New Legal Brief Argues Against Regulation of Greenhouse Gases

D.C., March 21, 2008—Today the
Competitive Enterprise Institute is filing an amicus brief against a
Sierra Club petition demanding that EPA regulate carbon dioxide (CO2) emissions
from new electric power plants.

CEI is joined by Freedom Works, National Center for Public
Policy Research, American Conservative Union, American Legislative Exchange
Council, Americans for Prosperity Foundation, Americans for Tax
Reform, Citizens Against Government Waste, Congress of Racial Equality, Frontiers
of Freedom Institute, Independent Women’s Forum, National Center for Policy
Analysis, National Taxpayers Union, and 60 Plus Association.

Background: The Clean Air Act’s Prevention
of Significant Deterioration (PSD) program is a pre-construction permitting
program. In areas where the air meets National Ambient Air Quality Standards
(NAAQS), companies must first obtain a PSD permit to begin construction of
"major" new stationary sources of regulated air
pollutants (or to modify existing major sources, if the
modification would increase emissions). A source is defined as
"major" if it is in one of 28 industrial categories and emits at
least 100 tons of a regulated pollutant per year, or is any other type of
facility and emits at least 250 tons a year.

To obtain a permit, major stationary sources must install
"best available control technology" (BACT) for the pollutants of
concern. EPA Region 8 issued a PSD permit to Deseret Electric Power
Cooperative, allowing Deseret to build a new coal-fired power plant in Bonanza,
Utah. The
Sierra Club has petitioned EPA’s Environmental Appeals Board to deny the permit
on the grounds that EPA Region 8 did not require Deseret
to install BACT for CO2 emissions.

Why CEI and others are filing this brief: The
purpose of the Clean Air Act is to protect public health and welfare from
hazards created by airborne pollutants. The Act’s fundamental logic
requires that EPA first determine the dangerousness of an air pollutant
before taking steps to regulate it. In the case of CO2, EPA has not yet issued
a finding that CO2 emissions endanger public health or welfare. Sierra
Club’s “regulate
first, ask questions” later approach stands the
logic of the Clean Air Act on its head.

The Sierra Club claims that the Supreme Court global warming
case, Massachusetts v. EPA (April 2, 2007), supports its position that
CO2 is an air pollutant currently "subject to regulation" for
purposes of the PSD program.

"The Sierra Club’s petition is preposterous," said
CEI Senior Fellow, Marlo Lewis.
"The issue in Mass. v. EPA was whether EPA had to regulate CO2
emissions from new motor vehicles, under Section 202, a provision dealing
solely with mobile source emissions. The Court specifically said it was not
ordering EPA to establish new tailpipe standards, nor even that EPA had to
issue or deny an endangerment finding regarding CO2, only that EPA’s action or
inaction must be grounded in the statute. In no way, shape, or form, did the
Court tell EPA it had to regulate CO2 emissions from stationary sources,
such as the Bonanza power plant."

If Sierra Club wins the litigation, potentially
hundreds of thousands of previously unregulated small- to mid-sized farms,
factories, and buildings would have to go through the costly and time-consuming
PSD permitting process, because the statutory threshold
for regulation under PSD is 250 tons a year. "Two hundred and fifty
tons may be a significant amount of smog- or soot-forming emissions, but it is
a miniscule amount of CO2,” said Lewis. A commercial kitchen that uses
natural gas for cooking, or a mid-sized office building heated with gas or oil
probably emits 250 tons of CO2 annually.

PSD permits can take more than a year and hundreds of
thousands to millions of dollars to obtain. If PSD is applied to CO2, EPA
and its state-level counterparts will likely be flooded with permit
applications, diverting administrative resources from more critical,
statutorily-required Clean Air Act responsibilities. Construction activities
around the country could come to a screeching halt.

"We could end up with the regulatory equivalent of a
dozen Kyoto Protocols yet without Congress ever voting on it or any
of the Sierra Club’s allies on the Hill taking any responsibility
for the administrative morass and damage to the economy," said Lewis.