Most observers agree that cap and trade legislation is dead for the year, but that does not mean that climate change as an issue is dead. In fact, there are several other initiatives under way that are much more promising for achieving some regulation of greenhouse gas emissions than cap and trade was.
First and foremost is the regulatory initiative at the Environmental Protection Agency. When the EPA issued a finding on December 7, 2009 that greenhouse gases, including carbon, represent a threat to public health and welfare, it triggered a requirement under the Clean Air Act to develop regulations to control emissions of these gases. Consequently, it is in the process of developing a regulatory structure to limit emissions from all sources, despite the failure of Congress to act on a program.
This rulemaking process is quite troubling for the energy sector. The Clean Air Act requires regulation of any sources that emit 100 tons of GHG each year—this is not very much. EPA has issued a proposal to regulate only sources that emit 25,000 tons each year, which would exempt convenience stores. More recently, it has indicated it may in fact raise that threshold to 75,000 tons per year, which would exempt even more sources of emissions. However, this represents a violation of the Clean Air Act and will likely trigger a lawsuit from environmental organizations, a suit that very well could succeed.
Meanwhile, Senator Lisa Murkowski (R-AK) and 40 of her senatorial colleagues, and Rep. Joe Barton (R-TX) and 91 of his House colleagues, are pushing resolutions disapproving of EPA’s endangerment finding and seeking to stop the rulemaking process. They feel that the development of broad emissions control regulations should be directed by Congress, not unelected officials at EPA. While these efforts are encouraging, they have little to no chance of becoming law. Rather, the hope is to demonstrate broad support in opposition to the rulemaking process and convince President Obama to delay the EPA’s efforts.
Recently, EPA has noted that it will not regulate any stationary sources of emissions until 2011. This was an empty pledge, because the rulemaking process renders it impossible to begin regulating sources until sometime in 2011 anyway. Several officials from coal-producing states have introduced legislation in the House and Senate to delay such regulations until 2012. However, these bills would not delay regulation of mobile sources like refineries.
Meanwhile, Senators John Kerry (D-MA), Joe Lieberman (I-CT) and Lindsey Graham (R-SC) are close to releasing an alternative legislative proposal that they believe will secure enough support to pass the Senate. Details are not yet available, but reports are the bill will take a sector-by-sector approach—whatever that means.
NACS is supporting the Murkowski and Barton resolutions and is anxiously waiting to see details on the new climate bill in the Senate. Our objective is to mitigate increases in the cost of electricity and petroleum products. For more information on NACS overall approach, read our issue backgrounder on energy policy and climate change.