At least for now, EPA has taken the position that CO2 is not a NSR pollutant under the Clean Air Act. See Deseret Power article by Tracy Penn. In response to a recent Environmental Appeals Board holding (In re Deseret Power Electric Cooperative, PSD Appeal No. 07-03 (EAB Nov. 13, 2008)), former EPA Administrator Stephen Johnson issued a last-minute memorandum to defend EPA`s interpretation of the scope of PSD regulation. The memorandum interprets the scope of ``regulate NSR pollutant`` to include each pollutant subject to either a provision in the Clean Air Act itself or to an EPA Clean Air Act regulation that ``requires actual control of emissions of that pollutant.`` In effect, the memorandum would maintain the position that CO2 should not be considered in PSD permitting decisions and does not trigger requirements to use best-available pollution control technology.

A Sierra Club petition for reconsideration challenged the memorandum as a procedurally-improper final rulemaking action. Regardless, the memorandum is not likely to be adopted by an Obama administration that includes greenhouse gas reduction among its top environmental priorities. In a related issue, in March 2008, EPA denied California`s request for a Clean Air Act waiver that would have allowed California to set CO2 vehicle emissions standards. On Jan. 26, 2009, President Obama issued a Presidential Memorandum that requires EPA to reconsider the prior administration`s decision to deny California`s waiver request and, based on that assessment, to initiate appropriate action. Link to article.

The outcome of EPA`s reconsideration of the vehicle emissions regulation issue likely will have a far-reaching effect on automakers, as 13 other states are set to follow California`s CO2 emissions standards. Link to Houston Chronicle article. Some industry groups, including the American Petroleum Institute, have argued that regulation of greenhouse gas tailpipe emissions by individual states would lead to an inefficient patchwork of legal requirements.