U.S. EPA's plan to give businesses another three years to show how they calculate their greenhouse gas emissions will weaken the agency's new reporting requirements and could be illegal, environmental groups said before yesterday's deadline to comment on the proposal.
Under the new reporting program, which was ordered by Congress in 2007, the largest pollution sources now have to gather data on their greenhouse gas emissions and make it available to the public. Most of the highest-emitting industrial plants had to start collecting the information with the 2010 calendar year and will need to submit their first annual reports later this year.
The goal is to determine the carbon footprint of each large facility, as part of a federal effort to figure out who is contributing how much to the nation's inventory of greenhouse gas emissions.
But a proposed rule released in December would spare companies from providing much of the underlying data until they send in their greenhouse gas emissions reports for the 2013 calendar year in March 2014. Citing concerns from the Federal Trade Commission and business groups, which said the data could reveal valuable trade secrets, EPA said the deferral would give officials enough time to decide whether the information should be confidential (E&ENews PM, Dec. 20, 2010).
Though they were quiet when the agency announced its plan to change course, environmental groups came out swinging yesterday.
EPA will be violating the intent of Congress and could be breaking the law if it waits three more years to start collecting data that Congress had ordered to be ready by 2009, according to comments submitted by the Sierra Club, Clean Air Task Force, Environmental Defense Fund and Natural Resources Defense Council.
The groups also say EPA has not explained why the data elements deserve to be treated as confidential business information, which is exempt from a Clean Air Act requirement that all pollution data be available to the public. If it is submitted to EPA, the agency would have no choice but to release it.
"The deferral would seriously degrade the reporting system's data quality, deny the public its legal right to this vital emission data, and disrupt other reporting programs," the environmental groups wrote.
Industry groups such as the American Chemistry Council have supported EPA's exemption, saying it will prevent their members from disclosing sensitive data that could, for instance, allow competitors to figure out how their plants are making their products.
They say the reporting program will still be useful, even if the public must wait a little longer for more information.
"Not having some of the underlying data in the interim will not change the reported GHG emissions," wrote Lorraine Krupa Gershman, director of regulatory affairs at the chemical industry group, in comments submitted last month.
Yesterday's letter marks a change of tone by some of the nation's largest environmental groups, which are often called the "big greens." Those groups have generally lined up to support EPA's handling of climate change rules under the Obama administration, but they have recently hit the agency for walking back on some requirements -- most notably, by giving biomass facilities a three-year reprieve from greenhouse gas permitting rules after industry groups complained that it did not recognize a distinction between biomass and fossil fuels.
Craig Segall, an attorney at the Sierra Club who co-authored yesterday's comments, said the group might end up suing EPA.
The exemption will make it more difficult for EPA to design new greenhouse gas limits for refineries if the agency does not have data on emissions inputs, he said. The program is meant to inform these types of policies, and an exemption for emissions data will also encourage companies to fudge their numbers, making it harder for the public to hold them accountable, the groups said in their comments.
"The delay proposed for reporting the verification data elements means that no one will be looking over industry's shoulders," the letter said. "EPA cannot legally take this course."
Yet some businesses want EPA to go further. The agency's proposal, which told companies that they would not need to send in about a quarter of the numbers they must calculate, did not give an exemption to other types of "critically sensitive" information that should still be treated as confidential, the American Petroleum Institute wrote in comments on the decision.
Considering that the program is breaking new ground, it seems like a sensible precaution to wait before requiring some data, said Brian Freeman, an environmental attorney at Robinson & Cole LLP, who is following the new reporting program for clients.
"The bottom line is: What are they emitting?" Freeman said upon the release of EPA's proposal. "That's the focus here" (E&ENews PM, Dec. 20, 2010).
States also concerned
Environmental groups' criticism was echoed by some states that have already moved to limit greenhouse gas emissions on their own. The data is crucial to designing smart policies to address climate change, the states say.
If the agency is going to proceed with an exemption, it should be shortened to one year and ensure that companies submit all data that is already collected by similar reporting programs, according to Northeast States for Coordinated Air Use Management (NESCAUM), a coalition of the six states in New England, as well as New York and New Jersey.
All of them have moved on climate change themselves by joining the Regional Greenhouse Gas Initiative's cap-and-trade program for carbon dioxide -- a program that also includes Maryland and Delaware.
The state of Washington, which is creating its own greenhouse gas inventory, has raised concerns about the changes. So has California, which is starting its own cap-and-trade program. Both states had planned to synchronized their plans with the federal program, but now they will need to gather extra information from businesses.
"We value GHG reporting requirements to support and inform state and national climate efforts," NESCAUM wrote, adding that "the burden of proof should be placed on the reporting entities to demonstrate that they have reasonable confidentiality concerns."
The program has recently been attacked by many Republicans, who say the program is a waste of resources because the federal government should not try to limit greenhouse gas emissions.
EPA would not be allowed to spend its funding on the reporting program under the continuing resolution passed by the House last month to keep the federal government running for the second half of fiscal 2011.
The spending bill proposed by House appropriators would have cut about half the program's budget. The rest of the funding was pulled from the bill under an amendment from freshman Rep. Mike Pompeo (R-Kan.) but that measure was stripped from a two-week spending bill that will keep the government running until March 18 while the Senate works on a longer-term bill.
Segall said he did not know why the greenhouse gas reporting program has become a target. Others have suggested that the words "greenhouse gas" in the name of the program were enough to draw fire considering the current political divide in Congress on climate change.
"You can have a pretty reasonable debate about how to control emissions, but first, you have to know what they are," he said.
Click here to read the letter from environmental groups.
Click here to read the letter from NESCAUM.
Click here to read the letter from the American Chemistry Council.