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Environmentalists typically push for tough pollution regulation, but attorneys for environmental organizations are using the absence of regulation to bring construction of new coal power plants to a standstill nationwide. Two crucial court decisions have stiffened environmental opposition to new coal power plants. Last year, the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) has the authority under the Clean Air Act to regulate carbon dioxide, the gas generally considered the main cause of global climate change. Massachusetts v. EPA, No. 05-1120. However, the EPA has yet to set any carbon dioxide emissions standards for coal plants. In February, the U.S. Circuit Court of Appeals for the District of Columbia voided the EPA rule that allowed a “cap and trade” system to reduce total mercury emissions from the nation’s coal power plants, ruling that the Clean Air Act requires pollution controls on each plant. New Jersey v. U.S. EPA, No. 05-1162. The EPA would have set a national cap on total mercury emissions from all coal power plants and limits for individual plants. Plants that exceed their limits on mercury emissions could purchase emission credits from plants that are below their limits. The court rejected the rule because mercury pollution tends to concentrate near the source of emissions. Need for certainty The two rulings have created a “regulatory void” in which developers of coal plants that cost $1 billion or more do not know what pollution control standards they will have to meet for mercury and carbon dioxide, said Seattle attorney Tom Lindley, who represents industry on coal issues as head of Seattle-based Perkins Coie’s environment and natural resources practice. “Companies need to calculate the rate of return [on their investment] and, to do that, they need certainty,” Lindley said. The uncertainty stems from provisions of the Clean Air Act that require controls for pollutants “subject to regulation.” If the EPA does not have a regulation governing the pollutant, the Clean Air Act requires an analysis to select emission controls from available technology. Since the D.C. Circuit voided the EPA rule on mercury emissions, the law requires new power plants to use the “maximum available control technology,” known as MACT. Attorneys representing environmental organizations are challenging permits for 32 coal power plants in 13 states, contending that the plants cannot be licensed unless they meet the MACT standard for mercury pollution. Attorneys from both industry and environmental organizations say that at least 60 of 150 coal power plants proposed or in the licensing process in 2007 have been canceled � in many cases because of uncertainty about regulatory standards. EPA spokesman Dale Kemery said of the D.C. Circuit ruling, “[w]e take the court’s decision and the issues it raises very seriously. We are working toward providing guidance to states and the regulated community as soon as possible.” Jeff Holmstead, formerly chief of the EPA Office of Air and Radiation and now director of the environmental strategies group at Bracewell & Giuliani, is optimistic that the legal challenges to new construction are manageable. Plant developers are typically willing to include effective mercury pollution controls, he said. In the meantime, attorneys on all sides are closely watching a challenge, pending before the EPA’s Environmental Appeal Board, to an air permit approved for the proposed Bonanza Power Plant in Utah. The 110-megawatt plant will emit an estimated 1.8 million tons of carbon dioxide annually. The Sierra Club, said Bruce Nellis, one of three attorneys for the club litigating the Bonanza case, is arguing that, until the EPA sets emission limits for carbon dioxide, new power plants are required by the Clean Air Act to install “best available control technology,” know as BACT. A key part of the Sierra Club argument is that carbon dioxide is a pollutant “subject to regulation” within the meaning of the Clean Air Act, because Congress mandated certain industries to measure and report emissions. The permit holder, Deseret Power Electric Cooperative, argues in its response that a carbon dioxide is not a pollutant “subject to regulation” because no law or regulation at this time requires that it be controlled. Deseret Power Electric Cooperative (Bonanza), No. OU-0002-04.00 (EPA Envtl. App. Bd.). The power cooperative and its counsel, Winston & Strawn of Chicago, declined to comment beyond what is stated in their legal response. Final briefs in the Bonanza case are due the end of April.

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