Today, the EPA announced that it has finalized new auto emissions standards for greenhouse gases.  These new regulations are the result of a three-way deal struck in May 2009 among the Obama Administration, the state of California, and the auto industry, pursuant to which the Administration adopted California’s so-called “Pavley” auto emissions standards nationwide.  The new standards will phase in a near 40% improvement in fuel economy by 2016, eventually producing an average fleet mileage of 35.5 mpg.

Also this week, the EPA released its final reconsideration of the infamous “Johnson Memo.” The new memo confirmed that when the auto emissions standards “take effect,” so too will widely-anticipated emissions control requirements for new or modified coal-fired power plants.  However, in the memo, the EPA explained that the new auto emission standards will not formally “take effect” until the 2012 model year begins (that is, no earlier than January 2, 2011),  meaning that the introduction of power plant regulations will be delayed until early next year.

This week’s announcement regarding power plants represents the latest installment in the long-running saga we at Warming Law lovingly call “the Bonanza Wars.”  Since it’s been awhile, here first is a link to a summary of the Bonanza Wars.   In essence, the tale to date has involved three episodes:

Episode I:  The CO2 Menace – In response to an administrative challenge spearheaded by Sierra Club, the EPA’s Environmental Appeals Board vacated and remanded a permit for an expansion to the “Bonanza” coal-fired power plant in Utah, finding that EPA had not sufficiently explained why the plant did not have to install “Best Available Control Technology” (BACT) for CO2 under the Clean Air Act. Permitting requirements stated that new or modified plants had to include BACT controls for any pollutant “subject to regulation,” but it was not clear whether CO2 – which was subject to monitoring requirements at the time – should be considered “subject to regulation.” The Board thus ordered the EPA to reexamine the permitting language for coal-fired power plants in the Clean Air Act and issue an interpretation of what “subject to regulation” meant for CO2.  It encouraged the Agency to solicit public comments, and to consider the nationwide scope of its decision, before handing down its findings.

Episode II:  The Administrator Strikes Back – Without giving the public any opportunity to comment,  Bush-appointed EPA Administrator Stephen Johnson released a memo ( the “Johnson Memo,” aka “EPA’s Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program”), finding that CO2 was not “subject to regulation” within the meaning of PSD permitting requirements, and therefore permits for coal-fired power plants did not need to include BACT controls for CO2.

Episode III:  Return of the EPA — In response to a Sierra Club petition to reconsider, and just days after newly-inaugurated President Obama named Lisa Jackson as the new EPA Administrator, EPA announced that it was reconsidering the Johnson Memo, but declined to stay its effectiveness.

Where things stand now: Episode IV

The memo issued this week by the EPA represents the Agency’s official “reconsideration” of the Johnson Memo.  In essence, the EPA affirmed that CO2 is not presently “subject to regulation” for the purposes of the coal-fired power plant permitting requirements. However, the Agency stated that CO2 will be “subject to regulation” once the upcoming auto emissions standards kick in.  (The Washington Post reports that the EPA pushed back the date on which the auto emissions restrictions would “take effect” until next January largely at the request of state and local officials, who are responsible for issuing permits for new power plants, and who stated they needed more time to prepare to implement the new standards.)

Stay tuned to Warming Law for more updates on auto emissions standards and the Bonanza saga.