For EPA’s Global Warming Rules, Will ‘Next Year’ Mean ‘Never’?

EPA is running out of time to craft carbon-emissions standards for industrial polluters beyond power plants.

RODEO, CA - JANUARY 25: Steam rises from stacks at the Conoco-Phillips refinery on January 25, 2011 in Rodeo, California. Gas prices continue to rise and have gone up 14% or $.39 a gallon over the past year. Crude oil is currently trading at just under $90 a barrell and some analysts speculate that it could skyrocket up above $150 a barrell in the coming year. 
National Journal
Ben Geman
March 11, 2014, 12:44 p.m.

EPA’s new budget plan says the agency hopes to make crit­ic­al — and con­tro­ver­sial — de­cisions about its ef­fort to reg­u­late green­house gases by the end of fisc­al 2015.

Spe­cific­ally, the budget says the agency hopes to de­term­ine wheth­er it should craft car­bon-emis­sions stand­ards for sev­er­al big in­dus­tri­al pol­lu­tion sources — not­ably re­finer­ies, but also pulp and pa­per fa­cil­it­ies, iron and steel pro­duc­tion, and few oth­er cat­egor­ies.

But if the pledges about ex­pand­ing cli­mate rules sounds fa­mil­i­ar to EPA-watch­ers, they should: The fisc­al 2014 plan said the same thing about a de­cision on the rules, and the fact that the agency has now moved these de­cisions to its 2015 budget sug­gests that de­term­in­a­tions in 2014 are prob­ably not in the cards.

Now, with the clock wind­ing down on the Obama ad­min­is­tra­tion, ex­perts say it’s un­clear wheth­er EPA will craft car­bon-emis­sions stand­ards for any big sta­tion­ary pol­lu­tion sources bey­ond power plants — or even if it has enough time or re­sources left to do so.

“As a prac­tic­al mat­ter, they would prob­ably need to get star­ted on the rule­mak­ing by the end of this year if they want to get new [green­house-gas] reg­u­la­tions in place for re­finer­ies or any oth­er in­dustry sec­tor be­fore they leave of­fice,” said Jeff Holmstead, who was the top EPA air pol­lu­tion of­fi­cial un­der Pres­id­ent George W. Bush and is now a part­ner at Bracewell & Gi­uliani.

“I’m pretty con­fid­ent they’re not work­ing on any­thing yet,” he said.

Here’s spe­cific­ally what EPA’s fisc­al year 2015 plan says about po­ten­tial rules for re­finer­ies and a small hand­ful of oth­er in­dus­tri­al cat­egor­ies: The agency in 2015 will “per­form ana­lyses and plans to make de­term­in­a­tions to ad­dress wheth­er reg­u­la­tion of GHG emis­sions from such lis­ted source cat­egor­ies is war­ran­ted as re­sources al­low, in­clud­ing con­tinu­ation of activ­it­ies in­volving the elec­tri­city gen­er­at­ing sec­tor.”

But get­ting from “plans to make de­term­in­a­tions” to ac­tu­ally reg­u­lat­ing re­quires EPA to cov­er lots of ter­rain. Craft­ing Clean Air Act rules is a slow, re­source-in­tens­ive pro­cess.

Once the agency has de­term­ined it will craft a rule, the pro­cess of writ­ing and pro­pos­ing it, tak­ing com­ment, and com­plet­ing it can take years. And for ma­jor rules, court chal­lenges al­most in­ev­it­ably fol­low.

“I would be pretty sur­prised if they try to do an­oth­er [green­house-gas] rule be­fore they leave of­fice,” said Holmstead, whose firm lob­bies on be­half of power com­pan­ies, re­finers, and oth­er in­dus­tries.

Power plants are by far the biggest sta­tion­ary source of car­bon emis­sions. Re­finer­ies rank second.

EPA has been fo­cus­ing heav­ily on craft­ing stand­ards for ex­ist­ing power plants, which the agency in­tends to pro­pose in June and com­plete a year later. The agency is also work­ing to com­plete fi­nal emis­sions stand­ards for new power plants.

If Pres­id­ent Obama is suc­ceeded by a Re­pub­lic­an, that could very well shut the door for years on car­bon-emis­sions stand­ards for in­dus­tri­al sources be­sides power plants.

Holmstead es­tim­ates that EPA would need to com­plete a fi­nal re­finery rule by Oc­to­ber 2016 to avoid hav­ing a sub­sequent ad­min­is­tra­tion with­draw it. He also notes that EPA has oth­er big-tick­et items on its plate, such as the re­view of ozone stand­ards that’s man­dated by stat­ute.

In 2010, EPA reached a set­tle­ment with a num­ber of states and en­vir­on­ment­al groups to set stand­ards for power plants and re­finer­ies. The power plant rules are pro­ceed­ing, al­beit more slowly than EPA had ini­tially pledged.

But the re­finery rules have be­come a big ques­tion mark.

“We are talk­ing to all kinds of folks about what [the power-plant rule] might mean for oth­er sta­tion­ary sources, but, frankly, this [power-plant rule] is where my fo­cus is and will be,” said EPA Ad­min­is­trat­or Gina Mc­Carthy, speak­ing to re­port­ers at an en­ergy con­fer­ence in Hou­s­ton last week.

EPA, to be sure, is do­ing more on cli­mate in Obama’s second term than the power-plant rule. For in­stance, the agency is craft­ing the next round of emis­sions stand­ards for big trucks.

But when it comes to car­bon emis­sions stand­ards for big sta­tion­ary in­dus­tri­al pol­luters, power plants are the big show — and maybe the only one.

Mi­chael Liv­er­more of the In­sti­tute for Policy In­teg­rity, an en­vir­on­ment­al group af­fil­i­ated with New York Uni­versity’s law school, said the fact that the clock is run­ning out on emis­sions stand­ards bey­ond power plants is a “con­cern.”

But what’s cru­cial, he said, is for EPA to fo­cus on cre­at­ing car­bon emis­sions stand­ards for power plants that will with­stand chal­lenges in the courts and on Cap­it­ol Hill, and he noted that the power plant rules are a high pri­or­ity for en­vir­on­ment­al­ists.

Those EPA rules are a center­piece of Pres­id­ent Obama’s cli­mate agenda.

“My guess is they see the re­finer­ies … as icing on the cake,” said Liv­er­more, who was the found­ing ex­ec­ut­ive dir­ect­or and is now seni­or ad­viser to the in­sti­tute. “But they mostly want to make sure the cake doesn’t fall apart.”

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