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It's Official: EPA Says Greenhouse Gases a Threat, Regulation Closer Than Ever

As expected, the Environmental Protection Agency declared Monday that greenhouse gases such as carbon dioxide are a threat to public health and welfare. The EPA didn't stop there. It also found that GHG emissions from on-road vehicles contribute to that threat, a ruling that opens the door to direct regulation of greenhouse gas emissions, specifically those from cars. For all of the details, EPA provided the final 284-page ruling.

The findings did not specify an emission reduction requirement. The EPA will finalize its GHG standards proposed earlier this year for new light-duty vehicles, according to information released during a press briefing in Washington D.C. on Monday afternoon. The standards were jointly proposed by the EPA and Department of Transportation in September.

Perhaps, not surprisingly, the oil and gas industry as well as the other business advocates criticized the EPA decision. Jack Gerard, president of American Petroleum Institute, called the action a threat to every American family and business, if it leads to regulation of greenhouse gases under the Clean Air Act.

"It could chill job growth and delay business expansion," he said in an e-mailed statement. "The Clean Air Act was meant to control traditional air pollution, not greenhouse gases that come from every vehicle, home, factory and farm in America. A fit-for-purpose climate law is a much preferred solution."
EPA began to lay the foundation for regulation earlier this year when it established a nationwide greenhouse gas emissions reporting system. Large emitters in the U.S. will begin next month to monitor their emissions. Beginning in 2011, these large emitters will have to submit publicly available information to allow the EPA to track emissions over time. Next spring, large emitters will be required to incorporate the best available methods for controlling greenhouse gas emissions when they plan to construct or expand. And here is the beginning of where the EPA and industry disagree. Oil and gas, along with other industries see this as an economic ball buster. The API, along with numerous other industry groups, are fearful that regulation will cripple business and in turn, hurt profits, which could lead to layoffs etc. Meanwhile, the EPA believes it will "bring to light opportunities to jump-start private investment in energy efficiency and new technologies and products -- saving money, improving bottom lines and growing the economy." The EPA views this as a common sense approach. Industry sees this as a heavy-handed approach and an example of government overstepping its bounds.

In the end, it could push Congress to move more quickly towards passage of a climate-change bill. EPA administrator Lisa P. Jackson repeatedly told reporters attending the briefing and listening in via conference call, that the finding was not meant to replace climate change legislation.

Regardless, it will have real implications for automakers -- and refiners. Efforts to increase fuel efficiency, for example, will further curb gas consumption in the United States, which is good for consumers and reducing emissions, but not so much for the folks selling gas.

Other tidbits from the EPA's announcement:

  • EPA's endangerment finding covers emissions of six key greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.
  • On-road vehicles contribute more than 23 percent of the total U.S. GHG emissions, the agency said.
  • The EPA's proposed standards for light-duty vehicles would reduce GHG emissions by nearly 950 million metric ton and conserve 1.8 billion barrels of oil over the lifetime of model year 2012 to 2016 vehicles.
  • The EPA's final findings are in response to the 2007 U.S. Supreme Court Decision that GHGs fit within the Clean Air Act definition of air pollutants, the agency said.