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Summary:
Major amendments to the Clean Air Act that would have established a cap-and-trade program for emissions from coal-fired electric power plants were among the first items on the agenda of the 109th Congress: S. 131 (the Clear Skies Act) was scheduled for markup by the Senate Environment and Public Works Committee March 9. But the committee failed to approve the bill, on a 9-9 tie vote, in large part because of complaints that the bill would weaken existing Clean Air Act requirements. A deadline for mercury regulations has helped drive the Clear Skies debate: EPA faced a judicial deadline of March 15, 2005, to promulgate standards for power plant mercury emissions. The agency met this deadline, but the specifics of its chosen regulation have been widely criticized and are now being challenged by at least 14 states. EPA also finalized, on March10, the Clean Air Interstate Rule (CAIR), which will cap emissions of sulfur dioxide and nitrogen oxides from power plants in 28 eastern states and the District of Columbia. Rather than promulgate these rules, the Administration would have preferred that Congress pass the Clear Skies Act. Under Clear Skies (as under the promulgated mercury and CAIR regulations), there would be national or regional caps on emissions of mercury, sulfur dioxide, and nitrogen oxides; utilities would receive a set number of allowances; and a trading regime would permit compliance through installation of pollution controls or the purchase and use of excess allowances. The CAIR and mercury regulations mimic much of Clear Skies' cap-andtrade approach, but Clear Skies would also remove or modify many existing Clean Air Act requirements. Whether to modify such requirements as New Source Review, deadlines for nonattainment areas, and provisions dealing with interstate air pollution are among the key issues in the Clear Skies debate. Other issues that Congress and EPA face include whether to cap emissions of carbon dioxide (CO2) in addition to the other three pollutants, and legal issues related to the mercury standard. Of the other air issues that Congress faces, the most significant is the regulation of fuel additives used in reformulated gasoline. One particular additive, MTBE, has contaminated groundwater in numerous states, leading 21 of them (notably California and New York) to ban or limit its use. As passed by the House on April 21, the energy bill (H.R. 6) would ban MTBE nationwide, with several potential exceptions, and would grant MTBE producers a safe harbor from product liability lawsuits. The Senate version of the bill, passed June 28, would ban MTBE sooner and would not provide a safe harbor. The bills also differ on how much stimulus to provide for the potential MTBE replacement, ethanol, how much to authorize for MTBE cleanup, and how much to authorize in transition assistance for MTBE producers. A third set of issues seeing early action is whether to modify a requirement that state and local transportation planners demonstrate conformity between their transportation plans and the timely achievement of air quality standards. Failure to demonstrate conformity can lead to a temporary suspension of federal highway funds. This issue brief will be updated on a regular basis.
