EPA’s proposed greenhouse gas emission standards for new power plants rest on the agency’s finding that carbon capture and sequestration (CCS) technologies are “achievable” and the “best system” for the reduction of carbon dioxide emissions from coal-fired power plants. This finding is highly debatable and will likely be the focal point of political and legal challenges to the regulations, if adopted.

Just in the first week since release of the regulations, EPA’s findings relating to CCS have been a lightning rod for political attack. The Senate Minority Leader introduced a bill to override the regulations through a type of legislative veto (using authority of the Congressional Review Act). Other Republican Senators grilled the EPA Administrator at a hearing to explain why the proposed CCS findings do not violate a provision of the Energy Policy Act of 2005, which these lawmakers contend prohibits consideration of government-subsidized CCS installations as evidence in support of EPA’s finding that CCS is an available control technology. And, the Nebraska Attorney General filed a lawsuit in federal court to stop the regulations based on the same Energy Policy Act of 2005 provision.

Also, opposition to an EPA mandate for use of CCS with new coal plants has been voiced by manufacturers of CCS technology. In a publicized meeting with EPA’s chief of air regulations, the manufacturers stated that CCS technology “is not ready.” They argued that requiring the use of CCS technology before it is commercially viable would discourage utilities from investing in the technology and committing to new coal plants. This result would, in their view, set back efforts to prove CCS technology is feasible for incorporation in new coal plants.

Behind these political headlines is a legal issue likely to be at the center of the inevitable petition for judicial review of a final EPA rule based on findings that CCS technology is “achievable,” and that emission performance of a new coal-fired power plant with partial use of CCS is the “best system of emission reduction.” These are related, but distinct legal requirements under section 111(b) of the Clean Air Act, which governs new source performance standards (NSPS) for new power plants.

Achievable.” Relying on its interpretation of prior appellate court decisions under section 111 of the Clean Air Act, EPA takes the position that an emissions technology, such as CCS, is “achievable,” if it has been “adequately demonstrated,” and “can reasonably be projected to be available to new sources at the time they are constructed,” even if “not in actual routine use” when the regulations are adopted. EPA points to evidence that the technology is already proven “technically,” and that its use is being demonstrated by a handful of power plant projects in the U.S. that have received substantial federal assistance and are in varying stages of development and construction. Opponents of the EPA findings can be expected to contend that CCS is unproven, and therefore is not likely to be commercially viable in the reasonably foreseeable future. In addition, as mentioned above, there is a serious question as to whether a provision in the Energy Policy Act of 2005, which was not addressed in the proposed regulations, prohibits EPA’s reliance on the government-subsidized CCS demonstration plants to establish that CCS technology is “achievable” for purposes of section 111.

Best system of emission reduction.” EPA grounds its finding that partial CCS is the “best system of emission reduction,” by examining three criteria: (i) amount of emission reductions; (ii) costs of achieving reductions; and (iii) encouragement of technological innovation. How EPA applies these open-ended criteria – the evidence it considers, the uncertainties it tolerates, the weighting of one factor against another, and the overall subjectivity of the analysis – will likely be at the forefront of a court’s review of the agency’s record of decision-making.

The courts generally accord EPA and other federal agencies substantial discretion in interpreting and applying legal criteria and courts will not overturn agency action so long as the result is rational and any necessary fact findings are adequately supported. In the next installments of this blog, we will examine in more detail EPA’s analysis in support of its findings that CCS technology is both “achievable” and the “best system of emission reduction.” We will consider whether the Energy Policy Act of 2005 circumscribes EPA’s permissible fact finding and we will highlight those parts of the agency’s rationale that might be most vulnerable to opposing evidence submitted during the public comment period.