EPA left to pick up climate change where Congress dropped the debate

By David A. Fahrenthold and Juliet Eilperin
Wednesday, August 4, 2010; A03

The Obama administration told Congress to find a way to regulate greenhouse gases -- or else.

Last month, Congress refused: Democratic leaders in the Senate declined to take up climate legislation before their August break, which means it looks effectively dead for this session.

Now the White House is stuck with "or else."

The Environmental Protection Agency will soon begin regulating greenhouse gases factory by factory, power plant by power plant. That could be unwieldy, expensive and unpopular -- even President Obama has said it's not his preferred solution.

But for now, it's his only option.

The next few months could bring a climax to the long-running debate over how to combat climate change, with the EPA trying to implement its rules and industry groups and opponents in Congress seeking to block it with lawsuits or legislation.

The administration will cite a mandate from the Supreme Court, which ruled in 2007 that greenhouse gases could be regulated like other air pollutants. But opponents will say it has chosen an approach that stretches the law and could impose serious economic costs.

The result of their fight could be the first limits on greenhouse gases from American smokestacks -- or a significant defeat for the White House and environmental groups.

The administration "wanted to be able to hold out the threat of clean-air regulation [by the EPA], as a way to . . . try to get people to the table," said Jeffrey R. Holmstead, an EPA official under the Bush administration, who now works for the law firm Bracewell & Giuliani. "They're now faced with the kind of unenviable task of trying to make it work."

Great hopes dashed

To environmentalists, Obama's election in 2008 brought the hope that legislation to cut greenhouse gases was finally at hand. They had a president who had campaigned on the issue, a Democratic Congress and a deadline to motivate them both. In December 2009, world leaders would gather in Copenhagen to hammer out a new climate treaty.

There was an early, encouraging sign: The administration worked out a deal with the car industry to set limits on auto emissions. But since then, little has worked out as environmental groups had hoped.

Last summer, the House of Representatives passed a "cap and trade" bill -- cutting emissions, and allowing businesses to buy and sell allowances to pollute. But the Copenhagen conference fizzled into a multilingual blame game. And the Senate refused to follow the House example: Senators said they worried that new pollution rules would cut jobs and raise energy prices.

Senators have focused on a more modest bill that aims to eliminate the $75 million cap on the liabilities of a company responsible for an oil spill and create incentives for the development of natural-gas vehicles. On Tuesday, Senate Majority Leader Harry M. Reid (D-Nev.) said even that bill wouldn't be voted on in the Senate until after the August recess."

"Congress, particularly the Senate, has dropped the ball and kicked it out of bounds," said Frank O'Donnell, of the District-based group Clean Air Watch. "If we're going to see any progress on climate, it's going to have to be the EPA" doing it at the national level.

Starting in January, under EPA rules new permits will require the largest factories and power plants to show they have installed the "best available" technology to curb emissions. Smaller sources of greenhouse gases like shops, apartment buildings and bakeries are exempt.

That might mean upgrades to make plants burn fuel more efficiently or perhaps to switch from coal to cleaner-burning natural gas.

These are "pretty modest steps, and it's not much compared to what legislation was set out to accomplish," said Joshua Freed, who directs the clean energy program at Third Way, a centrist think tank. "For the overwhelming majority of stationary sources [like power plants and factories] nothing's going to change for a while."

This is where the fight begins.

Some industry groups say that if the EPA requires aggressive cuts, the result could be crushing costs for businesses. So even before it begins, the EPA effort is the subject of lawsuits, from plaintiffs questioning both its science and legal underpinnings. At particular issue is the "tailoring rule" that limits regulation to the largest emitters: Opponents say it deviates from standards written into the 40-year-old Clean Air Act.

Joe Stanko, a lobbyist at Hunton and Williams who represents several greenhouse gas emitters, said the EPA's reasoning has "some basis in rationality if you had a blank piece of paper and you're designing a permitting program. But you don't, you have a statute."

Resistance in Senate

In Congress, some senators have worked to stop the EPA in its tracks. In June, a resolution from Sen. Lisa Murkowski (R-Alaska) narrowly failed. Another bill from Sen. John D. Rockefeller IV (D-W.Va.), which would suspend the effort for two years, awaits a vote.

A White House spokesman said that Obama would veto Rockefeller's measure if it passed. But more attempts could be made.

Carl Pope, the chairman of the Sierra Club, said that EPA administrator Lisa P. Jackson has overcome political pushback by persuading Obama: "She'd bring a regulatory proposal to the White House. The political folks at [the Office of Management and Budget] and Treasury would push back, saying, 'We don't think the science or the law compels you to go that far.' That's code for, 'It's going to cost too much politically.' She would respond, 'What don't you like about the science?' . . . The president would say, 'Well fine, it's the law or if the science requires it, then let's do it.' "

But critics wonder: If the administration couldn't force a climate bill through Congress, will it really take the heat of regulating greenhouse gases all by itself?

David Doniger, of the Natural Resources Defense Council, said his group intends to defend the EPA in the coming months. . The EPA "needs political support to sustain it. . . . We are going to come down very hard on any of the Democrats and moderate Republicans who flirt with these kinds of things," he said.

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