Maryland Bar Bulletin
Publications : Bar Bulletin : February 2014

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Concerns over climate change have been at the forefront of legal and public policy debate as we learn more about the anthropogenic effects on rising global temperatures. The U.S. Supreme Court recognized in its landmark decision Massachusetts v. EPA: “A well-documented rise in global temperatures has coincided with a significant increase in the concentration of carbon dioxide in the atmosphere. Respected scientists believe the two trends are related.”

In 2007, EPA was ordered by the Supreme Court to regulate greenhouse gases under the CAA if EPA found those gases posed a threat to human health and welfare.

EPA has followed suit and taken another step towards regulating greenhouse gases. On January 8, 2014, EPA published proposed standards to limit greenhouse gas emissions from new power plants under the New Source Performance Standards authority of the Clean Air Act (CAA). These will be the first federal limits on carbon pollution for this industry.

EPA proposes separate performance standards for units that burn coal, petroleum coke, and other fuels (“coal plants”) and for natural gas-fired stationary combustion turbines (“natural gas plants”). Both standards are based on the available technology for the type of facility – carbon capture and storage (CCS) for coal plants and modern, efficient combined cycle technology for natural gas plants. Sources are not required to use any particular technology, but must meet equivalent emissions rates of 1,100 pounds of carbon dioxide emissions per megawatt-hour (lbs/MWh) of electricity produced for coal plants; 1,100 lbs/MWh for small natural gas plants; and 1,000 lbs/MWh for larger natural gas plants.

Compliance will be measured on a rolling average basis over a twelve-month period. Operators are required to operate continuous monitoring to determine hourly carbon dioxide emissions rates. EPA explains that the proposal is focused on carbon dioxide alone because the other constituents of greenhouse gases represent less than one percent of emissions from fossil fuel-fired power plants. A sixty-day period for public comment continues through March 10, 2014. EPA is expected to publish a final rule by the end of 2014.

The CAA mandates the proposed rule’s reliance on a technology-based standard. Selection of the best system of emission reduction is based on the following factors: technical feasibility, reasonableness of the cost, amount of emission reductions, and the system’s promotion of implementation and further development of technology. EPA supported its selection of CCS technology for coal plants with reference to the use of CCS at the AES Warrior Run power plant in Cumberland, Maryland. At this facility, four percent of the carbon dioxide emissions are captured and sold to the food and beverage industry to store and package products. While four percent is less than the carbon capture expected of new power plants, the technology is the same.

Selection of CCS for coal plants is controversial as the emission standard is based on a technology that, some say, is not widely deployed and has questionable cost effectiveness for electricity generation. In fact, on January 15, 2014, the Nebraska Attorney General filed a complaint requesting the District Court of Nebraska to order EPA to withdraw the proposed rule. Nebraska also seeks an injunction from future consideration of CCS technology at facilities that received federal grants to implement the technology. Likewise, selection of modern combined-cycle technology for natural gas plants is also controversial because this technology would likely predominate even in the absence of these regulations. Critics do not believe these regulations went far enough.

While EPA has discretion in crafting the greenhouse gas rule, it no longer has discretion over whether to regulate greenhouse gases at all. In 2007, EPA was ordered by the Supreme Court to regulate greenhouse gases under the CAA if EPA found those gases posed a threat to human health and welfare. In 2009, EPA issued an Endangerment Finding and deemed greenhouse gas emissions a pollutant. The D.C. Circuit Court upheld EPA’s Endangerment Finding on June 26, 2012, and the Supreme Court denied certiorari on this issue on October 15, 2013. Therefore, EPA is required by law to implement regulations to limit this pollutant.

EPA first proposed standards for emissions of carbon dioxide for new power plants in April 2012. After considering more than two-and-a-half million comments, EPA withdrew the rule to revise the proposed approach. On June 25, 2013, President Obama directed EPA to propose limits on carbon and greenhouse gas emissions; on September 20, 2013, EPA announced the revised proposed new source performance standards. In contrast to the April 2012 proposed action, these emissions limitations reflect separate determinations of the best system of emission reduction for coal and natural gas plants.

This proposal for new coal and natural gas plants is likely just a first step. EPA is expected to propose carbon pollution standards for existing power plants this June. These will also apply to coal-fired power plants that are upgraded into “new source” status. These regulations are seen as an integral component to meet President Obama’s pledge to reduce greenhouse gas emissions by seventeen percent below 2005 levels by 2020.

Kate J. Udo is an associate with Hunsucker Goodstein, PC, in the environmental litigation and transactions practice areas

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Publications : Bar Bulletin : February 2014

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