This Week in Review – September 17-21, 2012

(1) House Passes Coal Bill That Would Amend Clean Air Act (September 21, 2012) – By a vote of 233 to 175, the House passed H.R. 3409, the Coal Miner Employment and Domestic Energy Infrastructure Act, which packages together a number of bills, including the Energy Tax Prevention Act of 2011 and the Transparency in Regulatory Analysis of Impacts on Nation (TRAIN) Act. The Energy Tax Prevention Act would prohibit EPA from promulgating any regulation concerning, taking any action relating to, or taking into consideration the emissions of a greenhouse gas (GHG) to address climate change. It would repeal the GHG Endangerment and Cause or Contribute Finding (74 Federal Register 66496), the Mandatory Reporting of GHGs Rule (74 Federal Register 56260) and all GHG permitting and permitting-related rules the agency has issued through December 30, 2010, including the Tailoring Rule (75 Federal Register 31514). The bill would preserve the Model Year 2012-2016 Light-Duty Vehicle GHG Emissions Standards and Corporate Average Fuel Economy Standards (75 Federal Register 25324) and the GHG Emissions Standards and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles (76 Federal Register 57106), but would prohibit EPA from issuing any future waivers to California for GHG emissions standards for cars. The TRAIN Act would create a committee of government officials to review the cumulative impact on the economy of a number of EPA rules issued under the Clean Air Act, including the ozone, sulfur dioxide and nitrogen dioxide NAAQS; the Clean Air Interstate Rule; the Industrial, Commercial and Institutional Boiler MACTs (major and area sources); the Utility Mercury and Air Toxics Standard (MATS); the Portland Cement MACT; any permitting-related actions by EPA or state or local governments related to GHGs; any New Source Performance Standards related to climate change; any regional haze rules or guidelines issued by EPA or state or local agencies; any future NAAQS; and any rule addressing fuels under title II of the Clean Air Act. In addition, the bill would repeal the Cross-State Air Pollution Rule and prohibit EPA from issuing any rule substantially similar to it. The bill would reinstate CAIR and prohibit EPA from issuing “any proposed or final rule under section 110(a)(2)(D)(i)(I) or section 126 of the Clean Air Act” relating to the ozone or PM NAAQS, including any replacement for CAIR, until three years after the committee submits its report to Congress. It would also require EPA to base the rule on monitored not modeled data, allow unrestricted trading and give states at least three years to implement the rule. The bill would also repeal the Utility MATS and 2 substitute new provisions in the Clean Air Act relating to how EPA is allowed to establish any future Utility MACT, including substantially delaying industry compliance with any standard. Finally, the bill would direct the EPA Administrator to consider feasibility and cost in setting any NAAQS. The Obama Administration issued a statement “strongly” opposing H.R. 3409, stating that it “would block landmark Clean Air Act public health regulations, such as the Mercury and Air Toxics Standard … [and] the recently-finalized National Program of fuel economy and greenhouse gas standards for Model Year 2017-2025 cars and light trucks.” In passing H.R. 3409, the House approved an amendment to the bill that would require the U.S. Department of Transportation (DOT) to report to Congress within 60 days of enactment on potential impacts of implementation of the recently promulgated EPA rule, 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards. The amendment, offered by Rep. Mike Kelly (R-PA), would compel DOT to provide estimates of ”1) the total number of jobs that will be lost due to decreased demand by year caused by the rule; 2) the number of additional fatalities and injuries that will be caused by the rule; and 3) the additional cost to the economy of the redundant regulation of fuel economy and greenhouse gas emissions by the Environmental Protection Agency and State agencies for model years 2011 through 2025.” In addition, the amendment stipulates that, “[o]ther than to gather basic factual information, the Secretary of Transportation shall not consult with the Administrator of the Environmental Protection Agency or any official from the California Air Resources Board” in fulfilling the requirement to prepare the report for Congress.” Another amendment to the bill, from Rep. Jeff Flake (R-AZ), would give states the authority to revoke any existing Federal Implementation Plan (FIP) for visibility. States that choose to exercise this authority would be required to propose a State Implementation Plan to regulate visibility within two years. A state that chooses to accept the FIP would have a minimum of five years to comply with the federal standards. Yet another amendment, from Rep. Paul Gosar (R-AZ), would limit EPA’s authority to issue regulations on the Navajo Generating Station, located near Page, Arizona. Among the amendments that failed was one from Rep. Peter DeFazio (D-OR) that would have required EPA and DOT to report to Congress within six months of enactment on the health and environmental impacts of fugitive coal dust. For further information: http://docs.house.gov/billsthisweek/20120917/CPRT-112-HPRT-RU00- HR3409.pdf, http://www.whitehouse.gov/sites/default/files/omb/legislative/sap/112/saphr3409r_ 20120919.pdf and http://www.4cleanair.org/Documents/CongressCAFEKellyAmendment092112.pdf

(2) NACAA Testifies in Support of California’s Waiver Request for Advanced Clean Car Program (September 19, 2012) – NACAA presented testimony at EPA’s public hearing on the California Air Resources Board’s (CARB’s) request for a waiver of federal preemption under Clean Air Act section 209(b) for the Low Emission Vehicle III and Zero Emission Vehicle components of the state’s Advanced Clean Car (ACC) program, approved by CARB in January 2012. In its testimony, delivered by NACAA Deputy Director Nancy Kruger, the association 3 offered strong support for full and prompt approval of CARB’s request, noting that the ACC program clearly meets the statutory tests upon which EPA must base its waiver decision and, further, that the program will yield important public health, environmental and economic benefits. Also testifying at the hearing were representatives of CARB, NESCAUM, Maryland Department of the Environment, National Automobile Dealers Association, Consumer Federation of America, Consumers Union (publisher of Consumer Reports), Calvert Investments, American Lung Association, Union of Concerned Scientists, Sierra Club, Environmental Defense Fund, Environment America, Maryland Sierra Club, Manufacturers of Emission Controls Association and Advanced Engine Systems Institute. All of those testifying strongly supported EPA approval of California’s waiver request without delay, except for the National Automobile Dealers Association, which opposes CARB’s ACC program. For further information: http://www.4cleanair.org/Documents/NACAATestimonyonCARBACCProgWaiverR equest091912.pdf

(3) OMB Issues Report on Effects of Budget Sequestration (September 17, 2012) – The White House Office of Management and Budget (OMB) issued a report that discusses the effects of the budget “sequestration” that is scheduled to take effect on January 2, 2013 if Congress does not adopt an alternative. Pursuant to the Budget Control Act of 2011, which Congress adopted after the Joint Select Committee on Deficit Reduction failed to propose a plan to reduce the deficit by $1.2 trillion, the sequestration would result in across-the-board reductions. According to OMB’s estimates, the sequestration would result in cuts from FY 2012 levels of 9.4 percent in non-exempt defense discretionary funding and 8.2 percent in non-exempt nondefense discretionary funding, which would include EPA’s funding. State and local air grants under sections 103 and 105 of the Clean Air Act, funded at $235.7 million in FY 2012, would be reduced by $19.3 million, down to $216.4 million. The 394-page report, which was required by law, provides estimates of the effects of the sequestration on government activities. It expresses the Administration’s belief that the sequestration is “a blunt and indiscriminate instrument” and “bad policy” and that Congress should adopt a comprehensive and balanced deficit reduction package in its place. For further information: http://www.whitehouse.gov/sites/default/files/omb/assets/legislative_reports/starep ort.pdf

(4) Federal Court Rejects RMRR Exemption Claim by Louisiana Power Plant (September 19, 2012) – The U.S. District Court for the Middle District of Louisiana rejected a claim by Louisiana Generating that the company’s replacement of the primary reheaters in two power plant generating units constituted Routine Maintenance, Repair or Replacement (RMRR) and should therefore be exempt from Prevention of Significant Deterioration (PSD) requirements. In United States v. Louisiana Generating, LLC (No. 3:09-cv-100), EPA and the Louisiana Department of Environmental Quality (LDEQ) charged Louisiana Generating with violating PSD provisions by failing to install Best Available Control Technology (BACT) at its Big Cajun II power plant after replacing the reheaters. Louisiana 4

Generating claimed that the reheater replacement, which took 25 days at a cost of $4.5 million and was intended to increase future generation, should be considered RMRR rather than a major modification requiring the installation of BACT. The court disagreed, allowing EPA and LDEQ to proceed with the case. For further information: http://members.4cleanair.org/rc_files/5436/louisiana.pdf

(5) CAAAC Sends GHG Permit Streamlining Report to EPA (September 20, 2012) – The Clean Air Act Advisory Committee (CAAAC) voted to forward a subcommittee workgroup report, Air Permitting Streamlining Techniques and Approaches for Greenhouse Gases, to EPA for consideration. The report was developed by the CAAAC Permits, New Source Review and Toxics Subcommittee Greenhouse Gas (GHG) Permit Streamlining Workgroup, which consisted of representatives of EPA, state and local agencies, tribes, industry and environmental groups. While the workgroup did not evaluate or recommend specific streamlining approaches, the report includes a compendium of information on potential streamlining options submitted by stakeholders and suggests that the next step, at the appropriate time, should be for EPA to consider additional stakeholder feedback on potential GHG permit streamlining options through notice and comment rulemaking. For further information: http://www.epa.gov/air/caaac/reports.html

(6) House Energy and Commerce Subcommittee on Energy and Power Holds Hearing on Bill Blocking EPA GHG Standards for Power Plants (September 20, 2012) – The House Energy and Commerce Subcommittee on Energy and Power held a hearing to discuss EPA’s proposed carbon dioxide (CO2) emissions standards for new fossil fuel-fired power plants and examine H.R. 6172, which would block EPA from issuing greenhouse gas (GHG) emissions standards for fossil fuel-fired power plants until at least three administration officials determine that carbon capture and sequestration (CCS) technology is technologically and economically feasible. Witnesses included representatives of the electric industry, the United Mine Workers, Alstom (which makes pollution control technology) and two environmental groups, as well as University of Alabama Professor John Christy. Committee Chairman Fred Upton (R-MI) said the hearing was a continuation of the committee’s oversight of “EPA's costly regulatory agenda,” which includes EPA’s recently proposed rule setting CO2 emissions standards for new fossil fuel-fired power plants. Upton said EPA’s standard would require coal plants to install carbon capture and storage (CCS) when CCS is not commercially available, thus continuing the administration’s “War on Coal.” Subcommittee Chair Ed Whitfield (R-KY) said this is why H.R. 6172 is so important, because the “bottom line is that the federal government would have to be on record that what it is requiring of coal-fired power plants is achievable in the real world.” For further information: http://energycommerce.house.gov/hearing/american-energy-initiative- focus-hr-6172

(7) Bipartisan Group of Senators Introduces Bill to Promote CCS (September 20, 2012) – A bipartisan group of senators introduced a bill to enhance the ability of companies to use an existing tax incentive for carbon capture and storage 5

(CCS). The bill – coauthored by Senators Kent Conrad (D-ND), Mike Enzi (R-WY) and Jay Rockefeller (D-WV) – would modify the existing CCS tax incentive, which provides a credit of $10 per ton of industrial carbon dioxide (CO2) used in enhanced oil recovery projects and $20 per ton for CO2 placed directly in secure geological storage. The bill amends current law to provide assurances to companies who were previously concerned that the tax credit would no longer be available to them once construction of CCS projects began. For further information: http://www.rockefeller.senate.gov/public/index.cfm/press- releases?ID=9b0dbd5d-298d-4857-856f-8c41feafc4a6 and http://www.conrad.senate.gov/pressroom/record.cfm?id=337680&

(8) Arctic Sea Ice Breaks Record for Minimum Extent in August (September 17, 2012) – The extent of the Arctic sea ice dropped to its lowest recorded levels, shrinking to 1.42 million miles at the end of August, and is expected to decrease even further as the melt season lasts until mid-September, according to a recent report from the National Oceanic and Atmospheric Administration. The previous record minimum was 1.61 million miles, which was recorded in September 2007. Furthermore, the globally averaged temperature for August 2012 marked the fourth warmest August since recordkeeping began in 1880. For further information: http://www.ncdc.noaa.gov/sotc/

(9) U.S. Government Underestimating Benefits of Cutting Carbon Emissions (September 17, 2012) – Authors of an article published in the Journal of Environmental Studies and Sciences argue that the U.S. government is using an overly low estimate for the social cost of carbon, which has the effect of undervaluing the benefits of reducing greenhouse gas (GHG) emissions. In 2010, the U.S. government published its first estimates of the benefits of reducing carbon dioxide (CO2) emissions, referred to as the social cost of carbon (SCC), and concluded that the government should value CO2 emissions reductions at $21 per metric ton. The authors recalculated an SCC using a range of discount values and methodologies that they said were “more appropriate for the very long time horizons associated with climate change” and using a methodology that weighted damages in poor countries (i.e., those countries less able to pay for adapting to climate change) more than damages in rich countries. The authors calculated SCCs that were between 2.6 and 12 times greater than the $21-per-metric-ton figure. For further information: http://www.springerlink.com/content/863287021p06m441/fulltext.pdf

(10) Utilities Could Use Combined Heat and Power to Replace Almost All of Retiring Coal Fleet (September 19, 2012) – According to the American Council for an Energy-Efficiency Economy (ACEEE), utilities could deploy highly efficient combined heat and power (CHP) to more cheaply replace a substantial portion of the coal-fired electric-generating capacity expected to retire in the near term. In a new report, ACEEE analyzes the potential for new CHP at energy-intensive industrial and commercial facilities and finds that by encouraging utilities to invest in CHP on customer sites, states could more easily meet future demand and offset 6 some or all of the need to invest in new power plants. For further information: http://www.aceee.org/research-report/ie123

(11) Researchers Argue That Co-Pollutant Benefits Should Be Considered in Designing GHG Reduction Programs (September 20, 2012) – Authors of a new report from the Joint Center for Political and Economic Studies argue that greenhouse gas (GHG) reduction programs should consider co-pollutant benefits so that important public health benefits of reducing air pollution emissions are captured in these programs. The researchers focused on California and gathered air pollutant emissions data from 1,500 facilities. They found that co-pollutant intensity – that is, the ratio of sulfur dioxide, nitrogen oxide, fine particulate matter and air toxics emissions to carbon dioxide (CO2) emissions – varied widely across pollutants, sectors and firms. Thus, in a GHG cap-and-trade system, for example, where firms can buy GHG allowances instead of reducing emissions, it makes a big difference to the local community whether the purchasing entity is a natural gas facility, which has lower co-pollutant emissions per unit of CO2 emissions, or a petroleum refinery, which has higher co-pollutant emissions per unit of CO2 emissions. In addition, from a societal perspective, the public health benefits of reducing co-pollutants are not recognized in a straightforward GHG cap-and-trade program. Therefore, the researchers believe “there is a strong case for integrating co-pollutants into climate-policy design on both efficiency and equity grounds.” For further information: http://www.e3network.org/papers/Cooling_the_Planet_Sept2012.pdf

(12) EPA Issues Direct Final Rule to List Substitutes for Ozone-Depleting Substances in the Fire Suppression and Explosion Protection Sector (September 19, 2012) – EPA issued a direct final rule to list substitutes for ozone- depleting substances (ODS) in the fire suppression and explosion protection sector under the agency’s Significant New Alternatives Policy (SNAP) program. The direct final rule adds three substances to the SNAP list of acceptable ODS substitutes: two fire suppression agents are added as acceptable substitutes for halon 1301 and one for halon 1211, subject to use restrictions. The rule is effective on December 18, 2012, unless adverse comment is received or a public hearing is requested by October 19, 2012. For further information: http://www.gpo.gov/fdsys/pkg/FR-2012-09-19/pdf/2012-23138.pdf and http://www.gpo.gov/fdsys/pkg/FR-2012-09-19/pdf/2012-23138.pdf

(13) EPA Announces 12th Annual Clean Air Excellence Awards (September 19, 2012) – EPA recognized eleven projects and companies from across the country for their efforts to protect public health, achieve cleaner air, educate the public, serve their communities and stimulate the economy. Award winners, by category, include the following: In the Clean Air Technology category – Renew Air Scrubber Technology (Racine, WI); in the Community Action category – Frazier Courtyard Homes (Dallas, TX), Electric Vehicle Ecosystem Pilot Project (Greensville, SC) and Free Zoo & Trolley Too! (Providence, RI); in the Education/Outreach category – the Conservation and Climate Change Challenge (Broward County, FL) and InnerTribal Beat (Spokane, Washington); in the 7

Regulatory/Policy Innovations category – Rapid Response Notification System (Maricopa County, AZ) and GHG Emissions Reduction Projects, Frito-Lay (Beloit, WI); and in the Transportation Efficiency Innovations category – Leadership in Reducing Ocean-going Vessel Emissions, Maersk Line (Charlotte, NC) and Climate Initiatives Program, Metropolitan Transportation Commission (San Francisco, CA). In addition, EPA awarded the Gregg Cooke Visionary Program Award to the SC Johnson Sustainability Program (Racine, WI). For further information: www.epa.gov/air/cleanairawards/index.html

The Week Ahead

Air and Waste Management Association Conference on Visibility and Air Pollution, in Whitefish, MT – September 24-28, 2012

NACAA 444 North Capitol Street, NW, Suite 307 Washington, DC 20001 Tel: (202) 624-7864/Fax: (202) 624-7863 [email protected]