WASHINGTON (Dow Jones)--The White House is fighting an intense private battle with officials at the Environmental Protection Agency to prevent the publication of a document that could become the legal roadmap for regulation of greenhouse gas emissions across the U.S. economy, according to people close to the matter.
Senior White House officials are eager to prevent the original document from being published because it is in opposition to their belief that regulating emissions could create major policy havoc.
The battle over the document is the latest conflagration of a long-running conflict between the EPA and the White House over climate change policy and will likely fuel existing Congressional investigations about the Bush administration's involvement in the agency's policymaking.
The draft document - reviewed by Dow Jones Newswires - outlines how the government, under existing law, could regulate greenhouse gas emissions from mobile sources such as cars, trucks, trains, planes and boats, and from stationary sources such as power stations, chemical plants and refineries.
Based on a multi-million dollar study conducted over two years, it shows how public welfare is endangered and gives a cost-benefit analysis to society both domestically and internationally of regulating greenhouse gasses.
But the Office Of Management and Budget is fighting to ax those sections, and instead wants the document to show that the existing law - the Clean Air Act - is flawed and greenhouse gas regulations should be developed under new legislation, several people close to the matter say. "This is a collision course between the agency and the OMB," said one person familiar with the document.
"They had in mind to lay out a different story and that's the Clean Air Act is broken and can't be used to regulate emissions," one person said. The document - a precursor to a formal rule-making - will be the agency's first response to an April 2007 Supreme Court decision that found that greenhouse gases such as carbon dioxide are pollutants under the Clean Air Act, and that the EPA can regulate them.
The court's ruling technically centered on emissions from automobiles, but set the stage for regulations affecting the entire U.S. economy - from power plants to factories and ships - by ordering the EPA to determine whether greenhouse gases endanger public health or welfare, the legal criteria for regulating greenhouse gasses under the Clean Air Act.
In recent weeks, the Bush administration has warned of a regulatory "train wreck" that it says would result if the EPA were to regulate greenhouse gases under the Act. The White House argues that the Act restricts EPA from considering costs when imposing regulations and could ultimately mean the agency would have to regulate nearly everything that created emissions, including hospitals, schools and apartment buildings.
EPA spokesman Jonathan Shradar said, "Work on the (document) continues in earnest and it will be published soon," but declined to comment further. No one from the White House or the Office of Management and Budget was immediately available for comment despite repeated emails and phone calls.
The EPA staff has concluded in the document that motor vehicles could be even more fuel-efficient than currently required by law. Based on advanced technologies such as plug-in hybrid vehicles, vehicle fuel-efficiency could be well above 35 miles per gallon between 2020 and 2025. A 2007 energy law that has been touted by the Bush administration mandated an average vehicle fuel-efficiency of 35 miles per gallon by 2020.
The EPA staff has concluded that motor vehicles could be more fuel-efficient than required by current law. For other sectors, the EPA staff showed how greenhouse gas emissions such as carbon dioxide could be regulated through the permitting process and through a cap-and-trade system similar to the programs the agency has administered for acid rain and mercury.
"The net benefit to society could be in excess of $2 trillion," according to the document. "Clearly, they don't want to leave behind a blueprint that suggests that the Clean Air Act could offer a potential pathway in a cost-effective way to reduce greenhouse gas emissions," one of the people close to the matter said.
"Leaving a blueprint behind could leave the next administration a document they could work from, and that's not in their interest," the person said. Peter Robertson, a former deputy administrator at the EPA and a partner at the Pillsbury law firm specializing in environmental public policy, says under the Administrative Procedures Act, if the agency establishes a policy direction in this phase of the rule-making, but later changes direction in the proposed rule, it could create opportunities for legal challenges.
"There wouldn't be a reason for OMB to monkey with this document if it weren't going to be an important step in the process now and later on," Robertson said. Although EPA Administrator Stephen Johnson originally supported much of the White House cuts from the draft, the edits became too aggressive and Johnson started re-thinking OMB's role, two people familiar with the matter said.
The internal battle has delayed the publishing of document, originally due out last Monday, but now seen possible later this week. Johnson and the Administration's role in blocking emission regulations have come under intense scrutiny by Congress.
One House committee has issued contempt orders for the EPA and subpoenaed Administration documents to reveal the extent of the White House's intervention in the EPA's management of the issue.
By Ian Talley, Dow Jones Newswires, 202-862-9285; ian.talley@dowjones.com By Siobhan Hughes, Dow Jones Newswires, 202-862-9285; siobhan.hughes.com (Stephen Power from the Wall Street Journal contributed to this piece)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=e5dpcBELj1EpRlsvwTJp8A%3D%3D.
You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires