EPA GHG Regulation
In Brief

In Brief

EPA Clean Air Act Regulation of Greenhouse Gas (GHG) Emissions

On January 2, 2011, the Environmental Protection Agency (EPA) will begin regulating greenhouse gas (GHG) emissions
from stationary sources under the Clean Air Act. EPA’s stationary source regulation risks significant adverse impacts on
investment, expansion and job creation in today’s fragile economy, raises significant legal concerns, and places a
tremendous regulatory burden on state resources.

Why is EPA Regulation of GHGs from Stationary Sources Problematic?

Economic Impacts
• These regulations will eventually impact as many as six million of America’s industrial facilities, power plants, hospitals,
and agricultural and commercial establishments.
• In order to comply, businesses would need to obtain permits before moving forward with construction and
modification. EPA has never estimated the cost to stationary sources.
• EPA has recently released guidance to permitting authorities on determining best available control technology (BACT)
for compliance. However, the guidance still creates uncertainty over what technologies will be required to satisfy the
permits and leaves huge questions as to engineering design and project cost assessment for new construction and
modification of existing facilities. The economy and jobs were major themes in this year’s elections, and the regulatory
uncertainty of this new regulation creates delay, which could result in loss of investment and ultimately jobs.
• The American Council for Capital Formation (ACCF) has estimated that EPA’s GHG regulations on only the most
directly impacted US industries could decrease capital investment by $25 billion to $75 billion and result in an
economy-wide job loss of 476,000 to 1,400,000 jobs.”

Legal Concerns
• Many lawsuits are challenging the legality of the actions EPA has taken to regulate stationary source GHG emissions
under the Clean Air Act.
• EPA’s “Tailoring Rule” finalized in May 2010 raises serious legal issues because it changes Clean Air Act language,
specifying emission thresholds of 100 or 250 tons for regulated pollutants from covered facilities.
• The EPA rule changes thresholds to 75,000 and 100,000 tons for GHG emissions (depending on circumstances).

State Regulatory Burden

• Many states are facing extreme financial strain even without the added permitting requirements of EPA’s regulations.
• If the “Tailoring Rule” fails to withstand legal scrutiny, then every stationary source would need permits and would
result in a huge additional increase in permitting burden on states.

What Should Congress Do?

• The Clean Air Act is fundamentally unsuited to regulate greenhouse gas emissions.
• API urges members of Congress to work together to stop EPA’s regulation of greenhouse gas emissions from
stationary sources.

February 2011