By Timothy Gardner and Ayesha Rascoe
WASHINGTON (Reuters) - The Obama Administration finalized rules on Thursday to cut greenhouse gas emissions from big factories and power plants starting next year aimed at giving momentum to the troubled climate bill.
Starting next year, the Environmental Protection Agency rules would require large power plants, factories and oil refineries that add capacity or do plant work to get permits proving they are using the latest green technology to cut emissions. The rule sets emitters up to face a host of future regulations if the climate bill fails.
"It's long past time we unleashed our American ingenuity and started building the efficient prosperous clean energy economy of the future," EPA Administrator Lisa Jackson said.
Although mounting industry lawsuits question EPA's authority on climate, President Barack Obama hopes the measure will push lawmakers in states heavily dependent on fossil fuels to support the climate bill.
As written, the bill would pre-empt automatic EPA regulations. That would come as a relief to emitters who feel they would have more influence with Congress to form new air laws than with the EPA that issues rules from the top down.
Capitals from Beijing to Brussels are closely watching how the United States addresses climate change, an effort seen as critical for building global agreement on a successor to the Kyoto Protocol, which Washington sat out.
The climate bill unveiled by Senators John Kerry, a Democrat, and Joseph Lieberman, an independent, on Wednesday currently lacks the Republican support it needs to pass.
The bill faces a host of obstacles, including the narrow span of time for negotiation before mid-term elections and the fact that some Democratic senators are anxious over offshore drilling provisions as a massive oil leak in the Gulf of Mexico continues to gush unchecked.
GUN IN THE AIR
Lawmakers who unveiled the legislation said the EPA move could boost support for the bill.
"The gun being held ... up in the air by EPA is having an effect," Lieberman told reporters on Wednesday. "That's a genuine worry and that's different this year than we've had before. That's what makes me think we can get to 60" votes needed for controversial legislation to pass in the Senate.
Under this ruling, the EPA is effectively trimming the Clean Air Act, or "tailoring" it, so it only applies to the biggest emitters of gases blamed for warming the planet. Without the tailoring, small emitters such as hospitals and schools would be regulated and overwhelm the agency with paperwork.
The rules would subject power plants, factories and oil refineries that emit 75,000 metric tones of carbon dioxide equivalent to regulations beginning in January 2011. Regulated polluters would include big coal-fired power plants and heavy energy users such as cement, glass and steel makers.
Waste landfills and factories that are not already covered by the Clean Air Act that emit at least 100,000 metric tones of greenhouse gases a year would get a six-month extension and would not be regulated until July 2011.
Sources that pollute less than 50,000 metric tones per year would not be regulated until 2016, if ever, said EPA air official Gina McCarthy.
Under the rules, polluters would have to get permits showing they are using the best available technology to cut emissions when building new plants or modifying existing ones.
The rules could hit big operators of coal-fired power plants. Companies such as Calpine Corp, Southern and Dynegy Inc may benefit because because they have "peaker" plants that only run in times of high demand.
But many industries and companies hope that the bill will fail and that they also can fight the EPA in court. The EPA issued a finding late last year that greenhouse gases endanger human health, which allows it to regulate greenhouse gases under the Clean Air Act.
Industry lawsuits questioning the EPA's authority on climate saying the agency has not done enough of its own research.
(Additional reporting by Tom Doggett and Richard Cowan; Editing by Russell Blinch and Lisa Shumaker)