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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 March 1, 2018, the U.S. Environmental Protection Agency’s (“EPA”) Administrator, E. Scott Pruitt, signed a notice seeking public comment on the proposed withdrawal of the control techniques guidelines (“CTG”) for the oil and natural gas industry.  The oil and natural gas CTGs make recommendations for reducing volatile organic compound emissions from oil and natural gas equipment and processes in ozone nonattainment areas classified as Moderate or higher and states in the Ozone Transport Region by addressing reasonably available control technology review requirements in their state implementation plans.

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…

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 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.