: Clean Air Act : Environmental Law ReSource

Posted on October 10, 2011 by David Wagner

Slides and Audio from Reed Smith's Quarterly Environmental and Energy Law Resource Telesiminar

This post was written by David Wagner.

On Wednesday, Reed Smith held its quarterly environmental and energy law resource teleseminar and the slides and audio are available. We discussed current or emerging issues under five general categories. The categories and discussion included:

Legislation/Rules — We reviewed the key points and effective dates related to the New Source Performance Standards for the oil and gas industry as well as for utilities and refineries.
Litigation — A big environmental litigation issue involving the oil and gas industry is the aggregation of air emissions from diverse sources and we discussed recent challenges to air permits involving this issue. We also discussed the U.S. Supreme Court's recent denial of certiorari in Morrison Enterprises v. Dravo Corporation and the implications on CERCLA cost recovery and contribution claims.
Policy and Technology — On this front, our presentation focused on a recent DOE report on the need for additional disclosure, and the policy implications related to the interplay between the U.S. Environmental Protection Agency and Federal Energy Regulatory Commission.
International Issues — Here we provided a brief preview of the upcoming COP in South Africa and the fate of the Kyoto Protocol
State Issues — On the state level, we focused on California and summarized recent developments regarding the implementation of the California Global Warming Solutions Act (aka AB32) and California's “Green Chemistry” Initiative.

Posted on September 16, 2011 by David Wagner

Join Us for Reed Smith's Environmental and Energy Law Resource Teleseminar on October 5

This post was written by David Wagner.

We expanded the scope of our quarterly teleseminar to include hot topics in environmental and energy law and invite you to join us. It’s on Wednesday, October 5, 2011 from 12 to 1 pm ET. There’s no cost but we do ask you to R.S.V.P. At the teleseminar, we’ll provide a regulatory update on five major legal developments in the environmental and energy law world:

Legislation/Rules — The hottest issue in new rules is the New Source Performance Standards for the oil and gas industry as well as for utilities and refineries. Our team will review the high points and effective dates, what industry should look out for, and likely challenges.
Litigation — A current issue in litigation, especially in the oil and gas industry, is aggregation of air emissions from diverse sources. We will discuss recent challenges to air permits involving this issue. Also, our team is challenging a CERCLA 107/113 appeal for cert to the United States Supreme Court – tune in to hear the latest in that area.
Policy and Technology — The policy framework behind fracking is in its infancy and studies to determine or influence policy framework abound. Our team will discuss recent DOE and USGS papers, as well as industry studies, concerning emissions. In addition, we will touch on the significance of the U.S. Supreme Court in Sackett v. EPA. We will also tackle the policy implications of interplay between the U.S. Environmental Protection Agency and Federal Energy Regulatory Commission.
International Issues — In the international arena, all eyes are on the upcoming COP in South Africa and the fate of the Kyoto Protocol. Our team will discuss these issues, as well as their implications for EU business and EU greenhouse gas regulations.
State Issues — We will focus on California with a summary of recent developments regarding the implementation of the California Global Warming Solutions Act (aka AB32) and California's “Green Chemistry” Initiative.

To sign up, please email Sandy Petrakis.

Posted on December 1, 2010 by David Wagner

USEPA Identifies 17 Counties in 11 States Violating Lead Standards

This post was written by Mark Mustian.

In late November, the U.S. Environmental Protection Agency (USEPA) determined that 17 counties in 11 states across the country are not meeting the National Ambient Air Quality Standards (NAAQS) for lead. These areas were designated as “nonattainment” because their 2007 to 2009 air quality monitoring data showed that they did not meet USEPA’s health-based standards.

As a result of the designation, states with these nonattainment areas must develop a State Implementation Plan that meets the requirements of Sections 172(c) and 191 of the Clean Air Act and provides for attainment of the NAAQS as expeditiously as practicable, but no later than December 31, 2015. This designation, which covers such heavily populated areas as Los Angeles County, Tampa, FL and Cleveland, OH, will require the states to develop and implement monitoring programs, develop emission inventories, and adopt control strategies to limit lead emissions within the non-attainment areas.

Moreover, the November 22, 2010 rulemaking is just phase 1 of USEPA's evaluation, and more non-attainment determinations are expected next year. In order to collect and evaluate additional monitoring data, USEPA put off a final decision on many areas of the country until October 15, 2011. The second phase of the rulemaking may greatly increase the number of areas considered to be in non-attainment. For example, in USEPA Region 3 (Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia), USEPA only identified non-attainment regions for the Commonwealth of Pennsylvania. All other states within Region 3 were deferred until October 2011.

In 2008, USEPA revised the National Ambient Air Quality Standards for lead and lowered the standard from a level of 1.5 μg/m3 to a level of 0.15 μg/m3. In addition, the Administrator changed the averaging time and form of the standard to a rolling 3-month average evaluated over a 3-year period. The rule also established new requirements for lead monitoring networks, including the requirement that new lead monitors be located in close proximity to the largest lead emissions sources by January 1, 2010. The final rule revising the lead NAAQS was published in the Federal Register on November 12, 2008, and became effective January 12, 2009.

Tags: Air, Clean Air Act, EPA, Lead, National Ambient Air Quality Standards, State Implementation Plan, U.S. Environmental Protection Agency

Posted on August 20, 2010 by David Wagner

Regulated Entities in Allegheny County (PA) and Certain California Counties, Be Aware: USEPA May Take Over GHG Air Permitting Programs Related to Construction or Modification Projects

This post was written by Jennifer Smokelin and David Wagner.

Here's the issue: Certain larger emission sources of greenhouse gases (GHGs) will be subject to permitting requirements for planned construction projects starting January 2, 2011. In 13 states, the permitting programs (known as the Prevention of Significant Deterioration (PSD) permitting program) do not apply to sources of GHGs. Thus, emission sources in those states would be unable to obtain a PSD permit that covers GHG emissions, and would potentially be unable to undertake construction or modification projects on or after January 2, 2011. The states are Alaska, Arkansas, Connecticut, Florida, Idaho, Kansas, Oregon, Texas, and portions of California, Arizona, Kentucky, Nebraska, and Nevada.

Here's USEPA's proposed solution: The Agency recently proposed two rules that would fill the gap in the permitting programs for these 13 states: (1) the SIP call and (2) the FIP. Under the first proposed rule, the U.S. Environmental Protection Agency (USEPA) would issue a "SIP call," requiring the 13 states to revise their State Implementation Plans (SIPs). According to USEPA, the PSD program in these jurisdictions is "presumptively inadequate" because they do not allow for the regulation of GHG emissions. All other states would be required to review their rules and inform USEPA if they would not be able to issue PSD permits for greenhouse gas emissions.

Under the second rule, USEPA proposes to establish a FIP - a Federal Implementation Plan for the 13 "presumptive inadequate" states, and for any other state in which USEPA determines that the state PSD program does not meet requirements for regulation of GHGs. Only the states deemed by USEPA to be inadequate would need the federal plan. In other words, in any states that do not update their regulations within 12 months after USEPA signs the final action, the second proposed rule would give the Agency the authority to take over until the state can assume the responsibility.

What this might mean to regulated entities: A state that has to amend its rules, especially the 13 "presumptive inadequate" states, would likely have difficulty making the changes by USEPA's deadline, which is within 12 months after USEPA signs the final action. If USEPA steps in as planned, new sources and modification projects might be unusually delayed while USEPA works through the GHG portions of permitting applications.

What this might mean in Allegheny County and most California counties: It's hard to say. Allegheny County and most of the Air Quality Management Districts in California are in a "grey area" - that is, they are not listed on either the Presumptive SIP Call or the Presumptive Adequate Lists. USEPA has determined that these jurisdictions (among others) do not have an approved PSD SIP. See additional discussion below.

What's next: The two rules have not yet been formally proposed with publication in the Federal Register, and comments on the rules would be due 30 days after publication. USEPA has scheduled a public hearing on the matter for August 25, 2010 in Arlington, Virginia.

Some Details and Acronyms

Under the first proposed rule, the SIP call, USEPA is proposing a finding of SIP substantial inadequacy for only the 13 states mentioned above (again, the "Presumptive Sip Call List"). For the most part, in all other states USEPA is proposing a finding of SIP substantial adequacy (the "Presumptive Adequate List"). If any of the Presumptive SIP Call List states are not in a position to submit to USEPA a corrective SIP revision within 12 months after USEPA signs the final action, USEPA will promulgate a FIP that will provide authority to issue PSD permits. USEPA intends to finalize the SIP call on or about December 1, 2010.

Nonetheless, for each of the presumptive adequate list states, USEPA is soliciting comments in the SIP call on whether their SIPs do or do not apply the PSD program to GHG sources. USEPA is not at this time proposing a FIP for the states on the "presumptive adequate" list. However, if EPA concludes after comment on the rule that a state's SIP does not apply to GHG sources, then USEPA will proceed to issue a finding of substantial inadequacy and a SIP call on the same schedule as the already-listed-as-presumptive-inadequate states. If a newly listed state is not able to submit to USEPA a SIP revision that applies the PSD program to GHG sources by the SIP call deadline, then USEPA proposes to promulgate a FIP for that state without further notice and comment. Thus, any state listed on the Presumptive Sip Call List (and any state that feels it might be added to such list after the comment period) should consider the comment period for the SIP call notice to be their opportunity to comment on the FIP as well.

Unlisted Jurisdictions: Inter alia, Allegheny County, Pennsylvania and Several California Counties

Again, the 13 states with "presumptive inadequate" SIPs are Alaska, Arizona, Arkansas, California, Connecticut, Florida, Idaho, Kansas, Kentucky, Nebraska, Nevada, Oregon and Texas. All other states for the most part are on the "presumptive adequate" list - which means they should not expect a SIP call unless USEPA decides to the contrary at the close of the comment period on the SIP call notice.

There are several unlisted jurisdictions. An example of this is Pennsylvania. Pennsylvania is on the presumptive adequate list (the list of states that appear to apply PSD to GHG sources). However, USEPA specifically excepted solely Allegheny County from the Presumptive Adequate List when listing Pennsylvania. In addition, Allegheny County, Pennsylvania, does not appear on the Presumptive SIP Call list. According to USEPA, the Agency has determined that Allegheny County (among others) does not have an approved PSD SIP. USEPA has determined that in Allegheny County, the applicable regulatory authority is USEPA's regulations, found at 40 CFR 52.21, and presumably has determined that no changes need to be made to apply PSD to GHG sources. It is worth noting that the docket record reflects that USEPA made this determination without input from Allegheny County, according to USEPA sources. This could be because Allegheny County did not respond to a 60-day letter request from USEPA regarding adequacy under the Tailoring Rule. Allegheny County may not have made a determination internally whether its air regulations require revision to apply PSD to GHG sources. There is only USEPA unchallenged assertion at this point. Thus it is still not clear whether Allegheny County air regulations require revision - that is, whether conflicting provisions create ambiguity within Allegheny County air regulation as to whether it applies to GHGs. If USEPA's conclusion remains unchallenged, sources in Allegheny County can expect the proposed FIP (that is, the provisions of 40 CFR 52.21 limited solely to GHGs) to apply to PSD permitting after January 2, 2011 in accordance with the Tailoring Rule and its phased-in approach.

Another example of unlisted jurisdictions is California. Four California Air Quality Management Districts (AQMD) appear on the Presumptive Adequate list (Mendocino, Monterey Bay Unified, North Coast Unified, and Northern Sonoma County). One California AQMD appears on the Presumptive Sip Call List (Sacramento Metropolitan). All other AQMDs in California are unlisted - presumably because USEPA has determined that these jurisdictions (among others) do not have an approved PSD SIP. This means that sources commenting on the USEPA proposed action have localized interests - that is, comments on and objections to USEPA's proposed action may vary from site to site. Companies with multiple facilities in California should coordinate responses carefully.

If you have any questions regarding these proposed rules, please do not hesitate to contact Larry Demase, Todd Maiden, Jennifer Smokelin or Dave Wagner.

Tags: Air, Clean Air Act, Climate Change, Federal Implementation Plan, GHG Emissions, Legislative Updates, SIP Call, Tailoring Rule, U.S. Environmental Protection Agency

Posted on March 1, 2009 by David Wagner

Recent Lawsuit Filed by USDOJ Underscores National Initiative Targeting Coal-Fired Power Plants

This article was written by Jennifer Smokelin.

On Feb. 4, the U.S. Department of Justice, on behalf of EPA, filed suit against Westar Energy, Inc. in St. Marys, Kansas for allegedly failing to install the best available control technology at one or more of its coal-fired power plants. The complaint, brought under the New Source Review ("NSR") provisions of the Clean Air Act, revives a line of NSR enforcement cases many thought was dead during the previous administration -- and revives an initiative targeting coal-fired power plants that the Clinton administration began in 1999. While there remains little clear guidance as to what projects at existing facilities may trigger NSR, the complaint against Westar Energy, Inc. is a signal to utilities to prepare for renewed regulatory attention to NSR enforcement and potential litigation over past, and potentially future, modifications.

Tags: Air, Clean Air Act, New Source Review, Obama Administration

Posted on September 4, 2008 by David Wagner

D.C. Circuit Court Allows State and Local Authorities to Supplement Title V Monitoring Requirements

This post was written by Lawrence A. Demase, Christopher L. Rissetto, and David W. Wagner.

On Aug. 19, 2008, a federal appeals court ruled that state and local permitting authorities may supplement, or “fix,” air pollution monitoring requirements when the U.S. Environmental Protection Agency has taken no action. In Sierra Club v. USEPA, ___ F.3d ___, 2008 WL 3834186 (D.C. Cir. Aug. 19, 2008), the U.S. Court of Appeals for the D.C. Circuit vacated a Clean Air Act rule that had prevented state authorities from issuing supplemental monitoring requirements in Title V permits regulating air pollution from stationary sources such as power plants and factories. On top of federal requirements, this decision will require environmental managers and other stakeholders to closely follow state and local developments of air monitoring and additional permitting requirements.

Since 1997, USEPA has gone back and forth on whether to allow state and local authorities to supplement monitoring requirements where federal standards are inadequate. (Where there are no federal monitoring requirements, state and local authorities must create one and include it in the permit.) In a 2006 rulemaking, USEPA finally determined the federal agency alone could fix inadequate monitoring requirements. It promulgated a rule prohibiting state and local permitting authorities from imposing additional monitoring requirements in Title V permits, including when existing standards were deemed inadequate for assuring compliance. 71 Fed. Reg. 75,422 (Dec. 15, 2006).

In reviewing the environmental group’s challenge, the court focused on the Clean Air Act’s mandate that “[e]ach permit . . . shall set forth . . . monitoring . . . requirements to assure compliance with the permit terms and conditions.” 42 U.S.C. § 7661c(c). USEPA and industry intervenors argued that the Act’s “[e]ach permit” mandate limits the imposition of new monitoring requirements to USEPA alone. They also argued that allowing supplementation by state and local authorities would create new emission standards not authorized by the Act. The court disagreed. Because USEPA failed to fix inadequate monitoring requirements prior to the issuance of the permits, the court found that state and local authorities must be allowed to cure those monitoring requirements before including them in the Title V permits. The court concluded that the 2006 rule violated the Clean Air Act, and vacated the rule.

The environmental group also sought review of the monitoring requirements of the Part 70 rules, arguing that if those provisions did not allow permitting authorities from supplementing inadequate monitoring requirements, they, too, must be vacated. The court denied this petition for review, concluding that the monitoring provisions are consistent with the Clean Air Act because they could be easily and reasonably read to allow state and local permitting authorities to supplement inadequate monitoring requirements in each Title V permit issued.

Importantly, the federal appeals court left open the question of who wins when USEPA and state authorities conflict over whether a given requirement is sufficient to ensure compliance with the Clean Air Act. This may mean that the states will be required to undertake the task of deciding whether existing requirements are adequate, and providing supplemental monitoring requirements. Further, groups such as the National Association of Clean Air Agencies may step in and offer guidance to the states. In any case, environmental managers and other related stakeholders may have to identify and adjust to varying state and local standards and requirements.

Tags: Air, Clean Air Act

Posted on July 21, 2008 by David Wagner

D.C. Circuit Court Strikes Down Clean Air Interstate Rule

This post was written by Steven M. Nolan, Lawrence A. Demase, and Louis A. Naugle.

In a recent, much-anticipated decision in State of North Carolina v. Environmental Protection Agency, No. 05-1244 (July 11, 2008), the District of Columbia Circuit Court vacated the Environmental Protection Industry’s Clean Air Interstate Rule (“CAIR”) in its entirety.

The immediate impact of the decision will be upon electric generators (“EGUs”), in that sulfur dioxide (“SO₂”) allowances under Title IV of the Clean Air Act will no longer be subject to expedited retirement. The new trading scheme for nitrogen oxide (“NOx”) allowances was also vacated by the decision.

The Clean Air Act imposes a duty on each state to have a State Implementation Plan which, inter alia, contains adequate provisions prohibiting in-state sources of air pollution from emitting any air pollutant in amounts that will contribute significantly to nonattainment in, or interfere with maintenance by, any other state with respect to any National Ambient Air Quality Standard (“NAAQS”).

Pursuant to its statutory authority to ensure that states have plans in place that implement the foregoing requirement, the EPA promulgated CAIR in 2005. The stated purpose of CAIR was to reduce or eliminate the impact of upwind sources on out-of-state nonattainment of NAAQS for fine particulate matter (pm2.5) and ozone. In accordance with CAIR, a number of states such as Pennsylvania revised their State Implementation Plans (“SIPs”) by promulgating regulations that incorporated all or most of CAIR by reference. As of the date of the Circuit Court’s decision, none of the revised SIPs had been approved by EPA.

The chemical species actually regulated under CAIR were sulfur dioxide (a chemical precursor of fine particulate matter) and nitrogen oxides (a precursor of both fine particulate matter and ozone). Under CAIR, each of the upwind states would be allocated an emission budget for SO₂ and NOx, and would be required to achieve certain emission targets in two phases with deadlines in 2010 and 2015. CAIR afforded the states the option of participating in cap-and-trade schemes for both pollutants. The SO₂ scheme would have required elimination of 65 percent of allowances from the already-existing Title IV (acid rain) cap-and-trade program; the NOx scheme supplanted an existing scheme under the previous NOx SIP call.

The court identified the following flaws in CAIR’s regulatory scheme:

The trading scheme was on a regional basis. While the court agreed that a trading program was a permissible approach to compliance, there was no link between the upwind sources and downwind nonattainment. Thus, for instance, it would be possible for all of the upwind sources of a particular downwind nonattainment area to purchase sufficient allowances to cover all of their current emissions, so that the nonattainment area would receive no relief at all.
In promulgating CAIR, EPA ignored the statutory requirement that upwind sources may not interfere with downwind maintenance of NAAQS compliance. EPA had focused solely on downwind areas that were in nonattainment, but had provided no relief to downwind areas that were in attainment, but were struggling to maintain that status as a result of pollution from upwind sources.
The 2015 compliance date was invalid because it was not coordinated with the provision in Title I of the Clean Air Act, which mandates 2010 as the compliance deadline for downwind states.
The SO₂ budget was unlawful because it interfered with the Title IV program, which was statutorily mandated.
Basing the NOx budget on a percentage of heat input was an invalid approach because it discriminated in favor of states more reliant on coal-fired utilities against states with oil- or gas-fired electrical generating units on the basis of “fairness,” a factor not permitted by the statute.

Although it appears that none of the petitioners had requested that CAIR be vacated in toto, the court found that CAIR—especially the trading scheme that lay at its heart—was so fundamentally flawed that the entire rule had to be vacated. Accordingly, the court did so.

The EPA may petition the entire D.C. Circuit Court for reconsideration en banc, or it may take an appeal to the U.S. Supreme Court. The case is of sufficient importance that it may choose to do so, but both of those courts may decline to hear the merits of the appeal.

If there is no successful appeal, for the CAIR program to survive, either Congress must respond with revisions to the Clean Air Act or else the EPA must promulgate a new rule that takes into account the court’s holding.

There are a number of implications resulting from the decision. Any new rule will have to regulate upwind sources of pollution for areas that significantly contribute to areas that are only marginally in attainment of NAAQS, in addition to nonattainment areas. This may mean that more states will be subject to regulation. Any cap-and-trade scheme, if that is the approach taken, cannot be on a regional basis. An intrastate trading scheme combined with other features, such as source specific limits, may have to be the approach. Currently, however, it should be noted that the NOx trading scheme under the earlier NOx SIP call was expressly revived in the decision, so that will remain in force until a new regulation is in force. Finally, while coal-fired electrical generating units have won a temporary reprieve from the effects of CAIR, the eventual form of regulation of EGUs can be expected to mandate specific emission limitations, given the EPA’s inability to impose a regional cap-and-trade scheme.

The effect on state regulations that incorporate CAIR by reference was not the subject of the Circuit Court decision. It is likely that a regulatory scheme such as Pennsylvania’s, the foundation of which was the existence of CAIR’s cap-and-trade scheme, will be found to be unworkable in the absence of CAIR and thus effectively invalidated by the court’s decision in North Carolina.

Finally, a significant concern is the effect of the decision on the impending NAAQS compliance date. The Clean Air Act establishes a compliance date of 2010 for meeting the ozone NAAQS, and in the absence of CAIR or a replacement, it is hard to see how downwind states will be able to attain their targets by that time. Since one possible implication of North Carolina is that the EPA lacks the power to alter deadlines established by Congress, any relief for downwind states will have to come from that body.