The Nickel Report

The phrase “interstate transport” conjures images of planes, trains and trucks carrying people and goods cross-country. But, under the federal Clean Air Act (CAA), the term is often used to refer to interstate air pollution—emissions from factories, power plants, motor vehicles, refineries and other sources that are transported by prevailing winds across state lines, sometimes over hundreds of miles. The interstate transport phenomenon often has posed for the US Environmental Protection Agency (EPA) what the Supreme Court has called “a thorny causation problem: How should EPA allocate among multiple contributing upwind States responsibility for a downwind State’s excess pollution?” EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1604 (2014). EPA’s efforts to address this issue have yielded, over the last two decades, a series of complex federal regulatory programs imposing increasingly stringent controls on emissions in most states in the eastern half of the country—first the “NOx SIP Call” rule in 1998, then the Clean Air Interstate Rule in 2005, followed by the Cross-State Air Pollution Rule (CSAPR) in 2011 and, most recently, the 2016 “CSAPR Update” rule. Now, however, EPA, while vigorously defending the CSAPR Update rule against pending litigation challenges, is signaling a fresh approach for potential future interstate transport regulation, an approach that may involve greater deference to states’ analyses and determinations and that may eschew additional broad regulatory mandates imposed by EPA.

In March 2018, EPA issued a guidance document describing information relevant to “state implementation plans” (SIPs), sometimes called “good neighbor” SIPs, that address interstate transport with respect to EPA’s newest national ambient air quality standard (NAAQS)—a more stringent air quality standard EPA adopted in 2015 for ground-level ozone. States face a deadline next month to submit good neighbor SIPs addressing that NAAQS. Part of the EPA document, titled “Information on the Interstate Transport State Implementation Plan Submissions for the 2015 Ozone National Ambient Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)” (available here), lays out a “Preliminary List of Potential Flexibilities Related to Analytical Approaches for Developing a Good Neighbor State Implementation Plan.” Despite its seemingly technical language, and notwithstanding its caveat that “EPA is not at this time making any determination that the ideas discussed” in the guidance document “are consistent with the requirements of the CAA,” the document outlines a number of areas in which EPA appears to recognize states’ discretion to use approaches that vary from those reflected in EPA’s past interstate transport regulations.

For instance, the March 2018 document suggests states may consider the effects that international emissions—emissions from sources located outside the US—have in increasing ozone concentrations in many states. In apparent recognition of the reality that no state has authority to control those emissions, the EPA document says states may choose to consider if “air quality, cost, or emission reduction factors should be weighted differently in areas where international contributions are relatively high.”

Another issue: what “threshold” for state-to-state air quality “contributions” should be used in determining whether a given state’s emissions have a big enough effect on downwind states’ air quality to make those emissions a potential candidate for additional regulatory controls? In CSAPR and the CSAPR Update rule, EPA used a contribution threshold of one percent of the applicable NAAQS (which, for the 2015 ozone NAAQS of 70 parts per billion (ppb), would be 0.70 ppb), a level that several states and regulated parties have criticized as unjustifiably low. EPA’s March 2018 document opens the door for states to consider “different contribution thresholds.” And, more specifically, an August 31, 2018, memorandum from EPA provides an analysis supporting the conclusion that using “a threshold of 1 ppb”—still very low, but nearly 50 percent higher than a 0.70-ppb, one-percent-of-the-NAAQS threshold—“may be appropriate for states to use” in developing interstate transport SIPs for the 2015 ozone NAAQS.

According to information on EPA’s website, two states thus far have submitted interstate transport SIPs for the 2015 ozone NAAQS. EPA has already approved one of those, a Washington State SIP that determined that state is not a significant contributor to ozone air quality problems elsewhere. In a July 23, 2018, proposed rule to approve that SIP (83 Fed. Reg. 34,813)—an action EPA made final in a September 20 Federal Register notice (83 Fed. Reg. 47,568)—EPA reiterated some of the points about state flexibility made in its March 2018 document. Other states, including several states in the eastern half of the country that are already subject to CSAPR and the CSAPR Update rule, are at various stages of developing interstate transport SIPs for the 2015 ozone NAAQS. A number of these SIPs likely will be submitted to EPA in the near future. These SIPs, and EPA’s decisions whether to approve them, can be expected to reveal more about the extent to which the recent guidance on state discretion in this area will be put into practice.