E.P.A. Limit on Gases to Pose Risk to Obama and Congress

WASHINGTON — With the federal government set to regulate climate-altering gases from factories and power plants for the first time, the Obama administration and the new Congress are headed for a clash that carries substantial risks for both sides.
While only the first phase of regulation takes effect on Sunday, the administration is on notice that if it moves too far and too fast in trying to curtail the ubiquitous gases that are heating the planet it risks a Congressional backlash that could set back the effort for years.

But the newly muscular Republicans in Congress could also stumble by moving too aggressively to handcuff the Environmental Protection Agency, provoking a popular outcry that they are endangering public health in the service of their well-heeled patrons in industry. “These are hand grenades, and the pins have been pulled,” said William K. Reilly, administrator of the environmental agency under the first President George Bush.

He said that the agency was wedged between a hostile Congress and the mandates of the law, with little room to maneuver. But he also said that anti-E.P.A. zealots in Congress should realize that the agency was acting on laws that Congress itself passed, many of them by overwhelming bipartisan margins.

President Obama vowed as a candidate that he would put the United States on a path to addressing climate change by reducing emissions of carbon dioxide and other greenhouse gas pollutants. He offered Congress wide latitude to pass climate change legislation, but held in reserve the threat of E.P.A. regulation if it failed to act. The deeply polarized Senate’s refusal to enact climate change legislation essentially called his bluff.

With Mr. Obama’s hand forced by the mandates of the Clean Air Act and a 2007 Supreme Court decision, his E.P.A. will impose the first regulation of major stationary sources of greenhouse gases starting Jan. 2.

For now, administration officials are treading lightly, fearful of inflaming an already charged atmosphere on the issue and mindful that its stated priorities are job creation and economic recovery. Officials are not seeking a major confrontation over carbon regulation, which offers formidable challenges even in a less stressed economic and political climate.

“If the administration gets it wrong, we’re looking at years of litigation, legislation and public and business outcry,” said a senior administration official who asked not to be identified so as not to provide an easy target for the incoming Republicans. “If we get it right, we’re facing the same thing.”

“Can we get it right?” this official continued. “Or is this just too big a challenge, too complex a legal, scientific, political and regulatory puzzle?”

The immediate effect on utilities, refiners and major manufacturers will be small, with the new rules applying only to those planning to build large new facilities or make major modifications to existing plants. The environmental agency estimates that only 400 such facilities will be affected in each of the first few years of the program. Over the next decade, however, the agency plans to regulate virtually all sources of greenhouse gases, imposing efficiency and emissions requirements on nearly every industry and every region.

Lisa P. Jackson, administrator of the E.P.A., has promised to pursue a measured and moderate course. The agency announced last week that it would not even begin issuing standards for compliance until the middle of 2011, and when it did so the rules would not impose unreasonable costs on industry.

But the reaction in Congress and industry has been outsized, with some likening the E.P.A. to terrorists and others vowing to choke off the agency’s financing for all air-quality regulation. A dozen states have filed suit to halt the new greenhouse gas rules, with one, Texas, flatly refusing to comply with any new orders from Washington.

Two federal courts, including one this week in Texas, have refused to issue restraining orders halting the implementation of the new rules. But both left open the possibility of finding the new rules unsupported by federal law.

Representative Fred Upton, the Michigan Republican who is set to become chairman of the powerful House Energy and Commerce Committee, said he was not convinced that greenhouse gases needed to be controlled or that the E.P.A. had the authority to do so.

“This move represents an unconstitutional power grab that will kill millions of jobs — unless Congress steps in,” Mr. Upton wrote this week in a Wall Street Journal opinion essay.

His co-author was Tim Phillips, president of Americans for Prosperity, a conservative group financed by Koch Industries and other oil companies that has spread skepticism about global warming and supported many of the Tea Party candidates who will join the new Congress.

Mr. Upton has proposed a moratorium on all global warming regulation until the courts have ruled definitively on the legality of federal action on the issue, decisions that are probably years away.

Others in Congress, including Senator John D. Rockefeller IV and Representative Nick J. Rahall II, both Democrats from West Virginia, have proposed a two-year delay in regulation by the E.P.A. while Congress comes up with its own rules. Virtually no one expects action on climate change legislation in the next Congressional session.

White House officials have said that they will recommend that Mr. Obama veto any measure that restricts the administration’s power to enforce clean air laws.

So the stalemate continues.

Greenhouse gas emissions in the United States are already falling faster than any current legislative or regulatory proposal envisions, because of the recession-driven drop in demand for electricity. Carbon dioxide emissions from the energy sector, by far the largest source of total emissions, fell to about 5,400 metric tons in 2009, down from 5,800 metric tons the year before, and they are likely to fall even further this year. Demand for electricity in 2009 fell by the largest amount in six decades and is almost certain to slip further in 2010. When demand for power begins to rebound with the economy, emissions are expected to rise more slowly than in the past, in part because utilities are using fuel more efficiently and switching to cleaner-burning natural gas for part of their electricity generation. But such moves will not take the place of the across-the-board reductions in emissions that will be required to meet the administration’s target of a 17 percent reduction in emissions over 2005 levels by 2020.

And it is that broader mandate that has set off such intense opposition from industry and its allies in Congress. “Early next year we’re going to have a very serious debate on whether the E.P.A. should be allowed to unilaterally go forward and restructure the American economy,” Jack Gerard, the president of the American Petroleum Institute, said in an interview. “As the president looks to 2012, his message has to be job creation, and this kind of regulation is inconsistent with that,” he said. “The public has a long memory. Anything viewed as hurting the opportunity to create jobs will not be well received.”