Gina McCarthy for EPA could be Obama’s most significant nominee

The vast majority of President Obama's second-term agenda on climate change and energy will go through the Environmental Protection Agency (EPA). And now we know who Obama wants to carry it all out: Gina McCarthy.

Gina McCarthyMy colleague Juliet Eilperin has a nice profile of the new nominee. McCarthy currently heads the EPA's Office of Air and Radiation and played a key role in crafting a variety of new pollution rules last term, including limits on soot and mercury emissions from power plants. But she also has a "strong working relationship with members of the business community."

That could come in handy. McCarthy will face a huge number of regulatory decisions in the upcoming term — many of them required under the Clean Air Act. And, with Congress deadlocked, it's likely that many of these EPA rules will be the only action the Obama administration takes on global warming this term.

So here are some of the biggest and most contentious issues McCarthy will face:

1) How to regulate carbon-dioxide emissions from power plants. Thanks to a 2007 Supreme Court decision, the EPA has the authority under the Clean Air Act to regulate carbon dioxide, the key gas that's heating the planet. So far, the agency has used that power to write carbon standards for power plants that have yet to be built. Green groups are now urging the EPA to turn its attention to existing power plants, which emit 40 percent of the nation’s carbon pollution.

One group, the Natural Resources Defense Council, has issued a detailed plan for how this might work. The EPA would set different overall emissions goals for each state and power companies would figure out how best to meet them through a combination of efficiency, less coal use, or renewable energy. All told, NRDC estimates that the United States could cut its carbon emissions an additional 10 percent by 2020 this way.

Here's a chart showing what this might look like. U.S. carbon-dioxide emissions from power plants are soon set to rise through 2025 (the dark blue line). Under the NRDC plan, by contrast, emissions would continue falling (light blue line):

The hurdles here? Many utilities are expected to oppose strict new regulations, which even NRDC expects to cost the U.S. economy some $4 billion per year. What’s more, using the Clean Air Act to regulate carbon dioxide could prove legally dicey, especially if the EPA pursues sharp cuts. (See this old post for a look at how the courts might block carbon regulations.)

And when McCarthy's done with that fight, there will be plenty more remaining: The EPA also has to consider how best to regulate carbon-dioxide from other stationary sources, including oil and gas refineries and cement kilns. That will involve plenty of back-and-forth negotiations with huge swaths of industry.

2) How to crack down on methane leaks from natural-gas infrastructure. Thanks to fracking and other new drilling techniques, the United States is now awash in cheap natural gas. That’s mildly helpful on the climate-change front if natural gas displaces coal, since it means less carbon-dioxide in the atmosphere. But there’s a catch: The process of drilling for and transporting natural gas can produce methane leaks. And methane is a potent greenhouse gas in its own right.

Fracking under scrutiny.

In a recent open letter (pdf) to the White House, the Clean Air Task Force urged the EPA to tighten restrictions on methane emissions in the coming years. The agency has already proposed new rules on toxic air pollution from natural-gas fracking — rules that could help curb methane leaks as well. But that still leaves oil wells, leaky gas pipelines and other bits of natural-gas infrastructure untouched. Hence the call for new regulations.

This won’t be controversy-free either. The oil and gas industries aren’t exactly enthusiastic about the EPA wading in to oversee the fracking boom, which has been one of the few bright spots in the U.S. economy these past four years. But green groups point out that leaking methane can often be captured and resold at a profit, which means that industry and environmentalists might be able to find common ground here.

3) How to deal with a flurry of pollution rules that have been postponed so far. If the above wasn't enough, there are a whole bunch of additional pollution regulations that still need to be updated under the Clean Air Act.

These include tighter national standards on ground-level ozone pollution (smog), which were famously nixed during Obama's first term. They also include interstate air-pollution controls for power plants, which have been tied up in courts. Plus, new rules for low-sulfur gasoline, clean-fuel standards for ocean-going ships, and regulations for coal-ash waste disposal at power plants.

"Some of the major and controversial things that are on the EPA's agenda are areas where Obama punted in the first term," said Frank O'Donnell, president of Clean Air Watch, in a recent interview.

McCarthy will have to grapple with all of that this time around, with environmentalists pushing for tighter rules and industry groups asking for a lighter touch. Regulators have a fair bit of leeway here — which is why the decisions she makes in the coming term could have a major impact on both the environment and the U.S. energy sector for many years to come.

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