The attorney generals of New York and nine other states,
along with three major green groups, had planned to sue the EPA
this week because it missed a deadline in April to finalize
emissions standards for new electric power plants.

Two months after notifying the agency they intended to sue,
the consortium had expected to file as early as Monday, but
backed off temporarily to allow the White House to disclose its
climate plans.

“Due to public reports that the president will be announcing
major action on climate change very soon, the Attorney General
has decided to postpone a lawsuit on this matter for a short
period,” said Melissa Grace, a spokeswoman for New York Attorney
General Eric Schneiderman.

President Barack Obama reportedly told campaign donors last
week he will unveil a package of measures to combat climate
change, possibly including EPA curbs on power plant emissions.

Many of those donors are ardent opponents of TransCanada
Corp’s planned Keystone XL pipeline, which would carry
oil produced in Canada’s oil sands regions to refineries on the
U.S. Gulf Coast. Some policy analysts reason that, if Obama
approves the pipeline, he will face pressure to announce strong
climate measures as an offsetting measure.

The Natural Resources Defense Council, one of the groups
that planned to sue, said in a statement that whatever Obama
rolls out should advance his previous pledges on climate action.

“The president has set a goal to cut our carbon emissions by
17 percent – from our 2005 levels – by 2020. We need a set of
actions that will get us there,” said David Hawkins, director of
climate programs at the environmental group.

Donors briefed on possible climate measures said they did
not know details about the plans, leading to speculation about
what policies would be included.

Some said recent low-key announcements by the White House,
such as a deal with China to limit ozone-harming
hydrofluorocarbons, or a plan announced earlier this month to
make the electric transmission system more efficient, signal the
start of a wider approach.

“The administration is putting some common sense building
blocks for climate progress into place,” said Vickie Patton, an
attorney for the Environmental Defense Fund.

“There is a strong sense of urgency given the gravity of the
problem and hope for solutions after the U.S.-China accord to
jointly curb some of the most potent climate pollutants.”

But other analysts expect the president to be more
aggressive in anticipating of approving the Keystone pipeline.

“If it weren’t for activism on Keystone XL, Obama might be
able to get by with small steps alone,” said Manik Roy, vice
president for strategic outreach at the Center for Climate and
Energy Solutions.

The attorney generals of New York and nine other states, along with three major green groups, had planned to sue the EPA this week because it missed a deadline in April to finalize emissions standards for new electric power plants.

Two months after notifying the agency they intended to sue, the consortium had expected to file as early as Monday, but backed off temporarily to allow the White House to disclose its climate plans.

“Due to public reports that the president will be announcing major action on climate change very soon, the Attorney General has decided to postpone a lawsuit on this matter for a short period,” said Melissa Grace, a spokeswoman for New York Attorney General Eric Schneiderman.

President Barack Obama reportedly told campaign donors last week he will unveil a package of measures to combat climate change, possibly including EPA curbs on power plant emissions.

Many of those donors are ardent opponents of TransCanada Corp’s planned Keystone XL pipeline, which would carry oil produced in Canada’s oil sands regions to refineries on the U.S. Gulf Coast. Some policy analysts reason that, if Obama approves the pipeline, he will face pressure to announce strong climate measures as an offsetting measure.

The Natural Resources Defense Council, one of the groups that planned to sue, said in a statement that whatever Obama rolls out should advance his previous pledges on climate action.

“The president has set a goal to cut our carbon emissions by 17 percent – from our 2005 levels – by 2020. We need a set of actions that will get us there,” said David Hawkins, director of climate programs at the environmental group.

Donors briefed on possible climate measures said they did not know details about the plans, leading to speculation about what policies would be included.

Some said recent low-key announcements by the White House, such as a deal with China to limit ozone-harming hydrofluorocarbons, or a plan announced earlier this month to make the electric transmission system more efficient, signal a wider approach.

“The administration is putting some common sense building blocks for climate progress into place,” said Vickie Patton, an attorney for the Environmental Defense Fund.

But other analysts expect the president to be more aggressive in anticipating of approving the Keystone pipeline.

“If it weren’t for activism on Keystone XL, Obama might be able to get by with small steps alone,” said Manik Roy, vice president for strategic outreach at the Center for Climate and Energy Solutions.

(Reporting by Valerie Volcovici.; Editing by Ros Krasny and Andre Grenon)

NEPA, a statute that dates to the Nixon administration, calls on officials to weigh whether projects such as highways, dams or oil drilling could harm the environment.

While it does not have the power to block development, NEPA forces officials to consider the environment before approving federal projects, and the White House has proposed that climate change should rank high among those concerns.

In early 2010, the White House suggested it would make an update to NEPA that would require counting greenhouse gas emissions among the impacts worthy of a NEPA review. But those standards have been on ice ever since they were written.

“We are taking the time necessary to carefully consider all input from the public, stakeholders and federal agencies,” said Taryn Tuss, a spokeswoman for the White House Council for Environmental Quality (CEQ), the steward for NEPA.

Although changes to NEPA don’t require White House review, several other cabinet agency rules have been held up by that process amid election-year politics and Republican complaints of costly over-regulation.

Democratic lawmakers have called on the White House to weigh climate change in proposals like the Keystone XL oil pipeline and coal export terminals planned for the Pacific Northwest.

Industry groups and Republicans, though, have warned Obama to keep NEPA out of the climate change debate.

LEGACY CONCERNS

Former White House officials say Obama must soon test the rule’s power to confront climate change if he wants to cement a legacy of trying to wean the nation off polluting fossil fuels.

“A president who wants to lead on climate change does not have many tools that do not involve Congress. One of them is NEPA,” said George Frampton, who led the CEQ in the final years of Bill Clinton’s presidency.

Several former U.S. officials said the White House is at least a year away from blessing a climate change component of NEPA – if such a move is taken at all.

“I would think any revision is a ways off,” said a former EPA official who dealt with NEPA issues.

Efforts by Congress to set mandatory limits on carbon emissions failed to pass in 2009 and 2010 amid intense partisan wrangling. Other administration pollution rules have also been challenged in the courts.

But with little hope of moving new comprehensive climate change legislation through Congress, the White House is running out of time to use its executive power to confront an issue that Obama has said requires urgent action.

“No one measure will halt climate change,” said Jessica Goad of the Center for American Progress, a liberal think tank with ties to the White House.

“But this is certainly one modest step. And we are talking about rules that have been on the shelf for three years.”

The administration has recently announced some actions targeting climate change, including a deal with China to reduce HFCs, a potent greenhouse gas used in air conditioners and refrigerators.

But it has given no sign it will finish the more controversial NEPA update, which could have an impact on some major energy projects.

BACKDOOR REGULATION?

Since it came on the books in 1970, NEPA has been used as a tool to scrutinize – and sometimes stall – big government developments.

And while environmentalists are eager to use the statute to consider the long-term impacts of climate change, industry groups worry the added layer could be crippling to projects.

“Let’s say you want to build a solar farm. Well, were those solar panels built in China using coal power? How far back do we trace these supposed impacts?” said Bill Kovacs, a senior energy adviser with the U.S. Chamber of Commerce.

Republican lawmakers agree. In April, 33 senators signed a letter discouraging the White House from finalizing the standards, saying NEPA would be a way to regulate carbon emissions without congressional approval.

And some Democratic lawmakers do have big plans for NEPA.

The governors of Oregon and Washington want the White House to apply NEPA as it weighs whether to speak up against coal export terminals planned for the Pacific Northwest.

The statute should not only weigh the impact of exporting U.S. coal but how burning the fuel in furnaces overseas could worsen climate change, the governors argue.

While the NEPA rules remain unfinished, government agencies are coming up with different conclusions about what some controversial projects will mean for climate change.

A State Department review found that burning oil sands fuel would not substantially worsen climate change if the Keystone XL pipeline were permitted to cross the border from Canada, while the EPA found the impact to be significant.

The Army Corps of Engineers, which is reviewing the coal export terminals, has declined to weigh global impacts while local governors have pressed for such studies.

The Chamber of Commerce’s Kovacs says the White House is wise to move slowly as it considers retooling NEPA but former officials say there is no time for delay.

“Time is running out to do something meaningful that will have an effect in Obama’s second term,” Frampton said.

(Reporting by Patrick Rucker and Valerie Volcovici; Editing by Ros Krasny and Eric Walsh)