CLIMATE:

New power plant rule hasn't been published in Federal Register -- but does it matter?

Eighty-four days after U.S. EPA unveiled its proposal to curb new power plant carbon dioxide emissions, the rule still hasn't appeared in the Federal Register.

Both the environmentalists who praised the agency's plans to bar construction of new coal-fired units without carbon capture and storage (CCS) and the industry leaders who oppose them say a near-three-month delay in publication is unusual. But observers part ways about whether it means EPA is reconsidering its rule.

David Bookbinder, a former Sierra Club attorney turned consultant, said the agency may be having second thoughts following the revelation of serious legal flaws with its justification for CCS as a best available control technology for coal plants.

"Certainly, the fact that it hasn't appeared almost three months later in the Federal Register, and in the intervening time two huge problems have developed, I would suggest that there is a link between those things," Bookbinder said.

To prove that partial CCS is "adequately demonstrated," the agency pointed in its rule to four power plants that will employ the technology and that are in various stages of planning and construction. Three of these are in the United States and are supported with federal funding.

But last month, House Energy and Commerce Chairman Fred Upton (R-Mich.) sent a letter to EPA noting that the Energy Policy Act of 2005 prohibits the agency from basing a standard on government-funded projects -- a development that Bookbinder called a serious "oops" for the agency.

Also last month, a work group of EPA's Science Advisory Board said that two studies by the Energy Department's National Energy Technology Laboratory that were also cited in the rule were not adequately peer-reviewed, and that EPA failed to conduct additional peer review.

Taken together, the two problems may send EPA back to the drawing board, Bookbinder said.

"It's not an exaggeration to say that 90 percent of EPA's factual basis for its factual determination has been wiped out," he said. "It's gone."

But while he echoed Bookbinder's view that the agency may need to reconsider its rule for new power plants, George W. Bush-era EPA air chief Jeff Holmstead said the rule was probably delayed for more mundane reasons.

"This is certainly longer than usual, but we had the government shutdown in the meantime, and that really backed things up," he said.

Holmstead, who is now a partner with the law firm Bracewell & Giuliani, said EPA may not have finished work on the technical support documents for the rule by the time Administrator Gina McCarthy had to sign off on it to comply with the president's Sept. 20 deadline.

McCarthy said at a recent forum hosted by the Center for American Progress that October's government shutdown was partially to blame for the delay in publication. But she said the proposal went to the Office of Management and Budget on the same day it was signed. The president did not specify a deadline for the rule to be finalized in his memo to EPA in June, and McCarthy has not offered one, either.

"We're having conversations as we should, and we'll finalize that rule as soon as we're comfortable that we've done the right work on it," she said at the CAP forum.

EPA staff said today that the agency expects the proposal to be published shortly.

Holmstead said the prohibition on basing rules on government-funded projects did place EPA's proposal in legal jeopardy. But he added that it would be unprecedented for an administrator to sign a rule and then for the agency to scrap it before it is published in the Federal Register. It would be more usual for the agency to address newly raised concerns by offering a subsequent proposal, he said.

David Doniger, who works on the issue for the Natural Resources Defense Council, said EPA may need to address the concerns raised in the Upton letter. But he said it overstated the prohibition on considering a technology that has been demonstrated by a federally funded project, and added that EPA based its proposal on other factors, including the use of capture and sequestration in natural gas facilities.

The Clean Air Act does not demand that a technology be demonstrated within the sector that would be covered by the rule, Doniger said.

"The whole point is to bring into the marketplace technologies that are technically available," he said.

The lack of regulation requiring power plants to use CCS has itself been a barrier to deployment of the technology, he added.

Meanwhile, EPA also remains in the beginning stages of writing its proposal for existing power plants, despite the president's commitment that it will be completed by June 1, 2014.

The agency extended its stakeholder input period due to the government shutdown, and those who interact with EPA staff say they are still weighing their options.

"I'm told they have not yet settled on one approach," said Doniger. "They certainly haven't taken things up the ladder to [acting EPA air chief Janet] McCabe and McCarthy for decisions yet."

But he said that did not mean the agency is running behind. The president's public commitment to the rule made last June during his rollout of the Climate Action Plan will mean it is a priority for OMB, easing and expediting the interagency review process. EPA might also opt to offer more than one option as part of its proposal, leaving a final decision for further down the line, he said.

OMB is usually allotted 90 days to review a rule, meaning the existing-plant guidance would need to be at OMB on March 1 to receive the full amount of time.

The administration could shorten that time frame. But Thomas Lorenzen, a partner at Dorsey & Whitney and the former assistant chief in the Environment and Natural Resources Division at the Department of Justice, said cutting short the White House's vetting process might put the existing power plant rule in jeopardy in the likely event that it is challenged in court.

"The worry is, do you get a rushed rule that is going to be more susceptible to challenge and potentially vacature?" he said.

He added that if EPA is faced with overhauling its new power plant rule as a result of the Energy Policy Act problem or for other reasons, that might affect the kind of guidance it proposes for existing power plants as well.

"This is all connected, so if you have to rethink one piece, you may need to think again about the second piece," he said.

Reporter Jason Plautz contributed.