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PRESENTED BY Peter Glaser Troutman Sanders LLP 401 9 th Street, NW Suite 1000

EPA Regulation of Greenhouse Gases: The View from Washington Troutman Sanders LLP/Trinity Consultants July 20, 2010. PRESENTED BY Peter Glaser Troutman Sanders LLP 401 9 th Street, NW Suite 1000 Washington, DC 20004 202.274.2950 www.troutmansanders.com. Topics. Endangerment Finding

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PRESENTED BY Peter Glaser Troutman Sanders LLP 401 9 th Street, NW Suite 1000

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  1. EPA Regulation of Greenhouse Gases: The View from WashingtonTroutman Sanders LLP/Trinity ConsultantsJuly 20, 2010 PRESENTED BY Peter Glaser Troutman Sanders LLP 401 9th Street, NW Suite 1000 Washington, DC 20004 202.274.2950 www.troutmansanders.com

  2. Topics • Endangerment Finding • Light-Duty Vehicle (LDV) Rule • Johnson Memo Reconsideration • Tailoring Rule • EPA GHG BACT Guidance • NSPS • Litigation

  3. Endangerment Finding74 Fed. Reg. 66496 (Dec. 15, 2009) • Endangerment Finding: elevated concentrations of six GHGs constitute “air” pollution endangering public health and welfare: CO2, CH4, N20, HFCs, PFCs and SF6 • “Cause or Contribute” Finding: the four of these GHGs that are emitted by new light-duty motor vehicles cause or contribute to this air pollution (CO2, CH4, N20, HFCs) • EPA: These findings trigger a requirement that we regulate GHG emissions from new light-duty motor vehicles

  4. LDV GHG Rule75 Fed. Reg. 25324 (May 7, 2010) • Joint DOT MPG - EPA gCO2/mi. standard • Key Point – EPA: EPA regulation of GHG emissions from LDVs makes the six GHGs regulated air pollutants under the PSD and Title V permit programs

  5. Johnson Memo Reconsideration(75 Fed. Reg. 17004 (Apr. 2, 2010) • Affirms Administrator Johnson’s 12/08 Memo that GHGs are not regulated air pollutants under PSD and Title V until EPA issues regulations actually controlling GHG emissions. Rejects environmental group position that GHGs were first regulated in 1990 CAA Amendments. • EPA’s auto rules are such regulations triggering regulation of GHGs under PSD and Title V • GHGs will be deemed to be regulated under PSD and Title V beginning 1/2/11 when auto rule “takes effect” • Will apply to any PSD permit then in process • Prior to 1/2/11: (a) states encouraged to use BACT for non-GHGs to reduce GHGs and (b) any state authority to require GHG BACT before 1/2/11 preserved

  6. Tailoring Rule75 Fed. Reg. 31514 (Jun. 3, 2010) • Addresses problem that statutory PSD thresholds are 100/250 tpy and Title V threshold is 100 tpy. Literally millions of sources have PTEs above 100 tpy for GHGs • Provides for 4-step phase-in (tailoring) of requirements - Step 1 - 1/2/11: Sources subject to PSD “anyway” will be required to do GHG BACT if increase emissions by 75,000 tons per year. Title V only for “anyway” sources. - Step 2 - 7/1/11: New sources above 100,000 tpy and existing sources that increase emissions by 75,000 tpy subject to PSD. Title V threshold = 100,000 tpy.

  7. Tailoring Rule • Step 3: EPA will do rulemaking commencing 2011 and concluding 7/1/12 to determine lower thresholds, but commits that no source below 50,000 tpy will be regulated for six years. Also look at streamlining and possible permanent exemption of “certain smaller sources.” • Step 4 - future study to determine whether sources with lower thresholds will be regulated and how, complete a rule by 4/30/16.

  8. Problem with State Regulation • Many States run their own PSD and Title V programs under state law • EPA recognizes tailoring rule may not allow states, under state law, to avoid regulating sources down to statutory 100/250 tpy thresholds • Final tailoring rule: states may “interpret” their laws to regulate only sources exceeding tailoring rule thresholds • But asks states to confirm by 8/2 that they can do so • Further regulatory proposal in process to address this issue

  9. EPA GHG BACT Guidance • CAAAC GHG Task Force • Phase one report 2/10 on policy issues • Phase two report soon on using energy efficiency as GHG BACT • EPA sector-by-sector technical guidance rolling out beginning this Summer • ORD GHG Mitigation Strategies Database • RACT/BACT/LAER Clearinghouse Enhancements • GHG Control Measures White Papers • Policy guidance by end of year

  10. New Source Performance Standards • Expect NSPS for CO2 from various source categories already listed and possibly for currently unlisted • EGU coal boilers: proposed and finalized in coordination with EGU MACT? Proposed 3/11, final 11/11? • Expect eventual adoption of NSPS for new and modified sources and then existing-unmodified sources

  11. Litigation • Appeals filed by numerous industry groups of endangerment finding, Johnson Memo Reconsideration and LDV Rule. Deadline for filing appeal of tailoring rule is 8/2 • Only one environmental group has filed a challenge of any of the regs – of Johnson Memo Reconsideration • 17 states on each side • Stay of regulation? • Don’t expect decision until latter part of 2012 at best

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