Will US-EPA Shutdown America’s Economic Recovery over GHG Permits?

President Obama was unable to get the Senate to enact the Waxman- Markey Bill or any other form of his cap and trade legislation. So plan B has been to use Federal regulatory process to do what Congress was unwilling to do.

Ground zero for that effort is the Environmental Protection Agency. It began late last year when EPA issued new rules requires businesses to begin reporting.  Now EPA has issued greenhouse gas best available control technology ‘guidance’ in advance of an expected notice of proposed rulemaking to requires such best technology use.

The problem is what is best available control technology?

That’s apparently the problem EPA is encountering—writing a rule that described what is acceptable as best available control technology is tough to do.   One set of requirements might be appropriate for power generation, another for manufacturers, a third for transportation and so on. So EPA put out a press release and fact sheet to try to explain its strategy.

EPA thought it could start with the biggest emitters and work its way down the food chain.  But rules need to be uniformly applicable if they are going to survive the inevitable legal challenges and EPA will have to assess the economic impact of its proposed rules.

To avoid the problem of a gazillion small business people screaming about new greenhouse gas emission regulations for their lawn care business, or body shop, or whatever EPA is granting “exemptions”.  After a while this is going to look like the mother of all games of playing favorites and will itself subject any rules to a charge that they are arbitrary and capricious.

The big boys in this fight are the electric power industry and particularly the utilities and merchant generators who produce electric power from coal and to a lesser extent natural gas. Beginning next year, electric power producers will need to seek and secure a pre-construction permit from either their state environmental agency or US EPA approving the proposed technology as the best available control technology.  But the states are dropping out of this system because they say they don’t know what the rules will be, don’t have the expertise to test and validate all the available technology options, and don’t have a solid regulatory basis upon which to either grant or deny permits.

US EPA says that it will be up to two years before its regulatory approval process will be ready to considering permit applications.

You see the problem coming don’t you?

If no electric utility or manufacturer or any other emitter of greenhouse gas can get approval on best available control technology then nothing will happen.  No construction, no jobs for construction workers, no materials purchased—and no way of knowing when EPA will make a decision.  But it might grant exemptions for small emitters.  But it probably will not grant exemptions to utilities that need to keep the lights on and the electricity reliably available to power America’s economic recovery.

And one more thing—all of this is going to hit the fan just as President Obama begins to run for re-election touting how much his Administration is doing to create jobs and stimulate our economic recovery—-except for the matter of a de facto regulatory moratorium on all new construction because of  these EPA permits.