The brewing conflict between the EPA, under Administrator Lisa Jackson, and Republicans in the House of Representatives, led by Energy and Commerce Chair Fred Upton, is shaping up to be one of the major stories in energy and climate in the new year. Though Upton and other GOP leaders have pledged to block the EPA's regulation of greenhouse gases, the path to doing so may be more challenging than it now seems, and could lead to even more complexity for businesses to navigate. In this Energy and Climate Brief, Garten Rothkopf lays out what regulations the EPA has in store for the new year, as well as what Congress is planning to do block or delay them.

While much of Washington’s attention focused this week on the swearing in of new Speaker John Boehner and the comings (Gene Sperling and Bill Daley?) and goings (David Axelrod and Robert Gibbs?) in the Obama Administration, the story that will loom large in the energy and climate space for this year is the battle between the new Chairman of the Energy and Commerce Committee, Fred Upton, and EPA Administrator Lisa Jackson.  Despite legal challenges and warnings of Congressional retaliation, the Environmental Protection Agency is moving ahead with its regulation of new and modified sources of greenhouse gases, as well as announcing plans to establish greenhouse gas performance standards for power plants and refineries.  In the Republican-led House, meanwhile, Energy and Commerce Chair Fred Upton is leading the charge to hold the EPA to account for its actions, threatening Jackson with a wave of oversight hearings; the EPA will also be under pressure from Oversight Committee Chairman Darrell Issa and the House Appropriations Committee, led by Hal Rodgers (R-KY).  But even though this group is committed to undermining forthcoming EPA regulations, the path to doing so may prove more challenging than it now seems, and may result in even greater complexity – as well as fits and starts – in the coming year.  Today’s GR Energy and Climate Brief assesses the current state of play in the battle between the Administration and Congress over EPA regulations.

Where the Regulatory Process Stands

As of this past Sunday, January 2nd, 2011, the EPA's first wave of regulations for greenhouse gases has gone into effect.  Though only a limited number of facilities will be affected – i.e., those already subject to Clean Air Act regulation for other pollutants that make modifications resulting in 75,000 tons or more of carbon dioxide per year being emitted – the rules will be followed by more comprehensive ones in the months ahead. In July, the greenhouse gas rules will be expanded to new and modified sources emitting over 100,000 and 75,000 tons per year of CO2, respectively.   n each case, companies will be required to obtain a permit for their greenhouse gases after first demonstrating that they have installed best available control technology. 

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