April 6, 2010 / 9:29 PM / 10 years ago

US rules on smokestack greenhouse gases out soon

* “Tailoring” rule expected out by end of month

* Would limit rules to larger polluters like power plants

By Timothy Gardner

WASHINGTON, April 6 (Reuters) - The U.S. Environmental Protection Agency will soon issue rules that will determine which power plants and factories will face greenhouse gas regulations, an agency official said on Tuesday.

The measure, known as the “tailoring rule,” will set emissions thresholds for the big emitters of gases blamed for warming the planet, such as coal-fired power plants and plants that make cement and glass.

EPA Administrator Lisa Jackson said earlier this year that only plants that emit 75,000 tonnes per year or more of carbon dioxide are likely to be be regulated under the rule in the next two years. The EPA wants to limit U.S. Clean Air Act regulations, or “tailor” them, so they apply only to larger polluters to avoid overwhelming federal and state agencies with paperwork.

“We’re expecting that rule to be done very shortly, hopefully by the end of the month,” said Gina McCarthy, an assistant administrator at the Environmental Protection Agency, told a conference.

Regulated plants would be required to hold permits demonstrating that they are using the latest technology to pare back emissions. They could also face other future EPA greenhouse gas regulations if Congress fails to pass a climate bill.

The Obama administration has long said it prefers that Congress pass legislation to limit greenhouse gases.

But with climate legislation stalled in Congress, the EPA has begun to issue rules that are expected to help cut emissions — which has angered some U.S. lawmakers and industry.

The 75,000 tonne threshold could lead to a rash of lawsuits against the EPA as it pits big power plants against small ones, said Kevin Book, an analyst at ClearView Energy Partners.

Companies such as Calpine Corp CPN.N, Southern (SO.N), Dynegy Inc DYN.N may benefit because they have “peaker” power plants that only run during times of heavy demand. The plants rake in profits during high times of high power demand but they may escape regulations because their annual emissions are small.

But any company that owns huge power plants that are on most of the time, including the above ones, could face additional costs that small plants would avoid, Book said.

“The short road to a law suit is picking winners and losers in an industry,” Book said about the rule, which he suspects will lead to an increase in litigation against the EPA.

EPA’s McCarthy said the agency is used to lawsuits and will carry on. Last week the EPA issued the first ever U.S. limits on greenhouse gas emissions from vehicles. [ID:nN01242702]

Starting next year the EPA will also require stationary sources of the gases, such as power companies and manufacturers, to get permits saying new plants or expansions use the best available technology to cut emissions.

McCarthy said the agency is trying to quell fears that the coming rules will require all big plants to use expensive, untested technology such as carbon capture and storage, or CCS. That method would allow snaring of the gas before it reaches the smokestack and socking it away for permanent storage.

“We’ve had discussions with industry sectors that are concerned they we’re going to be requiring CCS for all facilities out there,” McCarthy told reporters.

“Clearly the rules under the Clean Air Act that we are going to be implementing look at moving forward already demonstrated technologies, not innovative technologies that have yet to be properly demonstrated,” she said.

Reporting by Timothy Gardner; Editing by Lisa Shumaker

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