The unprecedented legal battles over the Clean Power Plan have been on ice for quite some time. However, recent events suggest the rule may start making headline news once again very soon.
On April 17, 2010 EPA issued a guidance document on the implementation of significant impact levels (“SIL”) for ozone and fine particles. Under EPA’s air pollution permitting regime known as “New Source Review,” SIL values are one way to demonstrate that a new facility or modification of an existing facility will not cause a violation of the National Ambient Air Quality Standards (“NAAQS”) or Prevention of Significant Deterioration (“PSD”) increments for a regulated pollutant. In short, if a source’s “projected impact on air quality” is below the “SIL,” the source is deemed to have no significant impact on air quality. If a source’s impacts are above the SIL, far more extensive modeling analyses are needed to demonstrate compliance, so the SIL helps streamline the permitting process for projects that can meet it.
On March 16, 2018, the D.C. Circuit Court of Appeals partially upheld and partially rejected an EPA rule known as the “Boiler MACT.” Officially named the “National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters,” it regulates the emissions of certain types of air pollutants known as “hazardous air pollutants” from boilers located at “major sources” of those pollutants. EPA issued the rule in several different rulemakings, due to the fact that the agency decided to reconsider a few provisions several times along the way. As a result, the litigation over the rule became very complicated. Sierra Club challenged numerous provisions of the rule, claiming that they failed to comply with the Clean Air Act. Most of those challenges were resolved in a 2016 decision, but the court had reserved two issues that were finally decided this week—namely Sierra Club’s challenges to EPA’s carbon monoxide (CO) limits for certain boilers and the startup and shutdown work practices. Specifically, Sierra Club alleged that (1) EPA failed to adequately justify its decision to make CO limit less stringent (130 ppm), and (2) EPA’s qualitative “work practice” standards during startup and shutdown are unlawful.
On March 20th, the DC Circuit upheld EPA’s June 2012 “CSAPR = BART Rule,” establishing that compliance with EPA’s Cross State Air Pollution Rule (CSAPR) will satisfy the Best Available Retrofit Technology (BART) requirements for SO2 and/or NOx under the Regional Haze Rules for electric generating units (EGUs) subject to CSAPR. Under the Regional Haze Program, EPA has issued regulations that allow the Agency to approve alternatives to BART if EPA finds that the controls are “better than BART.”
NSR—the program imposing onerous permitting requirements on the construction of new sources and “major modification” projects at existing sources—requires industrial sources of air emissions to determine whether the projects they propose will increase those emissions. EPA adopted regulations in 2002 to provide a new structure for those critical emission calculations, which specifies that sources must calculate the “sum of the differences” between a baseline and a future projection for each existing emission unit. That language is particularly important for individual projects that may cause emissions to go down at one unit but up at another.
On January 25, 2018, EPA’s Assistant Administrator, William Wehrum, issued a memorandum addressing when a “major source” subject to a section 112 maximum achievable control technology (“MACT”) standard of the Clean Air Act (“CAA”) can be reclassified as an “area source,” and thus avoid any more stringent requirements that only apply to “major sources.” The memorandum departs from and supersedes EPA’s longstanding “Once in Always in” (“OIAI”) policy articulated in the May 1995 Seitz Memorandum. Under the OIAI policy, a major source of hazardous air pollutants (“HAPs”) was permanently subject to the MACT standard at the “first compliance date” of the standard even if the source was able to later limit its potential to emit (“PTE”) HAPs below the major source thresholds. EPA’s new policy explains that a major source will become an area source once it takes enforceable limits on its PTE to ensure emissions cannot exceed the applicable major source thresholds for HAPS.
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 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. Continue Reading New Source Review Memorandum Alters EPA’s Enforcement Approach Concerning Actual-to-Projected-Actual Applicability Test
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.
The battle over regional haze in Texas continued this week, as EPA published a final rule for the state to address visibility degradation in its national parks. The rule itself appears relatively plain on its face—it simply approves for Texas a regional haze policy that is similar to what EPA has approved for many other states. That is, it deems compliance with an emission trading program to be sufficient to satisfy the regional haze requirement for Best Available Retrofit Technology (BART). However, the Texas rule is the most recent and obvious indication that the Trump EPA is taking a very different tack on regional haze than the Obama EPA.