This report was originally published in May 2009, and the majority of the text reflects the authors' analysis of EPA's potential regulation of stationary sources under the Clean Air Act at that time. That analysis has not changed substantially, but s ince that time , EPA has given several further indications of its intentions with regard to the regulation o f stationary sources of greenhouse gases, in congressional testimony, proposed regulations, and proposed guidance . T he agency has formally proposed greenhouse gas emission standards for new motor vehicles, and stated that it intends to promulgate such standards by March 31, 2010. An "endangerment finding,," which is a prerequisite for the motor vehicle and other greenhouse gas standards, was finalized December 7, 2009. The agency has stated in several venues that promulgation of motor vehicle GHG standards would make GHGs "subject to regulation" for the purposes of triggering permitting requirements for new and modified stationary sources under the Prevention of Significant Deterioration requirements of Section 165 of the Clean Air Act, and also for the purposes of the operating permit requirements of Title V. And it has p r oposed a Greenhouse Gas Tailoring Rule to limit the applicability of the PSD and Title V permitting requirements to sources that emit more than 25,000 tons per year of carbon dioxide equivalents. New legislation to address greenhouse gases is a leading priority of the President and many members of Congress, but the ability to limit these emissions already exists under various Clean Air Act (CAA) authorities that Congress has enacted, a point underlined by the Supreme Court in an April 2007 decision (discussed below). Indeed, the U.S. Environmental Protection Agency (EPA) has already begun the process that could lead to greenhouse gas regulations for new mobile sources in response to court decisions. When EPA finalizes the regulation of greenhouse gases from new mobile sources, legal and policy drivers will be activated that will lead to regulation of stationary sources as well. The legal drivers are beyond the scope of this report, which is focused on the policy options and control alternatives available to EPA as it uses existing authorities to regulate greenhouse gases from stationary sources. Stationary sources are the major sources of the country's greenhouse gas emissions. Overall, 72% of U.S. emissions of greenhouse gas come from stationary sources (the remainder come from mobile sources). As indicated in Table 1 , relatively large sources of fossil-fuel combustion and other industrial processes are responsible for about one-half the country's total emissions. If EPA were to embark on a serious effort to reduce greenhouse gas emissions, stationary sources, and in particular large stationary sources, would have to be included. This concentration of greenhouse gas emissions is even more important from a policy standpoint: reductions in greenhouse gas emissions from these sectors are likely to be more timely and cost-effective than attempts to reduce emissions from the transport sector. This report discusses three major paths and two alternate paths of statutory authorities that have been identified by EPA and others as possible avenues the agency might take in addressing greenhouse gas emissions under existing CAA provisions. After discussing the approaches, we identify categories of control options EPA could consider, including an EPA-coordinated cap-and-trade program. Then we discuss the administrative difficulties in using the Clean Air Act for greenhouse gas control, particularly New Source Review – Prevention of Significant Deterioration and Title V permitting requirements. Finally, we conclude by putting the issue into the context of previous environmental challenges the CAA has faced. A regulatory approach using existing Clean Air Act authorities has been under consideration at EPA for more than a decade. In 1998, EPA's General Counsel, Jonathan Cannon, concluded in a memorandum to the EPA Administrator that greenhouse gases were air pollutants within the Clean Air Act's definition of the term, and therefore could be regulated under the Act. Relying on the Cannon memorandum as well as the statute itself, on October 20, 1999, a group of 19 organizations petitioned EPA to regulate greenhouse gas emissions from new motor vehicles under Section 202 of the Act. Section 202 gives the EPA Administrator broad authority to set "standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles" if in her judgment they contribute to air pollution which "may reasonably be anticipated to endanger public health or welfare." EPA denied the petition in 2003 on the basis of a new General Counsel memorandum issued the same day in which the General Counsel concluded that the CAA does not grant EPA authority to regulate CO 2 and other GHG emissions based on their climate change impacts. The denial was challenged by Massachusetts, eleven other states, and various other petitioners in a case that ultimately reached the Supreme Court. In an April 2, 2007 decision ( Massachusetts v. EPA ), the Court found by 5-4 that EPA does have authority to regulate greenhouse gas emissions, since the emissions are clearly "air pollutants" under the Clean Air Act's definition of that term. The Court's majority concluded that EPA must, therefore, decide whether emissions of these pollutants from new motor vehicles contribute to air pollution that may reasonably be anticipated to endanger public health or welfare. If it makes this finding of endangerment, the Act requires the agency to establish standards for emissions of the pollutants. For nearly two years following the Court's decision, the Bush Administration's EPA did not respond to the original petition nor make a finding regarding endangerment. Its only formal action following the Court decision was to issue a detailed information request, called an Advance Notice of Proposed Rulemaking (ANPR), on July 30, 2008. The ANPR occupied 167 pages of the Federal Register . Besides requesting information, it took the unusual approach of presenting statements from the Office of Management and Budget, four Cabinet Departments (Agriculture, Commerce, Transportation, and Energy), the Chairman of the Council on Environmental Quality, the Director of the President's Office of Science and Technology Policy, the Chairman of the Council of Economic Advisers, and the Chief Counsel for Advocacy at the Small Business Administration, each of whom expressed their objections to regulating greenhouse gas emissions under the Clean Air Act. The OMB statement began by noting that, "The issues raised during interagency review are so significant that we have been unable to reach interagency consensus in a timely way, and as a result, this staff draft cannot be considered Administration policy or representative of the views of the Administration." It went on to state that "... the Clean Air Act is a deeply flawed and unsuitable vehicle for reducing greenhouse gas emissions." The other letters concurred. The ANPR, therefore, was of limited use in reaching a conclusion on the endangerment issue and, in any event, it presents the views of an Administration no longer in office. The current Administration made review of the endangerment issue a high priority. On April 17, 2009, EPA proposed a finding that GHGs do endanger both public health and welfare and that GHGs from new motor vehicles contribute to that endangerment. Publication of the proposal in the Federal Register on April 24 began a 60-day public comment period. In addition, public hearings were held May 18 in Arlington, VA, and May 21 in Seattle, WA. The endangerment finding was finalized December 7, 2009. While there has been considerable speculation in the literature about the meaning of Massachusetts v. EPA for stationary sources, there have also been several attempts to invoke the various authorities of the Clean Air Act to begin controlling greenhouse gas emissions from stationary sources. Among the legal initiatives currently underway are the following: In 2006, the EPA revised the New Source Performance Standard (NSPS) for electric utilities and other steam generating units without including any CO 2 standard, or other requirement. Led by New York, several states filed a petition for review of the new NSPS, challenging the omission of any CO 2 requirement. In September 2007 the D.C. Circuit Court of Appeals remanded the case back to EPA for further proceedings "in light of Massachusetts v. EPA ." In 2007, EPA Region 8 granted a Prevention of Significant Deterioration (PSD) permit authorizing construction of a waste-coal-fired electric generating plant near Bonanza, Utah. Appealing the decision, the Sierra Club argued to the Agency's Environmental Appeals Board (EAB) that because the Court had found in Massachusetts v. EPA that CO 2 was an air pollutant under the Act, and that EPA has imposed CO 2 monitoring and reporting requirements, the Bonanza plant was required to install Best Available Control Technology (BACT) for CO 2 emissions. The EAB rejected the Sierra Club's interpretation of the PSD-NSR language, but remanded it back to Region 8 for reconsideration of a CO 2 BACT requirement. In a second case, on February 18, 2009, the EAB remanded a permit issued by the Michigan Department of Environmental Quality for reconsideration of its decision not to regulate CO 2 from a new cogeneration boiler at Northern Michigan University. In a third PSD-NSR (New Source Review) case, EPA Region 9 filed a motion with the EAB in April 2009 for a voluntary remand of the PSD permit for the Desert Rock coal-fired power plant in New Mexico to allow for a reconsideration of its permit to include a CO 2 limitation. Region 9 wants to reconsider its decision not to require Desert Rock to install "carbon-ready" integrated gasification combined-cycle technology instead of allowing current pulverized-coal technology. The EAB remanded the permit September 24, 2009. In 2009, the Environmental Integrity Project, an environmental group, filed a complaint with the D.C. Circuit Court to force the EPA to review nitrous oxide (N 2 O) emissions from nitric acid plants. The group argues that EPA has not reviewed the NSPS for such plants since 1984, despite the statutory requirements for periodic reviews. It should be noted that amidst this legal activity and EPA's commitment to move forward with an endangerment finding, EPA Administrator Jackson and others in the Administration have made clear that their preference would be for Congress to address the climate issue through new legislation.