Margaret Campbell

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On January 9, 2018, the EPA published the third round of final area designations under the 2010 SO2 NAAQS.  In this round, the EPA identified six (6) nonattainment areas located in Florida, Indiana, Louisiana, Puerto Rico and Guam.  EPA designated 23 areas as unclassifiable and all other areas as attainment/unclassifiable.  The primary focus in this round was on those areas electing to rely on ambient air quality modeling to assess attainment with the standard.

On January 8, the Supreme Court denied Murray Energy’s petition for appeal of a Fourth Circuit decision that had rejected its efforts to obtain judicial enforcement of Section 321 of the Clean Air Act (“CAA”).  Section 321(a) requires EPA to evaluate the potential for plant closures and job losses resulting from regulation and/or enforcement under the Act.  The decision marks the end of a legal challenge brought by Murray Energy and 15 states in October 2016, in which the Northern District of West Virginia strongly rebuked EPA’s failure to comply with the statute (as previously reported here).  In a 27-page opinion, the district court took EPA to task, finding that the Agency’s longstanding failure to comply with § 321 evidenced a “continued hostility” to the provision.  The district court required the Agency to establish a system by the end of 2017 for conducting the evaluations.

On January 9, 2018, EPA released the pre-publication copy of its annual civil monetary penalty adjustment.  The final rule is scheduled to be published in the Federal Register on January 10, 2018.  The adjustments are mandated by 2015 revisions to the Federal Civil Penalties Inflation Adjustment Act, which requires federal agencies to make annual inflation adjustments to federal statutory civil penalty amounts.  In the past, EPA only adjusted penalty levels for inflation once every several years.  Beginning in 2017, however, EPA and other federal agencies must adjust their penalty amounts every year.

On December 20, 2017, EPA took the next step in completing the area designation process under the 2015 ozone standard.   Specifically, the Agency issued “120-day letters” to the states proposing designations for all areas of the U.S. that were not designated as part of the Agency’s November 6, 2017 rulemaking designating 2,646 areas as either attainment or unclassifiable under the 2015 ozone standard.  Under the Clean Air Act, states recommend area designations and if EPA intends to modify a state’s recommended designation, it must notify the state no later than 120 days prior to making the final designation and give the state an opportunity to respond.

On December 7, 2017, EPA Administrator Scott Pruitt issued a memorandum explaining EPA’s future approach concerning enforcement of the New Source review program, considering the uncertainty created by the Sixth Circuit’s decisions in the DTE NSR cases (U.S. v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013) and U.S. v. DTE, 845 F.3d 735 (6th Cir. 2017)). NSR requires new major sources and major modifications at existing sources to obtain a permit before construction commences. In determining whether a permit is needed for a major modification, owners or operators are required to conduct a pre-construction applicability analysis to determine whether the proposed project would cause a significant emission increase, calculated using the actual-to-projected-actual applicability test that compares past actual emissions to future projected emissions. The memorandum’s main focus is on circumstances where sources have used that test in determining NSR applicability and the pre- and post-project source obligations.

In an October 16, 2017 order signed by EPA Administrator Scott Pruitt, EPA reversed a position it has held for many years — that the Agency has authority, in the context of Title V permitting, to review previous state-level decisions on the applicability of new source permitting requirements.  The new policy outlined in the October 16 order removes the Title V petition to object as an avenue for citizens to seek EPA review of state preconstruction permitting decisions.

EPA issued what the Agency is calling “Round 1” of final area designations under the 2015 ozone standard on November 6, 2017. The designations, which will be published in the Federal Register tomorrow, November 16, and become effective 60 days later, include only those counties, tribal areas, and territories that EPA has designated “attainment/unclassifiable” — totaling 2,646 counties. EPA also designated 3 counties in the state of Washington as “unclassifiable.” EPA did not designate any nonattainment areas as part of the final rule, but simply noted that it is “not yet prepared to issue designations” for the remaining areas of the U.S.

EPA is currently facing litigation over its June 2017 announcement extending the deadline for designating areas under the 2015 ozone NAAQS by one year, to October 2018, even though the Agency later reversed that decision. On July 12, 2017, a dozen environmental and public health groups sued EPA in the D.C. Circuit Court of Appeals, claiming the Agency did not have authority to extend the deadline for designating areas under the Clean Air Act. Fifteen states followed in their footsteps, filing their own lawsuit challenging the delay on August 1. EPA responded the following day by publicly announcing its intent to withdraw the deadline extension and published official notification of the withdrawal in the Federal Register on August 10. (82 Fed. Reg. 37,218.)