The Environmental Protection Agency (EPA) had a deadline of April 13 to impose the first-ever greenhouse gas limits on new power plants, but they did not finalize the proposal on time. EPA is in the process of altering the rule to make sure it can withstand any legal challenges that may come its way. The rule if implemented as it was written would require new power plants to emit no more than 1,000 pounds of carbon dioxide per megawatt hour of electricity produced. EPA is debating the possibility of establishing separate standards for coal-fired power plants and gas-fired power plants. There is no timetable for when EPA will announce their next move.

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Gina McCarthy, the current head of EPA’s Office of Air and Radiation, has been nominated by President Obama to become the next EPA Administrator. McCarthy’s main background is in air enforcement and climate change issues. President Obama said she would help promote renewable energy programs, which she has experience doing from her days as an environmental official in Massachusetts. She helped develop recent mercury and soot emission power plant rules. One of the more important aspects of her nomination is her relationship with industry, which will likely help her during the nomination process.

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Earlier this week, Sen. Murkowski (R-AK) released an energy blueprint, entitled “Energy 2020.” The blueprint was developed with seven principles in mind: producing more, consuming less, clean energy technology, energy delivery infrastructure, effective government, environmental responsibility, and an energy policy that pays for itself. Murkowski believes this can be done with more oil and gas production, reducing carbon emissions, and the development of a “trust fund” for clean energy. Her hope is the blueprint could serve as a basis for starting a comprehensive energy discussion in Congress, which may result in a number of small, bipartisan energy bills this year.

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In the wake of a recent spate of RIN fraud cases involving a reported 140 million invalid RIN (renewable identification number) credits, EPA is considering revisions to the Renewable Fuels Standard (RFS2) program that would provide greater clarity for obligated parties (oil companies that refine and import gasoline and diesel). Although EPA has taken aggressive enforcement action against fraudulent RIN producers, EPA's current "buyer beware" policy also penalizes oil companies that are victims of RIN fraud by imposing civil penalties and requiring replacement of fraudulent RINs, thus adding insult to injury.

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Today, the U.S. Court of Appeals for the District of Columbia Circuit Court issued its decision on industry petitions concerning the Environmental Protection Agency’s(EPA) rules limiting greenhouse gas emissions. The main focus of the suit was on EPA’s “tailoring” rule, which requires only major polluters to obtain permits for their greenhouse gas emissions. The three judge panel denied this challenge from industry groups. The judges also dismissed all petition for EPA’s “tailpipe” rule, which set standards for cars and light-duty trucks beginning in the 2012 model year; and the “timing” rule, which focused on limiting greenhouse gas emissions from stationary sources. The decision by the court resulted in a victory for the EPA and the Obama administration and is a big blow to a number of industry groups.

Last week, the National Enhanced Oil Recovery Initiative(NEORI), in conjunction with the Great Plains Institute(GPI) and the Center for Climate and Energy Solutions(C2ES), released a set of recommendations for enhanced oil recovery(EOR) on Capitol Hill. The highlight of the list of recommendations is a federal tax incentive for companies that capture and transport the CO2. NEORI estimates that the tax credit would lead to a quadrupling of current U.S. oil production from EOR to nearly 400 million barrels/year, and at the same time reduce CO2 emissions by roughly 4 billion tons over the next 40 years. The report also recommends that federal policies should complement state policies that already exist. The recommendations received bipartisan support from Sens. Baucus(D-MT), Conrad(D-ND), Hoeven(R-ND), Lugar(R-IN), and Congressmen Rick Berg(R-ND) and K.Michael Conaway(R-TX). Sen. Baucus said, “I applaud the National Enhanced Oil Recovery Initiative for bringing together such a diverse group of stakeholders and presenting this set of policy recommendations. Enhanced oil recovery is a critical element of our broad, all-of-the-above approach to pursuing energy independence for America. It is also a clear example of American ingenuity that is re-invigorating oil fields.”

The new Corporate Average Fuel Economy(CAFE) standards were scheduled to be released at the end of this month, but yesterday President Obama announced that the new standards will be delayed until November. The new standards, which were agreed to in July by the White House and the automobile industry, would set the CAFE standard to 54.5 miles per gallon by model year 2025. The new rule was supposed to be released in a notice officially this Friday; however the rule is simply not completed according to administration officials. It is expected with the extra six weeks that the U.S. EPA, the National Highway Traffic Safety Administration(NHTSA) and the state of California will be able to complete the proposed rule and have it ready to be released in mid-November. There would then be a comment period on the proposed rule. The final rule would remain on schedule for a release in July 2012.

The Department of Energy announced late last week plans to distribute $14 million in funding to six different projects in an effort to improve technology at integrated gasification combined cycle (IGCC) power plants where carbon capture is used.  Secretary Chu said, “These new technologies will not only help reduce carbon pollution, they will keep America competitive, create the high-tech jobs of the future and drive down electricity costs for consumers.”  The goal of funding these projects is to promote the commercialization of IGCC with carbon capture by advancing the technologies, so they become more economical.  The six projects chosen, which will be managed by the DOE’s National Energy Technology Laboratory (NETL), are Electric Power Research Institute, Inc (Palo Alto, CA), TDA Research, Inc (Wheat Ridge, CO), General Electric Company (Houston, TX), Air Products and Chemicals, Inc (Allentown, PA), Reaction Engineering International (Salt Lake City, UT) and General Electric Company(Houston, TX). 

Citing the “importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover,” President Obama has asked Environmental Protection Agency (EPA) Administrator Lisa P. Jackson to withdraw the draft National Ambient Air Quality Standards for ground-level ozone (smog), proposed in January of 2010.  Characterized as a victory for business, Obama’s request means that current smog standards will not be revisited until 2013. 

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On Monday, the Department of Energy (DOE) issued more than $51 million in clean coal grants to  university, state and industry partners. One of the beneficiaries of the grant is the University of Kentucky, who will receive $14.5 million. The university will use its funding to test its clean coal technology at the 700MW E.W. Brown plant. The project’s main goal is to capture 90 percent of the CO2 emissions from the plant without increasing the cost of electricity by more than 35 percent. Other beneficiaries of the grants include Linde LLC (NJ), Neumann Systems Group (CO) and Southern Co.