December 7, 2007

TO THE MEMBERS OF THE UNITED STATES SENATE:

The complexity and broad scope of the energy legislation now under consideration raises several important issues with regard to overlapping regulatory authorities under the Clean Air Act. These issues must be addressed now in order to prevent the unintended triggering of an expansive and costly stationary source control program.

Any effort to establish a low-carbon fuel standard or to control carbon or any other greenhouse gas emissions from vehicles or fuels under the Clean Air Act could cause these substances to be regarded as pollutants subject to regulation more broadly under the Act. Under the provisions of the Act, this in turn would trigger a pre-construction permit program that will affect hundreds of thousands of very small stationary sources that have hitherto not been subject to requirements under the Act. Initial estimates suggest that the majority of small, mid-sized, and large manufacturing businesses -- over 300,000 facilities -- would potentially become regulated stationary sources. In addition, hundreds of thousands of commercial buildings as well as over a hundred thousand farm operations could be impacted.

The expected transaction and administrative costs of the program for individual sources, states, and the federal government would be unprecedented. Thousands of determinations as to whether the Clean Air Act's regulatory requirements are triggered would be required. Given the potential number of permits and the resulting delay in permit issuance, the construction and modification of plants would likely come to a standstill, causing significant harm to the economy. Even the ability to produce renewable fuels could be hampered through the imposition of lengthy pre-construction permitting requirements.

To address this problem and the broader problem of conflicting and overlapping regulatory authorities, the energy bill now under consideration must do two things. First, the energy legislation must contain explicit language clarifying that nothing in this bill can be construed as triggering the regulation of CO2 or any other greenhouse gas under the Clean Air Act. This will prevent the unintended and costly regulatory program described above from being triggered.

Second, the legislation must address the potential for duplicating and conflicting regulatory requirements by clarifying that carbon dioxide and other greenhouse gases cannot be regulated under Title II of the Clean Air Act. Title II of the Clean Air Act addresses emissions from fuels and vehicles which are the same sources that are subject to requirements under the energy bill. Directing the National Highway Traffic Safety Administration to establish new fuel economy standards could be undermined if those same sources are required to achieve conflicting standards under the Clean Air Act. Given the extraordinary challenge industry may be asked to address, it is only fair that there be one regulatory body and one set of regulatory requirements. Creating duplicative and potentially conflicting regulatory requirements would almost certainly delay the very technology advances sought by the legislation. The vehicle efficiency improvement standard and the alternative fuels provisions in the President Bush's energy proposals and in the energy legislation are preferred approaches to achieving substantial reductions in greenhouse gas emissions while reducing U.S. reliance on foreign energy sources.

Sincerely,

American Forest & Paper Association
American Gas Association
Association of American Railroads
National Association of Manufacturers
National Mining Association
National Petrochemical and Refiners Association
U.S. Chamber of Commerce