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Latest Development in the GHG Emission Standards, Can EPA Do It?

January 2014

In his June 25, 2013 speech on climate policy, President Obama announced that he would direct the U.S. Environmental Protection Agency (EPA) to use its existing authorities under the Clean Air Act to develop greenhouse gas (GHG) emission standards for power plants.

On September 20, 2013, using the authority of section 111 of the Clean Air Act, EPA proposed to regulate power plant GHG emissions.  This provision would authorize EPA and the states to set “standards of performance” for emissions from major emitting facilities.  The rule, which President Obama personally called for the agency to issue, would set the first carbon dioxide emissions limits in the power sector and rely on the use of carbon capture and sequestration technology.

However, in a surprise development, the Office of Management and Budget (OMB) and the White House have criticized the proposed EPA rule:

“EPA's assertion of the technical feasibility of carbon capture relies heavily on literature reviews, pilot projects, and commercial facilities yet to operate,” OMB noted in interagency comments.1  “We believe this cannot form the basis of a finding that CCS on commercial-scale power plants is ‘adequately demonstrated.'”

Section 111(a)(1) of the Clean Air Act stipulates that the emissions controls required by the EPA's performance standards be “adequately demonstrated.”  The power plant industry argues that carbon capture doesn't yet meet that requirement.

OMB prepared the interagency comments in August, shortly before the EPA released its new source performance standards for future power plants on September 20, 2013.

Finally, there is a practical question:  how can EPA set emission guidelines and performance standards when direct control technology for GHG emissions (such as carbon capture and sequestration) is not now commercially viable?  Given OMB's position, it is difficult to see how the standards can be written and what measures will be viable in measuring compliance. 

In his June Memorandum, the president directed EPA to actively engage the states, energy companies, labor, and other stakeholders in a collaborative process seeking a steady, responsible national action to slow the effects of climate change.  Thus far, it has been a lively exchange.  Now, the Administration appears to be debating itself.

As discussed above, EPA has defended its approach and is continuing to sail forward—into increasingly stormy weather.

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1From OMB's website on January 8, 2014, following the proposed rule's publication in the Federal Register.