With U.S. EPA announcing its endangerment finding for greenhouse gases last week, regulation of emissions from stationary sources could begin as early as March 2010. During today's OnPoint, Cal Dooley, president of the American Chemistry Council, urges Congress to postpone EPA's regulation of stationary sources. Dooley also explains why he believes EPA regulation could have negative impacts on the economy.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. Joining me today is Cal Dooley, president of the American Chemistry Council. Cal, nice to see you again.
Cal Dooley: Thank you, Monica.
Monica Trauzzi: Cal, with EPA announcing its endangerment finding last week regulation of emissions from stationary sources could begin as early as March of next year. ACC is calling for Congress to postpone EPA's regulation. Why? What would be direct impact be on your industry?
Cal Dooley: Well, we're very concerned that EPA taking action under the Clean Air Act is really like taking a sledgehammer to what is one of the most complicated and complex public policy issues we're confronted with in terms of how to manage and reduce greenhouse gases, while ensuring that our economy can continue to grow. I mean if this was an easy issue Congress and the Senate would be moving forward with a high degree of consensus. We would see even the international negotiations in Copenhagen, we'd see a much greater degree of consensus there. But we're not achieving that because of the complexities and with EPA taking action under the stationary source it is going to create such uncertainty that's going to stem the investment in new facilities, in modification of existing facilities that's going to further harm the recovery of our economy. It's going to cost us jobs.
Monica Trauzzi: But the direct impact on your industry, how would it trickle down?
Cal Dooley: Well, right now, if the EPA has this authority under the Clean Air Act it would literally require every chemical manufacturing facility to be permitted under both the PSD program, the prevention of significant deterioration, as well as the Title V program. And you would also be asking the states, under their authority in administering these permits, to also modify their legislation. And so we would be in a situation where our facilities that wanted to invest in new boilers or new equipment would have to wait to get a permit that we don't even have the rules in place. So, by EPA taking this course, if they were in fact going to implement these regulations on stationary sources as early as March 31, it's basically going to shut down any new investment and modification of facilities in the United States in the chemical industry.
Monica Trauzzi: So, Congress has a couple of options in terms of preempting EPA. Do you believe Congress will act to postpone EPA from regulating stationary sources?
Cal Dooley: Well ...
Monica Trauzzi: That's for option one.
Cal Dooley: Sure. Well, we're in the process of just making sure that a lot of members of Congress fully understand the implications of the EPA action is that this is going to forestall investment. You know, Congress is considering passing an additional stimulus bill that's going to have new opportunities for funding to go out, both in loans as well as direct funding, to stimulate investment in our economy. This action by EPA is totally inconsistent with congressional efforts to stimulate investment. So we're educating members of Congress to understand that it's time for them to ask EPA to really take a timeout, to postpone their action under the Clean Air Act, to give Congress more time to get the climate change legislation right.
Monica Trauzzi: Senator Murkowski, for one, has expressed opposition to the endangerment finding and does not want EPA to move forward with regulation. Are we really gearing up for a face-off between Congress and EPA on this in the coming months?
Cal Dooley: Well, I don't know, but I think Senator Murkowski understands that if you had a new facility out there that was going to even put in a 60 hp combustion engine they would have to get a permit under the EPA rules and regulations. Furthermore, if one of our facilities was going to make a significant modification we would be required under the EPA rules to implement the best available control technology. The problem is neither the states nor does EPA have the rules that even have made a determination what is the best available control technology? So, we're going to be in a situation where EPA and the states are going to be mandated to provide permits to the private sector who wants to make investments and yet they won't have the rules. They won't have the definitions in place that will allow the private sector who's trying to create jobs who's trying to invest in new plants and facilities -- we're just going to be stymied.
Monica Trauzzi: But you do believe that EPA should move forward with the regulation of mobile sources? Why the difference?
Cal Dooley: Well, I think that if EPA is making the contention now that they will promulgate and finalize the rule on mobile sources by March 31, they also suggest that that has an automatic then extension to stationary sources, we would say EPA needs to step back and really evaluate whether or not they want to trigger the regulation and the permitting under the Clean Air Act for stationary sources. And perhaps they can move forward on the mobile sources, but do so in a way that is more maybe distinguishing it and separating it from any requirement or mandate to move into stationary sources.
Monica Trauzzi: So if Congress is able to preempt EPA and postpone regulation, are they going to be able to turn around legislation in 2010?
Cal Dooley: Well, I think that you see a great deal of interest among Republicans and the Democrats alike to get climate change legislation right. You know, you had a bill, the Waxman-Markey that narrowly passed the House by I think around seven votes. The Senate has been unable to come to a consensus, but it's not for the lack of effort and it would behoove the administration, it would be in the interest of the EPA to just give Congress a little more time to act. We're not saying, no, never, but we are suggesting that we ought to have at least another year for Congress to really put together a comprehensive policy that reduces greenhouse gas emissions in this country while still ensuring that our manufacturing sector can continue to invest in the capacity that allows us to create high-paying jobs for many of the people we currently employ and a lot of those that are, unfortunately, on the unemployment ranks today.
Monica Trauzzi: How does this all play into the international negotiations that are looking to have a new treaty sometime in 2010, mid- to late-2010? How does this all interact?
Cal Dooley: Well, I think what I would suggest is that the countries that were engaged in negotiations know that it's going to be the Senate that is going to have to ratify any agreement that comes out that those negotiations. Thus, it ought to be the Senate and working with the House that is developing the policy which identifies the targets in terms of the reduction and emissions in the United States, the timing of those reductions, because that is going to be consistent with the popular will of the constituency in this country. EPA is basically circumventing what I think is the legitimate authority and jurisdiction of Congress and, again, taking a very aggressive approach that, unfortunately, is going to have dire and significant adverse consequences on the health of this economy.
Monica Trauzzi: OK, we will end it right there. Thank you for coming on the show again.
Cal Dooley: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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