EPA Permitting of Greenhouse Gases: What Does Legislative History Reveal about Congressional Intent?

Next week, petitioners’ merit briefs are due in Utility Air Regulatory Group v. EPA, the first Supreme Court case to examine the legality of an EPA rule addressing greenhouse gases.

The Court is limiting its review to one question: “Whether EPA permissibly determined that greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” In other words, the Court will review the agency’s April 2010 Timing Rule.

According to the Timing Rule, “major” greenhouse gas emitters became subject to the New Source Review (NSR) preconstruction and Title V operating permit programs on the day the EPA’s greenhouse gas Tailpipe Rule took effect (January 2, 2011). To obtain an NSR preconstruction permit, a covered source must commit to meet case-specific emission limitations known as “best available control technology” (BACT).

What light does legislative history shed on the question before the Court? After reviewing 20 years of legislation containing the terms “greenhouse gas” and “best available control technology,” I conclude that neither Congress as a whole, nor the House or Senate separately, nor any congressional committee intended for the EPA to regulate greenhouse gases through the NSR and Title V programs.

Thomas, the Library of Congress search engine, identifies 692 bills containing the term “greenhouse gas” during the 101st through the 111th Congresses. Only one bill, the Safe Climate Act, introduced in both the 109th and 110th Congresses, arguably authorizes (but does not require) the EPA to apply NSR to greenhouse gases.

Although the Safe Climate Act boasted 155 co-sponsors in the 110th Congress, there were no hearings, committee votes, or floor debates on the bill. In the 111th Congress, the bill’s chief sponsor, Rep. Henry Waxman (D-Calif.), appears to have had a change of heart. The legislation he co-sponsored with Rep. Ed Markey (D-Mass.), the American Clean Energy and Security Act (H.R. 2454) — the only cap-and-trade bill ever to pass in either chamber of Congress — specifically prohibits the application of NSR and Title V to any source based solely on its greenhouse gas emissions.

Thomas also identifies 55 bills introduced during the 101st through 111th Congresses containing the term “best available control technology.” Of those, only one bill introduced (twice) in the 101st Congress and another bill introduced in 110th Congress appear to contemplate some application of NSR and BACT to CO2.

In the 101st Congress, S.676/S.333, the Global Environmental Protection Act of 1989, introduced separately by Senators Max Baucus (D-Mont.) and Patrick Leahy (D.-Vt.), would require the EPA to establish “best available residential technology” standards for CO2 emissions from household furnaces, water heaters, and air conditioners. But here the Senators merely borrow the terminology of NSR rather than actually propose to subject households to NSR permitting. The bills would simply require the EPA to promulgate the functional equivalent of energy-efficiency standards for the equipment in question.

Regardless, although elements of S.676/S.333 were incorporated in S.1630, the Senate version of the 1990 Clean Air Act Amendments, the proposed “best available residential technology standards” for CO2 did not make the cut.

In the 110th Congress, Senator Lamar Alexander (R-Tenn.) introduced S.1168, the Clean Air/Climate Change Act of 2007. Among other provisions, the bill would require new coal power plants to meet a new source performance standard of 1,100 lbs. CO2 per megawatt hour. Since this standard can only be met through carbon capture and sequestration (CCS), the bill would also void the existing BACT standard for coal power plants based on the performance of “conventional pulverized” coal facilities. There is no indication in the bill that BACT for CO2 pertains to stationary sources in general. Rather, BACT for CO2 would apparently be limited to NSPS-regulated new coal power plants equipped with CCS. In any event, the bill attracted only one co-sponsor, was not the subject of hearings or other committee action, and was not debated on the Senate floor.

Additional details of the legislative history follow.

Bills Addressing Greenhouse Gases

From the 101st Congress (the last time Congress passed major amendments to the Clean Air Act) through the 111th Congress (the last time Democratic leaders sought to pass regulatory climate legislation), congressmen and senators introduced 692 pieces of legislation containing the term “greenhouse gas.” Here’s a numerical breakdown:

Search Term: “Greenhouse Gas”

Congress    No. of Bills

101                 34

102                 34

103                   4

104                   2

105                 18

106                 52

107                 60

108                 59

109                 70

110                315

111                 314

Total          692

In reviewing those bills, I find none that explicitly discusses New Source Review or its components — “prevention of significant deterioration” (PSD) or “best available control technology” (BACT) standards — in connection with greenhouse gases.

However, in the 109th Congress, Rep. Henry Waxman (D-Calif.) introduced H.R. 5642, the Safe Climate Act of 2006. The bill throws the regulatory kitchen sink at greenhouse gases, essentially giving the EPA carte blanche to use any option available in the Clean Air Act. The bill had 113 co-sponsors. There was no committee markup of the legislation, and no floor action on it.

The Safe Climate Act of 2006 would establish:

• A national GHG reduction target (a 2% reduction each year during 2010-2050, such that U.S. emissions in 2050 shall not exceed 20% of U.S. emissions in 1990)
• GHG standards for motor vehicles (the California program updated every five years)
• A national renewable electricity standard (at least 20% by 2020)
• A national energy efficiency standard
• New source performance standards (NSPS) for greenhouse gases (similar to the EPA’s “carbon pollution” rule), and
• A national cap-and-trade program

The bill would also prohibit federal preemption of State greenhouse gas regulatory programs.

Of greater potential relevance, Sec. 705 would authorize EPA to use any Clean Air Act regulatory tool it sees fit. The language in red could be interpreted as including NSR-related “best available control technology” standards.

SEC. 705. ADDITIONAL AUTHORITY TO REGULATE GREENHOUSE GAS EMISSIONS. (a) Additional Regulations- The regulations promulgated under section 703(a) may include additional regulations to reduce emissions of greenhouse gases from any source or sector, irrespective of whether the source or sector is described in section 704(b)(1). Regulations under this section may include emissions performance standards, efficiency performance standards, best management practices, technology-based requirements, and other forms of requirements.

Rep. Waxman reintroduced the Safe Climate Act in the 110th Congress as H.R. 1590. It, too, contains the regulatory carte blanche provision. As in the 109th Congress, however, there was no mark up and no floor action. Note also that, unlike the Timing Rule, which stipulates that greenhouse gas regulation under any part of the Clean Air Act automatically triggers NSR for greenhouse gases, the Waxman bill makes such action discretionary: The EPA’s greenhouse gas regulations “may” include “best management practices” and “technology-based requirements.”

So out of 692 pieces of legislation specifically addressing greenhouse gases, only two bills (or, rather, the same bill introduced in two successive Congresses) could be construed as intending to authorize BACT regulation of greenhouse gases from industrial sources, and neither made it past the introduction stage of the legislative process.

What’s more, by the 111th Congress, Rep. Waxman appears to have had second thoughts about the appropriateness of NSR as a climate policy tool.

On June 26, 2009, H.R. 2454, the American Clean Energy and Security Act, became the first (and only) greenhouse gas cap-and-trade bill ever to be passed by a chamber of Congress. Rep. Waxman was a chief co-sponsor along with Rep. Ed Markey (D.-Mass.). Although H.R. 2454 would establish new source performance standards for coal-fired power plants (similar to the EPA’s proposed “carbon pollution rule“), the bill also limits the applicability of NSR and Title V with respect to greenhouse gas emitters. See the provisions in red, below.

H.R.2454 American Clean Energy and Security Act of 2009 (Placed on Calendar Senate – PCS) ________________________________________

`PART C–EXEMPTIONS FROM OTHER PROGRAMS

`SEC. 831. CRITERIA POLLUTANTS. `As of the date of the enactment of the Safe Climate Act, no greenhouse gas may be added to the list under section 108(a) on the basis of its effect on global climate change.

`SEC. 832. INTERNATIONAL AIR POLLUTION. `Section 115 shall not apply to an air pollutant with respect to that pollutant’s contribution to global warming.

`SEC. 833. HAZARDOUS AIR POLLUTANTS. `No greenhouse gas may be added to the list of hazardous air pollutants under section 112 unless such greenhouse gas meets the listing criteria of section 112(b) independent of its effects on global climate change.

`SEC. 834. NEW SOURCE REVIEW. `The provisions of part C of title I shall not apply to a major emitting facility that is initially permitted or modified after January 1, 2009, on the basis of its emissions of any greenhouse gas.

`SEC. 835. TITLE V PERMITS. `Notwithstanding any provision of title III or V, no stationary source shall be required to apply for, or operate pursuant to, a permit under title V, solely because the source emits any greenhouse gases that are regulated solely because of their effect on global climate change.’

Climate-Related Bills with Provisions Addressing Best Available Control Technology

Thomas identifies 55 bills containing the term “best available control technology” during the 101st through 111th Congresses, of which 14 contain regulatory climate measures.

 Search Term: “Best Available Control Technology”

Congress     No. of Bills   No. with Climate Regulation

101                   19                       2

102                   7                        0

103                   4                        0

104                   1                         0

105                   0                        0

106                   0                        0

107                   7                         2

108                 10                        3

109                   7                        3

110                   5                        3

111                   3                         1

Totals           55                       14

In the 101st Congress, S.676/S.333, the Global Environmental Protection Act of 1989, introduced separately by Senators Baucus and Patrick Leahy (D.-Vt.), were early iterations of what became the Clean Air Act Amendments of 1990. S.676/S.333 required the EPA to establish “best available residential control technology” standards for CO2 emissions from household furnaces, water heaters, and air conditioners. However, this provision does not appear to refer to the New Source Review program. There is no suggestion, for example, that households are supposed to undertake anything like a multi-step BACT analysis to determine on a case-by-case basis what their emission reduction requirements are. Rather, the provision requires the EPA to set what are functionally equivalent to energy-efficiency standards for the aforementioned types of household equipment.

The bills also required the EPA to establish CO2 new source performance standards for cement kilns, iron and steel manufacturing operations, pulp and paper mills, and synthetic fiber plants, as well as CO2 emission standards for new motor vehicles.

S. 1630, the Senate version of the Clean Air Act amendments, did not retain the S.676/S.333 residential and industrial CO2 standards, and House-Senate conferees later dropped S.1630’s mobile source CO2 provisions.

In the 107th Congress, Senator Jim Jeffords (I-Vt.) introduced S.556, the Clean Power Act of 2001. The bill would establish national tonnage caps for sulfur dioxide (SO2), nitrogen oxides (NOx), CO2, and mercury emissions from coal power plants. It would also require power plants in service for 40 years after commencing operations to comply with all applicable best available control technology standards. There is no mention of NSR or BACT for CO2.

Senator Tom Carper (D.-Del.) introduced S.3135, the Clean Air Planning Act of 2002. This bill too would establish national tonnage caps for power plant emissions of SO2, NOx, CO2 and mercury. Section 4 of the bill amends the New Source Review program but mainly for the purpose of limiting regulatory burden. For example, modification of a source would not trigger NSR unless “the amount of the fixed capital costs of the replacement exceeds 50 percent of the amount of the fixed capital costs of construction of a comparable new covered unit.” There is no mention of NSR or BACT for CO2.

In the 108th Congress, Rep. Charles Bass (R-N.H.) introduced H.R.3093, the Clean Air Planning Act of 2003. The bill would establish national pollutant tonnage caps for CO2, SO2, NOx, and mercury from power plants. It would impose new “performance standards” under the “New Source Review Program,” but those standards are for SO2 and NOx.

Senator Carper introduced S.843, the Clean Air Planning Act of 2003. The bill would establish national tonnage caps for power plants emissions of SO2, NOx, CO2, and mercury. It would impose new performance standards for SO2 and NOx .

Senator Jeffords introduced S.366, the Clean Power Act of 2003. The bill would establish national tonnage limits on power plant emissions of SO2, NOx, CO2, and mercury. It would also require power plants in service for 40 years after commencing operations to comply with all applicable best available control technology standards. Provisions addressing New Source Review and “best available control technology” deal with SO2 and NOx, not CO2.

In the 109th Congress, Rep. Bass introduced H.R. 1873, the Clean Air Planning Act of 2005. Like the earlier iteration of the same title, this “4-P” bill would impose new “performance standards” for SO2 and NOx under the “New Source Review Program.”

Senator Jeffords introduced S.150, the Clean Power Act of 2005. The bill would establish national tonnage caps for power plant emissions of SO2, NOx, CO2, and mercury. It also provides that power plants in service 40 years after commencing operations shall be subject to “best available control technology standards” applicable to new sources. There is no mention of establishing BACT for CO2.

Senator Carper introduced S.2724, the Clean Air Planning Act of 2006. The bill would establish national tonnage caps for power plant emissions of SO2, NOx, CO2, and mercury. It would also tighten new source performance standards for SO2 and NOx. There is no mention of establishing performance standards for CO2.

In the 110th Congress, Senator Carper introduced S.1177, the Clean Air Planning Act of 2007. The bill would establish national tonnage caps for power plant emissions of SO2, NOx, CO2, and mercury. It would also establish a new source performance standard of 1,100 pounds CO2 per megawatt hour for new coal-fired power plants during 2015-2025 — roughly the same requirement as the EPA’s “carbon pollution rule.” As in previous iterations of the bill, S.1177 proposes “best available control technology” standards for SO2 and NOx but not for CO2.

Senator Susan Collins (R-Me.) introduced S.1554, the Energy Independence, Clean Air, and Climate Security Act of 2007. Among other provisions, the bill would establish national tonnage caps for power plant emissions of SO2, NOx, CO2, and mercury. It would require power plants in service 40 years after commencing operations to meet all applicable best available control technology standards. There is no mention of establishing BACT for CO2.

Senator Lamar Alexander (R-Tenn.) introduced S.1168, the Clean Air/Climate Change Act of 2007. The bill would establish national tonnage caps for power plant emissions of SO2, NOx, CO2, and mercury. It would also establish a new source performance standard of 1,100 lbs. CO2/MWh for new fossil-fuel power plants. The bill would “void” the EPA’s current understanding of BACT as based on the maximum degree of emission reduction achievable by a “conventional pulverized coal” power plant — a logical necessity given that (a) BACT is typically more stringent than NSPS, and (b) no coal plant lacking CCS can achieve 1,100 lbs. CO2/MWh. As noted above, there is no indication in the bill that BACT is to apply to new CO2 sources in general as distinct from new coal plants built in conformity with the proposed NSPS. In any event, S.1168 garnered only one co-sponsor. There was no committee action or floor debate on the bill.

Senator Bernie Sanders (I.-Vt.) introduced S.1201, the Clean Power Act of 2007. The bill would establish national tonnage caps for power plant emissions of SO2, NOx, CO2, and mercury. It would require power plants in service 40 years after commencing operations to meet all applicable best available control technology standards. There is no mention of establishing BACT for CO2.

Rep. Markey introduced H.R. 6186, the Investing in Climate Action and Protection Act. Among other provisions, the bill would establish a national greenhouse cap-and-trade program and performance standards requiring new coal power plants to achieve capture and sequestration of not less than 85% of total CO2 emissions (a target more stringent than the EPA’s “carbon pollution rule”). The bill would also require the EPA to establish “standards for the best available control technologies and practices” for reducing methane and nitrous oxide emissions from stationary sources not covered by the cap-and-trade program. In other words, the bill would address CO2 emissions via the cap-and-trade program and NSPS for power plants, not BACT. The bill attracted no co-sponsors and was not subject to any committee action.

In the 111th Congress, Senator John Kerry introduced S.1733, the Clean Energy Jobs and American Power Act. Approved by the Committee on Environment and Public Works, the bill was placed on the Senate calendar but never brought to a vote. Among other provisions, S.1733 would establish a national greenhouse cap-and-trade program and performance standards requiring new coal power plants after 2020 to achieve 65% capture and sequestration of total CO2 emissions. Although flagged by Thomas as containing the term “best available control technology,” the 1734-page bill contains no discussion of New Source Review or best available control technology.

Conclusion

The foregoing survey of climate-related legislation introduced during 1989-2010 indicates that Congress never intended to require New Source Review or Title V permitting based on a source’s greenhouse gas emissions. Out of more than 690 climate-related bills, only three proposed baby steps towards the full-blown greenhouse gas permitting system that the EPA today is implementing:

• The Baucus/Leahy Global Environmental Protection Act of 1989, introduced in the 101st Congress, proposed “best available residential technology” standards for CO2 — but those appear to be more akin to energy-efficiency standards rather than the case-specific BACT standards associated with New Source Review. In any event, the proposal was not retained in the Senate version of the Clean Air Act amendments.
• Rep. Waxman’s Safe Climate Act, introduced in the 109th and 110th Congresses, would authorize the EPA to use any regulatory tool to combat greenhouse gas emissions, including “best management practices” and “technology-based requirements,” which could be construed to mean BACT. But such action would be at the EPA’s discretion, not automatically triggered by greenhouse gas regulation under other parts of the Clean Air Act. More importantly, the legislation never got past the introduction stage in the legislative process, and the Waxman-Markey cap-and-trade bill that passed the House in 111th Congress specifically prohibited the application of NSR and BACT to sources based solely on their greenhouse gas emissions.
• Senator Alexander’s Clean Air/Climate Change Act of 2007, introduced in the 110th Congress, contemplates a CO2 BACT — but only for coal power plants based on a new source performance standard similar to the EPA’s recent “carbon pollution rule.” The bill attracted only one co-sponsor and was not the subject of committee or floor action.

Bottom line: There is not a shred of evidence in the legislative history that Congress as a whole, the House or Senate separately, or any congressional committee ever intended for the EPA to regulate greenhouse gases through the NSR and Title V programs.

The EPA’s extension of New Source Review and Title V permitting to greenhouse gas emitters exceeds any discernible legislative intent and should be overturned.