Climate Change Update

Originally published May 28, 2010

Federal regulatory and legislative initiatives regarding climate change continue to roll out. During the month of May, EPA moved forward with rules regulating greenhouse gas (GHG) emissions and Senators John Kerry and Joseph Lieberman unveiled the proposed "American Power Act," a renewed effort at national climate change legislation. Below is a summary of these and other significant developments.

EPA REGULATORY DEVELOPMENTS

EPA Finalizes Greenhouse Gas Emissions Rule for Large Stationary Sources

On May 13, 2010, the U.S. Environmental Protection Agency (EPA) announced the final Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule (the "Tailoring Rule"), which limits GHG emissions from stationary sources under the Clean Air Act (CAA). The Tailoring Rule affects new sources and modifications to existing sources, when either results in GHG emissions exceeding the Tailoring Rule's thresholds. The goal is the reduction of GHG emissions from the largest sources. The first phase of the Tailoring Rule, which takes effect on January 2, 2011, does not impact either small businesses or farms. The GHG emissions limits on new cars under the Light-Duty Vehicle Greenhouse Gas Emissions Standards and Corporate Average Fuel Economy Standards (the "Clean Cars Rule") are also effective as of January 2, 2011.

The final Tailoring Rule increases the thresholds that were set forth in the EPA's September 2009 tailoring proposal. This original proposal sought to require permits from facilities that released more than 25,000 tons of GHGs annually. The Tailoring Rule as promulgated will be phased in in three parts. The first phase will run from January 2, 2011 to June 30, 2011, and impact only sources already subject to Prevention of Significant Deterioration (PSD) and/or Title V permitting requirements for other non-GHG pollutants. For newly constructed sources, GHG emissions of 75,000 tons per year (tpy) total will trigger the Best Available Control Technology (BACT) requirement for GHG emissions, and for modifications, a 75,000 tpy increase to existing GHG emissions will trigger the requirement. In the second phase, from July 1, 2011 to June 30, 2013, new sources emitting a total of 100,000 tpy or more of GHGs and modifications to existing sources that cause a 75,000 tpy or more increase of GHG emissions will need PSD permits as a consequence solely of their GHG emissions. Also, any facility emitting...