EPA issues new rule to reduce emissions

The Environmental Protection Agency (EPA) on Tuesday proposed new clean-air regulations that would significantly reduce emissions that cross state lines and, it says, save tens of thousands of lives and billions of dollars in health costs.

The proposed Clean Air Transport Rule replaces — and strengthens — a George W. Bush-era rule in cutting soot-forming sulfur dioxide and smog-forming nitrogen oxide emissions from electric utilities that cross state lines, mainly in the eastern United States.

The new version was needed after a federal appeals court in December 2008 struck down the earlier standard. The court ordered EPA to revise the so-called 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.

EPA air quality chief Gina McCarthy said the new standard “tees up” a new model for upcoming rules EPA will issue 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.

The draft, which could have implications for efforts in the Senate to reduce carbon and other emissions from power plants, would begin reducing emissions in 31 states and the District of Columbia quickly — in 2012.

It would affect coal-fired and all other fossil fuel-powered electric utilities, and the EPA says it would cut sulfur dioxide emissions by 71 percent and nitrogen oxide by 52 percent over 2005 levels.

The regulation’s price tag is an estimated $2.8 billion in 2014. But EPA officials say it would save between $120 billion and $290 billion in annual health and welfare benefits the same year and help prevent up to 36,000 deaths.

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.

The Obama administration may be trying to distance itself from its predecessor on environmental policies. The Obama Interior Department has been under fire for following the same expedited environmental reviews and other policies governing offshore oil-and-gas drilling leading up to the Gulf of Mexico oil spill.

McCarthy argued the Bush administration established its 2005 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.

The new draft, she said, should address the problems the appeals court found. They include ensuring that “downwind” states whose air quality is affected by pollution from “upwind” states are able to more easily determine their own local emissions while not affecting emission trading credits established for states under EPA’s existing acid rain program.

But McCarthy said EPA is still expecting a lawsuit once the draft rule is finalized — commonplace whenever the agency issues a major rule.

Jeff Holmstead, a former EPA air chief and lead author of the 2005 Bush plan, said the agency’s draft preserves a cap-and-trade program as its central feature and “substantially increased” the stringency of the 2005 rule.

“Hopefully, the rule won’t set up an unfortunate choice between environmental compliance and keeping the lights on,” he said.

Dan Riedinger, a spokesman for the Edison Electric Institute, which represents investor-owned utilities, said the draft EPA plan would “require dramatic reductions in power-sector emissions, on top of major reductions to date, on a very short timeline.” EPA’s approach would appear at first to be “the most reasonable option on the table,” but not combined with future and more stringent regulations that leave “the power sector exposed to a great deal of regulatory uncertainty,” he said.

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.) seek action on their plan to cut sulfur dioxide, nitrogen oxide 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 pre-emption from future EPA regulations 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.

Holmstead said the draft rule could complicate climate change talks on Capitol Hill, particularly in regard 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.

---