This Week in Review – January 31 – February 4, 2011

(1) Senators and Congressmen Introduce Bills to Constrain EPA and State Authority to Regulate GHGs (February 1, 2011) – Senator John Barrasso (R-WY), Senator James Inhofe (R-OK) and Rep. Fred Upton (R-MI), and Senator John Rockefeller (D-WV) have introduced bills to either strip (Barrasso and Inhofe/Upton) or delay (Rockefeller) EPA regulation of greenhouse gas (GHG) emissions. The Barrasso bill (S. 228) would strip EPA of any authority to regulate GHG emissions for the purposes of addressing climate change, including rendering almost all previous GHG regulatory and policy actions null and void. The bill specifically declares that the following rules and policies “shall have no force and effect”; the GHG endangerment finding; the Johnson memo and its reconsideration, which determine when a pollutant becomes a regulated pollutant under the Clean Air Act; the GHG Tailoring Rule and related rules to conform state SIPs, SIP approvals and Title V programs to the thresholds in the Tailoring Rule and to ensure GHGs are considered regulated pollutants in the subject states; the section 209 waiver to California for its GHG emissions standards for motor vehicles; and the GHG mandatory reporting rule. The bill would retain the light-duty vehicle GHG emissions standards and Corporate Average Fuel Economy (CAFE) rule of 2010 (covering model years 2012-2016) and would retain the Secretary of Transportation’s authority to set CAFE standards. The bill would prohibit the head of any federal agency (not just EPA) and the President from promulgating any regulations to control GHG emissions or “consider climate effects in implementing or enforcing any law.” With respect to state authority, the bill would amend section 209 of the Act to prohibit the Administrator from granting a waiver to any state for standards adopted by the state for control of GHG emissions from motor vehicles. The bill would also directly affect state authority over GHG emissions. It provides that states have no authority “to require any entity to procure, hold, or surrender allowances for the emission of [GHGs] that takes place outside of the State”; to regulate or tax, indirectly or directly, any GHG emissions produced outside the state; or to “otherwise limit the importation of products or electricity into the State based on [GHG] emissions occurring outside the State.” The bill introduced by Senator Inhofe and Rep. Upton is in most respects identical to the Barrasso bill, except it strips only authority from EPA under the Clean Air Act to regulate GHG emissions (as opposed to the Barrasso bill, which takes that authority away from all federal agencies and the President as well). In addition, although it does eliminate the section 209 waiver for any

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California motor vehicle emissions regulations covering GHGs, it does not contain more overarching language to constrain state authority to regulate GHG emissions. Senator Rockefeller’s bill (S. 231) would delay regulation of stationary source GHG emissions by EPA for two years. Rockefeller had introduced an identical bill in the previous Congressional session. [For further information: Air Web – Emissions and Modeling, Global Warming, Mobile Sources and Fuels, New Source Review and Permitting Committee pages] (2) House Budget Committee Chairman Caps Spending for Remainder of FY 2011 (February 3, 2011) – Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, announced that he will file a discretionary spending allocation limit next week that will place enforceable limits on non-security discretionary spending bills for the rest of Fiscal Year 2011. This action will set 2011 discretionary budget authority at $1,055 billion, a level intended to bring non-security discretionary spending back to 2008 levels for the remainder of the year. Chairman Ryan did not indicate in his announcement which areas of discretionary spending were targeted, but did state that “the spending limits will restore sanity to a broken process and return spending for domestic government agencies to pre-stimulus, pre-bailout levels.” [For further information: http://budget.house.gov/] (3) Waxman and Dingell Initiate Letter to House Leadership Urging Support of CAA (February 3, 2011) -- Rep. Henry Waxman (D-CA) and Rep. John Dingell (D-MI) reached out to their House colleagues seeking co-signers to a letter to House Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA) opposing efforts to undermine the Clean Air Act (CAA). Noting the sustained success -- environmentally and economically -- of the CAA, the letter explains that the law “is now under attack.” In particular, it points to EPA’s responsibility, pursuant to the Supreme Court's decision in Massachusetts v. EPA, to use its existing CAA authority to reduce carbon emissions, as the agency has already "wisely" done by implementing one federal motor vehicle rule to reduce the nation's dependence on foreign oil and cut carbon emissions. The letter also serves as a reminder that "[t]he Clean Air Act was enacted in 1970, and significantly amended in 1990, with strong bipartisan support. In both instances we had divided government, with a Democratic Congress and Republicans in the White House. We worked together across party lines to enact a law that would protect public health and the environment, as well as our economy. We were successful. Since 1970, the Clean Air Act has reduced key air pollutants by 60%, while at the same time the economy grew by over 200%." The letter concludes by stating, "Congress has consistently rejected efforts to weaken the Clean Air Act and must do so again. We urge you to join us in keeping the Clean Air Act strong and the air safe and healthy to breathe." [For further information: Air Web - Mobile Sources and Fuels and Criteria Pollutants Committee pages]

(4) NACAA Comments on Proposed GHG and Fuel Efficiency Standards for Heavy-Duty Vehicles (January 31, 2011) -- NACAA submitted comments to EPA and the National Highway Traffic Safety Administration (NHTSA) on a joint

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proposal to establish greenhouse gas (GHG) emissions standards and Corporate Average Fuel Economy standards for heavy-duty engines and vehicles. In its letter, the association applauds EPA and NHTSA's proposal which, "when added to the federal GHG emissions standards already in place for light-duty vehicles in MYs 2012 to 2016, marks another very commendable step forward in what must be an ongoing effort to make our nation's entire mobile source fleet and fuels as clean and 'green' as possible." NACAA further notes that the proposed rule would not only yield climate change benefits, but also a significant number of co-benefits in the form of reduced criteria and toxic air pollutants. In addition, the association offers several recommendations to enhance the rulemaking including, among others, improving the stringency of the emissions standards for affected vehicle categories, strengthening the certification testing procedures, extending the useful life requirements, raising the steady-state speed parameter of the GHG Emissions Model, providing more information on vehicle labels and expanding the credits for advanced technology to include a wider range of technology and alternative fuel options. In addition, NACAA urges EPA and NHTSA to ensure promulgation of the final rule by July 2011, as is currently planned. [For further information: Air Web – Mobile Sources and Fuels Committee page] (5) Freshman Senators Express Concerns about Upcoming Boiler MACT to EPA (January 27, 2011) – A group of 13 newly elected Senators (12 Republicans and 1 Democrat) sent a letter to EPA Administrator Lisa Jackson expressing concerns about the upcoming boiler MACT rule. Specifically, they stated that even recently installed boilers will not be able to attain the standards in the proposed rule, because the proposal is “based on a ‘super’ boiler that does not currently exist.” They noted that the rules would cost billions of dollars and could put many jobs at risk. Additionally, they argued that the proposed biomass standards would adversely affect that industry. The senators urged EPA to consider using a risk-based standard in the final rule. The senators said that they join the 49 senators who previously wrote to EPA about their concerns with the stringency of the rule and asked for revisions that would protect the environment but also preserve jobs. [For further information: Air Web – Air Toxics Committee page] (6) EPA Schedules Five Listening Sessions to Hear Views on GHG NSPS (January 31, 2011) – EPA will hold five “listening sessions” to hear stakeholder views on the agency’s plans to include greenhouse gases (GHGs) in New Source Performance Standards (NSPS) for power plants and petroleum refineries, including a listening session for state and local representatives. As reported previously in the Washington Update, EPA reached a settlement with environmental groups and states setting deadlines for the agency to promulgate GHG NSPS under section 111(b) of the Clean Air Act for new and modified electric power plants and petroleum refineries and section 111(d) GHG emissions guidelines for existing electric power plants and petroleum refineries. The sessions are as follows: 1) February 4 – electric power industry representatives, in Washington, DC; 2) February 15 – environmental and environmental justice organization representatives, in Atlanta, GA; 3) February 17 – state and tribal representatives, in Chicago, IL; 4) February 23 – coalition group representatives,

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in Washington, DC; and 5) March 4 – petroleum refinery industry representatives, in Washington, DC. NACAA is organizing state and local air agency representation for the February 17 listening session. [For further information: Air Web – Global Warming Committee page] (7) EPA Proposes to Retain Carbon Monoxide NAAQS But Change Monitoring Requirements (January 31, 2011) – EPA proposed to retain the current National Ambient Air Quality Standards (NAAQS) for carbon monoxide (CO), which are 9 parts per million (ppm) measured over 8 hours and 35 ppm measured over 1 hour, concluding that they are sufficiently protective of public health. The agency is, however, proposing changes to the ambient air monitoring requirements for CO. EPA is proposing to require the co-location of CO monitors with “near-road” nitrogen dioxide monitors in urban areas having populations of 1 million or more. EPA estimates that the proposed requirement to include CO monitors at these near-road stations would result in the operation of approximately 77 CO monitors within 53 urban areas, as part of the overall CO monitoring network. EPA is proposing to retain the existing implementation guidance and regulations for the CO NAAQS. EPA will accept comment on the proposal for 60 days after publication in the Federal Register. If a request for a public hearing is received by February 18, 2011, the agency will hold a public hearing on February 28, 2011. The agency will finalize the CO NAAQS by August 12, 2011. [For further information: Air Web – Criteria Pollutants Monitoring Committee pages] (8) California Court Orders CARB to Reanalyze GHG Scoping Plan (January 31, 2011) – Last week, a California court ordered the California Air Resources Board (CARB) to conduct additional analysis of the its Climate Change Scoping Plan in order to comply with the California Environmental Quality Act (CEQA). In the case, Association of Irritated Residents, et al. v. CARB, petitioners challenged CARB’s implementation of California’s AB 32, under which CARB developed a Scoping Plan to reduce the state’s greenhouse gas (GHG) emissions to 1990 levels by 2020. Petitioners claimed CARB violated AB 32 and CEQA in approving the Scoping Plan and a related document, the Functional Equivalent Document (FED). The FED was prepared to evaluate the environmental consequences of implementing the Scoping Plan. Judge Ernest Goldsmith rejected all the plaintiffs’ claims that the Scoping Plan violated AB 32. However, he did find the FED to be lacking detail on alternatives to the Scoping Plan for implementing AB 32 and also that CARB failed to comply with the informational requirements in CEQA by beginning to implement the Scoping Plan without first completing the environmental review process. The judge enjoined further implementation of the Scoping Plan “until after [CARB] has come into complete compliance with its obligations under its certified regulatory program and CEQA.” [For further information: Air Web – Global Warming Committee page] (9) Federal Court Remands California Ozone SIP to EPA for Lack of TCMs (February 2, 2011) – The U.S. Court of Appeals for the Ninth Circuit granted a petition for review of a 2009 EPA decision on a 2003 ozone SIP revision by California for the South Coast Air Quality Management District. Petitioners in this

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case asserted that 1) EPA’s failure to order California to submit a revised attainment plan for the South Coast after disapproving the 2003 attainment plan was arbitrary and capricious, 2) EPA’s approval of PEST-1 (a control strategy designed to reduce emissions from pesticide application) violates the Clean Air Act due to lack of enforceable commitments and 3) EPA violated the Clean Air Act by failing to require transportation control measures (TCMs) to offset the increase in vehicle miles traveled (VMT). The Court agreed with the Petitioners on all three counts and remanded to EPA for further proceedings consistent with the Court’s opinion. With respect to the third issue, the Court notes that the Clean Air Act requires that “the State shall submit a revision that identifies and adopts specific enforceable transportation control strategies and transportation control measures to offset any growth in emissions from growth in vehicle miles traveled or numbers of vehicle trips in such area and to attain reduction in motor vehicle emissions as necessary, in combination with other emission reduction requirements…to comply with the requirements [pertaining to periodic emissions reduction requirements].” Accordingly, the Court decided, EPA was at fault in allowing California to forego TCMs based on the argument that motor vehicle emissions will decrease each year, since the law requires TCMs to offset any growth in VMT and there was, in fact, projected growth in VMT on the order of 30 percent. [For further information: Air Web – Mobile Sources and Fuels and Criteria Pollutants Committee pages] (10) In Court Filing, EPA Describes Plans to Grandfather Certain PSD Applications from NO2, Other Rules (January 31, 2011) – In a declaration filed with the U.S. Court of Appeals for the District of Columbia Circuit in ongoing litigation over a stalled power plant permit, EPA announced that it intends to grandfather certain permit application from Prevention of Significant Deterioration (PSD) permitting requirements under the new 1-hour nitrogen dioxide (NO2) standard. In documents submitted in Avenal Power Center v. EPA (No. 1:10-cv-00383-RJL), the agency describes its new position, stating that it “has determined that it is appropriate, under certain narrow circumstances, to grandfather certain PSD applications from the requirement to demonstrate that the proposed facility will not cause or contribute to a violation of the hourly NO2 standard.” EPA went on to explain that it also believes that those same applications should not be subject to permitting requirements that took effect during the time period when the applications were pending and applicants were “seeking to compile the additional information necessary to demonstrate that the source will not cause or contribute to a violation of the hourly NO2 standard.” The Avenal PSD permit application was submitted in 2008. EPA will allow for public notice and comment before taking final action to exempt the permit from the applicable requirements. [For further information: http://members.4cleanair.org/rc_files/5146/avenalmccarthy.pdf] (11) President Announces Plan to Boost Energy Efficiency in Commercial Buildings (February 3, 2011) – President Obama announced a Better Buildings Initiative to boost energy efficiency in commercial buildings. Under the President’s plan, by 2020, commercial building space in the U.S. will be 20 percent more energy efficient through cost-effective upgrades. To achieve this goal, the President is calling on Congress to increase tax incentives for building energy

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efficiency, proposing to provide more financial assistance for commercial retrofits, including through the Small Business Administration and the Department of Energy, and proposing new competitive grants to states and local governments that streamline building performance standards, encourage upgrades and attract private sector investment. [For further information: www.whitehouse.gov/the-press-office/2011/02/03/president-obama-s-plan-win-future-making-american-businesses-more-energy] (12) EPA Proposes Primary Lead Smelter Air Toxics Standard (January 31, 2011) – EPA proposed a Residual Risk and Technology Review standard for Primary Lead Smelters under section 112(f) of the Clean Air Act. The standard not only establishes a lead emissions cap of 0.22 pounds of lead per ton of lead produced, but also establishes an ambient lead concentration limit of 0.15 µg/m3. The standard also removes an exemption for startup, shutdown and malfunctions that was contained in the original MACT standard. The proposed rule will apply to only one facility, in Missouri. EPA has estimated that the cancer risks from the source category (after MACT) are within the acceptable range, but that the non-cancer, multipathway risk is excessive, due to the exceedance of the lead NAAQS by a factor of 50. There will be a 45-day comment period after the proposal is published in the Federal Register. For further information: www.epa.gov/ttn/oarpg/t3/fr_notices/primaryleadprop2011.pdf] (13) Industry Files Challenges to Final GHG Mandatory Reporting Program Requirements for Oil and Natural Gas Systems, Fluorinated GHGs (January 31, 2011) – A number of industry groups have filed petitions challenging the reporting requirements for oil and natural gas systems and additional sources of fluorinated greenhouses gases (GHGs) under EPA’s Mandatory GHG Reporting Program. Challenges to the oil and natural systems requirements (75 Federal Register 74458) were filed in the U.S. Court of Appeals for the District of Columbia Circuit by the American Gas Association, Gas Processors Association, Interstate Natural Gas Association of America and Chesapeake Energy Corporation in American Gas Ass’n v. EPA (No. 11-1020), Gas Processors Ass’n v. EPA (No. 11-1023), Interstate Natural Gas Ass’n of America (docket number unavailable), and Chesapeake Energy Corp. v. EPA (No. 11-1025). The Semiconductor Industry Association (SIA) also filed a challenge in the same federal court against EPA’s final reporting requirements for additional sources of fluorinated GHGs (75 Federal Register 74774) in Semiconductor Industry Ass’n v. EPA (No. 11-1024). Similar petitions for reconsideration were also filed with EPA. The American Petroleum Institute filed a petition for reconsideration of the oil and natural gas system requirements, while SIA filed a petition for reconsideration of the fluorinated GHGs requirements. [For further information: Air Web – Emissions and Modeling Committee Page]

(14) EPA Takes Action on Deferred 2006 24-Hour PM2.5 Designations (February 3, 2011) – EPA took action on three areas for which it deferred taking action in designating areas for the 2006 24-hour fine particulate matter (PM2.5) standard. Plumas and Shasta Counties in California and their surrounding

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counties are being designated unclassifiable/attainment, while a portion of Pinal County, Arizona is being designated as nonattainment. EPA is also correcting a section 110(k)(6) error (affecting Ravalli, Montana) and making a technical correction (affecting Knoxville, Tennessee) related to the 2006 24-hour PM2.5 NAAQS designations. Finally, in this action, EPA announces its decision to retain the current designation of unclassifiable/attainment for Harris County, Texas and Pinal County, Arizona for the 1997 annual PM2.5 standard. [For further information: 76 Federal Register 6056]

(15) Group Releases Report on Reducing GHG Emissions from Pasture-Raised Beef Production in U.S. (February 2, 2011) – The Union of Concerned Scientists (UCS) released a report with recommendations as to how to reduce greenhouse gas (GHG) emissions from pasture-raised beef production in the U.S. For example, to reduce methane emissions from cattle, UCS recommends increasing the nutritional quality and digestibility of forage (the plants the cattle eat while on pasture). The report also includes tips for climate-friendly pasture management. According to UCS, beef production contributes approximately 2.2 percent of total GHG emissions in the U.S. [For further information: Air Web – Agriculture Committee page]

The Week Ahead

• House Energy and Commerce Subcommittee on Energy and Power Hearing on “The Energy Tax Prevention Act of 2011,” in Washington, DC – February 9, 2011

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