Transcript EPA Regulation of Stationary GHG Sources

EPA Regulation of
Stationary GHG Sources
Bob Wyman
[email protected]
August 7, 2010
Latham & Watkins operates as a limited liability partnership worldwide with affiliated limited liability partnerships conducting the practice in the United Kingdom, France and Italy and
affiliated partnerships conducting the practice in Hong Kong, Japan and Singapore. Latham & Watkins practices in Saudi Arabia in association with the Law Office of Mohammed Al-Sheikh.
© Copyright 2010 Latham & Watkins. All Rights Reserved.
Potential Sources of Authority
Endangerment Finding Required
NAAQS
(§§ 108-10)
NSPS
(§ 111)
NESHAPS
(§ 112)
Int’l Endangerment
(§§ 115)
US emissions cause or contribute to air
pollution reasonably anticipated to
endanger foreign public health or welfare
Foreign country reciprocity required
SIP tools available (fees, marketable
permits, auctions)
“Regulated Pollutant” Requirements
PSD
(§§ 165,169)
Potential Sources of Authority
Endangerment Finding Required
NAAQS
(§§ 108-10)
NSPS
(§ 111)
NESHAPS
(§ 112)
Int’l Endangerment
(§§ 115)
US emissions cause or contribute to air
pollution reasonably anticipated to
endanger foreign public health or welfare
Likely Paths Forward
Foreign country reciprocity required
SIP tools available (fees, marketable
permits, auctions)
“Regulated Pollutant” Requirements
PSD
(§§ 165,169)
Near-Term: PSD and BACT
•
•
Note – Nonattainment NSR does not contain similar
“regulated pollutant” language
Applicability of PSD to GHG Sources
•
Controversy regarding whether a new or modified source (project)
must independently trigger PSD for criteria pollutants
•
•
•
Application of BACT to GHG Sources
•
•
Tailoring Rule and Interpretive Memo (see handouts)
EPA Climate Change Work Group
•
•
•
•
EPA says no
Counter-argument
Phase I
Phase II
Upcoming EPA Guidance (BACT White Papers)
State Issues
NSPS for GHGs – What Could It Look Like?
•
•
•
Endangerment Finding – by source category
State Plan or FIP Process
Content of Standards
•
•
Best “adequately demonstrated” system of emission reduction taking into account
cost and non-air quality health, environmental and energy issues
Specifically authorizes “equivalent” methods
•
•
•
Can EPA Integrate New and Existing Source Standards for GHG Sources?
•
•
Cap and Trade?
Performance-Based Averaging and Trading?
EPA has taken the position that it must have set new source standards if it is to set
existing source standards, but section 111 does not preclude EPA nor the states
from setting a single performance standard for both new AND existing sources
NSPS versus BACT
•
Traditionally, NSPS sets a floor for BACT, but the Act does not preclude EPA nor
the states from implementing NSPS in a manner that would satisfy the BACT
requirement
•
To satisfy CAA §169(3) (BACT), EPA should find that compliance with the national GHG
existing source program constitutes the “maximum degree of reduction of each pollutant
subject to regulation . . . taking into account energy, environmental, and economic
impacts and other costs, determine[d]” to be achievable for the permitted units.
An Integrated National GHG Market?
CLOSED
TECHNOLOGY
MARKETS
innovative
technology
credits
(ITC)
low-carbon
biomass fuels
(cellulosic
ethanol,
biodiesel),
carbon
capture and
sequestration
Advanced
battery,
advanced
combustion,
other vehicle
and engine
advances
OPEN
MARKET
renewable
fuel
standard
Electric power
generators
TONS
Refineries
motor
vehicles
Transition to
cap and trade
Glass Plants
Cement Plants
Landfills
TONS
Solar, wind,
biomass
CAP AND
TRADE
P-B AVERAGING
AND TRADING
Other
renewable
electricity
standard
+
OFFSETS
ONE-WAY
TRADING
Internal Trading and Banking Only
Unrestricted Trading, Banking; No Safety Valve IF
Program Linked at Outset; Otherwise Transitional Safety
Valve