In a move that would have a wide effect on energy industry facilities, the EPA is said to be nearing a decision to propose limiting carbon dioxide emissions from stationary sources. While EPA, under a memorandum issued under the Bush Administration in December 2008, has stated that carbon dioxide is not a regulated pollutant under the Clean Air Act (CAA), the pending proposal would reverse that position by creating a 25,000-ton emissions threshold, under which small emissions sources would be exempted, but major source emissions would be targeted.

The proposal would apply to the application of prevention-of-significant-deterioration (PSD) provisions of the CAA, thus requiring new and modified major pollution sources to have modern pollution controls. This move would bring the EPA in line with many environmental groups, who maintain that carbon dioxide is a regulated pollutant and is subject to PSD requirements.

In a recent interview with BNA, Bracewell & Giuliani Counsel Rich Alonso stated that “EPA cannot just say it will not regulate emissions below 25,000 tons per year, when the Clean Air Act applies the requirements to emissions above 250 or 100 tons per day.” He said that “EPA would have to get that interpretation past the U.S. Court of Appeals for the District of Columbia Circuit,” and maintained that “other parties could challenge the threshold as a means of stopping projects that they oppose for other reasons. If someone thinks EPA is not going to get sued over this, they’re not living in the environmental world of the last 10 years.”