### Comments Regarding the Proposed Endangerment and Cause or

Contribute Findings for Greenhouse Gases

Under Section 202(a) of the Clean Air Act

From the American Public Power Association (APPA)

Submitted to
The U. S. Environmental Protection Age ncy (EPA)

Docket ID No. EPA

- HQ

- OAR

- 2009

- 0171.

June 23, 20091

EPA Docket Center (EPA/DC), Mailcode 6102T Attention Docket ID NO. EPA

- HQ

- OAR

- 2009

- 0171 U.S. EPA 1200 Pennsylvania Ave., NW Washington, DC 20460

Re: American Public Power As sociation’s Comments on Proposed Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 18886 (April 24, 2009); Docket No. EPA

- HQ

- OAR

- 2009

- 0171

Dear Sir/Madam: The American Public Power A ssociation (APPA) appreciates the opportunity to provide comments on U.S. EPA‘s proposed endangerment and cause or contribute findings (―Proposed Endangerment Findings‖) , published in the Federal Register at 74FR 18886 , April 24, 2009. APPA previously comm ented on U.S. EPA‘s Advance Notice of Proposed Rulemaking (ANPR) on regulating greenhouse gases, published at 73FR44354, July 30, 2008. APPA has attached a copy of those comments to this submittal, for inclusion in the current rulemaking record.

Public power is the term used to describe the more than 2,000 municipal and other state and local community

- owned electric utilities that provide electricity for approximately 43 million Americans. These public power systems are among the most diverse of the ele ctric utility sectors, representing utilities in small, medium and large communities in 49 states (all states except Hawaii). Seventy

- five percent of public power systems are located in cities with populations of 10,000 or less. Overall, public power acc ounts for about 16 percent of all kilowatt

- hour sales to consumers. APPA was created in 1940 as a non

- profit, non

- partisan organization. Its purpose is to advance the public policy interests of its members and their consumers, and provide member services to ensure adequate, reliable electricity at a reasonable price with the proper protection of the environment. More than 90 p ercen t of APPA member utilities meet the definition and qualify under Small Business Regulatory Enforcement and Fairness Act of 1996 (SBR EFA).
One characteristic of public power municipal electric utilities that makes our perspective unique on the questions pertaining to geologic sequestration (often referred to as CCS) of CO 2 as a control option is that more than 80 p erc ent of the public power u tilities also manage drinking water utilities that supply residential, industrial, commercial and industrial customers. While the Endangerment proposal is not calling for comments about CCS, APPA believes that both fuel switching to natural gas and geologi c sequestration technical issues are worthy of discussion. Should the U.S. EPA propose any regulatory controls on CO 2 for the electric utility sector in the short term, these comments offered here and under the proposed UIC rule must be considered

. APPA appreciates the opportunity to file comments and remains willing to meet with the U.S. EPA staff or contractors.
Thank you.2

Table of Contents

I. APPA believes the U.S. EPA has selected two gases for consideration for a Section 202(a) endangerment finding

– U.S. EPA has selected two greenhouse gases not emitted by motor vehicles, and has omitted two gases that are emitted
or are precur sors to GHGs. Pg. 4

II. APPA believes that U.S. EPA has mistakenly categorized climate effects as ―health‖ impacts, while the Clean Air Act and regulatory precedents are clear that such effects must be categorized as ―welfare‖ impacts. Pg. 8

III. APPA’s o bservations about welfare

- based standards Pg. 11

IV. The proposed endangerment finding is in conflict with the larger structure of the Clean Air Act Pg. 11

V. U.S. EPA must consider the broad flexibility it has to make reasonable regulatory decisions following on Endangerment findings. Pg. 14

VI. U.S. EPA’s regulatory options following an endangerment determination on human health basis would require considerable U.S. EPA’s Science Advisory Board (SAB) review and analysis before the U.S. EPA could propos e specific regulations. Pg. 16

VII. Any U.S. EPA action following an endangerment finding must consider all of the U.S. EPA’ s regulatory options. Pg. 17

VIII. The various regulatory options must consider energy policy and consequences from fuel switc hing to natural gas. Pg. 19

IX. APPA believes the U.S. EPA has considerable discretion in sequencing or phasing in regulatory controls under the existing Clean Air Act. Pg. 22

X. The U.S. EPA might want to address other s first before addressing all industria l sectors. Pg. 23

XI. APPA believes the U.S. EPA must consider the status of commercially viable and fully demonstrated technology if it would regulate through NSPS, HAPS, or critical pollutants NAAQS/SIP process. Pg. 243

XII. Before making an endangerm ent determination that could lead to proposing and setting standards, the U.S. EPA must consider the ramifications of international GHG emission contributions to the background emissions. Pg. 24

XIII. APPA believes the U.S. EPA must consider existing renewabl e requirements and other state or regional GHG reduction strategies, regulations and laws to give credit for early reduction of CO 2 . Pg. 24

XIV. APPA believes that the U. S. EPA’s actions under the Clean Air Act must consider both international energy for ecasts, emissions, and growth in CO 2 emissions resulting from circumstances beyond the utility’s control before setting standards. Pg. 254

Introduction
U.S. EPA‘s proposed endangerment finding represents the first step toward a potentially irrevers ible course of greenhouse gas regulation under the Clean Air Act, a course of action even the U.S. EPA Administrator recently recognized as an undesirable outcome. APPA believes consistent with our comments filed on Nov. 26 th , 2008 in response to the ANPR that the Clean Air Act is not a suitable method to reduce carbon dioxide (CO 2 ) and other GHGs. A copy of the APPA comments on the ANPR is found in the Appendix (page 28 ). 1 Importantly, for the reasons described below, APPA believes that U.S. EPA continue s to retain discretion at this moment , and should exercise that discretion, to avoid triggering the otherwise unavoidable cascade of consequences that would result from a final endangerment determination. Given the uniform recognition of the unsuitability of the Clean Air Act to address GHGs

— including a recent
statement s by U.S. EPA Administrator Lisa Jackson

— and the ongoing developments on comprehensive legislation, EPA must exercise this discretion to defer a final endangerment determination at this time . APPA‘s views have not changed as to a preference that Congress pass an entirely new law to accommodate an economy wide approach to reduce GHGs and mitigate against climate change. APPA is not offering comments in this submittal regarding any views on
any bills pending in Congress. However in the Appendix (page 28 ) the APPA policy views on climate change may be found. APPA‘s comments on the endangerment are specifically focused on the authorities under existing law and do not offer views on cap and trade, carbon taxes, or any other new legislative approaches being considered in Congress.

I. APPA believes the U.S. EPA has selected two gases for consideration for a Section 202(a) endangerment finding

– U.S. EPA has selected two greenhouse gases not emitted by m otor vehicles, and has omitted two gases that are emitted or are precursors to GHG s.
(a) Summary
U.S. EPA‘s proposed definition of ―air pollution‖ for the endangerment finding is specified as the combined mix of the six ―long

- lived‖ greenhouse gases: CO 2 , CH 4 , N2 O , HFCs, PFCs, and SF 6 (74 FR 18895). This definition is inappropriate because it neither fits the source category being addressed by the rulemaking (mobile sources) nor the immediate nature of multiple GHG effects. Enlarging this definition to i nclude B lack C arbon and tropospheric ozone should be considered, as these two substances or their precursors are emitted by mobile sources. U.S. EPA has found no direct effects of greenhouse gases on human health (74 FR 18901). U.S. E PA has, however, concluded that these gases , acting through changes in the climate, can impact public health , both positively and negatively . As discussed in more detail below, APPA believes that there is substantial legislative and regulatory history tha t supports the view that such impacts are properly characterized as ―welfare‖ impacts, and not health impacts.

1 A PPA re

- submits those comments in this submittal of comments on the proposed endangerment.5

A related and significant issue is the fact that the Clean Air Act provides greater flexibility for attaining secondary (welfare) standards than primary (health) standards. Hence, the issue of how best to address indirect health issues is one which materially affects a series of implementation issues, including the technical and economic reasonableness of mitigation measures, and mandatory sanctio ns for failure to attain a National Ambient Air Quality Standard (NAAQS). The proposal states that o ne significant indirect impact of climate change on human health is the effect of temperature changes on mortality (74 FR 18901)

. The proposal further stat es that h igher temperatures can increase mortality in the summer, and decrease mortality in the winter, but conclude s that the net impact is ambiguous (74 FR 18901). Numerous studies point to the net benefit of a warmer climate with respect to this aspect of indirect health impacts. These issues are presented in greater detail below.

(b) Definition of air pollution U.S. EPA has proposed to define climate

- related ―air pollution‖ to be the six ―long

- lived‖ gases (or groups): CO 2 , CH 4 , N2 O , HFCs, PFCs, SF 6 . U.S. EPA has considered and rejected inclusion of both B lack C arbon (BC) , and tropospheric ozone as part of the mix of gases affecting climate change. The radiative forcing of greenhouse gases is measured in watts per square meter (W/m 2 ). According to the IPCC 2 , the contributions to radiative forcing (in 1998) by the six GHGs proposed by U.S. EPA in its definition of ―air pollution‖ total about 2.1 W/m 2 , and individually are

o CO 2 : 1.46 W/m 2

o CH 4 : 0.48

o N2 0 : 0.15

o HFCs, PFCs, SF 6 : 0.02 According to Ramana than & Carmichael 3 :

o ―Emissions of B lack C arbon are the second strongest contribution to current global warming.‖

o ―Deposition of B lack C arbon darkens snow and ice surfaces, which can contribute to melting, in particular of Arctic sea ice.‖

2 Climate Change 2001: The Scientific Basis , Intergovernmental Panel on Climate Change, 2001.

3 Global and regional climate changes due to black carbon , V. Ramanath an and G. Carmichael (Scripps Institution of Oceanography and College of Engineering, University of Iowa), Funded by NSF, NOAA, and NASA, Nature Geoscience , 1: 221

- 227, March 2008.6 o Black C arbon is r emoved from the atmosphere by rain and snowfall, and by direct deposition to the earth‘s surface. Black C arbon particles remain in the atmosphere approximately one week.

o ―The BC (Black Carbon) forcing of 0.9 W/m 2 is as much as 55 p erc ent of the CO 2 forcing and i s larger than the forcing due to the other GHGs such as CH 4 , CFCs, N2 O or tropospheric ozone. Similar conclusions have been inferred by others....‖

o ―Given that BC (Black Carbon) has a significant contribution to global radiative forcing, and a much shorter lifetime compared with CO 2 (which has a lifetime of 100 years or more), a major focus on decreasing BC (Black Carbon) emissions offers an opportunity to mitigate the effects of global warming trends in the short term. Reductions in BC (Black Carbon) are a lso warranted from considerations of regional climate change and human health.‖ According to M. Jacobson 4 :

o ―Soot particles containing B lack C arbon, from fossil

- fuel and biofuel burning sources, have a strong probability of being the second

- leading cause of global warming after carbon dioxide and ahead of methane. Control of soot emissions, particularly from fossil

- fuel sources, is very likely to be the fastest method of slowing global warming.‖

o ―The United States‘ soot contribution to global warming m ay exceed each its methane and nitrous oxide contributions to global warming.‖

o ―The main sources of U.S. fossil

- fuel soot are nonroad vehicles, followed by onroad mobile vehicles.‖ According to Zender 5 , ―Reducing Arctic BC concentrations sooner rather than later is the most efficient way to mitigate Arctic warming that we know of.‖ According to the IPCC 6 , ―Tropospheric ozone changes due to emissions of ozone forming chemicals (nitrogen oxides, carbon monoxide, and hydrocarbons) contribute 0.35 W/m 2 .‖ Motor vehicles are a major source of nitrogen oxides, carbon monoxide, and hydrocarbons.

The above references demonstrate that U.S. EPA has elected to include in the definition of climate change air pollution, three groups of gases that cumulatively contribute 0.02 W/m 2 to radiative forcing, and which are not emitted in significant quantities by motor vehicles, while electing to exclude B lack C arbon and tropospheric ozone smog that contribute 0.9 and 0.35 W/m 2 , respectively, to radiative forcing, and which are d erived in

4 Testimony for the Hearing on Black Carbon and Arctic , House Committee o n Oversight and Government Reform, Mark Jacobson, Professor of Civil & Environmental Engineering, Stanford University Atmosphere/Energy Program, October 18, 2007.

5 Arctic Climate Effects of Black Carbon , C. Zender, Department of Earth System Science, Univ ersity of California, Irvine, Testimony before the House Oversight and Government Reform Committee, October 18, 2007.

6 IPCC, 2007: Summary for Policymakers , Intergovernmental Panel on Climate Change, 2007.7

large part, if not primarily in the U.S., from motor vehicles This could be significant since the two excluded pollutants have approximately 60 p er cent of the radiative forcing effect of the six gases selected by U.S. EPA. Strategies to mitigate climat e change should be built around the definition of the gases that contribute most to radiative forcing

. Practical decisions will be necessary in order to achieve reductions that can be sustained over time and have the least deleterious impact on the U.S. ec onomy. In the Proposal, U.S. EPA defines both the ―air pollution‖ reasonably anticipated to endanger public health and welfare and the ―air pollutant‖ that contributes to the air pollution as a collective class of six greenhouse gases. By improperly defin ing ―air pollutant‖ to include perfluorocarbons and sulfur hexafluoride

— substances that are not present in motor vehicle emissions

— the Administrator exceeded her statutory authority under CAA Section 202(a). See Sierra Club v. EPA , 479 F.3d 875, 884 (D.C. Cir. 2007) (―If the Environmental Protection Agency disagrees with the Clean Air Act‘s requirements for setting emission standards, it should take its concerns to Congress . . . In the meantime, it must obey the Clean Air Act as written‖). As discussed i n more detail below, Section 202 indicates one and only one reason for the Administrator to make an endangerment finding: as a basis for promulgating emission standards for new motor vehicles. Thus, it is inappropriate to propose a stand alone endangermen t finding for air pollutants which cannot be regulated under Section 202.

o U.S. EPA acknowledged the scope of its authority when considering an endangerment finding in the ANPR: ―Title II of the CAA provides U.S. EPA statutory authority for mobile source air pollution c ontrol.‖ ANPR, 73 Fed. Reg. 44 432 (July 30, 2008). U.S. EPA also acknowledged that ―[p]erfluorocarbons (PFCs) and sulfur hexafluoride (SF 6 ) are not emitted from motor vehicles or motor vehicle engines in the United States.‖ Id at 44 431. Yet, in the Proposal, the Agency is unable to justify this overly broad definition, merely stating that ―it is entirely appropriate for the Administrator to define the air pollutant in a manner that recognizes the shared relevant properties of all of these six gases, even though they are not all emitted from the source category before her.‖ 74 Fed. Reg . at 18 904.

o Past endangerment findings under Section 202(a) demonstrate U.S. EPA‘s consistent approach of defining ―air pollutant(s)‖ in accordance with the Act‘s clear direction, to include only those emitted from the relevant source category. For instance, in U.S. EPA‘s Notice of Proposed Rulemaking for Heavy

- Duty Engine and Vehicle Standards, the Agency found that ―emissions of NO x , VOCs, SO x , and PM from heavy

- duty trucks can reasonably be anticipated to endanger the public health or welfare.‖ 65 Fed. Reg . 35 436 (June 2, 2000) (emphasis added). The Administrator proposed standards to regulate those particular air pollutants from heavy duty trucks, not a broader class of ―air pollutants‖ including pollutants not actually present in heavy duty vehicle emissions.
The Proposal itself uses the statutory term ―air pollutant(s) inconsistently

— at times referring to the group of six GHGs as the ―air pollutant,‖ while in other instances falling back on a four pollutant definition. For example: ―[t]he Administrator further proposes to8

find that combined emissions from new motor vehicles and new motor vehicle engines for four of these greenhouse gases

- carbon diox ide, methane, nitrous oxide, and hydrofluorocarbons

- contribute to this air pollution.‖ Proposal, 74 Fed. Reg . at 18888. The Administrator‘s own inconsistency demonstrates the difficulty with including PFCs and SF 6 in the cause or contribute finding. Fo r these reasons, the endangerment proposal oversteps legal bounds in defining the scope of pollution address to include air pollutants beyond those potentially subject to Section 202 authority. This makes the endangerment proposal fundamentally flawed; an d U.S. EPA must revise the proposal to include only the four greenhouse gases

.

II

. APPA believes that U.S. EPA has mistakenly categorized climate effects as ―health‖ impacts, while the Clean Air Act and regulatory precedents are clear that such effects must be categorized as ―welfare‖ impacts. The Proposal explicitly concedes that the only public health effects resulting from global climate change would be indirect in nature. 74 Fed. Reg. at 18901 (all public health risks ―occur [ ] through changes in climate, but the end result is an adverse effect on the health of the population.‖) 7

. Classifying these indirect ―welfare‖ effects as ―public health‖ effects for purposes of an endangerment finding is improper under the Clean Air Act. Although the Act co ntains no definition of ―public health,‖ it does define effects on ―welfare‖ as including ―effects on ... weather

... climate .... [and] personal comfort and well being.‖ 42 U.S.C. § 7602(h) ; CAA 302(h) . In its Proposal, the Administrator rejected any distincti on between the two categories, claiming that adverse impacts on ―welfare‖ may lead to adverse impacts on ―public health.‖ 74 Fed. Reg. at 18,902. Given that Congress provided a separate and specific definition of ―welfare,‖ it clearly intended ―health‖ a nd ―welfare‖ t o encompass different effects. Thus, the Administrator‘s interpretation provided in the Proposal is not permissible under th e CAA

. The legislative history of the Act reveals Congressional intent for public health effects to encompass only di rect exposure to air pollutants. The relevant parts of CAA Sections 202(a) and 302(h) were enacted in the 1970 Clean Air Act Amendments. Prior to 1970, ―adverse effects on welfare‖ included only ―injury to crops and livestock, damage to and deterioration of property, and hazards to transportation.‖ 1970 Legis. Hist. 1543, 1571 (quoting Clean Air Act, § 302(g)). The 1970 Amendments significantly expanded the Act‘s definition of welfare effects to include effects on weather, climate and ―personal comfort and well

- being.‖ 42 U.S.C. §7602(h). This expansion was concurrent with the Senate‘s creation of separate ambient air quality standards for both public health and public welfare.

7 EPA made the same concession in its ANPR. Se e 73 Fed. Reg. at 44,478 (July 30, 2008) (―GHGs at current or projected ambient levels appear to have no known adverse effects on human health. Rather the health impacts associated with ambient GHG concentrations are a result of the changes in climate ... w hich trigger myriad ecological and meteorological changes that can adversely affect public health. The effects on human health are thus indirect impacts resulting from these ecological and meteorological changes, which are effects on welfare. This raises the question of whether it is more appropriate to address these health effects as part of our consideration of the welfare effects of GHGs when setting a secondary NAAQS rather than a primary NAAQS.‖).9

The simultaneous expansion of ―welfare‖ effects and their statutory separ ation from ―public health‖ effects was a stark contrast from an earlier bill which proposed only a single NAAQS providing for both ―the protection of the public health and guard against environmental and economic effects of air pollution.‖ See

, e.g. , Sen. Hearing, Sub comm. on Air and Water Pollution, Comm. on Public Works (Mar. 17, 1970) (statement of Dep‘t of HEW Sec. Finch), 1970 Leg. Hist. 972. Proponents explained that this single standard would be based solely on ― direct personal health impacts‖ but would have the co

- benefit of also protecting ―welfare‖ impacts. Sen. Hearing, Subcommittee on Air and Water Pollution, Comm. on Public Works (Mar. 17, 1970) (statement of Dr. Middleton, Comm‘r, Nat‘l Air Pollution Control Admin., HEW), 1970 Leg. Hist. 1194 (emphasis added). The Senate bill that ultimately passed unbundled ―public health‖ effects from ―public welfare‖ effects, despite the relationship between the two. Instead, the final Senate bill required one standard to protect the health of persons an d a separate standard to protect the ―public welfare,‖ which included but was not limited to, ―effects on soil, water, vegetation, manmade materials, animals, wildlife, weather, visibility, and climate, as well as effects on economic values.‖ The Senate C ommittee Report explained the difference between the national standards and goals:
National ambient air quality standards are authorized because . . . the protection of health is a national priority, but the Committee also recognizes that man‘s natural an d man

- made environment must be preserved and protected. Therefore, the bill provides for the setting of national ambient air quality goals at levels necessary to protect public health and welfare from any known or anticipated adverse effects of air pollut ion

— including effects on soils, water, vegetation, man

- made materials, animals, wildlife, visibility, climate , and economic values.(emphasis added). This is clearly the source of the current definition of welfare effects in Section 302(h), which also incl udes ―personal comfort and well being.‖ 8 Notably, the Senate‘s proposal contemplated that welfare effects, including climate, weather, and personal well being would encompass indirect effect on the public health, suggesting that the separate public health effects standard excludes these indirect effects considered under the public welfare prong.

Considering both direct and indirect effects under the public health standard would be duplicative and essentially result in the same single

- standard analysis fr om earlier versions of the bill that the Senate rejected. At a minimum, the Senate Report and floor debate demonstrate that Senator Edmund Muskie, the leading proponent of the final bill, conceptualized health effects to include only direct effects on hum an health.

8 The final version of the bill included a primary st andard tied to public health and a secondary standard to protect the public welfare. The list of welfare effects was moved from Section 109 to Section 302(h).10

In the nearly forty years since the 1970 Clean Air Act Amendments, U.S. EPA has consistently categorized direct human health effects, such as increased risks of cancer, asthma, neurological effects, and the like as ―public health effects,‖ while defining effects on vegetation, weather, climate, and visibility as impacts to welfare . By importing, for the first time, weather and climate impacts into the public health effects analysis, the Agency sharply departs from its past position without provi ding an explanation for its new interpretation. More importantly, the proposal would categorize weather and climate impacts as ―public health‖ effects, in conflict with the clear definition in the CAA that they are ―welfare‖ effects.
Just as an example, i n the 1995 review of the NO 2 NAAQS, U.S. EPA listed the public health effects of NO 2 as lung cell injury, death, increased susceptibility to respiratory illness in children, pulmonary adema, and increased airway resistance in asthmatics. 9 In its separate public welfare analysis, U.S. EPA listed the effects of NO 2 as including impacts to ecosystems, including adverse effects to vegetation, wetlands, aquatic systems, soil, and toxicity to wildlife, and impacts to visibility and man

- made materials. Review of the National Ambient Air Quality Standards for Nitrogen Dioxide, Assessment of Technical and Scientific Information, U.S. EPA (September 1995).
Prior court decisions supported prior Agency decisions limiting the public health effects analysis to those t hat have a direct impact on human health. In NRDC v. EPA , the D.C. Circuit rejected a claim that U.S. EPA must consider the effect of increased unemployment on public health in setting a primary NAAQS. NRDC v. EPA , 902 F.2d 962, 973 (D.C. Cir. 1990). Th e Court explained that, ―[i]t is only the health effects relating to pollutants in the air that U.S. EPA may consider.‖ Id . (emphasis added). U.S. EPA later relied on this holding in defending its decision to set a primary NAAQS for ozone based solely o n direct health effects of ozone

. In a Petition for Rehearing, U.S. EPA argued that the primary NAAQS should be set through consideration of only ―direct adverse effects on public health, and not indirect, allegedly beneficial effects.‖ U.S.EPA Pet‘n fo r Rehearing, Am. Trucking Ass’n v. EPA , No. 97

- 1440 (D.C. Cir. June 28, 1999).
Most importantly, U.S. EPA categorized climate change as a public welfare effect in a prior endangerment finding. In listing new municipal solid waste landfills as a source
cat egory under Section 111, U.S. EPA identified global climate change, along with odor, fires and explosions, reduced plant growth, decreased crop yield and deterioration of

man

- made materials as public welfare effects to which landfill emissions cause or

con tribute. 56 Fed. Reg. 24 469 (May 30, 1991). U.S. EPA‘s position in the NSPS reinforces the proper classification of climate change impacts as welfare impacts.

9 EPA has made similar health and welfare distinctions in numerous reviews of the NAAQS. See e .g., CO National Ambient Air Quality Standards, 50 Fed. Reg. 37484, 37 494 (Sept. 13, 1985); Review of the national Ambient Air Quality Standards for Ozone, Policy Assessment of Scientific and Technical Information, U

. S

. EPA (July 2007); National Ambient Ai r Quality Standards for SO 2 , 38 Fed. Reg. 25 678 (Sept. 14, 1973); Proposed National Ambient Air Quality Standard, 42 Fed. Reg. 63 076 (Dec. 14, 1977).11

III. APPA’s observations about welfare

- based standards

U.S. EPA notes that Primary National Am bient Air Quality Standards (P

- NAAQS) must be attained within 5 years from the effective date of designation of an area as nonattainment (with a possible 5 year extension), but that ―there is no statutory maximum date for attainment‖ of a secondary standar d. 10 APPA encourages the U.S. EPA to take appropriate time to submit the GHG reduction targets, regulatory approaches and specific sector regulatory concepts, along to the U.S. EPA Science Advisory Board (SAB). Pre

standards setting consultation and review of the U.S. EPA‘s plans to reduce CO 2 and GHGs would be very beneficial. This review would help determine the optimal methods and timing for compliance with any possible secondary welfare standards. Implementation plans for attaining secondary standards w ould require the use of ―reasonably available control measures,‖ but under a secondary standard attainment plan, these measures ―allow for consideration of costs‖. 11

A welfare

- based approach to climate change mitigation would provide states (and U.S. EPA) the flexibility to avoid economically disruptive mandates that precede the availability of affordable and effective control technologies. This could be particularly relevant to the power sector, where a major source of GHG emissions is fossil fuel combustion, but where carbon capture and storage technology or geosequestration remains an immature technology, lacking any commercial scale demonstration. Moreover, states in compliance with such a plan would not be subject to mandatory, but
counte rproductive, sanctions denying federal funds to states not in compliance with attainment plans under a Primary NAAQS approach.

IV. The proposed endangerment finding is in conflict with the larger structure of the Clean Air A ct
GHGs are generally distribu ted equally throughout the global atmosphere. As a result, the level of localized GHG emissions ha s no direct effect on local or global atmospheric concentrations of GHGs . This stands in sharp contrast to the pollutants currently regulated under the CAA (e.g., volatile organic compounds), which create local or regional air quality problems. It is this unique nature of GHGs that sets them apart from other, more traditional air pollutants, and makes the current Act a poor fit for addressing this global na ture of GHG concentrations. As former U.S. EPA Administrator Johnson warned, ―[t]he potential regulation of greenhouse gases under any portion of the Clean Air Act could result in an unprecedented expansion of U.S. EPA authority that would have a profound effect on virtually every sector of the economy and touch every household in the land.‖ 73 Fed. Reg. 44354, 44 355 (July 30, 2008). Given the current

10 Ibid, 73 FR 44481, July 30, 2008.

11 Ibid.12

Administrator‘s stated preference for new legislation to reduce GHG emissions, rather than regulations ba sed on the current Act, and the stated concerns of other federal agencies as reflected in a recent OMB memorandum, 12 U.S. EPA‘s proposals will virtually assure adverse, unintentional consequences.
The Clean Air Act‘s unsuitability for regulating GHG emissio ns is illustrated in three unavoidable consequences of an endangerment finding under Section 202:
(1) the presumption of an endangerment finding under multiple other provisions of the Act;

(2) a corresponding duty to regulate GHG emissions under those ot her sections; and

(3) a duty to require permits for GHG from countless newly

- regulated sources under the Act‘s pre

- construction and operating permit provisions. While the U.S. EPA‘s 166

- page July 2008 ANPR discussed these consequences in detail, the Prop osal contains only the narrowest mention of the ANPR and the public comment on that notice. 13 See 73 Fed. Reg. 44 354 (July 30, 2008). The Administrator has taken the drastic step of issuing the Proposal before responding to comments on the ANPR in any mea ningful fashion, despite the existence of a direct relationship between the ANPR and the Administrator‘s current Section 202(a) Proposal. For that reason, we have resubmitted our comments on the ANPR in this proceeding. See Appendix item I for a copy of A PPA‘s 200+ page comments with attachments.

M any sections of the CAA, including sections 108, 111, 112, 211, 213, 231 and 615, contain similar language requiring the Administrator to make a positive endangerment finding prior to proceeding with regulations. While the endangerment language in each CAA section is slightly different, each section generally calls for similar analysis of the impact of the air pollution at issue. This means that a positive GHG endangerment finding under one provision is likely t o overflow into other provisions. In fact, U.S. EPA acknowledged in the ANPR that ―a positive or negative endangerment finding for GHG emissions under one provision of the Act could have a significant and direct impact on decisions under other C AA section s.‖ 73 Fed. Reg. 44354, 44 420 (July 30, 2008).

12 First (1st) Round of Office of Management and Budget (OMB) C omments to USEPA on the Proposed Findings, Doc. ID EPA

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- 0124, Docket ID EPA

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.

13 In the Proposal, EPA states that an endangerment finding under Section 202(a) does not trigger the CAA's Prevention of Significant Deterioration (―PSD‖) program for GHGs. However, E PA notes that the Interpretive Guidance on In Re Deseret Power Electric Cooperative Decision, upon which its current position regarding the PSD trigger is based, is under reconsiderat ion. Proposal, 74 Fed. Reg. 18 905, n. 29. More importantly, EPA fails t o mention the regulations that will presumably follow from its endangerment finding.13

I n the Proposal, the Administrator notes that ―EPA is not proposing or taking action under any other provision of the Clean Air Act.‖ 74 Fed. Reg. at 18888. However, merely making such a statement can not prevent a regulatory ―cascade‖ of consequences throughout the Act the Agency admits it wants to avoid, as an endangerment finding‘s statutory effect can not be limited by a proclamation in the Proposal‘s preamble. An endangerment finding under Section 202 , or any other similar section, is the necessary prerequisite to mandatory regulation. In most instances, once an endangerment finding is made, the Act provides that U.S. EPA ―shall‖ regulate the subject pollutant. That mandatory duty to regulate, combin ed with the cascading effect of a single endangerment finding, means that U.S. EPA may face an overwhelming burden of needing a regulatory regime in place for all emission sources at the time it starts to regulate the first source. Accordingly, the creati on of GHG emission standards for new motor vehicles could trigger a duty for U.S. EPA to regulate GHG emissions from stationary sources under other CAA sections, such as the development of NAAQS, New Source Performance Standards (―NSPS‖), the PSD program, Title V, and National Emission Standards for Hazardous Air Pollutants (―NESHAP‖). For reasons explained in detail in our ANPR comments, each of these is impractical or inappropriate for addressing GHG emissions.

The U.S. EPA‘s issuance of an endangerment finding and promulgation of final GHG emission standards under any of the CAA‘s related sections would trigger a duty to regulate GHG emissions under the PSD and Title V operating permit programs. These sections apply to stationary sources that emit, on an annual basis, at or above certain thresholds of any regulated air pollutant. Stationary sources emitting 250 tons per year or more of a regulated pollutant, or 100 tons per year or more for certain listed source s , must acquire a PSD permit before const ructing or modifying the source . Title V‘s permit obligations are triggered for stationary sources emitting 100 tons per year or more of a regulated pollutant. According to U.S. EPA‘s own analysis, regulation of GHG emissions would expand the PSD program ‘s scope by ―orders of magnitude.‖ 73 Fed. Reg. at 44 498. Similarly, U.S. EPA estimated that an addition 550,000 existing sources would require a Title V operating permit. Id. at 44 511. While the statutorily mandated thresholds may be appropriate for t raditional air pollutants such as sulfur dioxide and nitrogen oxides, they were never intended for GHGs, and in particular CO 2 , which is emitted in much larger quantities during combustion. Consequently, many minor sources that were never intended by Cong ress to be regulated under either the PSD or Title V program would exceed the statutory thresholds. For these sources, even the smallest modification, such as minor equipment upgrades or energy efficiency measures, could trigger these burdensome permittin g requirements. U.S. EPA undoubtedly would like to ―fix‖ the PSD and Title V problem, but the Agency has recognized in the ANPR that any possible solution under the Clean Air Act is legally untested. Id. at 44 506.14

V. U.S. EPA must consider the broad fle xibility it has to make reasonable regulatory decisions following an Endangerment finding.
In the Proposal, the Administrator invited comment on alternatives to an endangerment finding under Section 202. See 74 Fed. Reg. at 18 890. We do not believe U.S. E PA should move forward with finalizing an endangerment finding under Section 202 until it fully vets all other alternatives and options, including Section 115 of the CAA

— International Air Pollution. While APPA in these comments does not advocate Section 1 15 or any other Clean Air Act provision as an appropriate approach to regulating GHGs, at the same time APPA believes U.S. EPA should fully consider all options prior to proceeding, including Section 115.

Section 115 has the potential to offer an effective , flexible, economically reasonable, and legally supportable means by which to regulate GHG emissions under the current CAA. The potential advantages of regulating GHG emissions under Section 115 are significant and include

(1) broad flexibility regardi ng which source categories are regulated and how they are regulated;

(2) easier harmonization of future legislation and/or international agreements;

(3) use of a regulatory scheme that reflects the global nature of GHG emissions and effects;

(4) a st ructure that satisfies the Supreme Court‘s mandate in Massachusetts ;
(5) avoidance of other CAA regulatory programs that many, including U.S. EPA itself, have recognized are ill

- suited for regulating GHG emissions;

(6) avoid of the potentially serious economic consequences of regulating minor sources under the PSD and Title V programs; and

(7) an opportunity to partner with the states in building an effective approach to GHG regulation. Despite these potential benefits, and the availability of a sect ion specifically created to address international air pollution, U.S. EPA has yet to seriously consider regulating GHG emissions under CAA § 115.

As its name

—

International Air Pollution

— suggests, Section 115 was designed by Congress to address air pollu tion issues that are international in nature and that require, at the very least, consideration of actions taken by other countries. When certain requirements are met, including an endangerment finding, Section 115 authorizes15

U.S. EPA to issue what amounts to a State Implementation Plan (SIP) call, requiring

states to take direct action in regulating domestic emission sources. To trigger action Section 115, there must be (1) receipt of an international report; (2) an international (as opposed to dom estic) endangerment finding; and (3) international reciprocity.

The ANPR expended only three paragraphs discussing Section 115 as an avenue for regulating GHG emissions. 14 Two issues raised by U.S. EPA in this discussion require clarification. First, in the ANPR, U.S. EPA appears to assume that a GHG NAAQS would be required before Section 115 could be used. 73 Fed. Reg. 44354, 44 482 (July 30, 2008). APPA believes this is incorrect. U.S. EPA may require SIP revisions in order to meet NAAQS attainment ―or to otherwise comply with any additional requirement established under [the Act].‖ 42 U.S.C. §§ 7415(b), 7410(a)(2)(H)(ii). Second, U.S. EPA also seemed to assume that an endangerment finding under Section 115 is no different than the endangerment fin ding provisions found elsewhere in the Act. 73 Fed. Reg. at 44 420. This is also incorrect, as a Section 115 endangerment is fundamentally different in that it analyzes the effects of air pollution outside of the United States. As discussed below, an end angerment finding under Section 115 does not prompt the endangerment ―overflow‖ and regulatory ―cascade‖ under other provisions of the CAA.

U.S. EPA‘s failure to give serious consideration to a potentially relevant provision may be, not just unwise, bu t unlawful as a matter of administrative action. Before finalizing the proposed endangerment finding, the Administrator should either consider using Section 115 in lieu of Section 202 or explain why the Clean Air Act‘s existing provision governing interna tional air pollution is unsuited to regulated proposed air pollutants that are indisputably international in scope.

As the U.S. EPA considers the viability of a Section 115 over a Section 202 endangerment finding, it should consider the following issues at a minimum:

o First, Congress designed Section 115 for air pollution that is international in nature. Its reciprocity requirement allows the U.S. EPA to consider the extent of GHG emission regulation in other countries and how domestic regulation would effect domestic sources competing in a globalized market. Although Section 115 would only regulate these domestic emission sources, regulatory decisions could be informed by the type and degree of controls taken by other countries, either independently or through international agreements.

14 Importantly, the staff analysis is comprehensive with regard to virtually every other CAA program, so this should in no way be read as a criticism of the document gene rally.16

o Second, Section 115 provides an alternative to a Section 202 endangerment finding while still satisfying the U.S. Supreme Court‘s mandate in Massachusetts . Under Section 115, U.S. EPA may still issue an endangerment find ing and may still regulate mobile source emissions, however, it would likely prevent the endangerment ―overflow‖ and regulatory ―cascade,‖ as discussed below. Further, as discussed above, Section 115 will allow for regulation that is more befitting an int ernational environmental matter than under Section 202.

o Third, the issuance of an endangerment finding and subsequent regulation under Section 115, instead of Section 202, may avoid the endangerment ―overflow‖ and regulatory ―cascade‖ that will lead to unintended consequences, constrain U.S. EPA discretion and result in years of legal challenges. The unique nature of Section 115 provides strong arguments to avoid regulating GHG emissions in ways not intended by Congress and resulting in severe regulator y burdens. Additionally, U.S. EPA will be afforded more discretion to develop a GHG emission regulatory plan that effectively utilizes available resources to reduce emissions in a more comprehensive and efficient manner.

o Finally, Section 115 allows U.S. E PA to partner with the States in order to create more flexible, efficient, creative and effective regulatory programs while remaining under U.S. EPA oversight at the national level. Several States have invested significant sums of time and resources into developing their own GHG mitigation strategies on either a state

- wide or regional basis. Section 115‘s SIP process allows opportunities for States to reduce GHG emissions through consideration of their own unique combination of emission sources and contro l alternatives, rather than have to work within a uniform set of federal mandates.

For all of these reasons, U.S. EPA should provide serious consideration to withdrawing its proposed endangerment finding under Section 202 and proceeding under Section 115 or at least articulate a reasoned basis for rejecting Section 115‘s provisions governing international air pollution control.

V I

. U.S. EPA’s regulatory options following an endangerment determination on human health basis would require considerable U.S. EPA’s Science Advisory Board (SAB) review and analysis before the U.S. EPA could propose specific regulations.
Although APPA believes that public health endangerment is not justified, we recognize that U.S

. EPA is proposing precisely such a finding. Shoul d the U.S. EPA proceed with an Endangerment determination based upon public health, the U.S. EPA and the SAB must review many regulatory options. Included in the staff preparation of options would be SAB review and votes as to the proper way to regulate. T he SAB must meet, review technical papers dealing with17

human health issues (if they exist) and processes t h at the U.S. EPA could utilize to reduce the pollutants and reduce the human health risks.
Typically from staff preparation time to concluding votes, SAB review may require as long as two years. APPA urges the U.S. EPA to take the required time to make suggestions for SAB‘s review. This time would be consistent with SAB‘s on

- going review of ozone, PM, PM 2.5 and other pollutants such as lead.

V II

. Any U.S. EPA action following an endangerment finding must consider all of the U.S. EPA’s regulatory options

. Prior to finalizing any Section 202 endangerment finding, the U.S. EPA must carefully assess and be prepared for the consequences of impacts no t just on cars and light duty trucks, but on stationary source GHG emissions. The regulatory options currently available to the U.S. EPA were not designed and not adaptable for controlling GHG emissions that accumulate and mix on a global scale. An attem pt to force GHG emission reductions through the National Ambient Air Quality Standards, New Source Review and the New Source Performance Standards programs would involve enormous costs and unparalleled administrative burdens and likely inefficient results.

The global nature of GHG emissions bar any realistic or practical NAAQS approach. First, no State can take any meaningful action to reduce GHG concentrations in either their region or the United States, making it impossible for any state or county to m ove from a nonattainment status to attainment. It is well understood that a NAAQS for GHGs will be utterly ineffective at a local or regional level, but will result in solely a symbolic statement that the nation is either in attainment or out of attainmen t for GHGs. Second, implementing a NAAQS depends on the existence of control technologies that will reduce stationary source emissions. No commercially feasible control technology exists today to reduce GHGs from fossil

- fueled electricity generating unit s. While pursuing the impossible goal of reaching NAAQS attainment status, States and their regulated industrial sources would be subjected to extraordinarily costly, onerous, and punitive regulatory requirements that will not lead to any ability for them to come into attainment. The only other alternative, classifying the entire nation as being in attainment with a GHG NAAQS would likely produce little GHG reductions and be strongly opposed by environmental groups.
Congress designed the NSPS to regulate stationary sources that cause or contribute significantly to air pollution that may endanger the public health or welfare. 42 U.S.C. § 7411(b)(1)(A). Under the NSPS, new or modified stationary sources must meet emission standards based on the best demon strated technology

– a standard that must be ―adequately demonstrated‖ in practice. Id. § 7411(a)(1). Congress‘ intent for broad national standards was to prevent industries from ―forum shopping,‖ where they seek out States with the most lenient air poll ution standards. ASARCO, Inc. v. EPA , 578 F.2d 319, 327, 332 (D.C. Cir. 1978). The global nature of GHG concentrations, however, nullifies such an intent

– GHG emissions originating from one State will have no different an impact on global GHG
concentrat ions than if the facility was located in any other State. Additionally, no control18

technology to control or capture GHG emissions has been ―adequately demonstrated‖ for purposes of NSPS at this time

. Section 112 of the Act regulates hazardous air pollut ants (―HAPs‖), which are commonly referred to as air toxics. The U.S. EPA is required to identify major sources of HAPs, which are in turn required to employ highly stringent levels of emissions controls known as ―maximum achievable control technology‖ (―M ACT‖). The threshold emission or potential

to

- emit levels defining a ―major source‖ under section 112 are extremely low

– 10 tons per year (―tpy‖) for individual HAPs or 25 tpy for multiple HAPs from a source. 42 U.S.C. § 7412(a)(1). Thus, listing one o r more GHGs as a HAP would expand the applicability of section 112 to at least hundreds of thousands of new sources across the nation, imposing upon them one of the most stringent and costly types of regulation under the CAA. New potential major sources w ould become subject to case

- by

- case MACT determinations before construction. The costs and time associated with implementing such a program would be astonishingly burdensome. Section 112 was, however, quite obviously never intended to regulate substances such as GHGs, where emissions are dispersed globally rather than causing low

- dose local exposures. This is borne out by the fact that the 190 HAPs listed by Congress generally cause serious health effects in small doses (most are known or suspected carci nogens). GHGs, in contrast, are not lethal to humans by direct exposure in amounts anywhere remotely close to those released by any type of emissions source, be it electric power plants or lawn mowers (or, for that matter, human exhalation). Section 112 was clearly not designed, and is wholly ill

- suited, to address GHG emissions.
The NSR program applies to any new stationary source emitting a threshold amount of a regulated air pollutant and existing sources that undertake modifications triggering emissi on increases above a significance level. 42 U.S.C. § 7479(1); 40 C.F.R. § 52.21(b)(23)(i). Although GHGs are not currently a regulated NSR air pollutant, if the U.S. EPA were to change this status, stationary sources with the potential to emit more than 250 tons of GHGs would become subject to the NSR program. U.S. EPA has acknowledged that GHGs are routinely emitted in such large quantities that the number of new sources requiring NSR permits would increase by orders of magnitude, with one study placing the number in excess of one million sources. Portia Mills, A Regulatory Burden: The Compliance Dimension of Regulating CO 2 as a Pollutant , Sept. 2008. The administrative burden under such a scheme would be immense. Permitting times would increase drama tically, even with dramatic increases in permitting staff and budgets. This is at a time where the country desperately needs new jobs, economic growth would be stifled across all sectors. Finalizing a Section 202 Rule without being prepared for the conse quences on the NSR program would be an administrative and economic disaster, and further demonstrates the need for the U.S. EPA must carefully exercise its discretion at this time regarding the timing of any endangerment determination and subsequent GHG re gulation

. APPA also thinks that, in consideration of a Section 115 approach to controlling CO 2 from power plants, that the U. S. EPA should become more familiar with technology options that are commercially viable now or would be likely to become commercia lly viable in the next decade. Additionally, APPA is familiar with the ―envelope‖ policy of controlling CO 2 and conventional pollutants in Australia. This approach is be wo rthy of consideration by the U. S. EPA since this19

approach has allowed the Australia n government to set reduction targets for CO 2 (which are enforceable) but also that provide the maximum flexibility to industrial facilities, commercial enterprises, and local government. The Australian government has had an aggressive CO 2 reduction stra tegy through its ―envelope‖ program which includes first measures such as energy efficiency, changes in building codes, and other measures with geologic sequestration to follow when the costs reduce. These reduction methods have nothing to do with the Aust ralian government‘s Emissions Trading System (ETS) for GHGs which is expected to go into effect in 2010. However, Australian‘s approach to regulating CO 2 through other less expensive but verifiable methods should by the U.S. EPA. This approach should be se riously evaluated for any future proposed regulatory actions.
Beyond the ―envelope‖ approach, Australia has some very useful pilot projects on geologic sequestration of CO 2 in situ t hat would be very valuable to study. Two of the primary benefits of the Australian CCS projects is that they have tremendous emphasis on reducing the parasitic load of the plants to run the carbon separation and geologic sequestration and that they have assessed the cost of CCS to be, in 2009 dollars, the equivalent to $125 U .S. (these costs include transportation and SO 2 removal which are not required in the Australian projects). While these numbers may not be dispositive for geologic seque stration technologies in the U. S. they are a very helpful start to understanding the c osts and timing of g eologic sequestration in the U. S. APPA does not presume that everything that the Australian government has done is to be used in a cookie

- cutter fashion but we do believe that since CO 2 is a global substance that looking at what other countries have done might me rit consideration before the U. S. EPA proposes standards under the Clean Air Act. 15

In addition, the U. S. EPA should focus on each pollutant in a common sense manner based upon it with scientific technology and economic impacts to society. This might mean, for example, that CO 2 and methane might be regulated differently for different industrial or commercial

sources. APPA believes, as stated in the introduction to these comments and in our ANPR
comments ( submitted on Nov. 26 th

, 2008) that the Clean Air Act was not designed to deal with a  ̳pollutant‘ as ubiquitous as CO 2 . If the U.S. EPA proceeds, the full panoply of regulatory options must be considered under the Clean Air Act.

VI II

. The various regulatory options must conside r energy policy and consequences from fuel switching to natural gas.
APPA believes the U.S. EPA may have a notion that the entire electric utility sector may switch to natural gas as a CO 2 mitigation/ reduction method. Serious questions remain as to availa bility of adequate natural gas supplies as well as the impacts to the existing coal fleet if the existing fleet were prematurely retired . In addition to supply issues, the U.S. EPA must consider fuel cost volatility in the economic analysis. This economic analysis is requi red under Executive Order 12866

, the Unfunded Mandates Reduction Fairness Act (UMRA) and the Small Business

15 Summary of the Australian Carbon Capture & Storage and conventional pollutant/energy efficiency ―envelope‖ policy based upon a presentation by and follow up conference call with the Honorable James McGregor, PE, Energy Systems Manager, CSIRO Energ y Technology, CSIRO Energy Centre, Mayfield West NSW, Australia. James.mcgregor@csiro.au20

Regulatory Enforcement Act of 1996 ( SBREFA ) require such analysis of economic impact, unfunded mandates and energy impacts . More th an 9 0 p e rce nt of APPA‘s member utilities are SBREFA qualified. As our member utilities are entities of local and state government, all are covered by UMRA.
Other economic and industry infrastructure considerations:
The cost of building new natural gas storage an d pipeline infrastructure for the portion of coal

- fired electric utility sector should it be forced to switch to natural
gas under a NAAQS, NSPS, HAPs, or PSD driven regulatory system.
The U.S. EPA‘s economic impacts should identify the macroeconomic effe cts to regions of the U.S. such as the Southeast and Midwest areas t ha t rely heavily upon coal

- generation.
The costs of pre

- maturely retired or mothballed coal generation facilities and any remaining debt incurred by a division of state and local governm ents under UMRA

. These debts must be evaluated on a state and regional basis.
Natural gas, emissions from natural gas units, and the realities of power plants:

One of the greatest myths of ―baseload‖ generation today is that the power plants run 24 hours a day, seven days a week at full generating capacity. This is almost never the case. Most ―baseload‖ coal plants have increasing variation in load on a daily, weekly and monthly basis reflecting both market dispatch and criteria pollutant control concerns (based upon energy generation) . Additionally, from 2002 to 2007 the U.S. has nearly tripled its electricity generation from wind and solar from 0.304 pe rcent of to 0.806 p e rcent 16 ( energy generation ) and the presence of these excellent resources has necessitated more flu ctuations in generating capacity of the baseload coal plant to meet and follow demand when the wind drops or sunlight decreases.

Electricity is generated from natural gas using either a simple cycle or combined cycle process. The simple cycle natural ga s utility unit operates in the same way as an airplane engine and, in fact, these are almost always retired airplane engines.

How combined cycle and simple cycle natural gas units differ : The simple cycle natural gas utility unit‘s fuel is burned and th e hot compressed exhaust gases expand through a turbine to generate electricity. This simple cycle has the advantage of being able to be started up and produce electricity very rapidly. However, the heat in the exhaust gas is wasted, thus leading to lowe r efficiency overall.

The combined cycle plant uses the waste heat from the exhaust gas to generate steam to produce additional electricity, thus using the same fuel source twice (thus the expression ―combined cycle‖). Therefore, it takes additional ti me (upwards of 2

- 3 hours, depending on the temperature of the boiler water and ambient conditions ) for the plant to generate electricity at full capacity.

16 Based on EIA data21

Until the water is heated enough to produce steam, the combined cycle plant will only operate in a lo w

- load simple cycle startup mode thus producing less electricity

. Availability of natural gas is critical

— but it is not the total picture: With the newly emerging shale gas production fields in Texas, Arkansas, and the Marcellus shale fields in the northe astern United States , it might be more feasible to fuel switch electric utilities to natural gas from a resource standpoint. However there might be reliability impacts if the entire electric utility‘s fossil generation is based upon natural gas for baseloa d generation.

In plain English, the ―nimbleness‖ refers to how quickly full power can be produced when the utility gets the signal for dispatch. U.S. EPA must include in its regulatory analysis the complete natural gas picture if fuel switching (directly or indirectly) is used to set a CO 2 standard or if a natural gas equivalency is to be used for a NSPS. The U.S. EPA must look at pipeline and storage capacity and fuel price volativity in addition to North American natural gas supply (including Canada)

A PPA believes that when the U.S. EPA assesses the options of controlling CO 2 through a NSPS standard which is either directly or indirectly a natural gas equivalent, that these reliability, ―nimbleness‖, natural gas infrastructure , and cost issues should be considered for the entire utility industry . These are the critical real world issues affecting the effectiveness of a CO 2 control method at the U.S. EPA t hat will determine how effectively and how quickly CO 2 can realistically be reduced through fuel sw itching to natural gas.

Wind and natural gas : Many current press stories and interviews feature the benefits of wind and other renewables with natural gas as the backup. Many APPA member utilities are very proud of their investments in wind generation and often have simple cycle generation backing up that wind. Currently wind power from electric utilities is supplemented with simple cycle natural gas turbines

– that can produce full power at perhaps 30 minutes‘ notice if the wind ceases to blow (or when th e wind or ice exceeds a safe operating condition). That comes at a cost of increased CO 2 emissions

– simple cycle plants average approximately 1350 lb/MWh versus combined cycle plants which can operate at less than 900 lb/MWh (when running continuously). While natural gas generation overall can potentially reduce the CO 2 emission rate by approximately half compared with the CO 2 emission rate of coal generation , the U.S. EPA must consider the ―real world‖ operating and fuel supply conditions which might ma ke combined cycle natural gas power plants unable to achieve that presumed ―half‖ of the emissions level of a conventional coal plant. The cost of finding oil and natural gas resources cost companies 35 percent more last year amid the up

- and

- down ride of c ommodity prices, according to a report released June 18, 2009 by Ernst & Young. While this figure includes oil, there are operational and locational links between oil and gas. The three

- year average cost per barrel of oil equivalent, excluding acquisition s and proved reserves, was $27.22. That cost jumped to $51.96 in 2008. Thus the costs for producing natural gas would also increase. APPA believes that these operational issues and price volatility should be considered by the U. S. EPA when it considers any natural gas

- equivalent standard or NSPS or other Clean Air Act regulation which would use the CO 2 equivalent from a natural gas as a method to determine, set or calibrate any future EPA standard.22

IX

. APPA believes the U.S. EPA has considerable discre tion in sequencing or phasing in regulatory controls under the existing Clean Air Act.
We recognize that President Obama recently announced on that the government will regulate cars and light duty trucks in the upcoming year. Importantly, however, the go vernment can achieve these goals through the imposition of CAFE standards. The U.S. EPA has discretion at this time to avoid imposing Clean Air Act regulations of GHGs, and thus avoid the adverse consequences described above.

At the outset, the U.S. EPA h as discretion to defer a final endangerment determination at this time and avoid the adverse consequences described above. Specifically, the U. S. EPA retains considerable discretion regarding when regulations imposing emission reductions may be promulgat ed and the schedule for which any emission standards are phased

- in. The U.S. Supreme Court‘s Massachusetts decision noted the U.S. EPA‘s substantial discretion in when it must respond to the Court‘s mandate. Massachusetts , 549 U.S. 497 533 (2007) (―EPA no doubt has significant latitude as to the manner, timing, content, and coordination of its regulations with those of other agencies‖); see also Massachusetts v. EPA , Dkt. No. 03

- 1361 (D.C. Cir. June 26, 2008) ( per curium order rejecting petition for writ o f mandamus ) (the court has ―often allowed delays significantly beyond a year, especially where, as here, the issue facing the agency was both complicated and controversial‖); S.F. Chapter of A. Philip Randolph Inst. v. EPA , 2008 U.S. Dist. LEXIS 27794 at * 10

- 11 (N.D. Cal. Mar. 28, 2008) (―[t]he Supreme Court was careful not to place a time limit on the U.S. EPA, and indeed did not even reach the question whether an endangerment finding had to be made at all‖). Courts apply a ―rule of reason‖ for agency de cision

- making that heavily weigh s the complexity of the issue under consideration. See Sierra Club v. Thomas , 828 F.2d 783, 799 (D.C. Cir. 1987) (―Given the complexity of the issues facing the U.S. EPA and the highly controversial nature of the proposal, agency deliberation for less than three years

– little more than one year since the close of the public comment period

– can hardly be considered unreasonable.‖).

Here, the U.S. EPA is faced with the most complex and ambitious regulatory action the Agency has ever attempted. There is no legal mandate for the Administrator to issue an endangerment finding quickly, or at all, and certainly no reason why the Agency should take action before resolving the myriad of impacts such a finding would have on the regu lated community and the resources of permitting agencies. Caution and deliberation are imperative in this case, given the lack of any statutory instruction from Congress. The Administrator should, at the very least, consider other options described in bo th comments on the Proposal and on the ANPR before considering further action.

If the U.S. EPA were to proceed with issuing a final endangerment finding and emission standards for mobile sources, the Agency should remain mindful of exercising discretion

r egarding the timing of subsequent regulatory triggers. For example, certain groups may argue that an endangerment finding under Section 202 would satisfy the requirements of an endangerment finding under Section 108(a). The statute, however, does not dict ate when a Section 108(a) finding must be made, stating only that primary and secondary ambient air quality standards need only be revised ―from time to time....‖ 42 U.S.C. § 7408(a)(1). This discretion23

affords the U.S. EPA the opportunity to undertake a p roper deliberation regarding how it will or will not approach the question of establishing air quality criteria, how States may address stationary source controls in their implementation plans and several other issues inherent in such an endangerment findi ng. Ultimately, the U.S. EPA retains discretion through the SIP process in determining how and when GHG emission reduction strategies are phased

- in over time.

Further, and critical to APPA and its member utilities, the Agency also should exercise additi onal discretion to avoid regulating GHG‘s at this time under the Section 111 NSPS. NSPS can provide the U.S. EPA with an additional layer of discretion to avoid imposing standards at the outset if the U.S. EPA chooses to exercise such discretion. Unlike most other Clean Air Act provisions, Section 111 explicitly mandates only the promulgation of source category emission standards that the Administrator ―deems appropriate,‖ as acknowledged in the Agency‘s final rulemaking promulgating standards of performa nce for petroleum refineries. 73 Fed. Reg. 35838, 35858 (J une 24, 2008) (citing 42 U.S.C. § 7411(b)(1)(B)). For example, the U.S. EPA in the 2008 NSPS for petroleum refineries exercised this discretion to decline setting performance standards for GHGs, ci ting the statute‘s provision of ―significant flexibility in determining which pollutants are appropriate for regulations under 111(b)(1)(B).‖ 73 Fed. Reg. at 35858 (citing Nat’l Lime Ass’n v. v. EPA , 627 F.2d 416, 426 (D.C. Cir. 1980); Nat’l Ass’n of Clea n Air Agencies v. EPA , 489 F.3d 1221, 1228

- 1230 (D.C. Cir. 2007)). 17 In explaining its previous declination to impose GHG emission standards on petroleum refineries, the U.S. EPA stated that the global nature of GHG emissions ―renders them readily distingu ishable from other air pollutants,‖ which warranted ―proceeding initially through a more deliberate process‖ such as the ANPR. 73 Fed. Reg. at 35860. Additionally, the subsequent ―complexity of PSD issues arising from regulation of GHG emissions, among o ther complex issues of regulating a pollutant,‖ made them unsuited for new source performance standards. 73 Fed. Reg. at 35860

- 61. The U.S. EPA should not disturb its prior exercise of discretion in refraining from imposing GHG standards under Section 11 1. Instead, it should explore the many regulatory and sequencing alternatives offered in both the ANPR in the comments and from industry to the ANPR.

X

. The U.S. EPA might want to address other s first before addressing all industrial sectors.
Ultimately it will be difficult to reduce CO 2 adequately in the U. S. to compensate for the significant increases in CO 2 as the third world industrializes. In order to achieve significant emissions reduction s, targets must be focused on economy

- wide approaches. The U.S. EPA has suggested in the ANPR and other TSD reports that significant reductions in CO 2 could be accomplished through Federal Acquisition Requirements (FAR), changes in local building codes, and through fleet conversions of U.S. government owned fleets (postal trucks, mi litary/non

combat vehicles etc.) APPA applauds the consideration that realistic CO 2 reduction methods across all industrial sectors be encouraged in this way while reasonable reduction methods are undertaken following a welfare

- based end angerment determination. APPA strongly believes that sequencing or other pra ctical approaches might allow the use of energy efficiency measures

17 EPA also determined that nothing in the NSPS 8

- year review provision requires the addition of n ew standards for air pollutants not previously covered. 73 Fed. Reg. at 35859

- 60.24

involving the ultimate utility customer to be considered as a viable emissions reductions options for fossil ge neration electric utilities in lieu of fuel switching to natural gas (or a NSPS equivalent such as what Congress has defined in recent legislation as CCS technology with emissions limits for power plants of roughly 65 p erce nt reduction). This does not preclude CC S or other technologies in later years. It merely makes reduction targets more realistic. Fuel switching to natural gas would only reduce the CO 2 emissions by approximately 50 p e r cen t while the regulatory impact of that fuel switching to gas would be enormous

. Na tural gas production and combustion involves methane emissions

. It is not clear to the APPA that fuel switching to natural gas will result in an exact reduction of CO 2 by 50 per cent given both the increases in methane in natural gas production and combustion and the increased use of natural gas for renewables.

X I

. APPA believes the U.S. EPA must insure that control technologies are both commercially viable and fully demonstrated before it regulate s emissions sources through NSPS, HAPS, or criteria pollutants NAAQ S/SIP process.
APPA strongly supports the research and demonstration of pilot or RD&D projects needed for carbon separation and geologic sequestration of CO 2
. We believe the technology is promising but not yet a promise. APPA believes that any endangermen t decision and the ensuing regulatory actions for the electric utility sector must consider the commercial deployment of a technology before it is used to set or inform BACT, LAER, or NSPS standards for coal or gas fired generation. Commercial deployment m ust be based upon non

- oil and gas locations, solely power plant applications of CCS, and injection into a wide variety of geologic formations.

X II

. Before making an endangerment determination that could lead to proposing and setting standards, the U.S. EP A must consider the ramifications of international GHG emission contributions to the background emissions.
Additionally APPA believes that the U.S.EPA must consider additional CO 2 emissions resulting from increased industrial growth in India, China, Forme r Soviet/Russian countries, Latin America and from changes in generation demand. For example, any NSPS, NAAQS or other Clean Air Act regulatory system must accommodate electricity growth demand increases

. Additionally, any U.S. EPA action to regulate elect ric utilities must also propose a way to flexibly accommodate increased CO 2 and other GHGs if the advent of PHEVs (broadly adopted) as well as any other electronic products not envisioned today. Given the advent of computers, internet, PDAs, IPODs and cell phone technology which was not imagined in 1977, this is not a far

- fetched possibility . Such electrification of new products or displacement of liquid fuels would likely increase CO 2 from the electric utility sector until nuclear power or renewables are b roadly deployed

.
XI II

. APPA believes the U.S. EPA must consider existing renewable requirements and other state or regional GHG reduction strategies, regulations and laws to give credit for early reduction of CO 2 . APPA would like to reserve the right to file additional comments on this later.25

XI V

. APPA believes that the U. S. EPA’s actions under the Clean Air Act must consider both international energy forecasts, emissions, and growth in CO 2 emissions resulting from circumstances beyond the utility’s control before setting standards.
The U.S. Department of Energy‘s Energy Information Administration (EIA) predicts global energy demand will rise 44 percent between 2006 and 2030, cause mainly by a 73

- percent rise in demand from non

- developed countries 18

. The giants of the developing world, China and India, will fuel much of the growth as their economies continue to expand, EIA said in its International Energy Outlook 2009 report. The EIA projects global carbon dioxide emissions to reach 40.4 billion tons by 2030, up from 29 billion in 2006. A tenth of the increase in CO 2 emissions

– an additional 1 billion tons a year by 2030, rising from 13.6 billion tons in 2006 to 14.6 billion

– will come from the world's developed countries. The lion‘s share

– an a dditional 10 billion tons a year by 2030, a jump from 15.4 billion to 25.8 billion

– will come from the world‘s developing nations . By 2030, developing countries‘ CO 2 emissions will exceed those of developed countries by 77 percent . See the figure below:

Some of this increase is fueled by electronics. The International Energy Agency estimates that the yearly energy consumed from Information Technology and consumer electronics is on pace to double by 2020 and triple by 2030 to 1,700 terawatt

- hours. Th at would be the equivalent of the combined residential electricity consumption of Japan and the United States in a year. This growth will again be more pronounced in developing countries. Whereas mobile phones are prevalent in the U.S., in Africa, only o ne in nine people now has a mobile phone

18 See May 27, 2009 Associated Press Story (AP) ―Carbon pollution to grow by 40%‖, AP, H. Josef Herbert and related articles including ―Global energy demand seen up 44% by 20 30:EIA‖ , source: Reuters By Tom Doggett and Ayesha Rascoe, May 27, 2009

.26

APPA believes that the U.S. EPA must seriously evaluate the effectiveness of any CO 2 or GHG control program under the Clean Air Act given these international or ―backgr ound‖ emissions details. The U. S. government‘s regulatory system, whether under the Clean Air Act or any other authorizing law, should consider both the emissions inventory contributions from other countries and new factors that might increase CO 2 emissions in outlying years. The additional causes for CO 2 emissions from power plants might be increases in population which would drive load as well as increased reliance from electricity to power Plug In Hybrid Electric Vehicles (PHEVs). Unless all new PHEV vehicles are powered by 100 p e rcent renewables or nuclea r, there would be some increase in CO 2 emissions at most utilities. Even where wind generation is backed up with natural gas, the PHEV vehicle charging would have impacts on CO 2 emissions from the power plant. APPA believes that any U.S. EPA control strate gy should give flexibility to reduce CO 2 but must also consider load growth from electronics, PHEVs and population increases. These are the types of complex issues that the U.S. EPA‘s SAB needs to review before the EPA can propose effective regulations.

C onclusion:
APPA believes that the U.S. EPA must recognize the limitations of the existing Clean Air Act as a regulatory system to reduce CO 2 in any effort to slow stop or reverse the ill effects of climate change. APPA would prefer a new law to control CO 2 and other GHGs. While APPA‘s comments on preferring a new law do not imply support for H

. R

. 2454 (the Waxman

- Markey bill), we believe that it is possible to craft a better way to reduce CO 2 for the electric utility
sector.

APPA resubmits in these com ments our comments submitted on Nov. 26th, 2008 and asks that those comments be considered in totality. APPA notes that the U.S. EPA proposed endangerment determination requests a resubmittal of these ANPR comments for consideration. APPA also

re

- submits the comments on the U.S. EPA UIC Class VI Proposed Rule since there is a link between the presumption of CCS as a control technology and its commercial deployment and the timing of geologic injection or ―geosequestration‖ for non

- oil and gas sector locati ons.

APPA believes the expertise of the U.S. EPA senior water, waste

, and air staff should be used to benefit the U.S. EPA administrator on the timing, availability and commercial deployment for geosequestration if CCS is presumed to be the technology to e nable future coal plants in the electric power sector. APPA believes the U.S. EPA Office of Air and Radiation presumes the technology to be commercially deployable in the ne xt decade while the U.S. EPA‘s Office of Water (OW) and the state water directors r ecognize that the data needs for new full size coal plants (>800 MW ) with large scale geosequestration might take more than two decades. APPA is very optimistic about the possibility of the technology but does not want the U.S. EPA‘s Office of Air and Radi ation to presume that the technology is fully commercial or deployable in all
states at this time . The multimedia or cross regulatory programs must be discussed at the most senior levels of the U.S. EPA before the U.S. EPA should propose any regulatory st andards based upon carbon separation and geologic sequestration for the electric utility sector‘s fossil fleet.27

Submitted by : Theresa Pugh

Director, Environmental Services

American Public Power Association

(202) 467

- 2943

JP Blackford
Environmental Services Engineer

American Public Power Association

(202) 467

- 2956

Appendix28 I. APPA‘s November 26th, 2008 comments on ANPR

II. APPA‘s December 19th, 2008 comments on UIC

III. APPA

- AWWA joint letter on UIC Class VI Proposed Rule

IV. Gov't: Carbon pollution to grow by 40 percent. By H. J osef H ebert

V. ― Global energy demand seen up 44% by 2030:EIA”

Reuters by Tom Doggett and Ayesha Rascoe, May 27, 2009

VI. APPA Legislative Resolutions

Resolution 08

- 03: Encouraging the Environmental Protection Agency to Act Prudently on Any Proposals to Regulate Greenhouse Gas Emissions
Resoluti on 09

- 08: Enact Climate Change Legislation that Is Distinct and Separate from the Clean Air Act and Addresses the New Source Review Dilemma
Resolution 08

- 10: Principles for a Potential Federal Cap

and

- Trade Program to Reduce Greenhouse Gas EmissionsDecember 24, 2008

U. S. Environmental Protection Agency Docket ID No. EPA-HQ-OW-2008-0390 Office of Groundwater and Drinking Water (OGWDW) Mail Code: 2822T 1200 Pennsylvania Ave. NW Washington, DC 20460

RE: Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide Geosequestration Wells, Proposed Rule

Dear Docket:

This letter is submitted on behalf of the American Water Works Association (AWWA) and the American Public Power Association (APPA). Our two associations represent utilities that provide drinking water and/or electric generation to approximately 260,000,000 customers across the United States. Together we represent more than 90% of all the municipal electric (2,000) and drinking water systems (4,700) of all sizes.

We submit this letter in response to the proposed rule from the July 25 th , 2008 Federal Register (73 FR 43491). Both associations will file more detailed comments. However, AWWA and APPA have the following common concerns, which we are also addressing in more detail in separate Association correspondence.

 Protection of underground sources of drinking water (USDWs) should be the highest priority – "water should trump everything!"

 A Class VI regulatory permit system is needed to advance geosequestration demonstration projects.

 Geosequestration activities should be prohibited in the immediate vicinity of sole source aquifers.

 The protection of the lowermost USDWs is of critical importance, and the location of these USDWs should be the primary factor in determining if a geosequestration project can be located in the same area.

 Reevaluation of the Area of Review should occur annually for the first ten years, and then every five years for the remaining life of the project.

 Although geosequestration might look feasible, especially in oil/gas formations, there is still much to be known about this technology. The Authoritative Resource on Safe Water SMDecember 24, 2008 Page 2

 Congress must address liability issues under CERCLA, RCRA and Natural Resource Damage Assessment before this technology is commercially deployable.

 It is not realistic to presume that we know enough about carbon separation or geosequestration to draw the conclusion that all new power plants with these new technologies would be carbon neutral in the first few decades of operation.

 More research is needed to answer USDW protection and technical questions related to feasibility, infrastructure and reliability. This research includes the work from the U.S. Geological Survey and other agencies.

We appreciate the expertise from your staff, and the public workshops and meetings that were held by your agency during the deliberative process. We stand ready to work with you and the state regulatory agencies in implementing the new rule.

Yours Sincerely,

Thomas W. Curtis Theresa Pugh Deputy Executive Director Director, Environmental Services American Water Works Association American Public Power AssociationGov't: Carbon pollution to grow by 40 percent.

By H. JOSEF HEBERT

– May 27, 2009

WASHINGTON (AP

— The amount of heat

- trapping carbon dioxide seeping into the atmosphere will increase by nearly 40 percent worldwide by 2030 if ways are not found to require mandatory emission reductions, a government report said Wednesday.

The Energy Information Administration said world energy consumption is expected to grow by 44 percent over the next two decades as the global economy recovers and continues to expand. The b iggest increases in energy use will come from economically developing countries such as China and India.

Substantial growth is expected in the use of renewable energy sources such as hydropower, wind and solar, the report said. But it also said overall gro wth in demand will require continued reliance on fossil fuels, especially oil and coal.

As a result, the analysis predicted a steady increase in emissions of carbon dioxide, the greenhouse gas that scientists say threatens a serious warming of the Earth la ter this century. Between now and 2030, Wednesday's report said, global carbon dioxide pollution is expected to increase by 39 percent. That translates to 33 billion metric tons in 2015 and 40 billion metric tons by 2030, compared to 29 billion metric tons in 2006, the report said.

The EIA report emphasized that its analysis is based on current regulatory and legal requirements and does not assume enactment of laws or international treaties requiring reductions in greenhouse gases. Any such action would for ce shifts away from fossil fuels and less carbon pollution being released.

Congress is considering legislation that would reduce greenhouse gases by 17 percent by 2020 and about 80 percent by mid

- century. President Barack Obama has called for mandatory lim its on greenhouse gases. An international conference is scheduled for December to try to work out a treaty requiring such emission reductions.

But the EIA analysis provides an indication of how difficult such reductions might be to achieve given the expect ed increase in future energy growth and continued heavy reliance on fossil fuels without some international, mandatory action to address climate change.

The EIA report said that "much of the increases in carbon dioxide emissions is projected to occur
among the developing nations" including China and India.

It said 94 percent of the world's expected increase in industrial energy use between now and 2030 is expected in the economically developing countries, with Brazil, Russia, India and China expected to acc ount for two

- thirds of that growth.The EIA report projected continued growth in demand for oil, although unconventional resources

such as biofuels, oil sands and liquid coal are expected to increase as well and account for nearly half of the projected inc rease in overall liquid fuel demand.

The report declined to project future oil prices, noting that "recent experience demonstrates that world oil prices can be extremely volatile." Instead it provided a broad range of possible future oil prices, depending on future production and demand of oil and other liquid fuels.

Crude oil prices could range from $50 a barrel in 2030 or as much as $200 a barrel in 2007 dollars, the report said, depending on available supplies of oil, biofuels and other liquid fuels.

Cru de oil prices increased to about $63 a barrel on Wednesday, the highest since last November. Oil prices reached a peak of $147 a barrel last summer.

On the Net:

Energy Information Administration: http://www.eia.gov

Copyright © 2009 The Associated Press. All rights reserved.

http://www.google.com/hostednew s/ap/article/ALeqM5jtWc

- i6TqeYeux0Xzs4J_b24uYGwD98EKPKO1

## Global energy demand seen up 44 percent by 2030: EIA

Wed May 27, 2009 2:16pm EDT

By Tom Doggett and Ayesha Rascoe

WASHINGTON (Reuters)

- Global energy demand is expected to soar 44 percent over the next two decades with most of the demand coming from developing countries such as China and Russia, the U.S. government's top energy for ecasting agency said on Wednesday.

The worldwide economic downturn has hit energy consumption, but an expected recovery next year could respark demand and boost prices, the Energy Information Administration said in its new forecast.

U.S. oil prices are for ecast to rise from an average $61 barrel this year to $110 in 2015 and $130 in 2030.

Oil prices "begin to rise in 2010

- 2011 period as the economy rebounds and global demand once again grows more rapidly than non

- OPEC liquid supply," EIA acting administrato r Howard Gruenspecht told a news conference.

Global oil demand is expected to rise to 107 million barrels per day over the next two decades from nearly 84 million bpd this year. Oil will account for 32 percent of the world's energy supply by 2030 from abou t 36 percent in 2006.

Almost 75 percent of the rise in global energy demand through 2030 will occur in developing countries, particularly China, India, Russia and Brazil, the agency said.

The Organization of Petroleum Exporting Countries will continue to p rovide 40 percent of the world's oil supplies during the period.

Renewable energy, like wind and solar power, will be the fastest growing energy source, making up 11 percent of global supplies. Biofuels, including ethanol and biodiesel, are expected to rea ch 5.9 million bpd by 2030.

The EIA said its long

- term forecast does not reflect efforts the United States may take to cut greenhouse gas emissions or an expected international agreement to curb greenhouse gases.

Gruenspecht said the agency will analyze th e possible impact of climate change legislation approved last week by the U.S. House of Representatives Energy and Commerce Committee.

But he said the bill may not change energy use initially, citing carbon dioxide emission limits and the allowed transfer of carbon cuts to developing countries.

"One could imagine that one could comply at least with the 2020 part of this proposal calling for a 17 percent reduction (from 2005 levels) just using the offsets and not having a significant change in our consumptio n or the way we use energy at all," Gruenspecht said.

If global climate change laws and policies don't change, world energy

- related carbon dioxide emissions will rise by a third to 40 billion metric tons a year, the agency said.

The EIA's report also found that global natural gas demand will increase by almost 50 percent to 153 trillion cubic feet. The agency said that unconventional natural gas production, particularly from gas shale, will make the United States "virtually self sufficient in natural gas su pply in 2030."To see the forecast growth for OPEC oil production, please click here: here

The EIA's forecast also predicts that in 2030:

* World production of unconventional petrole um resources, including oil sands, extra

- heavy oil and coal

to

- liquids, will quadruple to 13.4 million bpd, representing 13 percent of total global petroleum supplies.

* Iraq's crude oil production will jump from 2 million bpd to 5 million bpd.

* China's e lectricity generation from coal

- fired power plants will triple.

(Editing by Russell Blinch, Neil Stempleman and David Gregorio)

http://www.reuters.com/article/GCAOil/idUSTRE54Q4KS20 090527Resolution 08-03 Sponsors: JEA, MEAG Power

Encouraging the Environmental Protecti on Agency to Act Prudently on Any Proposals to Regulate Greenhouse Gas Emissions

The April 2007 U.S. Supreme Court decision in Massachusetts v. EPA stated that the

U.S. Environmental Protection Agency (E PA) has the statutory authority under the

existing Clean Air Act to regulate emissi ons of greenhouse gases from new motor

vehicles if, in EPA’s judgment, those emissi ons cause or contribute to air pollution that

may reasonably be anticipated to endanger public health and welfare. Greenhouse gases

include carbon dioxide (CO 2 ), methane, and sulfur hexafluoride (SF 6 ). If EPA makes

such a judgment and regulates new motor vehicles, it could also seek to regulate

emissions of greenhouse gases from electricity -related stationary sources such as fossil

fueled power plants (that emit CO 2 and other greenhouse gases), substations (that use SF 6
insulation), and coal mines (that emit me thane). A proposed rulemaking by the EPA

could occur as early as in 2008. Any such rulemaking could substantially affect the

ability of APPA members to deliver reliable electric service at a competitive cost.

NOW, THEREFORE, BE IT RESOLVED : That the American Public Power

Association (APPA) will monitor these possible regulatory developments and ensure that

any rule, if finalized:

1) Maintains the ability of APPA member utilities to deliver a reliable supply of

electricity to residential, commercial, industrial, and government customers;

2) Addresses all types of stat ionary sources appropriately, no t just those associated with

electricity production and delivery;3) Considers existing local, state and regi onal initiatives to ad dress greenhouse gas

emissions and the availability of local energy resources that have low greenhouse gas

emissions;

4) Considers greenhouse gas emissions reductions resulting from the Energy

Independence and Security Act of 2007, Public Law 110-140;

5) Ensure the reliability of the electricity grid by retaining a diverse mix of electric

generation (including coal, oil, gas, nucl ear, hydropower and other renewables);

6) Considers the financial impact on consumers;

7) Considers the availability of technological solutions;

8) Guards against widespread fuel-switching to natural gas or an increase in dependence

on imported fuels such as liquefied natural gas.

As adopted June 24, 2008 by the membership of the American Public Power Association at its annual meeting in New Orleans, Louisiana.Resolution 09-08

Sponsor: APPA Climate Change Task Force

Enact Climate Change Legislation that Is Di stinct and Separate from the Clean Air Act and Addresses the New Source Review Dilemma

The American Public Power Association (A PPA) supports congressional action to reduce

greenhouse gas (GHG) emissions to address the a dverse effects of global climate change.

However, the Clean Air Act (CAA) is partic ularly unsuited for such a task and APPA

believes that Congress should adopt separate and distinct legi slation addressing GHG

emissions rather than amend the CAA to do so or to allow the Environmental Protection

Agency to regulate GHG emissions under the existing CAA. 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19 In enacting separate GHG emission legisl ation, however, Congress must include

provisions that make such separation from the CAA clear and workable. This would

include, for example, provisions that ensure there is a pollution control exclusion

specifically designed for CO2 and other GHG em issions, and a clear exemption from the

CAA Title V permitting program and any other relevant parts of the Clean Air Act that

could inadvertently create ambiguity and/ or unnecessary duplication between the Clean

Air Act and any new statute to reduce GHG emissions.

In addition, Congress needs to resolve the “New Source Re view dilemma” that is

currently impeding the most efficient use of many coal and natural gas-fired electric

generating units. On October 27, 2003, th e Environmental Protection Agency (EPA)

finalized a rule on New Source Review (NSR ) for Routine Maintenance, Repair, andReplacement (RMRR) that was challenged in federal court. On May 2, 2007, the

Supreme Court refused the petition to hear th is case. Until the matter is resolved by

Congress or the EPA, all electric utilities continue to face great uncertainty surrounding

NSR and how to make maintenance and re pair decisions wit hout consulting state

agencies or EPA. As a result, fossil-fu el generation owners have been extremely

conservative in their maintenance and repair activities so that NSR requirements are not

triggered that would obligate them to insta ll very expensive new control equipment.

APPA believes that any federal GHG emission reduction regime enacted by Congress or

the Administration should not trigger NSR. 20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42 APPA believes Congress must be accountable to the American consumer for establishing

a set of climate change goals and a broa d greenhouse gas statutory framework under a

new law and remove the confusion from attempting to regulate CO 2 under the Clean Air

Act while also resolving th e application of NSR.

NOW, THERFORE, BE IT RESOLVED : That APPA urges Congress not to use the

Clean Air Act to regulate CO 2 or other greenhouse gas emissi ons, but to enact stand-alone

legislation to address reducti on of those emissions and incl ude provisions that clearly

separate the GHG emissions reduction program from the requirements of the CAA. This

would include, for example, provisions that ensure there is a pollution control exclusion

specifically designed for CO2 and other GHG em issions, and a clear exemption from the

CAA Title V permitting program; andBE IT FURTHER RESOLVED: that APPA supports reform of the new source review

requirements in the CAA that would allow re asonable levels of routine maintenance,

repair, and replacement at existing coal-fired generating units in order to improve their

efficiency and reliability without resulting in the application of NSR requirements. 43

44

45

46Resolution 09-08

Sponsor: APPA Climate Change Task Force

Enact Climate Change Legislation that Is Di stinct and Separate from the Clean Air Act and Addresses the New Source Review Dilemma

The American Public Power Association (A PPA) supports congressional action to reduce

greenhouse gas (GHG) emissions to address the a dverse effects of global climate change.

However, the Clean Air Act (CAA) is partic ularly unsuited for such a task and APPA

believes that Congress should adopt separate and distinct legi slation addressing GHG

emissions rather than amend the CAA to do so or to allow the Environmental Protection

Agency to regulate GHG emissions under the existing CAA. 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19 In enacting separate GHG emission legisl ation, however, Congress must include

provisions that make such separation from the CAA clear and workable. This would

include, for example, provisions that ensure there is a pollution control exclusion

specifically designed for CO2 and other GHG em issions, and a clear exemption from the

CAA Title V permitting program and any other relevant parts of the Clean Air Act that

could inadvertently create ambiguity and/ or unnecessary duplication between the Clean

Air Act and any new statute to reduce GHG emissions.

In addition, Congress needs to resolve the “New Source Re view dilemma” that is

currently impeding the most efficient use of many coal and natural gas-fired electric

generating units. On October 27, 2003, th e Environmental Protection Agency (EPA)

finalized a rule on New Source Review (NSR ) for Routine Maintenance, Repair, andReplacement (RMRR) that was challenged in federal court. On May 2, 2007, the

Supreme Court refused the petition to hear th is case. Until the matter is resolved by

Congress or the EPA, all electric utilities continue to face great uncertainty surrounding

NSR and how to make maintenance and re pair decisions wit hout consulting state

agencies or EPA. As a result, fossil-fu el generation owners have been extremely

conservative in their maintenance and repair activities so that NSR requirements are not

triggered that would obligate them to insta ll very expensive new control equipment.

APPA believes that any federal GHG emission reduction regime enacted by Congress or

the Administration should not trigger NSR. 20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42 APPA believes Congress must be accountable to the American consumer for establishing

a set of climate change goals and a broa d greenhouse gas statutory framework under a

new law and remove the confusion from attempting to regulate CO 2 under the Clean Air

Act while also resolving th e application of NSR.

NOW, THERFORE, BE IT RESOLVED : That APPA urges Congress not to use the

Clean Air Act to regulate CO 2 or other greenhouse gas emissi ons, but to enact stand-alone

legislation to address reducti on of those emissions and incl ude provisions that clearly

separate the GHG emissions reduction program from the requirements of the CAA. This

would include, for example, provisions that ensure there is a pollution control exclusion

specifically designed for CO2 and other GHG em issions, and a clear exemption from the

CAA Title V permitting program; andBE IT FURTHER RESOLVED: that APPA supports reform of the new source review

requirements in the CAA that would allow re asonable levels of routine maintenance,

repair, and replacement at existing coal-fired generating units in order to improve their

efficiency and reliability without resulting in the application of NSR requirements. 43

44

45

46