Regulating Greenhouse Gas Emissions Under the Clean Air Act, 44354-44520 [E8-16432]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 73, Number 147 (Wednesday, July 30, 2008)]
[Proposed Rules]
[Pages 44354-44520]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16432]



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Part II





Environmental Protection Agency





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40 CFR Chapter I



Regulating Greenhouse Gas Emissions Under the Clean Air Act; Proposed 
Rule

Federal Register / Vol. 73, No. 147 / Wednesday, July 30, 2008 / 
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Chapter I

[EPA-HQ-OAR-2008-0318; FRL-8694-2]
RIN 2060-AP12


Regulating Greenhouse Gas Emissions Under the Clean Air Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Advance Notice of Proposed Rulemaking.

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SUMMARY: This advance notice of proposed rulemaking (ANPR) presents 
information relevant to, and solicits public comment on, how to respond 
to the U.S. Supreme Court's decision in Massachusetts v. EPA. In that 
case, the Supreme Court ruled that the Clean Air Act (CAA or Act) 
authorizes regulation of greenhouse gases (GHGs) because they meet the 
definition of air pollutant under the Act. In view of the potential 
ramifications of a decision to regulate GHGs under the Act, the notice 
reviews the various CAA provisions that may be applicable to regulate 
GHGs, examines the issues that regulating GHGs under those provisions 
may raise, provides information regarding potential regulatory 
approaches and technologies for reducing GHG emissions, and raises 
issues relevant to possible legislation and the potential for overlap 
between legislation and CAA regulation. In addition, the notice 
describes and solicits comment on petitions the Agency has received to 
regulate GHG emissions from ships, aircraft and nonroad vehicles such 
as farm and construction equipment. Finally, the notice discusses 
several other actions concerning stationary sources for which EPA has 
received comment regarding the regulation of GHG emissions.
    The implications of a decision to regulate GHGs under the Act are 
so far-reaching that a number of other federal agencies have offered 
critical comments and raised serious questions during interagency 
review of EPA's ANPR. Rather than attempt to forge a consensus on 
matters of great complexity, controversy, and active legislative 
debate, the Administrator has decided to publish the views of other 
agencies and to seek comment on the full range of issues that they 
raise. These comments appear in the Supplemental Information, below, 
followed by the June 17 draft of the ANPR preamble prepared by EPA, to 
which the comments apply. None of these documents represents a policy 
decision by the EPA, but all are intended to advance the public debate 
and to help inform the federal government's decisions regarding climate 
change.

DATES: Comments must be received on or before November 28, 2008.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2008-0318, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     E-mail: a-and-rDocket@epa.gov.
     Fax: 202-566-9744.
     Mail: Air and Radiation Docket and Information Center, 
Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460. In addition, please mail a copy of 
your comments on the information collection provisions to the Office of 
Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 
20503.
     Hand Delivery: EPA Docket Center, EPA West Building, Room 
3334, 1301 Constitution Ave., NW., Washington DC, 20004. Such 
deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2008-0318. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or e-mail. 
The www.regulations.gov Web site is an ``anonymous access'' system, 
which means EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov 
your e-mail address will be automatically captured and included as part 
of the comment that is placed in the public docket and made available 
on the Internet. If you submit an electronic comment, EPA recommends 
that you include your name and other contact information in the body of 
your comment and with any disk or CD-ROM you submit. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at https://www.epa.gov/epahome/dockets.htm. For additional 
instructions on submitting comments, go to Section VII, Public 
Participation, of the SUPPLEMENTARY INFORMATION section of this 
document.
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at the Air and Radiation Docket 
and Information Center, EPA/DC, EPA West, Room 3334, 1301 Constitution 
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Joe Dougherty, Office of Air and 
Radiation, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone 
number: (202) 564-1659; fax number: (202) 564-1543; e-mail address: 
Dougherty.Joseph-J@epa.gov.

SUPPLEMENTARY INFORMATION: 

Preface From the Administrator of the Environmental Protection Agency

    In this Advanced Notice of Proposed Rulemaking (ANPR), the 
Environmental Protection Agency (EPA) seeks comment on analyses and 
policy alternatives regarding greenhouse gas (GHG) effects and 
regulation under the Clean Air Act. In particular, EPA seeks comment on 
the document entitled ``Advanced Notice of Proposed Rulemaking: 
Regulating Greenhouse Gas Emissions under the Clean Air Act'' and 
observations and issues raised by other federal agencies. This notice 
responds to the U.S. Supreme Court's decision in Massachusetts v. EPA 
and numerous petitions related to the potential regulation of 
greenhouse gas emissions under the Clean Air Act.
    EPA's analyses leading up to this ANPR have increasingly raised

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questions of such importance that the scope of the agency's task has 
continued to expand. For instance, it has become clear that if EPA were 
to regulate greenhouse gas emissions from motor vehicles under the 
Clean Air Act, then regulation of smaller stationary sources that also 
emit GHGs--such as apartment buildings, large homes, schools, and 
hospitals--could also be triggered. One point is clear: The potential 
regulation of greenhouse gases under any portion of the Clean Air Act 
could result in an unprecedented expansion of EPA authority that would 
have a profound effect on virtually every sector of the economy and 
touch every household in the land.
    This ANPR reflects the complexity and magnitude of the question of 
whether and how greenhouse gases could be effectively controlled under 
the Clean Air Act. This document summarizes much of EPA's work and lays 
out concerns raised by other federal agencies during their review of 
this work. EPA is publishing this notice today because it is impossible 
to simultaneously address all the agencies' issues and respond to our 
legal obligations in a timely manner.
    I believe the ANPR demonstrates the Clean Air Act, an outdated law 
originally enacted to control regional pollutants that cause direct 
health effects, is ill-suited for the task of regulating global 
greenhouse gases. Based on the analysis to date, pursuing this course 
of action would inevitably result in a very complicated, time-consuming 
and, likely, convoluted set of regulations. These rules would largely 
pre-empt or overlay existing programs that help control greenhouse gas 
emissions and would be relatively ineffective at reducing greenhouse 
gas concentrations given the potentially damaging effect on jobs and 
the U.S. economy.
    Your input is important. I am committed to making the data and 
models EPA is using to form our policies transparent and available to 
the public. None of the views or alternatives raised in this notice 
represents Agency decisions or policy recommendations. It is premature 
to do so. Rather, I am publishing this ANPR for public comment and 
review. In so doing, I am requesting comment on the views of other 
federal agencies that are presented below including important legal 
questions regarding endangerment. I encourage the public to (1) 
understand the magnitude and complexity of the Supreme Court's 
direction in Massachusetts v. EPA and (2) comment on the many questions 
raised in this notice.
BILLING CODE 6560-50-P

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Department of Transportation

    The Department of Transportation (``the Department'' or ``DOT'') 
hereby submits the following preliminary comments on the Environmental 
Protection Agency (``EPA'') staff's draft Advance Notice of Proposed 
Rulemaking ``Regulating Greenhouse Gas Emissions under the Clean Air 
Act,'' which was submitted to the Office of Management and Budget on 
June 17, 2008 (``June 17 draft'' or ``draft''). In view of the very 
short time the Department has had to review the document, DOT will 
offer a longer, more detailed response by the close of the comment 
period.

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General Considerations

    In response to Massachusetts v. EPA and multiple rulemaking 
petitions, the EPA must consider whether or not greenhouse gases may 
reasonably be anticipated to endanger public health or welfare, within 
the meaning of the Clean Air Act. Such a determination requires the 
resolution of many novel questions, such as whether global or only U.S. 
effects should be considered, how imminent the anticipated endangering 
effects are, and how greenhouse gases are to be quantified, to name 
just a few. Without resolving any of these questions, let alone 
actually making an endangerment finding, the June 17 draft presents a 
detailed discussion of regulatory possibilities. In other words, the 
draft suggests an array of specific regulatory constructs in the 
transportation sector under the Clean Air Act without the requisite 
determinations that greenhouse gas emissions endanger public health or 
welfare and that regulation is feasible and appropriate. In fact, to 
propose specific regulations prejudices those critical determinations 
and reveals a predilection for regulation that may not be justified.
    Policymakers and the public must consider a broader question: even 
if greenhouse gas regulation using a law designed for very different 
environmental challenges is legally permissible, is it desirable? We 
contend that it is not. We are concerned that attempting to regulate 
greenhouse gases under the Clean Air Act will harm the U.S. economy 
while failing to actually reduce global greenhouse gas emissions. Clean 
Air Act regulation would necessarily be applied unevenly across 
sources, sectors, and emissions-causing activities, depending on the 
particular existing statutory language in each section of the Act. 
Imposing Clean Air Act regulations on U.S. businesses, without an 
international approach that involves all of the world's major emitters, 
may well drive U.S. production, jobs, and emissions overseas, with no 
net improvement to greenhouse gas concentrations.
    The Department believes that the Nation needs a well considered and 
sustainable domestic climate change policy that takes into account the 
best climatological, technical and economic information available. That 
policy--as with any significant matter involving Federal law and 
regulation--should also reflect a national consensus that the actions 
in question are justified and effective, and do not bring with them 
substantial unintended consequences or unacceptable economic costs. 
Reducing greenhouse gas emissions across the various sectors of our 
economy is an enormous challenge that can be met effectively only 
through the setting of priorities and the efficient allocation of 
resources in accordance with those priorities.
    It is an illusion to believe that a national consensus on climate 
policy can be forged via a Clean Air Act rulemaking. Guided by the 
provisions of a statute conceived for entirely different purposes--and 
unconstrained by any calculation of the costs of the specific 
regulatory approaches it contemplates--such a rulemaking is unlikely to 
produce that consensus.
    Administrator Johnson of the EPA said in a recent speech, ``now is 
the time to begin the public debate and upgrade [the Clean Air Act's] 
components.'' Administrator Johnson has called for fundamental changes 
to the Clean Air Act ``to consider benefits, costs, risk tradeoffs and 
feasibility in making decisions about how to clean the air.'' This, of 
course, is a criticism of the Clean Air Act's ability to address its 
intended purposes, let alone purposes beyond those Congress 
contemplated. As visualized in the June 17 draft, the U.S. economy 
would be subjected to a complex set of new regulations administered by 
a handful of people with little meaningful public debate and no ability 
to consider benefits, costs, risk tradeoffs and feasibility. This is 
not the way to set public policy in an area critical to our environment 
and to our economy.
    As DOT and its fellow Cabinet departments argue in the cover letter 
to these Comments, using the Clean Air Act as a means for regulating 
greenhouse gas emissions presents insurmountable obstacles. For 
instance, Clean Air Act provisions that refer to specific pollutants, 
such as sulfur dioxide, have been updated many times over the past 
three decades. In contrast, the language referring to unspecified 
pollutants, which would apply to greenhouse gases, retains, in fossil 
form, the 1970s idea that air pollution is a local and regional scale 
problem, with pollution originating in motor vehicles and a few large 
facilities, for which ``end of pipe'' control technologies exist or 
could be invented at acceptable cost. Greenhouse gas emissions have 
global scale consequences, and are emitted from millions of sources 
around the world. If implemented, the actions that the draft 
contemplates would significantly increase energy and transportation 
costs for the American people and U.S. industry with no assurance that 
the regulations would materially affect global greenhouse gas 
atmospheric concentrations or emissions.

Transportation-Related Considerations

    As the Nation's chief transportation regulatory agency, the 
Department has serious concerns about the draft's approach to mobile 
sources, including, but not limited to, the autos, trucks, and aircraft 
that Section VI of the draft considers regulating.
    Title II of the Clean Air Act permits the use of technology-forcing 
regulation of mobile sources. Yet Section VI of the draft appears to 
presume an endangerment finding with respect to emissions from a 
variety of mobile sources and then strongly suggests the EPA's intent 
to regulate the transportation sector through an array of source-
specific regulations. Thus, much of Section VI is devoted to describing 
and requesting information appropriate to setting technology-forcing 
performance standards for particular categories of vehicles and engines 
based on an assessment of prospective vehicle and engine technology in 
each source category.
    In its focus on technology and performance standards, the draft 
spends almost no effort on assessing how different regulatory 
approaches might vary in their effectiveness and compliance costs. This 
despite the fact that picking an efficient, effective, and relatively 
unintrusive regulatory scheme is critically important to the success of 
any future program--and far more important at this stage than 
identifying the cost-effectiveness of speculative future technologies.
    The draft fails to identify the market failures or environmental 
externalities in the transportation sector that regulation might 
correct, and, in turn, what sort of regulation would be best tailored 
to correcting a specific situation. Petroleum accounts for 99 percent 
of the energy use and greenhouse gas emissions in the transportation 
sector. Petroleum prices have increased fivefold since 2002. Rising 
petroleum prices are having a powerful impact on airlines, trucking 
companies, marine operators, and railroads, and on the firms that 
supply vehicles and engines to these industries. Petroleum product 
prices have doubled in two years, equivalent to a carbon tax of $200 
per metric ton, far in excess of the cost of any previously 
contemplated climate change measure. Operators are searching for every 
possible operating economy, and capital equipment manufacturers are 
fully aware that fuel efficiency is a critical selling point for new 
aircraft, vehicles, and engines. At this point, regulations could 
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more powerful incentive for commercial operators than that already 
provided by fuel prices. Badly designed performance standards would be 
at best non-binding (if private markets demand more efficiency than the 
regulatory standard) or would actually undermine efficient deployment 
of fuel efficient technologies (if infeasible or non-cost-effective 
standards are required).
Light Duty Vehicles
    On December 19, 2007, the President signed the Energy Independence 
and Security Act (``EISA''), which requires the Department to implement 
a new fuel economy standard for passenger cars and light trucks. The 
Department's National Highway Traffic Safety Administration (``NHTSA'') 
has moved swiftly to comply with this law, issuing a Notice of Proposed 
Rulemaking (``NPRM'') on April 22, 2008. The comment period for this 
NPRM closed on July 1, 2008. If finalized in its present form, the rule 
would reduce U.S. carbon dioxide emissions by an estimated 521 million 
metric tons over the lifetime of the regulated vehicles.
    This NPRM is only the latest in a series of NHTSA Corporate Average 
Fuel Economy (``CAFE'') program rules proposed or implemented during 
this Administration. Indeed, these proposals together represent the 
most aggressive effort to increase the fuel economy (and therefore to 
reduce the emissions) of the U.S. fleet since the inception of the CAFE 
program in 1975.
    In enacting EISA, Congress made careful and precise judgments about 
how standards are to be set for the purpose of requiring the 
installation of technologies that reduce fuel consumption. Although 
almost all technologies that reduce carbon dioxide emissions do so by 
reducing fuel consumption, the EPA staff's June 17 draft not only 
ignores those congressional judgments, but promotes approaches 
inconsistent with those judgments.
    The draft includes a 100-page analysis of a tailpipe carbon dioxide 
emissions rule that has the effect of undermining NHTSA's carefully 
balanced approach under EISA. Because each gallon of gasoline contains 
approximately the same amount of carbon, and essentially all of the 
carbon in fuel is converted to carbon dioxide, a tailpipe carbon 
dioxide regulation and a fuel economy regulation are essentially 
equivalent: they each in effect regulate fuel economy.
    In the draft's analysis of light duty vehicles, the external 
benefits of reducing greenhouse gas emissions account for less than 15 
percent of the total benefits of improving vehicle efficiency, with the 
bulk of the benefits attributable to the market value of the gasoline 
saved. Only rather small marginal reductions in fuel consumption or 
greenhouse gas emissions would be justified by external costs in 
general, and climate change benefits in particular. Thus, the draft 
actually describes fuel economy regulations, which generate primarily 
fuel savings benefits, under the rubric of environmental policy.
    Though it borrows an analytical model provided by NHTSA, the draft 
uses differing assumptions and calculates the effects of the Agency's 
standard differently than does the rule NHTSA proposed pursuant to 
EISA. The draft conveys the incorrect impression that the summary 
numbers such as fuel savings, emission reductions, and economic 
benefits that are presented in the draft are comparable with those 
presented in NHTSA's NPRM, when in fact the draft's numbers are 
calculated differently and, in many cases, using outdated information.
    The draft does not include the provisions of EISA or past, current, 
or future CAFE rulemakings in its baseline analysis of light duty 
vehicle standards. Thus, the draft inflates the apparent benefits of a 
Clean Air Act light duty vehicle rulemaking when much of the benefits 
are already achieved by laws and regulations already on the books. The 
draft fails to ask whether additional regulation of light duty vehicles 
is necessary or desirable, nor gives any serious consideration how 
Clean Air Act and EISA authorities might be reconciled.
    The draft comprehensively mischaracterizes the available evidence 
on the relationship between safety and vehicle weight. In the draft, 
EPA asserts that the safety issue is ``very complex,'' but then adds 
that it disagrees with the views of the National Academy of Sciences 
(NAS) and NHTSA's safety experts, in favor of the views of a two-person 
minority on the NAS panel and a single, extensively criticized article.
    Much of the text of this portion of the draft is devoted to a 
point-by-point recitation and critique of various economic and 
technological assumptions that NHTSA, the Office of Management and 
Budget, and other Federal agencies--among them EPA--painstakingly 
calculated over the past year, but that EPA now unilaterally revises 
for this draft. It is not clear why it is necessary or desirable to use 
one set of analytical assumptions, while the rest of the Federal 
Government uses another.
    The public interest is ill-served by having two competing 
proposals, put forth by two different agencies, both purporting to 
regulate the same industry and the same products in the same ways but 
with differing stringencies and enforcement mechanisms, especially 
during a time of historic volatility in the auto industry and mere 
months after Congress passed legislation tasking another agency with 
regulation in this area. The detailed analysis of a light duty vehicle 
rule in the draft covers the same territory as does NHTSA's current 
rulemaking--and is completely unnecessary for the purposes of an 
endangerment finding or for seeking comment on the best method of 
regulating mobile source emissions.
Setting Air Quality Standards
    The discussion of the process for setting National Ambient Air 
Quality Standards (``NAAQS'') and development of state/Federal 
implementation plans for greenhouse gases is presented as an option for 
regulating stationary sources, and is placed in the discussion of 
stationary sources. The draft describes a scenario in which the entire 
country is determined to be in nonattainment.
    Such a finding would reach beyond power plants and other 
installations to include vital transportation infrastructure such as 
roads, bridges, airports, ports, and transit lines. At a time when our 
country critically needs to modernize our transportation 
infrastructure, the NAAQS that the draft would establish--and the 
development of the implementation plans that would follow--could 
seriously undermine these efforts. Because the Clean Air Act's 
transportation and general conformity requirements focus on local 
impacts, these procedures are not capable of assessing and reducing 
impacts of global pollutants without substantial disruption and waste.
    If the entire Nation were found to be in nonattainment for carbon 
dioxide or multiple greenhouse gases, and transportation and general 
conformity requirements applied to Federal activities, a broad range of 
those activities would be severely disrupted. For example, application 
of transportation conformity requirements to all metropolitan area 
transportation plans would add layers of additional regulations to an 
already arduous Federal approval process and expand transportation-
related litigation without any assurance that global greenhouse gas 
emissions would be reduced. Indeed, needed improvements to airports, 
highways and transit systems that would make the transportation system 
more efficient, and thus help reduce greenhouse gas and other 
emissions, could be precluded due to

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difficulties in demonstrating conformity. Though the potential for such 
widespread impact is clear from even a cursory reading of the draft, it 
ignores the issue entirely.
    For these reasons, we question the practicality and value of 
establishing NAAQS for greenhouse gases and applying such a standard to 
new and existing transportation infrastructure across the Nation.
Heavy Duty Vehicles
    The draft contemplates establishing a greenhouse gas emissions 
standard for heavy duty vehicles such as tractor-trailers. The draft's 
discussion of trucks makes no mention of the National Academy of 
Sciences study required by Section 108 of EISA that would evaluate 
technology to improve medium and heavy-duty truck fuel efficiency and 
costs and impacts of fuel efficiency standards that may be developed 
under 49 U.S.C. Section 32902(k), as amended by section 102(b) of EISA. 
This section directs DOT, in consultation with EPA and DOE, to 
determine test procedures for measuring and appropriate procedures for 
expressing fuel efficiency performance, and to set standards for 
medium- and heavy-duty truck efficiency. DOT believes that it is 
premature to review potential greenhouse gas emission standards for 
medium- and heavy-duty trucks in light of this study and anticipated 
future standard-setting action under EISA, and, in any event, that it 
is problematic to do so with no accounting of the costs that these 
standards might impose on the trucking industry.
    In the case of light duty vehicles, it can be argued that consumers 
do not accurately value fuel economy, and regulation can correct this 
failure. Heavy-duty truck operators, on the other hand, are acutely 
sensitive to fuel costs, and their sensitivity is reflected in the 
product offerings of engine and vehicle manufacturers. The argument for 
fuel economy or tailpipe emissions regulation is much harder to make 
than in the case of light duty vehicles.
    The medium and heavy truck market is more complex and diverse than 
the light duty vehicle market, incorporating urban delivery vans, on-
road construction vehicles, work trucks with power-using auxiliaries, 
as well as the ubiquitous long-haul truck-trailer combinations. 
Further, a poorly designed performance standard that pushes operators 
into smaller vehicles may result in greater and not fewer of the 
emissions the draft intends to reduce. Because freight-hauling 
performance is maximized by matching the vehicle to the load, one 
large, high horsepower truck will deliver a large/heavy load at a lower 
total and fuel cost than the same load split into two smaller, low 
horsepower vehicles.
Railroads
    The Clean Air Act includes a special provision for locomotives, 
Section 213(a)(5), which permits EPA to set emissions standards based 
on the greatest emission reduction achievable through available 
technology. The text of the draft suggests that EPA may consider such 
standards to include hybrid diesel/electric locomotives and the 
application of dynamic braking.
    As in other sectors, it is hard to imagine how a technology-forcing 
regulation can create greater incentives than provided by recent oil 
prices. And sensible public policy dictates caution against imposing 
unrealistic standards or mandating technology that is not cost-
effective, not reliable, or not completely developed.
Marine Vessels
    The International Maritime Organization (``IMO'') sets voluntary 
standards for emissions from engines used in ocean-going marine vessels 
and fuel quality through the MARPOL Annex VI (International Convention 
for the Prevention of Pollution from Ships, 1973, as modified by the 
Protocol of 1978 relating thereto (``MARPOL''), Annex VI, Prevention of 
Air Pollution from Ships). Member parties apply these voluntary 
standards through national regimes. The IMO is also working to consider 
ways to address greenhouse gas emissions from vessels and marine 
transportation, including both vessel-based and operational measures. 
The U.S. is a participant in these discussions. We believe that the 
discussion of ways to reduce greenhouse gas emissions from vessels and 
marine transportation should reference the IMO voluntary measures and 
discussions, and need not address detailed technological or operational 
measures.
Aviation
    The draft includes a lengthy discussion of possible methods by 
which to regulate the greenhouse gas emissions of aircraft. For all its 
detail, however, the draft does not provide adequate information (and 
in some instances is misleading) regarding aviation emissions related 
to several important areas: (1) The overwhelming market pressures on 
commercial airlines to reduce fuel consumption and therefore carbon 
dioxide emissions and the general trends in aviation emissions growth; 
(2) expected technology and operational improvements being developed 
under the interagency Next Generation Air Transportation System 
(``NextGen'') program; (3) the work and role of the International Civil 
Aviation Organization (``ICAO'') in aviation environmental matters; (4) 
limits on EPA's ability to impose operational controls on aviation 
emission; and (5) the scientific uncertainty regarding greenhouse gas 
emissions from aircraft.
    First, the draft does not provide the public an accurate picture of 
aviation emissions growth. Compared to 2000, U.S. commercial aviation 
in 2006 moved 12 percent more passengers and 22 percent more freight 
while burning less fuel, thereby reducing carbon output. Further, the 
draft's projections of growth in emissions are overstated because they 
do not reflect technology improvements in aircraft or air traffic 
operations and apparently do not take into account the industry's 
ongoing contraction or even the sustained increase in aviation jet fuel 
prices in 2007 and 2008. That increase (in 2008, U.S. airlines alone 
will spend $60 billion for fuel, compared to $16 billion in 2000) 
provides an overwhelming economic incentive for a financially troubled 
industry to reduce fuel consumption. Because reduction of a gallon of 
jet fuel displaces about 21 pounds of carbon dioxide, that incentive is 
the single most effective tool for reducing harmful emissions available 
today. Yet the draft makes no note of the trend.
    Second, the draft does not adequately address the multi-agency 
NextGen program, one of whose principal goals is to limit or reduce the 
impact of aviation emissions on the global climate. This includes 
continued reduction of congestion through modernization of the air 
traffic control system, continued research on aircraft technologies and 
alternative fuels, and expanded deployment of operational advances such 
as Required Navigation Performance that allow aircraft to fly more 
direct and efficient routes in crowded airspace. Through NextGen, the 
Department's Federal Aviation Administration (FAA), in cooperation with 
private sector interests, is actively pursuing operational and 
technological advances that could result in a 33 percent reduction in 
aircraft fuel burn and carbon dioxide emissions.
    Third, the draft gives short shrift to the Administration's efforts 
to reduce aviation emissions through a multilateral ICAO process, and 
it contemplates regulatory options either never analyzed by EPA or the 
aviation community for aircraft (``fleet

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averaging''\1\) or previously rejected by ICAO itself (flat carbon 
dioxide standards). The FAA has worked within the ICAO process to 
develop guidance for market-based measures, including adoption at the 
2007 ICAO Assembly of guidance for emissions trading for international 
aviation. ICAO has established a Group on International Aviation and 
Climate Change that is developing further recommendations to address 
the aviation impacts of climate change.\2\ The FAA's emphasis on 
international collaboration is compelled by the international nature of 
commercial aviation and the fact that performance characteristics of 
engines and airframes--environmental and otherwise--work best when they 
maximize consistency among particular national regulations.\3\
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    \1\ The concept of ``fleet averaging,'' though used for 
automobiles, has never been applied to aviation or considered by 
either ICAO or FAA as a basis for standard setting. The draft offers 
little indication of why the concept would be worth serious 
consideration, and it is difficult to understand how that could be, 
given that manufacturers turn out only several hundred commercial 
airplanes for ``averaging'' annually, compared to over a million 
light duty vehicles per year built by large manufacturers. In any 
event, if further analysis supports the viability of fleet 
averaging, the appropriate venue for pursuing this would be through 
ICAO--so that aviation experts from around the world can assess the 
concept.
    \2\ In this context, we note that the draft invites comment on 
proposals in the European Union regarding an emissions trading 
scheme to be imposed by the EU on all Europe-connected commercial 
operations. The U.S. Government, led by the Department of State, has 
repeatedly argued that any of these proposals, if enacted, would 
violate international aviation law and has made clear its opposition 
to the proposals in ICAO and other international fora. It is curious 
that the EPA would solicit comments on the benefits of proposals 
that the United States (along with numerous other nations) opposes 
as unlawful and unworkable.
    \3\ The draft is potentially misleading in suggesting that the 
fuel flow rate data reported for the ICAO landing and takeoff cycle 
engine emissions certification process, and the carbon dioxide 
emissions concentrations data collected for calculation and 
calibration purposes may be used as the basis for a carbon dioxide 
standard.
---------------------------------------------------------------------------

    Fourth, the draft invites comments on potential aviation 
operational controls that might have emissions benefits. But proposals 
for changes to airspace or air traffic operational procedures usurp the 
FAA's responsibility as the Nation's aviation safety regulator and air 
traffic manager. It is inappropriate for the EPA to suggest operational 
controls without consideration of the safety implications that the FAA 
is legally required to address.
    Finally, the draft does not accurately present the state of 
scientific understanding of aviation emissions and contains misleading 
statements about aviation emissions impacts. The report of the 
Intergovernmental Panel on Climate Change (cited in the draft but often 
ignored) more clearly conveys cautions about underlying uncertainties 
associated with regulating aviation emissions. For instance, the IPCC 
specifically concludes that water vapor is a small contributor to 
climate change, yet the draft focuses on condensation trails produced 
by water vapor and includes an inaccurate statement that carbon dioxide 
and water vapor are ``the major compounds from aircraft operations that 
are related to climate change.'' Further, the draft does not convey the 
significant scientific uncertainty associated with measuring 
particulate matter (PM) emissions from aircraft engines. That 
understanding needs to be significantly improved before any 
``tailpipe'' PM standard could sensibly be considered.

Conclusion

    The EPA has made an enormous effort in assembling the voluminous 
data that contributed to the draft as published today. However, because 
the draft does not adequately identify or discuss the immense 
difficulties and burdens, and the probable lack of attendant benefits, 
that would result from use of the Clean Air Act to regulate GHG 
emissions, DOT respectfully submits these preliminary comments to point 
out some of the problematic aspects of the draft's analysis regarding 
the transportation sector. We anticipate filing additional comments 
before the close of the comment period.

Department of Energy

I. Introduction

    The U.S. Department of Energy (Department or DOE) strongly supports 
aggressively confronting climate change in a rational manner that will 
achieve real and sustainable reductions in global greenhouse gas (GHG) 
emissions, promote energy security, and ensure economic stability. In 
support of these goals, DOE believes that the path forward must include 
a comprehensive public discussion of potential solutions, and the 
foreseeable impacts of those proposed solutions--including impacts on 
energy security and reliability, on American consumers, and on the 
Nation's economy.
    The Department supports the actions taken by the United States to 
date to address global climate change and greenhouse gas emissions, and 
believes these efforts should be continued and expanded. These actions 
have included a broad combination of market-based regulations, large 
increases in funding for climate science, new government incentives for 
avoiding, reducing or sequestering GHG emissions, and enormous 
increases in funding for technology research. The Department has played 
a significant role in implementing many of these initiatives, including 
those authorized by the Energy Policy Act of 2005 and the Energy 
Independence and Security Act of 2007.
    The Department believes that an effective and workable approach to 
controlling GHG emissions and addressing global climate change should 
not simply consist of a unilateral and extraordinarily burdensome Clean 
Air Act (CAA or the Act) regulatory program being layered on top of the 
U.S. economy, with the Federal Government taking the position that 
energy security and indeed the American economy will just have to live 
with whatever results such a program produces. Rather, the United 
States can only effectively address GHG emissions and global climate 
change in coordination with other countries, and by addressing how to 
regulate GHG emissions while considering the effect of doing so on the 
Nation's energy and economic security. Considering and developing such 
a comprehensive approach obviously is enormously difficult.
    Unfortunately, and no doubt due in part to the limitations of the 
Clean Air Act itself, the draft Advance Notice of Proposed Rulemaking 
prepared by the staff of the Environmental Protection Agency (EPA) does 
not take such an approach. That draft Notice, entitled ``Regulating 
Greenhouse Gas Emissions under the Clean Air Act'' (``draft''), which 
was submitted to the Office of Management and Budget on June 17, 2008, 
instead seeks to address global climate change through an enormously 
elaborate, complex, burdensome and expensive regulatory regime that 
would not be assured of significantly mitigating global atmospheric GHG 
concentrations and global climate change. DOE believes that once the 
implications of the approach offered in the draft are fully explained 
and understood, it will make one thing clear about controlling GHG 
emissions and addressing global climate change--unilaterally proceeding 
with an extraordinarily burdensome and costly regulatory program under 
the Clean Air Act is not the right way to go.
    DOE has had only a limited opportunity to review the June 17 EPA 
staff draft, and therefore anticipates providing additional comments at 
a later date. Based on the limited review DOE has been able to conduct 
so far, it is apparent that the draft reflects extensive work and 
includes valuable information, analyses and data that

[[Page 44366]]

should help inform the public debate concerning global climate change 
and how to address GHG emissions.
    However, DOE has significant concerns with the draft because it 
lacks the comprehensive and balanced discussion of the impacts, costs, 
and possible lack of effectiveness were the United States, through the 
EPA, to use the CAA to comprehensively but unilaterally regulate GHG 
emissions in an effort to address global climate change. The draft 
presents the Act as an effective and appropriate vehicle for regulating 
GHG emissions and addressing climate change, but we believe this 
approach is inconsistent with the Act's overarching regulatory 
framework, which is based on States and local areas controlling 
emissions of air pollutants in order to improve U.S. air quality. 
Indeed, the Act itself states that Congress has determined ``air 
pollution prevention * * * and air pollution control at its source is 
the primary responsibility of States and local governments,'' CAA Sec.  
101(a)(3); that determination is reflected in the Act's regulatory 
structure. The CAA simply was not designed for establishing the kind of 
program that might effectively achieve global GHG emissions controls 
and emissions reductions that may be needed over the next decades to 
achieve whatever level of atmospheric GHG concentration is determined 
to be appropriate or necessary.
    Although the draft recognizes that the CAA does not authorize 
``economy-wide'' cap and trade programs or emission taxes, it in 
essence suggests an elaborate regulatory regime that would include 
economy-wide approaches and sector and multi-sector trading programs 
and potentially other mechanisms yet to be conceived. The draft has the 
overall effect of suggesting that under the CAA, as it exists today, it 
would be possible to develop a regulatory scheme of trading programs 
and other mechanisms to regulate GHG emissions and thus effectively 
address global climate change. It is important to recognize, however, 
that such programs have not yet been fully conceived, in some cases 
rely on untested legal theories or applications of the Act, would 
involve unpredictable but likely enormous costs, would be invasive into 
virtually all aspects of the lives of Americans, and yet would yield 
benefits that are highly uncertain, are dependent on the actions of 
other countries, and would be realized, if at all, only over a long 
time horizon.
    The draft takes an affirmative step towards the regulation of 
stationary sources under the Act--and while it is easy to see that 
doing so would likely dramatically increase the price of energy in this 
country, what is not so clear is how regulating GHG emissions from such 
sources would actually work under the CAA, or whether doing so would 
effectively address global climate change. Other countries also are 
significant emitters of GHGs, and ``leakage'' of U.S. GHG emissions 
could occur--that is, reduced U.S. emissions simply being replaced with 
increased emissions in other countries--if the economic burdens on U.S. 
GHG emissions are too great. In that regard, CAA regulation of GHG 
emissions from stationary sources would significantly increase costs 
associated with the operation of power plants and industrial sources, 
as well as increase costs associated with direct energy use (e.g., 
natural gas for heating) by sources such as schools, hospitals, 
apartment buildings, and residential homes.
    Furthermore, in many cases the regulatory regime envisioned by the 
draft would result in emission controls, technology requirements, and 
compliance costs being imposed on entities that have never before been 
subject to direct regulation under the CAA. Before proceeding down that 
path, EPA should be transparent about, and there should be a full and 
fair discussion about, the true burdens of this path--in terms of its 
monetary cost, in terms of its regulatory and permitting burden, and in 
terms of exactly who will bear those costs and other burdens. These 
impacts are not adequately explored or explained in the draft. What 
should be crystal clear, however, is that the burdens will be enormous, 
they will fall on many entities not previously subject to direct 
regulation under the Act, and all of this will happen even though it is 
not clear what precise level of GHG emissions reduction or atmospheric 
GHG concentration level is being pursued, or even if that were decided, 
whether the CAA is a workable tool for achieving it.
    In the limited time DOE has had to review the draft, DOE primarily 
has focused on the extent to which the draft addresses stationary 
sources and the energy sector. Based on DOE's review, we briefly 
discuss below (1) the inadequacy of CAA provisions for controlling 
greenhouse gas emissions from stationary sources as a method of 
affecting global GHG concentrations and addressing global climate 
change; (2) the potential costs and effects of CAA regulation of GHG 
emissions on the U.S. electric power sector; and (3) considerations for 
U.S. action to address GHG emissions from stationary sources in the 
absence of an effective global approach for addressing climate change 
and worldwide GHG emissions.

II. The Ineffectiveness and Costs Associated with CAA Regulation of 
Greenhouse Gas Emissions from Stationary Sources

    The draft states that it was prepared in response to the decision 
of the United States Supreme Court in Massachusetts v. EPA, 549 U.S. --
----, 127 S. Ct. 1438 (2007). In that case, the Court held that EPA has 
the authority to regulate GHG emissions from new motor vehicles because 
GHGs meet the Clean Air Act's definition of an ``air pollutant.'' Id. 
at 1460. As a result, under section 202(a) of the Act, the EPA 
Administrator must decide whether, ``in his judgment,'' ``the emission 
of any air pollutant from any class or classes of new motor vehicles or 
new motor vehicle engines'' ``cause, or contribute to, air pollution 
which may reasonably be anticipated to endanger public health or 
welfare.'' If the EPA Administrator makes a positive endangerment 
finding, section 202(a) states that EPA ``shall by regulation prescribe 
* * * standards applicable to the emission of'' the air pollutant with 
respect to which the positive finding was made.
    The Supreme Court stated that it did not ``reach the question 
whether on remand EPA must make an endangerment finding, or whether 
policy concerns can inform EPA's actions in the event that it makes 
such a finding.'' Instead, the Court said that when exercising the 
``judgment'' called for by section 202(a) and in deciding how and when 
to take any regulatory action, ``EPA must ground its reasons for action 
or inaction in the statute.''
    As a result, and based on the text of section 202(a) of the Clean 
Air Act, any EPA ``endangerment'' finding must address a number of 
issues that involve interpretation of statutory terms and the 
application of technical or scientific data and judgment. For example, 
an endangerment determination must involve, among other things, a 
decision about the meaning of statutory terms including ``reasonably be 
anticipated to,'' ``cause, or contribute to,'' ``endanger,'' and 
``public health or welfare.'' Moreover, because the Act refers to ``air 
pollutant'' in the singular, presumably EPA should make any 
endangerment finding as to individual greenhouse gases and not as to 
all GHGs taken together, but this also is a matter that EPA must 
address and resolve. There are other issues that must be resolved as 
well, such as: whether the ``public health and welfare'' should be 
evaluated with respect to the United States alone or, if foreign 
impacts can or

[[Page 44367]]

should or must be addressed as well, what the statutory basis is for 
doing so and for basing U.S. emissions controls on foreign impacts; 
what time period in the future is relevant for purposes of determining 
what is ``reasonably anticipate[d]''; whether and if so how EPA must 
evaluate any beneficial impacts of GHG emissions in the United States 
or elsewhere in making an endangerment determination; and whether a 
particular volume of emissions or a particular effect from such 
emissions from new motor vehicles must be found before EPA may make a 
``cause or contribute'' finding, since the Act explicitly calls for the 
EPA Administrator to exercise his ``judgment,'' and presumably that 
judgment involves more than simply a mechanistic calculation that one 
or more molecules will be emitted.
    If EPA were to address these issues and resolve them in favor of a 
positive endangerment finding under section 202(a) of the Act with 
respect to one or more greenhouse gases and in favor of regulating GHG 
emissions from new motor vehicles, then the language similarities of 
various sections of the CAA likely would require EPA also to regulate 
GHG emissions from stationary sources. A positive endangerment finding 
and regulation of GHGs from new motor vehicles likely would immediately 
trigger the prevention of significant deterioration (PSD) permit 
program which regulates stationary sources that either emit or have the 
potential to emit 250 tons per year of a regulated pollutant or, if 
they are included on the list of source categories, at least 100 tons 
per year of a regulated pollutant. Because these thresholds are 
extremely low when considered with respect to GHGs, thousands of new 
sources likely would be swept into the PSD program necessitating time 
consuming permitting processes, costly new investments or retrofits to 
reduce or capture GHG emissions, increasing costs, and creating vast 
areas of uncertainty for businesses and commercial and residential 
development.
    In addition to the PSD program, it is widely acknowledged that a 
positive endangerment finding could lead to three potential avenues of 
stationary source regulation under the CAA: (1) The setting of national 
ambient air quality standards (NAAQS) under sections 108 and 109; (2) 
the issuance of new source performance standards (NSPS) under section 
111; and/or (3) the listing of one or more greenhouse gases as 
hazardous air pollutants (HAP) under section 112. Each of these 
approaches, and their associated deficiencies with respect to GHG 
emissions and as a method of addressing global climate change, are 
briefly discussed below.
a. Sections 108-109: NAAQS
    Section 108 of the CAA requires EPA to identify and list air 
pollutants that ``cause or contribute to air pollution which may 
reasonably be anticipated to endanger public health or welfare.'' For 
such pollutants, EPA promulgates ``primary'' and ``secondary'' NAAQS. 
The primary standard is defined as the level which, in the judgment of 
the EPA Administrator, based on scientific criteria, and allowing for 
an adequate margin of safety, is requisite to protect the public 
health. The secondary standard is defined as the level which is 
requisite to protect the public welfare. Within one year of EPA's 
promulgation of a new or revised NAAQS, each State must designate its 
regions as non-attainment, attainment, or unclassifiable. Within three 
years from the NAAQS promulgation, States are required to adopt and 
submit to EPA a State implementation plan (SIP) providing for the 
implementation, maintenance, and enforcement of the NAAQS.
    At least three major difficulties would be presented with respect 
to the issuance by EPA of a NAAQS for one or more greenhouse gases: (1) 
The determination of what GHG concentration level is requisite to 
protect public health and welfare; (2) the unique nature of GHGs as 
pollutants dispersed from sources throughout the world and that have 
long atmospheric lifetimes; and (3) GHG concentrations in the ambient 
air are virtually the same throughout the world meaning that they are 
not higher near major emissions sources than in isolated areas with no 
industry or major anthropogenic sources of GHG emissions.
    While much has been said and written in recent years about the need 
to reduce greenhouse gas emissions to address climate change, there is 
far less agreement on the acceptable or appropriate atmospheric 
concentration level of CO2 or other GHGs. As the draft 
states, ``[d]etermining what constitutes `dangerous anthropogenic 
interference' is not a purely scientific question; it involves 
important value judgments regarding what level of climate change may or 
may not be acceptable.'' While the Department agrees with this 
statement, the courts have held that when setting a NAAQS, EPA cannot 
consider important policy factors such as cost of compliance. This 
limitation inhibits a rational balancing of factors in determining and 
setting a GHG NAAQS based on the science available, the availability 
and cost of emission controls, the resulting impact on the U.S. 
economy, the emissions of other nations, etc.
    Unlike most pollutants where local and regional air quality, and 
local and regional public health and welfare, can be improved by 
reducing local and regional emissions, GHGs originate around the globe, 
and are mixed and dispersed such that there is a relatively uniform 
atmospheric GHG concentration level around the world. There is little 
or nothing that a single State or region can do that will appreciably 
alter the atmospheric GHG concentration level in that particular State 
or region. Thus, it is hard to see how a GHG NAAQS, which required 
States to take action to reduce their emissions to meet a particular 
air quality standard, would actually work. A GHG NAAQS standard would 
put the entire United States in either attainment or non-attainment, 
and it would be virtually impossible for an individual State to control 
or reduce GHG concentrations in its area and, thus, to make significant 
strides towards remaining in or reaching attainment with the NAAQS.
    Whatever level EPA might eventually establish as an acceptable 
NAAQS for one or more GHGs, EPA's setting of such a level would 
immediately implicate further issues under the NAAQS regime, including 
the ability of States and localities to meet such a standard. If the 
GHG NAAQS standard for one or more gases is set at a level below the 
current atmospheric concentration, the entire country would be in 
nonattainment. All States then would be required to develop and submit 
State Implementation Plans (SIPs) that provide for meeting attainment 
by the specified deadline. And yet, as the draft states, ``it would 
appear to be an inescapable conclusion that the maximum 10-year horizon 
for attaining the primary NAAQS is ill-suited to pollutants such as 
greenhouse gases with long atmospheric residence times * * * [t]he long 
atmospheric lifetime of * * * greenhouse gases * * * means that 
atmospheric concentrations will not quickly respond to emissions 
reduction measures * * * in the absence of substantial cuts in 
worldwide emissions, worldwide concentrations of greenhouse gases would 
continue to increase despite any U.S. emission control efforts. Thus, 
despite active control efforts to meet a NAAQS, the entire United 
States would remain in nonattainment for an unknown number of years.''
    As the draft also recognizes, if the NAAQS standard for GHGs is set 
at a

[[Page 44368]]

level above the current atmospheric concentration, the entire country 
would be in attainment. In a nationwide attainment scenario, the PSD 
and new source review (NSR) permitting regimes would apply and States 
would have to submit SIPs for the maintenance of the primary NAAQS and 
to prevent interference with the maintenance by other States of the 
NAAQS; tasks, that as applied to GHGs, are entirely superfluous given 
the inability of any single State to change through its own unilateral 
action the global or even local concentration level of GHGs.
    As the difficult choices and problematic results outlined above 
demonstrate, the inability of a single State to appreciably change 
atmospheric GHG concentrations in its own area through its own emission 
reduction efforts is inconsistent with a fundamental premise of the 
Clean Air Act and of the NAAQS program--that States and localities are 
primarily responsible for air pollution control and maintaining air 
quality, and that State and local governments can impose controls and 
permitting requirements that will allow the State to maintain or attain 
air quality standards through its own efforts.
b. Section 111: NSPS
    Section 111 of the CAA requires the EPA Administrator to list 
categories of stationary sources if such sources cause or contributes 
significantly to air pollution which may reasonably be anticipated to 
endanger public health or welfare. The EPA must then issue new source 
performance standards (NSPS) for such sources categories. An NSPS 
reflects the degree of emission limitation achievable through the 
application of the ``best system of emission reduction'' which the EPA 
determines has been adequately demonstrated. EPA may consider certain 
costs and non-air quality health and environmental impact and energy 
requirements when establishing NSPS. Where EPA also has issued a NAAQS 
or a section 112 maximum achievable control technology (MACT) standard 
for a regulated pollutant, NSPS are only issued for new or modified 
stationary sources. Where no NAAQS has been set and no section 112 MACT 
standard issued, NSPS are issued for new, modified, and existing 
stationary sources.
    Regulation of GHGs under section 111 presents at least two key 
difficulties. First, EPA's ability to utilize a market system such as 
cap and trade has not been confirmed by the courts. EPA's only attempt 
to establish a cap and trade program under section 111, the ``Clean Air 
Mercury Rule,'' was vacated by the U.S. Court of Appeals for the 
District of Columbia Circuit, though on grounds unrelated to EPA's 
authority to implement such a program under section 111. DOE believes 
EPA does have that authority, as EPA previously has explained, but 
there is legal uncertainty about that authority, which makes a GHG 
market-oriented program under section 111 uncertain.
    Second, EPA's regulation of small stationary sources (which account 
for a third of all stationary source emissions) would require a 
burdensome and intrusive regulatory mechanism unlike any seen before 
under the CAA. If EPA were to determine that it cannot feasibly issue 
permits to and monitor compliance for all of these sources, a section 
111 system presumably would cover only large stationary sources, which 
would place the compliance burden completely on electric generators and 
large industrial sources, and reduce any overall effect from the GHG 
control regime.
    However, there are questions about whether it would be permissible 
for EPA to elect not to regulate GHG emissions from small stationary 
sources. Section 111(b)(1) indicates that the Administrator must list a 
category of sources if, in his judgment, it causes, or contributes 
significantly to, air pollution which may reasonably be anticipated to 
endanger public health and welfare. Given the volume of greenhouse 
gases that are emitted from small stationary sources in the aggregate, 
it is uncertain whether, if EPA makes a positive endangerment finding 
for emissions of one or more GHGs from new motor vehicles, EPA could 
conclude that small stationary sources do not cause ``or contribute 
significantly'' to air pollution that endangers the public health or 
welfare. This might well turn on the interpretation and application of 
the terms in CAA section 202(a), noted above. Regardless, it is 
uncertain whether, and if so where, EPA could establish a certain GHG 
emission threshold for determining what sources or source categories 
are subject to GHG regulations under section 111. What does seem clear 
is that regulating GHG emissions under section 111 would entail 
implementation of an enormously complicated, costly, and invasive 
program.
c. Section 112: HAP
    Section 112 contains a list of hazardous air pollutants subject to 
regulation. A pollutant may be added to the list because of adverse 
health effects or adverse environmental effects. DOE believes it would 
be inappropriate for greenhouse gases to be listed as HAPs given, among 
other things, EPA's acknowledgment that ambient GHG concentrations 
present no health risks. Nevertheless, if one or more GHGs were listed 
under section 112, EPA would have to list all categories of ``major 
sources'' (defined as sources that emit or potentially emit 10 tons per 
year of any one HAP or 25 tons per year of any combination of HAPs). 
For each major source category, EPA must then set a maximum available 
control technology (MACT) standard.
    It is entirely unclear at this point what sort of MACT standard 
would be placed on which sources for purposes of controlling GHG 
emissions, what such controls would cost, and whether such controls 
would be effective. However, complying with MACT standards with respect 
to GHG emission controls likely would place a significant burden on 
States and localities, manufacturing and industrial facilities, 
businesses, power plants, and potentially thousands of other sources 
throughout the United States. As the draft explains, section 112 
``appears to allow EPA little flexibility regarding either the source 
categories to be regulated or the size of sources to regulate * * * EPA 
would be required to regulate a very large number of new and existing 
stationary sources, including smaller sources * * * we believe that 
small commercial or institutional establishments and facilities with 
natural gas fired furnaces would exceed this major source threshold; 
indeed, a large single family residence could exceed this threshold if 
all appliances consumed natural gas.''
    Compliance with the standards under section 112 is required to be 
immediate for most new sources and within 3-4 years for existing 
sources. Such a strict timeline would leave little to no time for 
emission capture and reduction technologies to emerge, develop, and 
become cost-effective.
d. Effects of CAA Regulation of GHGs on the U.S. Energy Sector
    While the Department has general concerns about the portrayal of 
likely effects of proposals to regulate GHGs under the CAA on all 
sectors of the U.S. economy, DOE is particularly concerned about the 
effects of such regulation on the energy sector. The effects of broad 
based, economy-wide regulation of GHGs under the CAA would have 
significant adverse effects on U.S. energy supplies, energy 
reliability, and energy security.
    Coal is used to generate about half of the U.S. electricity supply 
today, and the Energy Information Administration (EIA) projects this