EPA Issues Mandatory Greenhouse Gas Reporting Regulations

March 11, 2009

Summary

  EPA ISSUES PROPOSED MANDATORY GREENHOUSE GAS REPORTING REGULATIONS

                On March 10, 2009, the United States Environmental Protection Agency ("EPA") proposed regulations mandating reporting of greenhouse gas emissions from "all sectors of the economy."  The proposed regulation would apply to downstream facilities with greenhouse gas emissions equal to or greater than 25,000 tons per year and to upstream suppliers of fossil fuels and industrial greenhouse gases as well as to manufacturers of vehicles and engines.  Those subject to the regulations would be required to submit annual reports of emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and other fluorinated gasses.  By and large, reporting would be made at the facility level, except for certain suppliers and vehicle engine manufacturers who would report at the corporate level.  The first emissions reports would be due on March 31, 2011, for emissions during 2010.  Reports would be submitted annually thereafter.  EPA estimates that the expected cost to the private sector to comply with the proposed regulations may be $160 million for the first year and that the annualized cost in subsequent years may be $127 million.

Categories of entities or facilities that may be subject to the proposed regulations include, without limitation, the following:  (1) fossil fuel fired electric generating units, (2) oil and natural gas systems, (3) petroleum refineries, (4) petrochemical production, (5) any supplier of coal, coal based liquid fuels, petroleum products, natural gas and NGLs, industrial greenhouse gases, (6) underground coal mines that are subject to quarterly or more frequent sampling by MSHA ventilation systems, (7) municipal landfills that generate CH4 in amounts equivalent to 25,000 metric tons CO2 equivalent or more per year, (8) ethanol production, (9) cement production, (10) electronics -- photovoltaic manufacturing, (11) semiconductor, MEMS, and LCD manufacturing facilities with an annual production capacity that exceed specified thresholds, (12) phosphoric acid production, (13) silicon carbide production, (14) soda ash production, (15) titanium dioxide production, (16) feral alloy production, (17) food processing, (18) glass production, (19) hydrogen production, (20) iron and steel production, (21) lead production, (22) magnesium production, (23) pulp and paper manufacturing, (24) zinc production, (25) aluminum production, (26) ammonia manufacturing, (27) industrial landfills, (28) lime manufacturing, (29) nitric acid production, (30) manure management systems that emit CH4 and N2O in amounts equivalent to 25,000 metric tons CO2 equivalent or more per year, (31) manufacturers of passenger cars, light trucks, and medium duty passenger vehicles, (32) manufacturers of highway heavy duty engines and complete vehicles, (33) manufacturers non-road diesel engines and non-road large spark ignition engines, (34) manufacturers of non-road small spark ignition engines, marine spark ignition engines, personal watercraft, highway motorcycles, recreational engines and vehicles, (35) manufacturers of locomotive and marine diesel engines, and (36) manufacturers of jet and turbo prop aircraft engines. 

EPA intends to hold two (2) hearings on the proposed regulations.  The first hearing will be held on April 6 and 7, 2009, at One Potomac Yard, 2777 S. Crystal Drive, Arlington, VA 22202.  The second hearing will be held on April 16, 2009, at the Sacramento Convention Center, 1400 J Street, Sacramento, CA 95814.  Comments on the proposed regulation will be due sixty (60) days after the date of publication of the proposed regulations in the Federal Register.

William C. Scott is a member of Modrall Sperling's Natural Resources Department.  His practice focuses on transactions, permitting, regulatory compliance, and litigation in the areas of natural resources, environmental and Indian law.