Clean Air Act
13Greenhouse Gas Reporting Program
14Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act
15New Source Review (NSR) Policy & Guidance
16U.S. Greenhouse Gas Emissions
17United States Court of Appeals For The District of Columbia Circuit, Case: 10-1036, Document: 1240064, Filed: 04/15/2010
18New Source Review (NSR) Regulations & Standards
19USEPA Addressing Greenhouse Gas emissions
20Air Quality Planning & Standards, Addressing Greenhouse Gas Emissions
21Geologic Sequestration of Carbon Dioxide
22USEPA Greenhouse Gas Reporting Program
23Carbon SequestrationFAQ Information Portal


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