The Nickel Report

The New Source Review (NSR) Program of the Clean Air Act requires large new plants (in the parlance of the act, “major” “stationary sources”) to go through an extensive, time-consuming and expensive review and permitting process prior to construction. Such sources are required through these permits, among other requirements, to install the best available control technologies (BACT) to reduce levels of specific regulated pollutants. The NSR program also applies to existing facilities if they are modified in substantial ways and if, as a result, emissions increase by significant amounts (these are known as “major modifications”).

For the first two decades of the NSR program, existing sources rarely triggered it. That is because EPA applied it in a way to be triggered only by unusual projects that would expand the capacity of the source. It is also because NSR is so time-consuming and expensive that sources generally avoided activities that would expand their capacities because they could trigger NSR.

That all changed drastically in the late 1990s.

[caption id="attachment_291" align="aligncenter" width="300"] Navajo Generating Station[/caption]

In two related decisions issued on March 20, 2017, the Ninth Circuit upheld an EPA plan imposing regional haze requirements on the Navajo Generating Station (NGS).  The rulings suggest a possibility that future haze plans need not be unduly inflexible—sometimes forcing premature unit closures, as many haze plans did during the program’s first round of implementation.

Since 2013, EPA’s enforcement office has been promoting an initiative it terms Next Generation Compliance. In common parlance, the term “next generation” refers to the next stage of development or version of something. The term inherently suggests improvement – a better mousetrap, for example. Who would object to such progress? Several recent applications of EPA’s “Next Gen” strategy illustrate that, as with most things in life, the devil is in the details.

During much of the Obama administration, states and EPA were in conflict about how to craft Clean Air Act plans to reduce “regional haze” impairment of visibility in national parks and wilderness areas. The technical and policy issues are daunting. Regional haze forms in the atmosphere from many sources’ air emissions — emissions from cars and trucks, construction equipment, factories and power plants (among others), plus natural sources like wildfires and dust storms. Developing regional haze implementation plans entails complex policy choices and weighing sometimes heavy compliance costs for emission controls — costs that may total in the hundreds of millions or even billions of dollars — against improvements in visibility that can be hard to measure and in some cases are even imperceptible to the human eye.

The U.S. Environmental Protection Agency (EPA) published the Cross-State Air Pollution Rule “Update” for the 2008 national ambient air quality standards for ozone – the so-called CSAPR Update Rule – on October 26, 2016.  81 Fed. Reg. 74504.  The CSAPR Update Rule regulates emissions of nitrogen oxides (NOx) from power plants located in 22 states in the eastern half of the country by establishing statewide ozone-season NOx emission budgets scheduled to take effect beginning May 1, 2017.  (Under the Clean Air Act, the regulatory “ozone season” runs from May 1 through September 30 each year.)

Just before Christmas, the U.S. Environmental Protection Agency (EPA) released controversial regulations, titled Accidental Release Prevention Requirements: Risk Management Programs under the Clean Air Act; Prepublication Final Rule, that EPA states will “modernize” the Clean Air Act Section 112(r)(7) Risk Management Program (RMP) regulations. These 1990s-era regulations, covering about 12,500 facilities across the country, require that facilities storing certain amounts of specified chemicals develop risk management plans to prevent the accidental release of those substances into the air and mitigate impacts of accidental releases that do occur. 

Executive Branch agencies write vague rules.  Then they give them meaning through interpretation.  That meaning may change over time through re-interpretation.  Indeed, it is not hard to find examples of rules that meant one thing one day and the opposite the next.  See, e.g.,  Perez v. Mortgage Bankers Association, 135 S. Ct. 1199 (2015).  This is a problem for regulated entities that face penalties for failure to comply.  Reflecting such concerns, the deference doctrine has eroded slowly over the past two decades, with pronounced critical commentary from conservative Justices.  In October 2016, the Supreme Court granted review  in a case from the Fourth Circuit -- GG v. Gloucester County School Board (cert. granted Oct. 28, 2016)—where the court gave “controlling weight” to a staff interpretation of a Department of Labor (“DOL”) regulation.  In Gloucester County, the Court will have an opportunity to rein in a particularly aggressive use of agency deference.  Does this case presage more comprehensive review of the Court’s deference jurisprudence?  And what does it portend for the Trump Administration’s efforts to reverse Obama Administration regulatory priorities?

A pteropod is not a winged dinosaur. It is a category of marine life that includes sea snails and sea slugs, both of which serve as forage for other marine species. According to the Center for Biological Diversity (CBD), ocean acidification is endangering some pteropods, such as sea snails, by eroding their shells. The sea snail is not the only threatened species—the CBD posits that most marine calcifying organisms (including oysters, clams and coral) are at risk of damage from ocean acidification.

Should environmental groups or citizens be able to file lawsuits against their governments to force them to step up action to fight climate change? Some climate activists have claimed that resorting to judicial remedies is necessary because, in their opinion, the political system focuses on short-term economic interests to the detriment of long-term environmental concerns. Attempts to involve the courts in climate policy decision making have had very limited success, but a recent decision in The Netherlands may reinvigorate those efforts.

On October 17, the federal District Court of the Northern District of West Virginia ruled in a lawsuit brought by Murray Energy that EPA had violated Clean Air Act § 321(a)’s requirement that the agency “conduct continuing evaluations of potential loss or shifts of employment” that may result from EPA air regulations. Judge John Preston Bailey, a nominee of President George W. Bush, found that “Congress unmistakably intended to track and monitor the effects of the Clean Air Act and its implementing regulations on employment in order to improve the legislative and regulatory processes,” and that job loss evaluations “may have the effect of convincing the EPA, Congress, and/or the American public to relax or alter EPA’s prior decisions.” At that time, Judge Bailey gave EPA just two weeks to come up with a plan to evaluate those impacts.

Politico reports today that the Sierra Club is set to launch a $5 million campaign to fight construction of the 221 natural gas-fired power plants planned to be constructed across the country. Sierra Club argues that the world cannot afford more carbon dioxide emissions from combustion of fossil fuels.

This summer has been an eventful time for EPA’s regional haze program. In July, the Fifth Circuit issued an important decision to stay EPA’s controversial Texas and Oklahoma regional haze rule and to retain jurisdiction over the litigation on that rule, denying an EPA request that the litigation be transferred to the DC Circuit. While that litigation played out in the spring of this year, EPA proposed major revisions to the regional haze rules­ that will shape the next round of the program’s implementation.