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.

Continue Reading EPA Decides Both “Increases” and “Decreases” Count in Determining NSR Applicability

On February 14, 2018, the House Committee on Energy and Commerce held a hearing on the Environmental Protection Agency’s (“EPA”) New Source Review (“NSR”) permitting program as an initial step towards NSR reform.  See https://energycommerce.house.gov/hearings/new-source-review-permitting-challenges-manufacturing-infrastructure/.  Six witnesses presented testimony at the hearing, with four in favor of and two against reform.  There is wide anticipation that EPA will move to adopt some sort of reform of the NSR program, although exactly how and when is not known.  The EPA Administrator this past December issued a Memorandum to the EPA regional administrators providing guidance on “Enforceability and Use of the Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability,” and it is expected that further guidance or rulemakings may be forthcoming.  In addition, it is expected that a new effort will be made to reform the program through legislation, with Rep. Morgan Griffith (R-Va.) having introduced two bills last June on that subject.

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.

Continue Reading EPA Changes Course on Authority to Revisit NSR Permits in Title V Context

The federal appellate court hearing the appeal of EPA’s “Section 111(b)” regulations establishing a carbon capture and storage “new source performance standard” for new coal-fueled electric generating stations has today suspended the April 17, 2017 date for oral argument in the case.  The U.S. Court of Appeals for the D.C. Circuit said it was suspending the oral argument date pending its consideration of EPA’s motion to hold the case in abeyance in light of President Trump’s recent Executive Order ordering EPA to review the Section 111(b) rule and the Clean Power Plan.  EPA’s abeyance motion was filed Tuesday night, and today all of the State and industry petitioners challenging the rule filed a response in support of the motion.  States and environmental interest groups supporting the Section 111(b) rule have not yet filed formal oppositions to the abeyance motion but have indicated they intend to do so.  The court’s action does not mean that it will grant EPA’s request to hold the case in abeyance, only that it does not wish to proceed with oral argument at this time while it considers the future of the case.

The court’s action also does not affect the parallel EPA motion to hold the Clean Power Plan in abeyance.  No responses to that motion have yet been filed.

Last month, the U.S. Court of Appeals for the Sixth Circuit reinstated an Environmental Protection Agency (EPA) enforcement action against DTE Energy (DTE) for violating the New Source Review (NSR) program under the Clean Air Act.  This case stems from capital projects undertaken at DTE’s Monroe Power Plant in Monroe, Michigan during a three-month scheduled outage in 2010.  DTE had characterized the projects performed during the 2010 outage as routine maintenance, repair and replacement activities, which, if accurate, would exempt them from NSR.

Continue Reading Sixth Circuit Ruling Reinforces EPA’s Ability to Initiate NSR Enforcement Based on Projected Emissions Increases