The rule, with a forthcoming one on existing power plants, is the centerpiece of President Obama's second-term climate agenda and is key for reaching an administration goal of cutting emissions 17 percent below 2005 levels by the end of the decade.
The EPA filed the rule in the Federal Register, triggering a 60-day comment period. It's largely unchanged from a draft the agency released when it announced in September its intent to issue the rule.
That riled opponents, who said the rule is untenable because its basis for requiring carbon capture and sequestration at new plants relies partially on projects that have received federal funding and are not commercially viable.
"In typical EPA fashion, they're putting the cart before the horse to advance their environmental policy agenda. They're moving forward with a controversial rule to regulate carbon based on technology that isn't commercially available. Not only is this wrongheaded, it's beyond the scope of their legal authority," said Sen. David Vitter, R-La., the top Republican on the Senate Environment and Public Works Committee.
Carbon capture and sequestration is a process that traps carbon emissions and stores them underground. The proposed EPA rule would effectively block building new coal-fired power plants without it, though few utilities have plans to build such plants as they have increasingly switched to cheap natural gas.
The EPA proposal, however, requires the agency to look beyond electric utilities for application of the technology, which has been in used in some forms for decades, said Anne Weeks, senior counsel and legal director with the Clean Air Task Force.
"It's kind of a silly argument. If that were all the EPA were relying on, that would be interesting," she said of the industry's case, which she said rests on a "misleading" interpretation of the Energy Policy Act of 2005.
"The rule demands EPA to look beyond the regulated industry," she added.
The EPA says a 2012 ruling by the U.S. Court of Appeals for the D.C. Circuit gives it standing to regulate carbon and other greenhouse gas emissions from stationary sources, such as power plants, through the Clean Air Act. That ruling upheld a lower court ruling that said carbon emissions endanger the public, allowing the EPA to regulate those pollutants.
Public health advocates say the rule would save billions in healthcare costs. And environmental groups say it would mitigate the effects of climate change, helping blunt costly damage from extreme weather that is linked to a warming planet.
But Republicans and industry groups say the rules would raise the cost of energy and stifle economic activity.
It also would deter investment in carbon capture and sequestration technology, making it more difficult to drive costs down, said Jeff Holmstead, counsel to the Electric Reliability Coordinating Council, a coalition of power companies, as a partner at Bracewell & Giuliani.
"EPA argues that companies will find ways to make this technology cheaper, but companies say they will simply stop investing in new technologies for coal plants if EPA mandates a technology that is not yet ready for commercial use," said Holmstead, who was an EPA air administrator under former President George W. Bush.