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.
The DC Circuit issued a decision on July 3, 2017, vacating the 90-day stay of the Oil & Gas Industry NSPS rules – the first rules to regulate methane from that sector. In a June 5 Federal Register notice, the new Trump EPA stayed the rules pending reconsideration under Section 307(d) of the Clean Air Act. Environmental Groups filed an emergency challenge to the stay, asking for either a stay of that decision or summary vacatur of it. Issuing its decision less than a month later, the court vacated EPA’s stay of the rules.
Yesterday, the United States Court of Appeals for the Fourth Circuit (“Fourth Circuit” or “the court”) vacated a federal district court’s order requiring EPA to account for the economic impacts of Clean Air Act (“CAA”) regulations. This decision stems from a suit filed by coal companies claiming that EPA had failed to perform a non-discretionary duty by completing continuous evaluations of job losses and plant closures resulting from CAA implementation or enforcement as required under Section 321 of the CAA. In a strongly worded opinion, the district court ordered EPA to come into compliance with the requirements of Section 321 by July 2017, an order that EPA subsequently appealed to the Fourth Circuit.
In the Rose Garden of the White House, President Trump fulfilled a key campaign promise today by confirming that the United States will begin withdrawing from the Paris Climate Change Agreement (“Agreement”). President Trump cited the Agreement’s potential financial and economic burdens as a key reason for the withdrawal. Continue Reading U.S. to Withdraw from Paris Climate Deal
Today, the U.S. Court of Appeals for the District of Columbia Circuit issued orders holding litigation challenging two major climate regulations in abeyance—the “Clean Power Plan” and the “Carbon Pollution Standards” for new and modified electric generating units. Both rules were critical components of the Obama Administration’s climate change agenda by requiring steep cuts in CO2 emissions from existing and new power plants, respectively. In the orders, the court granted EPA’s motion to hold the case in abeyance, but only for 60 days. The court also ordered EPA to file status reports every 30 days. The court further directed the parties to submit supplemental briefs by May 15th to address whether the cases should be remanded to EPA instead of held in abeyance.
The orders can be found at the following links: Clean Power Plan & Carbon Pollution Standards. For more information or questions on these cases, please contact Peter Glaser, Margaret Campbell, or Mack McGuffey.