E.P.A. Staff Struggling to Create Pollution Rule

Source: By CORAL DAVENPORT, New York Times • Posted: Wednesday, February 5, 2014

The new regulation would primarily affect the country’s 600 coal-fired power plants, like this one in Texas, and could ultimately shutter hundreds of them. Tom Pennington for The Texas Tribune

WASHINGTON — In marathon meetings and tense all-day drafting sessions, dozens of lawyers, economists and engineers at the Environmental Protection Agency are struggling to create what is certain to be a divisive but potentially historic centerpiece of President Obama’s climate change legacy.

If the authors succeed in writing a lawsuit-proof regulation that is effective in cutting carbon emissions from America’s 1,500 power plants — the largest source of the nation’s greenhouse gas pollution — the result could be the most significant action taken by the United States to curb climate change.

But if the language in the regulation is too loose, there could be little environmental impact. And if it is too stringent, it could lead to the shutdown of coal plants before there is enough alternative power to replace them and, ultimately, to soaring electric bills, power blackouts and years of legal battles.

“Failure is not an option,” said S. William Becker, executive director of theNational Association of Clean Air Agencies, whose members are state and local officials.

In his State of the Union address, Mr. Obama declared his intent to use his authority under the Clean Air Act and a 2007 Supreme Court decision to issue new regulations to curb carbon pollution. He is pressing forward as quickly as possible.

Mr. Obama has ordered the E.P.A. to issue by June 1 the draft of a regulation that will set a national standard for carbon pollution. Early indications are that the regulation will direct states to create and carry out their own plans for meeting the standard.

In addition, the agency is looking closely at a proposal by the Natural Resources Defense Council, a nonprofit group, that could well be the heart of the regulation: states could comply with the rule not just by cleaning or shutting down coal plants, but also by making far broader changes across the electricity system — reducing demand, investing in “smart grid” technology or supporting more renewable sources of energy.

Depending on how the rule is written, states could also comply by enacting “cap and trade” programs, which would cap carbon pollution and create a market for buying and selling pollution permits.

The regulation would primarily affect the 600 power plants in the United States that are fired by coal, and could ultimately shutter hundreds of them, depending on how it is written.

In anticipation, coal-heavy states are extensively lobbying the environmental agency. John Lyons, Kentucky’s assistant secretary for climate change, said the Natural Resources Defense Council proposal “would shut down our coal-fired generation at a certain point, and that’s just unacceptable.”

Overall, coal supplies about 40 percent of the nation’s electricity, but states like Kentucky, Ohio and Missouri rely on coal for 80 percent to 90 percent of their power.

Mr. Lyons’s reaction underscores a central risk of the regulation: Handing so much choice to the states sets up the likelihood that Republican governors opposing climate policy will fight the federal requirement, either by suing the E.P.A. or by refusing to create plans to carry it out.

E.P.A. officials have also been warily watching the troubled rollout of the Affordable Care Act and the 36 governors who balked at setting up state health care exchanges. People close to the climate regulation process say they view the health care rollout as an object lesson in how they need to ease the public reception of what they hope will be a legally bulletproof regulation. The task of writing that language falls chiefly on the shoulders of Joseph Goffman, the agency’s senior counsel in the office of clean air and a 30-year veteran of Clean Air Act legal battles.

The E.P.A. administrator, Gina McCarthy, is in the meantime traveling across the country to meet with governors, coal industry leaders, energy companies and environmentalists to try to smooth the way politically for the rule. Ms. McCarthy, who once worked for Mitt Romney when he was governor of Massachusetts, is known for her ability to get along with Republican governors as well as for her environmental policy expertise.

Top agency officials, including Ms. McCarthy, have also held public listening sessions in 11 cities, and the agency is bolstering the efforts with an online campaign on Twitter, Facebook and Vine, the video-sharing website.

In Washington, Mr. Goffman and his team have held more than 200 meetings with state officials, environmentalists and utilities like the Ohio-based American Electric Power, which owns the nation’s largest fleet of coal-fired plants. John McManus, the power company’s vice president for environmental services, said of the climate regulation, “This could change the whole system of electricity — generation, transmission, distribution.”

However, Mr. McManus said, the E.P.A. is soliciting comments from all sides. “It’s a larger outreach than I’ve seen before, and it’s appropriate,” he said.

The public relations campaign is also aimed at building support for a draft regulation released last September that would limit carbon pollution from future power plants. The rule on existing plants to be released in June will be far more consequential.

Administration officials argue that the urgency of global warming requires rapid and ambitious action and point to a large number of scientific reports concluding that as carbon emissions increase, the coming decades will bring rising sea levels, melting land ice, an increase in the most damaging types of hurricanes, drought in some places and deluges in others — and perhaps even difficulty in producing enough food.

In a 2009 United Nations accord, Mr. Obama pledged that the United States would cut its emissions from 2005 levels 17 percent by 2020 and 83 percent by 2050. Climate policy experts say the new rules will be essential to meeting the 2020 goal, although further action will be required to reach the 2050 goal.

Kentucky coal. Kentucky and other coal-heavy states are extensively lobbying the environmental agency over the new rule. Ben Sklar for The New York Times

People working on the regulation say that White House officials regularly remind them of its urgency. One person even described White House “nagging” — a notable reversal for an administration that slowed down controversial environmental regulations during the 2012 presidential campaign.

Writing the new rule is legally complicated. Although the environmental agency has the authority to issue the regulation, Mr. Goffman and his lawyers will have to employ a rarely used portion of the Clean Air Act that was not specifically written to address climate change.

They could devise a legally cautious rule that has little environmental impact, or they could write an aggressive regulation that would slash emissions but be legally vulnerable.

“The legal interpretation is challenging,” said an E.P.A. official who spoke on the condition of anonymity. “This effectively hasn’t been done.”

The agency’s task is further complicated by Mr. Obama’s tight timeline, intended to complete as much of the regulatory process as possible by the end of his term in early 2017. After the release of the draft in June, the president wants a final version by June 2015. By June 2016, states must submit plans for carrying it out — a challenge for state environmental agencies, which typically have two to three years to write major new regulations.

“It will be a heavy lift,” said Scott Nally, who last month stepped down as Ohio’s top environmental official. In December, Mr. Nally met with environmental agency officials in Washington for a five-and-a-half-hour session aimed at hashing out details of the rule — particularly how states could meet the schedule.

“We rolled up our sleeves,” Mr. Nally said. “We started with coffee and finished with coffee.”

The timeline is also delicate politically. The draft regulation will come out just months before the 2014 midterm elections, when Republican campaigns plan to reignite charges that Democrats are waging a “war on coal.”

Already, the Senate Republican leader, Mitch McConnell of Kentucky, who faces his own-re-election battle this fall, has said he intends to force a vote on the E.P.A’s draft climate rule for new coal plants, making vulnerable Democrats cast a difficult election-year vote.

A coalition of industry lobbies and political advocacy groups are also planning to fight the rules. The American Energy Alliance, which receives funding from Koch Industries, the oil refining conglomerate owned by the billionaire brothers Charles and David Koch, plans to attack the proposal in television and radio ads.

“That’s going to be a big fight, when they roll out the rule for existing plants,” said Tom Pyle, president of the group and a former lobbyist for Koch Industries. “We’ll be ready for them.”