Weekly Climate Change Policy Update - May 17, 2010

Article by Kyle Danish, Shelley Fidler, Kevin Gallagher, Megan Ceronsky and Tomás Carbonell

Commentary

The long-anticipated Kerry-Lieberman bill came out last week, taking the form of a discussion draft. (For more information, see May 13, 2010 Issue Alert). Majority Leader Reid will caucus with committee chairmen after the Memorial Day recess to determine whether the American Power Act comes to the Senate floor in June; the Majority Leader already has said that consideration of an energy-only bill is an alternative . . . On the day following the release of the K-L text, EPA issued its final version of the Tailoring Rule, which outlines emission thresholds and a schedule for phasing in certain permitting requirements for stationary sources of GHG emissions under the Clean Air Act. (For more information, see May 14, 2010 Issue Alert ). . . Sen. Murkowski plans to bring her Resolution of Disapproval of EPA's "endangerment finding" for GHGs to the Senate floor by the June 7th cut-off date. Passage of the resolution by Congress and signature by the President would remove the legal basis for EPA's regulation of GHGs under the Clean Air Act.

Executive Branch

President Obama Voices Support for American Power Act. President Barack Obama greeted the release of the draft Kerry-Lieberman climate change bill, the American Power Act, with a supportive statement expressing a desire to see legislation enacted this year. The President said the bill "will create American jobs building the solar panels, wind blades and the car batteries of the future," and would also benefit national security by reducing U.S. dependence on imported oil. EPA Releases Final "Tailoring Rule." The Environmental Protection Agency finalized its long-awaited "Tailoring Rule," which establishes a phased timetable for implementing Clean Air Act permitting requirements for greenhouse gas (GHG) emissions from large stationary sources. The rule provides that Prevention of Significant Deterioration (PSD) requirements will first apply to GHG emissions as of January 2, 2011. This initial phase will apply only to new and modified facilities that that would already be required to obtain PSD permits as a result of their non-GHG emissions, and whose construction will result in an increase in GHG emissions of at least 75,000 tons CO2-equivalent per year. A second phase of the program will commence on July 1, 2011, and will impose PSD requirements on new facilities that emit at least 100,000 tons CO2-e per year, as well as modified facilities whose emissions will increase by at least 75,000 tons CO2-e per year. According to the rule preamble, EPA will initiate a new rulemaking next year to establish emission thresholds and permitting requirements to take effect beginning in 2013. In addition to these PSD requirements, the Tailoring Rule sets comparable emission thresholds and timetables for new and existing facilities to obtain operating permits under Title V of the Clean Air Act. The text of...