On December 7, 2009, the Environmental Protection Agency (“EPA”) promulgated its long-awaited endangerment finding.  Evidently timed to coincide with the beginning of the international climate change negotiations in Copenhagen, the Agency’s finding states that elevated atmospheric concentrations of six greenhouse gases (“GHGs”) emitted by man – carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride – are contributing to dangerous climate change.  According to EPA, “[t]he accumulation of CO2 and other greenhouse gases in the atmosphere can lead to hotter, longer heat waves that threaten the health of the sick, the poor, the elderly – that can increase ground-level ozone pollution linked to asthma and other respiratory illnesses.”

Although the endangerment finding technically is being made in the context of GHG emissions from new motor vehicles, the finding will trigger GHG regulation of a variety of mobile and stationary sources under the Clean Air Act (“CAA”).  The first GHG regulation that EPA will issue will be its light-duty motor vehicle GHG regulation, likely by March 2010.  This regulation is being issued jointly with the Department of Transportation and primarily requires improvements in fuel economy for automobiles and light duty trucks beginning in Model Year 2012.  Comments on the motor vehicle rulemaking were due on November 27, 2009.

EPA states that once the motor vehicle GHG regulations become effective sixty days after they are issued next March, GHGs will be considered to be regulated pollutants under the Prevention of Significant Deterioration (“PSD”) air quality permit program.  As a result, at that time, new “major” stationary sources of GHG emissions, and modifications of existing “major” stationary sources that “significantly” increase their GHG emissions, will be required to obtain a permit setting forth Best Available Control Technology for those emissions.

 Both EPA and business in general have a high level of concern that a very large number of sources could be required to obtain PSD permits for their GHG emissions when GHGs become regulated pollutants next year.  As a result, to avoid grid-locking the PSD permit system, the Agency has proposed a “tailoring” rule designed to limit applicability of the PSD program to only the largest GHG emitters, at least for an initial five-year period.  Under the tailoring rule, “major” sources to which PSD requirements for GHG would become applicable would be those that emit more than 25,000 tons per year (“tpy”) of CO2 equivalent, and a “significant” increase of GHG emissions from a modification would be defined at a level somewhere between 10,000 and 25,000 tpy.  The tailoring rule would also set a 25,000 tpy threshold under the Title V operating permit program.

 The legality of the tailoring rule has been questioned, however, as the CAA explicitly defines the PSD “major” source threshold as 100 tpy for sources in 28 industrial categories and 250 tpy for sources in all other categories, and the Title V threshold at 100 tpy.  Comments on the tailoring rule proposal are due December 28, 2009.

 The endangerment finding is likely to result in other forms of regulation as well.  Numerous petitions are pending at EPA from various state and environmental groups seeking regulation of a variety of mobile sources (trucks, airplanes, ships, boats, equipment) and stationary sources.  With the endangerment finding issued, EPA is likely to begin acting on these petitions next year.  Additionally, last week the Center for Biological Diversity filed a petition with EPA seeking promulgation of a GHG National Ambient Air Quality Standard.  Granting the petition could lead to highly draconian and unworkable emission control requirements.

The findings signed by the EPA Administrator will be published in the Federal Register (www.regulations.gov) under Docket ID No. EPA-HQ-OAR-2009-0171.  A pre-publication version is available at: http://www.epa.gov/climatechange/endangerment/downloads/FinalFindings.pdf.