August 24, 2010
On August 2nd, five electric power companies[1] filed a Petition for Certiorari with the Supreme Court, seeking review of a Second Circuit decision holding that power companies can be sued for creating a public nuisance by emitting greenhouse gases. The litigation began in 2004, when eight states, along with the City of New York and several private land trusts, brought an action against the nation’s five largest coal-burning power companies,[2] alleging that their greenhouse gas emissions create a nuisance by contributing to global warming. The Southern District of New York dismissed the case on the grounds that it posed non-justiciable political questions. Connecticut v. American Electric Power Co., 406 F.Supp.2d 265 (S.D.N.Y. 2005). The plaintiffs appealed, and on September 21, 2009, the Second Circuit issued an opinion reversing the case’s dismissal. Connecticut v. American Electric Power Co., 582 F.3d 309 (2d Cir. 2009). A more detailed analysis of the Second Circuit’s opinion can be found in an earlier SPR blog post.
Key issues raised in the petition to the U.S. Supreme Court by the power companies include:
- The national importance of resolving whether greenhouse gases can or should be regulated by the courts on a case-by-case basis;
- Whether court decisions are precluded by new federal regulations governing greenhouse gas emissions that were not in place at the time of the Second Circuit’s decision, such as EPA/NHTSA’s joint emissions standards for vehicles and EPA’s greenhouse gas Tailoring Rule for stationary sources;
- The prospect of a proliferation of cases seeking damages for alleged injuries caused by multiple defendants’ contribution to climate change;
- Whether plaintiffs have legal standing to sue;
- Whether the Second Circuit was justified in deviating from other recent federal court decisions in which common law claims against greenhouse gas emitters have been dismissed, such as California v. General Motors Corp., 2007 WL 2726871 (N.D. Cal. 2007); Native Village of Kivalina v. ExxonMobil Corp., 663 F.Supp.2d 863 (N.D. Cal. 2009) (appeal pending); Comer v. Murphy Oil USA, 2007 WL 6942285 (S.D. Miss. 2007), appeal dismissed for technical reasons, 585 F.3d 855 (5th Cir. 2009);
- Whether a court-imposed emissions cap requires policy decisions that are not within the proper province of the courts; and
- Whether the Second Circuit’s decision represents an unwarranted extension of the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007).
We will provide an update when the papers opposing Supreme Court review have been filed.
For more information on emerging climate change law and policy, contact Jeff Gracer.
[1] The petitioners are American Electric Power Company, Inc., its subsidiary American Electric Power Service Corporation, Duke Energy, Southern Company, and Xcel Energy.
[2] The named plaintiffs were American Electric Power Company, Inc., its subsidiary American Electric Power Service Corporation, Cinergy Corporation (since merged into Duke Energy), Southern Company, Xcel Energy, and the Tennessee Valley Authority.
August 10, 2010
On July 26th, the Fourth Circuit Court of Appeals dismissed a lawsuit brought by the State of North Carolina against the Tennessee Valley Authority (“TVA”) alleging that interstate air emissions from TVA power plants create a public nuisance. The dismissal set aside an injunction that would have required the installation of more than a billion dollars worth of emissions control technologies at four TVA plants in Alabama and Tennessee. North Carolina v. TVA, — F.3d —, 2010 WL 2891572 (4th Cir. Jul. 26, 2010).
The Fourth Circuit rejected the use of “vague public nuisance standards” to address activities that are expressly permitted and extensively regulated under the Clean Air Act. It stressed the potential for chaos among states resulting from a patchwork of nuisance injunctions and for disruption of expectations and reliance interests of those actors that have complied with the Act’s requirements. However, the Court refrained from completely preempting the field of air emissions regulation, noting that the Clean Air Act’s savings clause may allow for certain common law nuisance claims.
Citing principles of federalism, the Fourth Circuit also criticized the district court’s decision for its application of North Carolina law extraterritorially to TVA plants located in Alabama and Tennessee by crafting an injunction that relied on the emissions standards of a North Carolina state law. The three-judge panel highlighted the remedies that remain available to North Carolina, including the Clean Air Act’s Section 126 petition process, the comment period for State Implementation Plans, judicial review of EPA actions, as well as citizen suit remedies under the Clean Air Act.
While the precedential impact of the opinion is yet unclear, the participation of the attorneys general of sixteen other states, including New York’s Andrew Cuomo, in an amicus brief supporting the authority of states to bring public nuisance actions to abate interstate pollution signals the importance of the issue. Although the Fourth Circuit’s decision did not involve claims relating to greenhouse gas emissions, a recent petition for certiorari challenging the Second Circuit’s common law nuisance findings with respect to greenhouse gas emissions cited North Carolina v. TVA as evidence that comprehensive regulation under the Clean Air Act can displace federal common law nuisance claims. Connecticut v. American Electric Power Co., 582 F.3d 309 (2d Cir. 2009), petition for cert. filed, No. 10- (U.S. Aug. 2, 2010). This issue will continue to percolate in the courts unless and until it is resolved by the Supreme Court.
July 28, 2010
On July 6, 2010, the U.S. Environmental Protection Agency (“EPA”) announced a proposed rule to address air emissions that cross state lines and contribute to ozone and particulate matter pollution in the eastern half of the country. Many areas in the northeast cannot meet National Ambient Air Quality Standards (“NAAQS”) because of pollution from upwind states.[1] The rule would create Federal Implementation Plans (“FIPs”) to reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from electric power plants in 32 states through a combination of direct abatement standards and a limited voluntary “cap-and-trade” emissions permit trading program.
Once adopted, the proposed rule will replace the 2005 Clean Air Interstate Rule (“CAIR”), which required states to develop State Implementation Plans (“SIPs”) to address interstate transport of SO2 and NOx.[2] CAIR allowed states to opt into a voluntary cap-and-trade program.[3] In a 2008 decision and subsequent decision on rehearing,[4] the D.C. Circuit remanded CAIR to EPA, holding the rule unlawful but declining to vacate it during the period of the agency’s reconsideration.
The basis of the court’s objections was that CAIR’s permit trading program did not contain absolute emissions limits for individual sources, and so could technically allow individual sources in upwind states to increase emissions by buying enough emissions allowances. The court found that this system violated the CAA, which requires SIPs to contain “adequate measures” prohibiting sources from “contribut[ing] significantly to nonattainment in … any other State …” or “interfere[ing] with the maintenance of” NAAQSs.
The newly proposed EPA rule aims to remedy these flaws. It relies on state-specific data to identify each state’s contribution to nonattainment or interference with NAAQSs maintenance in other states and uses this information to create a state-wide emissions budget and an enforceable FIP designed to reduce emissions in the state below that budget. States will have the option of replacing these FIPs with SIPs that achieve the same emissions reduction goals.[5] Within this framework, the rule allows trading of emissions allowances within each state, as well as limited interstate trading.
In addition to this primary proposal, EPA has also requested comment on two alternative schemes. Under the first alternative, interstate trading of emissions allowances would be prohibited, although trading among power plants within states would continue. Under the third option, emissions trading would be replaced completely with emissions rate limits.
The final rule, if it survives legal challenges, could have substantial impacts on air quality and also impose significant costs on industry. EPA estimates that its preferred approach would have annual health and welfare benefits amounting to $120-290 billion in 2014, including the prevention of 14,000 to 36,000 premature deaths, at an annual cost of compliance of $2.8 billion. The rule represents a central element of EPA’s wider effort to reduce ozone and particulate matter pollution in the eastern U.S., as evidenced by EPA’s recent adoption of more stringent SO2 and NOx standards.
EPA will be receiving public comment on each of the three proposed versions of the Air Transport Rule for 60 days following its publication in the Federal Register. Three public hearing will be conducted following the comment period, in locations to be announced in the Federal Register notice.
Dan Mach is a summer associate at Sive, Paget & Riesel, P.C.
[1] Factsheet, EPA, Proposed Transport Rule Would Reduce Interstate Transport of Ozone and Fine Particle Pollution, at 1 (July 6, 2010). See CAA 109(a), 42 U.S.C. § 7409(a).
[2] 70 Fed. Reg. 25,162 (May 12, 2005).
[3] EPA, Clean Air Interstate Rule: Basic Information, http://www.epa.gov/cair/basic.html (last visited July 16, 2010).
[4] North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
[5] EPA, Proposed Air Transport Rule, at 14.
July 27, 2010
Last week, air pollution litigation was a prominent theme at the office of the New York State Attorney General, which announced major developments in two separate matters.
On July 20, 2010, Attorney General Andrew Cuomo announced that his office, as well as the Pennsylvania Department of Environmental Protection (“PADEP”), had issued a notice of intent to sue the Homer City Station power plant in western Pennsylvania over Clean Air Act (“CAA”) violations that affect air quality in New York. The Homer City Station plant is a 1,884 megawatt electric power plant located 50 miles west of Pittsburgh. According to a Cuomo press release, the plant emits “over 100,000 tons of sulfur dioxide (SO2), nitrogen oxides (NOx), and particulate matter (PM) each year,” and “the plant’s annual emissions of over 100,000 tons of SO2 alone constitut[e] one of the largest upwind sources of this kind of pollution to New York state.” New York and PADEP allege that the plant, in violation of the CAA, failed to upgrade its pollution control technology when the facility underwent modifications in the 1980s and 1990s which increased its emissions. The lawsuit would seek the facility’s full compliance with the Clean Air Act, which would include the adoption of new pollution control technology.
On July 22, 2010, Cuomo announced that New York, joined by 12 other states, had filed a motion to intervene in a consolidated case challenging EPA’s recent greenhouse gas “Tailoring Rule.” The Tailoring Rule makes regulation of carbon dioxide (CO2) emissions practicable by setting the threshold for the applicability of the CAA’s Title V and prevention of significant deterioration (“PSD”) permit requirements at 100,000 tons per year (“tpy”) for new sources and 75,000 tpy for modified sources.
The existing statutory threshold, at 100 tpy for certain listed sources, or 250 tpy for other sources, was designed for pollutants present in much lower ambient concentrations than CO2.[1] EPA had determined that, with its recent classification of CO2 as a regulated pollutant (due to the new EPA/NHTSA automobile emissions standards), the old threshold would give rise to a 140-fold increase in PSD permits[2], a significant burden both for the newly regulated sources as well as for EPA.
Since the publication of the Tailoring Rule in the Federal Register on June 3, 2010, at least five separate challenges to the rule have been brought in the D.C. Circuit, where they have been consolidated. On June 23, the D.C. Circuit set an initial briefing schedule for these cases, with all dispositive motions currently due by September 13, 2010. New York State, which supports the Tailoring Rule, has been joined in the motion to intervene by California, Illinois, Iowa, Maryland, Massachusetts, Maine, New Hampshire, New Mexico, North Carolina, Oregon, Pennsylvania, and Rhode Island.
Congress’s continued inability to pass comprehensive legislation governing greenhouse gas emissions shifts the focus on regulatory efforts by EPA and the states to address conventional pollutants as well as greenhouse gas emissions. The recent actions by New York and other states to enforce the Clean Air Act as it applies to coal fired power plants and to defend EPA’s greenhouse gas regulations represents an important, if fragmented, effort to fill the gap left by continued Congressional inaction.
[1] See CAA §§ 165 (limiting application of PSD to “major emitting facilities”), 169(1) (defining “major emitting facility” with reference to the 100/250 tpy threshold).
[2] 75 Fed. R. 31514, 31535 (June 3, 2010).
July 9, 2010
EPA proposed regulations under the Clean Air Act (“CAA”) for maximum achievable control technologies (“MACT”) for boilers, process heaters and solid waste incinerators on April 29. The regulations have been published in the Federal Register[1] and are available for hearing and public comment through August 3, 2010.
Boilers burn fuels including natural gas, coal, wood, and oil to produce steam for electricity or heat. Process heaters are used in industrial processes to heat raw or intermediate materials. Both are used at facilities such as refineries, chemical and manufacturing plants, and paper mills, and may also be used to provide heat for large complexes such as shopping malls or universities. Incinerators are used to burn waste for disposal, and some recover energy in the process.
EPA has proposed this regulatory action for boilers and commercial/industrial solid waste incinerators (“CISWI”) together since similar units may be considered boilers or CISWI depending on what material they burn. As part of this regulatory proposal, EPA included a new rule under the Resource Conservation and Recovery Act (“RCRA”) defining which non-hazardous secondary materials are considered fuel and which are considered solid waste. The regulatory action is the result of a 2007 court order following NRDC’s petition for review of EPA’s old standards for boiler and incinerator emissions, as well as the CISWI definitions rule.[2]
MACT standards for major source boilers and process heaters affect sources emitting greater than 10 tons per year of any one hazardous air pollutant[3] (“HAP”) or more than 25 tons per year of combined HAPs.[4] The standard for existing sources is based on the average emission limitation achieved by the best performing 12 percent of existing sources, and new sources must match the best-controlled similar source.[5]
Area sources are any stationary source of HAPs that are not major sources, and are subject to a different set of MACTs.[6] For all coal-fired boilers and process heaters, new or existing, EPA is proposing emissions limits for mercury, particulate matter (“PM”) and carbon monoxide. Biomass and oil-fired area sources would also have to meet emissions standards for PM and carbon monoxide. Both area sources and major sources would be required to conduct a one-time energy-saving assessment to analyze cost-effective energy saving practices. Additionally, the standards for both major and area sources would apply at all times, including times of malfunction, start-up and shut-down.
Small boilers and process heaters (those with a capacity of less than 10mm BTU/hr) and boilers and process heaters using natural gas or refinery gas will be subject to a less stringent work practice standards including periodic tune-ups rather than emissions limitations. EPA has proposed that these sources would have to come into compliance within three years of the final rule’s publication in the Federal Register.
CISWI are subject to more stringent emissions limits under the Proposed Rule for mercury, lead, cadmium, hydrogen chloride, PM, carbon monoxide, dioxins/furans, nitrogen oxides and sulfur dioxide. In addition, the proposed rules require that CISWI units have stacks tested and monitored along with annual inspections of emissions control devices.
States would have to submit revised State Implementation Plans (“SIPs”) within one year of the promulgation of the revised standards. Following the submission of the new SIPs, CISWI units would have a three year period to demonstrate compliance with the SIP. Alternatively, CISWI will have five years to demonstrate compliance after the final regulations are promulgated if a SIP is not submitted.
Overall, these proposed rules if adopted would constitute much more stringent regulation of boilers and incinerators because the emissions limitations apply at all times. The energy-saving assessment required for all boilers and incinerators is a facility-wide assessment, which could serve as a predecessor to energy-saving requirements for greenhouse gases as well.
As noted above, comments are being received on the proposed regulations until August 3.
Maggie Macdonald is a summer associate at Sive, Paget & Riesel, P.C.
[1] National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial and Institutional Boilers and Process Heaters, 75 Fed. Reg. 32,006 (June 4, 2010) (to be codified at 40 C.F.R. pt. 63); National Emissions Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial and Institutional Boilers, 75 Fed. Reg. 31,896 (June 4, 2010) (to be codified at 40 C.F.R. pt. 63); Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units, 75 Fed. Reg. 31,938 (June 4, 2010) (to be codified at 40 C.F.R. pt. 60); Identification of Non-Hazardous Secondary Materials that Are Solid Waste, 75 Fed. Reg. 31,844 (June 4, 2010) (to be codified at 40 C.F.R. pt. 241).
[2] NRDC v. EPA, 489 F.3d 1250 (D.C. Cir. 2007).
[3] Hazardous air pollutants are listed in the CAA § 112(b).
[4] CAA § 112(a)(1).
[5] Id. § 112(d)(3).
[6] Id. §§ 112(a)(2), (d)(5).
June 16, 2010
On June 3rd, EPA announced a final rule that will tighten the National Ambient Air Quality Standards (NAAQS) for sulfur dioxide (SO2) under the Clean Air Act, abandoning the currently applicable 24-hour and annual standards in favor of a 1-hour standard. The NAAQS also establish a new monitoring network for areas where SO2 emissions coincide with high population densities. The new regulations are aimed at preventing short-term exposure to SO2 and are specifically meant to curb the negative health effects associated with SO2 emissions including asthma, emphysema and other respiratory conditions.
EPA is required by statute to revise the NAAQSs for SO2 under Clean Air Act Sections 108 and 109. This revision is the result of a challenge[1] by the American Lung Association to EPA’s 1996 findings that the anticipated health benefits from revising the NAAQS for sulfur oxides to include short-term and peak concentration limits were not compelling.[2] As a result of the American Lung Association’s challenge, the EPA was directed to further explain its position that 5-minute and peak limits were unjustified. The resulting rule relies on the science of respiratory morbidity following short-term exposure to SO2, finding that a limit of 75 ppb 1-hour standard provides the requisite protection of public health. EPA will consider secondary standards, aimed at protecting public welfare (including the environment) in 2012.
The final rule will take effect sixty days after publication in the Federal Register and is available here.
Maggie Macdonald is a summer associate at Sive, Paget & Riesel, P.C.
[1] American Lung Ass’n v. EPA, 134 F. 3d 388 (D.C. Cir. 1998).
[2] 61 Fed. Reg. 25,572 at 25,575.
June 14, 2010
On Thursday, June 10th the Senate voted 53-47 against a resolution by Lisa Murkowski (R-Alaska) to disapprove EPA regulation of greenhouse gases (“GHGs”) under the Clean Air Act. Senator Murkwoski invoked a rarely utilized legislative procedure under the Congressional Review Act that would have required a simple majority of 51 votes. President Obama had already promised to veto the Murkowski resolution if it had passed.
Despite the fact that Murkowski garnered the support of six Democrats, many argue that the vote on the EPA disapproval resolution is not indicative of the Senate’s general posture toward enacting comprehensive climate change legislation. It is possible that votes for the Murkowski resolution were expressions against rulemaking by EPA under its existing Clean Air Act authority, and not necessarily an indication of how Senators would vote on comprehensive legislation. It has been reported that another vote on a proposal by Senator Rockefeller to delay EPA regulation of stationary sources for two years has been gaining support and may have been part of a compromise that led to the defeat of Murkowski’s resolution.
The EPA regulations, which will go into effect beginning in 2011 unless they are stalled by Congress or the courts, include a light-duty motor vehicle rule combining fuel economy standards with emissions limits to address the GHG emissions EPA found contribute to global warming in an endangerment finding published last year. Murkowski was also seeking to overturn EPA’s Tailoring Rule, published last week in the Federal Register, which phases-in regulation of GHG emissions from stationary sources and shields many small emitters from implementing best available control technologies when GHGs begin to be regulated.
For more information on emerging climate change law and policy, contact Jeff Gracer.
Maggie Macdonald is a summer associate at Sive, Paget & Riesel, PC.
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