EPA Administrator Lisa Jackson and President Barack Obama

Facing environmental suits and court-imposed obligations, the Environmental Protection Agency has agreed to issue new rules to regulate climate destabilizing greenhouse gas (GHG) emissions from power plants and oil refineries, setting the Obama Administration up for a tough balancing act.

“We are following through on our commitment to proceed in a measured and careful way to reduce GHG pollution that threatens the health and welfare of Americans, and contributes to climate change,” Administrator Lisa Jackson said today in a press release.

The EPA announced plans to apply regulatory tools under the Clean Air Act to set performance standards for emissions at both new and existing power plants and refineries, two major sources of climate pollution responsible for roughly 40 percent of all U.S. GHG emissions. The rules for power plants [pdf] would be proposed by July 26, 2011 and finalized by May 26, 2012, while refinery rules [pdf] will be released December 20, 2011 and finalized by November 10, 2012.

This sets up the Obama Administration and EPA for a protracted fight as new rules are developed and both political and legal challenges ensue.

The EPA is obligated by court rulings to promulgate rules to limit greenhouse gas emissions at the nation's largest emitters, including power plants, industry, and refineries. The agency has previously issued emissions standards for cars and trucks (in the form of new fuel economy standards) and large new industrial emitters. Environmental groups have pressed EPA in courts to apply the Clean Air Act as broadly as possible to tackle climate pollution, however, including suing to require EPA to apply regulations to power plants, refineries, and other large stationary emissions sources. Meanwhile, with cap and trade legislation stymied in Congress, the Administration is likely to turn to the EPA to continue making progress on climate change, which President Obama rightly considers a threat to the public.

However, the EPA route will encounter stiff resistance from both industry and ascendent Republicans in Congress. 

Both the incoming chairman of the House Oversight Committee, Republican Rep. Darrell Issa of California, and Rep. Fred Upton of Michigan, the new chairman of the House Energy and Commerce Committee have vowed to fight EPA's efforts to regulate greenhouse gases, and are likely to repeatedly haul Administrator Lisa Jackson in front of their committees to defend the EPA's efforts. 

Support has also grown since November in both the House and the Senate to pass legislation blocking EPA from regulating GHGs. While opponents of EPA regulation may not have enough votes to overcome a presidential veto, they do have enough support -- and now the right committee chairmanships -- to provoke a very public fight, one the Obama Administration may be reluctant to engage in. 

Going into the new divided Washington political environment, the president will presumably want the public to see him as a champion of job creation and the economy, and a big fight over new regulations on industry and energy companies is not going to help.

The real challenge here though is that setting performance standards for power plants and industry is not as simple as requiring scrubbers for smokestack pollution or catalytic converters for cars. At this time, there are no easy ways to scrub the CO2 from power plants or refineries and the continue on with business as usual. 

Instead, we're talking about fundamentally changing the way we make and use energy, and that is a perhaps the greatest technology challenge we've yet faced as a nation, harder than the Manhattan Project and the Apollo Project combined. 

Regardless of what happens on the regulatory front, then, what America needs is a serious effort to develop clean, affordable, and massively scalable energy sources to power the nation and the world. That is primarily a technology and innovation challenge, not a regulatory challenge, and that is an area where new effort and leadership is required from the President and Congress alike. 

If done right, an innovation focused strategy to make clean energy cheap and abundant may even find common ground with Republicans who may not be worried about climate change and will fight new EPA regulations each step of the way, but nevertheless are motivated to reform and modernize our energy system to reduce reliance on costly oil and polluting coal. 

The two approaches are not mutually exclusive, of course, and EPA GHG regulations may help prevent new investments in long-lived polluting infrastructure, such as new coal-fired power plants, that will only exacerbate the energy transition challenge ahead.

Deep emissions cuts cannot be unlocked by regulation, however, and fights over EPA regulations will undoubtedly prove divisive. With EPA regulation the new battlefront, the 'Climate Wars' are set to continue until progress is made on the technology challenges preventing a dramatic transformation of the U.S. and global energy system.

By Jesse Jenkins, reporting for theEnergyCollective.com