EPA draft clean air rule could affect future regs, Congress

The Environmental Protection Agency’s proposed updating Tuesday of a Bush-era interstate clean air rule for electric utilities would establish a model for future Obama administration air quality rules and possible implications for efforts in the Senate to reduce heat-trapping and other pollutants from power plants.

The proposed Clean Air Transport Rule was needed after a federal appeals court in December 2008 struck down an earlier 2005 Clean Air Interstate Rule (CAIR) after the state of North Carolina and several utilities successfully argued that parts of the program were illegal under the Clean Air Act.

But perhaps more importantly, EPA air quality chief Gina McCarthy said Tuesday the new standard “tees up” a new model for upcoming EPA rules aimed at further limiting smog-causing and other pollutants.

“I think it is a large statement for us moving forward, but again it’s not the final answer,” she said of Tuesday’s draft plan.

EPA is pushing forward with new national ozone limits by the end of August. That new standard would, in turn, be used as a baseline for developing a longer-term strategy for addressing interstate pollution than the one proposed Tuesday.  

That next draft transport rule – which will be issued in summer 2011 and finalized in summer 2012 – will be designed to make further cuts in nitrogen oxide pollution, McCarthy said. “We’ve done pretty well but there are more NOx reductions that are going to follow,” she said.

EPA finalized a new national sulfur dioxide reduction rule in June and is also separately working on an update of a Bush-era rule limiting mercury emissions from power plants that the appeals court also tossed out in 2008.

McCarthy argued the Bush administration established its 2005 interstate rule predominantly based on cost-benefit analyses, while the current administration is proposing to shape this and future rules based first on air-quality modeling.
 
Congress has been using the threat of EPA regulation as a way to bring industry and others at the table to negotiate legislative solutions for curbing carbon and other pollution from power plants and other industrial sectors.
 
The revision comes as a bipartisan group of senators led by Tom Carper (D-Del.) and Lamar Alexander (R-Tenn.) are seeking action on their plan to cut SO2, NOx and mercury from power plants.
 
Carper issued a statement saying EPA “has done a great job considering the requirements demanded of them” by the court. But the likelihood of another lawsuit, he added, “underscores the need for Congress to step up to the plate and pass legislation that adequately addresses this complex and critical issue.”
 
Alexander, in a statement, said the rules are “a good first step, but they are too regional, too complicated and too weak to be a permanent solution for public health and for the certainty and flexibility that utilities need to keep electric rates down.”
 
McCarthy said EPA will soon release promised agency modeling of the Carper-Alexander proposal.
 
Electric utilities are also negotiating with senators over receiving preemption from future EPA rules in return for accepting a carbon-pricing plan focused on power plants. They are facing strong resistance, though, from the American Lung Association, Environmental Defense Fund and others.
 
Jeff Holmstead, former EPA air chief under Bush and now an industry lobbyist with Bracewell & Giuliani, said the draft rule could complicate climate change talks on Capitol Hill, particularly in regards to a utility-only carbon pricing plan.
 
“If the CAIR replacement rule is too inflexible and stringent, a utility-only carbon cap will add burden but will not be able to achieve reasonable regulatory certainty for the sector,” he said.