EPA Proposes Tough Greenhouse-Gas Rules for Big Industries

By SIOBHAN HUGHES and IAN TALLEY
WASHINGTON -- The Environmental Protection Agency proposed requiring new power plants, factories and oil refiners to obtain permits to emit so-called greenhouse gases, ratcheting up pressure on Congress to pass comprehensive climate legislation.
The EPA's proposal would effectively require new, large industrial facilities and existing ones undergoing modification to use the most up-to-date technology to curb carbon-dioxide emissions. The announcement came as environmentally minded Senate Democrats vowed to bring a newly unveiled climate bill to a vote before a major international summit on climate change in December.
Other Democratic lawmakers from states dependent on coal and manufacturing jobs said they couldn't support the draft proposal, which calls for cutting U.S. emissions somewhat faster than a similar proposal narrowly approved by the House in June.
"The EPA's ready to work with Congress," EPA Administrator Lisa Jackson said in announcing the proposal. "But we're not going to continue with business as usual while we wait for Congress to act."
Because the federal Clean Air Act limits the EPA's ability to weigh the costs of new regulations, many businesses worry that new EPA rules might be unduly burdensome. To address such concerns, the EPA's proposal would effectively exempt small businesses such as restaurants and farms, applying the rules only to facilities that emit 25,000 tons of greenhouse gases or more a year. A threshold of 25,000 tons of carbon dioxide is comparable to the emissions from the annual energy use of about 2,200 homes, according to the Environmental Defense Fund.
"The question is -- is this legal?" said Luke Popovich, a spokesman for the National Mining Association. He said his group is skeptical the EPA would be allowed under current law to distinguish between small and large emitters when setting new controls on greenhouse gases.
Under the EPA proposal, which officials said could take effect as early as next year, new power plants and other large emitters could be denied regulatory permits if they didn't use the most up-to-date technology to curb carbon-dioxide emissions. Similar technology would have to be incorporated into any major upgrades. The EPA is expected to spell out what kinds of controls would qualify in later guidance.
Meanwhile, several key senators said a draft bill designed to fight climate change, announced by Sens. Barbara Boxer (D., Calif.) and John Kerry (D., Mass.), lacked sufficient support to pass the chamber. Sen. John D. Rockefeller IV (D., W.Va.), said the bill's proposal to cut U.S. emissions 20% beneath 2005 levels by 2020 would be "unrealistic and harmful" for his coal-abundant state. Other lawmakers said the chamber's focus on health-care legislation was straining their ability to examine the measure.
The climate-change issue also is dividing industry. Nike Inc. said Wednesday it was resigning a seat on the board of the U.S. Chamber of Commerce, citing disagreement with the group's stance against proposed climate-change legislation. But the company said it planned to remain a member of the chamber. A chamber spokesman said its position "reflects the diversity of its membership and the broad business community."—Stephen Power contributed to this article.
Write to Siobhan Hughes at siobhan.hughes@dowjones.com and Ian Talley at ian.talley@dowjones.com