UPDATE 2-US EPA issues rules on biggest carbon polluters

* EPA to regulate power plants, landfills, factories

* EPA action could push lawmakers to support climate bill

* Climate bill would likely pre-empt EPA from regulating
(Releads, add quotes from Lieberman, greens)

By Timothy Gardner and Ayesha Rascoe

WASHINGTON, May 13 (BestGrowthStock) – The Obama Administration
finalized rules on Thursday to cut greenhouse gas emissions
from big factories and power plants starting next year aimed at
giving momentum to the troubled climate bill.

Starting next year, the Environmental Protection Agency
rules would require large power plants, factories and oil
refineries that add capacity or do plant work to get permits
proving they are using the latest green technology to cut
emissions. The rule sets emitters up to face a host of future
regulations if the climate bill fails.

“It’s long past time we unleashed our American ingenuity
and started building the efficient prosperous clean energy
economy of the future,” EPA Administrator Lisa Jackson said.

Although mounting industry lawsuits question EPA’s
authority on climate, President Barack Obama hopes the measure
will push lawmakers in states heavily dependent on fossil fuels
to support the climate bill.

As written, the bill would pre-empt automatic EPA
regulations. That would come as a relief to emitters who feel
they would have more influence with Congress to form new air
laws than with the EPA that issues rules from the top down.

Capitals from Beijing to Brussels are closely watching how
the United States addresses climate change, an effort seen as
critical for building global agreement on a successor to the
Kyoto Protocol, which Washington sat out.

The climate bill unveiled by Senators John Kerry, a
Democrat, and Joseph Lieberman, an independent, on Wednesday
currently lacks the Republican support it needs to pass.
[ID:nN12199780]

The bill faces a host of obstacles, including the narrow
span of time for negotiation before mid-term elections and the
fact that some Democratic senators are anxious over offshore
drilling provisions as a massive oil leak in the Gulf of Mexico
continues to gush unchecked.

GUN IN THE AIR

Lawmakers who unveiled the legislation said the EPA move
could boost support for the bill.

“The gun being held … up in the air by EPA is having an
effect,” Lieberman told reporters on Wednesday. “That’s a
genuine worry and that’s different this year than we’ve had
before. That’s what makes me think we can get to 60” votes
needed for controversial legislation to pass in the Senate.

Under this ruling, the EPA is effectively trimming the
Clean Air Act, or “tailoring” it, so it only applies to the
biggest emitters of gases blamed for warming the planet.
Without the tailoring, small emitters such as hospitals and
schools would be regulated and overwhelm the agency with
paperwork.

The rules would subject power plants, factories and oil
refineries that emit 75,000 tonnes of carbon dioxide equivalent
to regulations beginning in January 2011. Regulated polluters
would include big coal-fired power plants and heavy energy
users such as cement, glass and steel makers.

Waste landfills and factories that are not already covered
by the Clean Air Act that emit at least 100,000 tonnes of
greenhouse gases a year would get a six-month extension and
would not be regulated until July 2011.

Sources that pollute less than 50,000 tonnes per year would
not be regulated until 2016, if ever, said EPA air official
Gina McCarthy.

Under the rules, polluters would have to get permits
showing they are using the best available technology to cut
emissions when building new plants or modifying existing ones.

The rules could hit big operators of coal-fired power
plants. Companies such as Calpine Corp (CPN.N: ), Southern (SO.N: )
and Dynegy Inc (DYN.N: ) may benefit because because they have
“peaker” plants that only run in times of high demand.

But many industries and companies hope that the bill will
fail and that they also can fight the EPA in court. The EPA
issued a finding late last year that greenhouse gases endanger
human health, which allows it to regulate greenhouse gases
under the Clean Air Act.

Industry lawsuits questioning the EPA’s authority on
climate saying the agency has not done enough of its own
research.

Stock Market Money

(Additional reporting by Tom Doggett and Richard Cowan;
Editing by Russell Blinch and Lisa Shumaker)

UPDATE 2-US EPA issues rules on biggest carbon polluters