Washington (Platts)--10Mar2011/700 pm EST/000 GMT

Legislation to ban the US Environmental Protection Agency from regulating greenhouse gas emissions, including from refineries and power plants, cleared its first hurdle in Congress Thursday.

No amendments were offered by either Republicans or Democrats on the Energy and Power Subcommittee, which approved the Energy Tax Prevention Act in a voice vote.

The House Energy and Commerce Committee Monday will begin debating the bill, which has 30 co-sponsors, including three Democrats. A similar bill with 43 co-sponsors, including one Democrat, Joe Manchin of West Virginia, has been introduced in the US Senate.

The bill would repeal EPA's authority to control GHG emissions under the Clean Air Act, reversing a landmark 2007 decision by the US Supreme Court that carbon dioxide is a pollutant.

In addition to stopping EPA from regulating GHG emissions from power plants and refineries, the bill also would end California's ability to get a federal waiver to set tougher tailpipe standards for carbon after 2017.

Subcommittee Chairman Ed Whitfield, a Kentucky Republican, said California's ability to secure a waiver and set higher standards on GHG tailpipe emissions than federal requirements creates problems for interstate commerce. "It's not right that California should be dictating standards for the rest of the country," he said.

The bill also would quash the EPA's 2009 mandatory GHG reporting rule for various industries yet sustain the 1990 Clean Air Act Amendments carbon monitoring and reporting rules for power plants while not allowing restrictions on these emissions.

EPA on January 2 issued GHG permit requirements for new and modified power plants and oil refineries. The agency plans to propose GHG performance standards for existing electric generating units and refineries in July and finalize them in 2012.

Last year, EPA and the Department of Transportation reached an agreement with US automakers on fuel economy and GHG tailpipe limits through model year 2016 and are prepared to negotiate standards beyond 2017 this year.

Republican backers of the bill squared off with Democrats over the impacts of the legislation on the economy and public health.

Bill supporters said EPA controls on GHGs would lead to higher gasoline prices and cost jobs, while opponents argued the legislation would allow China and other nations to surpass US innovation and job creation in low-emission energy technology and result in greater dependency on foreign oil.

By repealing EPA's GHG "endangerment finding" as required by the Supreme Court and the Clean Air Act, the bill would undermine fuel economy and carbon standard for vehicles that was carefully crafted by EPA, DOT, California and US automakers, according to California Democrat Henry Waxman.

EPA's insertion of GHG limits in the tailpipe rules allowed for 30% greater efficiency to save more than 1 billion gallons of oil and a $3,000 savings for car buyers, he said.

"Despite your good intentions, you don't accomplish what you say our accomplishing," Waxman told the subcommittee Republicans. "This is an extreme bill that takes us in exactly wrong direction."

--Cathy Cash, cathy_cash@platts.com

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