Climate Action Plan Takes Shape
The summer of 2015 saw several controversial EPA rulemaking proceedings that will affect the energy, transportation, waste management and construction sectors across the United States. These rulemakings implement President Obama’s 2013 Climate Action Plan, which has a goal of reducing greenhouse gas (GHG) emissions to mitigate the impacts of climate change.
These actions include the following:
Clean Power Plan
EPA Administrator Gina McCarthy signed this hotly debated rule on August 3, 2015. The rule requires states to develop plans, based on ambitious state average CO2 emission goals, that will shift generation away from existing coal-fired power plants to natural gas and renewable energy. The aim: to achieve a 32% reduction in CO2 emissions from the power sector nationally by 2030. The final rule differs from the proposal in several key ways, particularly in relying on trading as the most efficient path for states to comply. Numerous trade associations, regulated entities and states will challenge the legality of the rule upon its publication, which is expected in October 2015. Among the chief challenges: whether EPA has the authority to require, using a Clean Air Act rule, shifts in generation from a CO2-emitting source (regulated source) to a zero-emitting source (an unregulated source); and whether the final rule differs so substantially from the proposal that it violates the notice-and-comment requirement of the Administrative Procedure Act. The Clean Power Plan is accessible here.
CO2 Emission Limits On New, Modified and Reconstructed Plants
Also on August 3, 2015, EPA set standards to limit CO2 emissions from new, modified and reconstructed power plants. The rule sets forth the emission standards for newly constructed units that fire natural gas or coal. The natural gas standard is set at 1000 lbs CO2/MWHr gross which can be achieved by combined cycle units. The coal standard is 1400 lbs CO2/MWHr gross, requiring partial carbon capture and storage. The final rule was revised substantially from the proposal. The rule affecting new, modified, and reconstructed generating units is accessible here.
Oil and Gas Emissions Reduction Rules
On August 18, 2015, EPA proposed a suite of rules seeking to reduce methane emissions from the oil and gas sector by 40 – 45 % from 2012 levels by 2025. One rule requires hydraulically fractured oil wells to reduce methane and VOC emissions from previously unregulated equipment in the natural gas transmission sector, and requires owners/operators to find and repair leaks. The proposed oil and gas methane rule is accessible here.
EPA also proposed a new rule seeking to “clarify” air permitting rules that apply to the oil and gas industry. It proposed and seeks comment on two definitions for the term “adjacent” – one based on proximity and the other based on proximity or function – to determine whether oil and gas equipment/activities are subject to major source permitting requirements. The air permitting clarification rule is accessible here.
EPA further proposed a Federal Implementation Plan (FIP) for Indian Country Minor New Source Review (NSR). EPA required tribes administering the Clean Air Act to establish minor NSR programs in 2011. Tribes that have not implemented acceptable programs yet will be subject to EPA’s FIP. Because many oil and gas well sites are “minor” new sources, the FIP will provide guidance on air permitting for drilling in tribal territories. States may also view the FIP as a model for state implementation of minor NSR. The Indian Country FIP proposal is accessible here.
Municipal Solid Waste (MSW) Landfill Methane Emissions Rule
This August 14, 2015 proposal updates EPA’s 1996 Emission Guidelines for MSW Landfills, requiring the landfills to begin collecting and controlling methane-rich landfill gas at emission levels almost a third lower than current requirements. The proposal seeks to reduce methane emissions from MSW landfills by about 436,000 metric tons per year beginning in 2025. The proposed MSW landfill methane rule is accessible here.
Endangerment Finding Regarding Greenhouse Gas Emissions from Aircraft
On July 1, 2015, EPA issued its draft finding that GHG emissions from certain commercial aircraft contribute to the air pollution that causes climate change and endangers public health and welfare. The endangerment finding also included an Advanced Notice of Proposed Rulemaking (ANPR) to notify the public that EPA intends to adopt prospective International Civil Aviation Organization (ICAO) CO2 emission standards for the aircraft industry. ICAO intends to finalize the standards in February 2016. EPA held a public hearing on its endangerment finding and ANPR on August 11, 2015. The endangerment finding and ANPR is accessible here.
Renewable Fuel Standards
On June 10, 2015, EPA proposed long overdue renewable fuel standards for cellulosic biofuel, biomass-based diesel, and total renewable fuels for all gasoline and diesel produced or imported in years 2014, 2015, and 2016. The standards are designed to encourage the development and marketability of non-petroleum based transportation fuels. They require petroleum marketers to sell these fuels, thus creating a market for the alternative fuels. The proposed volumes are below those originally set by Congress in 2007 because EPA determined that those volumes were not achievable. However, EPA’s standards still increase renewable fuel use in the U.S. above historical levels and provide for steady growth going forward. The proposed standards are accessible here.
Fuel Efficiency Standards for Medium and Heavy-Duty Vehicles
On July 13, 2015, EPA and the Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) jointly proposed Phase 2 of their fuel efficiency standards for medium and heavy-duty vehicles, beginning in the model year 2021 and culminating in standards for model year 2027. Their aim is to reduce GHG emissions by 1 billion metric tons and conserve about 1.8 billion barrels of oil. The proposed standards are accessible here.
New Rule Prohibiting Certain Hydrofluorocarbons (HFCs) and HFC-Containing Blends
The rule, finalized on July 20, 2015, bans a number of HCFs in the aerosols, refrigeration and air conditioning, and foam blowing sectors, and also bans certain hydrochlorofluorocarbons (HCFCs) being phased out under the Montreal Protocol. The rule is part of EPA’s Significant New Alternatives Policy (SNAP). EPA uses SNAP to continuously review alternatives to ozone-depleting substances to find substitutes that pose less risk to human health and the environment. The HFC rule is accessible here.
EPA’s recent climate change rules impose significant regulations on a broad spectrum of the American economy, including the power generation, construction, waste management, automotive and aviation industries.