March 7, 2014
The U.S. Environmental Protection Agency (“EPA”) finalized a new regulation on Monday implementing a program designed to reduce air pollution from passenger cars and trucks. The regulation is part of EPA’s Tier 3 Motor Vehicle Emissions and Fuel Standards program, a mobile source emission control program authorized under the Clean Air Act (“CAA”). Starting in 2017, Tier 3 will require gasoline sulfur levels to be reduced by two thirds from 30 to 10 parts per million, and will also set more stringent vehicle tailpipe emissions standards. The two components of the program are interrelated: the presence of sulfur in gasoline reduces the efficiency of vehicle catalytic converters, which leads to increased tailpipe emissions of nitrogen oxides, particulates, and other pollutants linked to lung disease and asthma. Notably, when oil refiners comply with the new clean-gasoline regulation, the increased efficiency which results will also help automakers to meet the tightening vehicle fuel economy standards.
Proponents of the rule, including the American Lung Association and American Academy of Pediatrics, say that it will save lives and protect the health of millions of Americans. Some oil industry representatives have opposed the rule, stating that it is unnecessarily costly and imposes inequitable burdens on business. The auto industry, however, worked closely with the Obama administration to develop a regulation harmonizing existing federal and state standards and supports the rule.
EPA predicts that by 2030, the rule will reduce on-road emissions of nitrogen oxides by 25%, volatile organic compounds by 16%, carbon monoxide by 24%, and fine particulate matter by 10%, which may assist states in attainment of National Ambient Air Quality Standards under the CAA.
December 13, 2013
On December 10, 2013, the U.S. Supreme Court heard oral argument on two challenges to the Environmental Protection Agency’s (“EPA’s”) Cross-State Air Pollution Rule, commonly known as the “Transport Rule” or “CSAPR.”
Under its so-called “good neighbor” provision, Section 110 of the Clean Air Act (“CAA”) requires states to prohibit the emission within their borders of air pollutants that will “contribute significantly” to downwind states’ inability to attain or maintain compliance with national air quality standards. The Transport Rule would implement the good neighbor provision in twenty-eight eastern states by requiring power plants in those states to reduce their emissions of pollutants that cause ground-level ozone and particulate matter pollution in downwind states.
The challengers to the Transport Rule argue, first, that EPA impermissibly issued the rule without first allowing the states the opportunity to achieve compliance with the good neighbor provision without EPA intervention and, second, that the rule impermissibly uses cost-effectiveness as a consideration in determining upwind states’ emissions-control obligations.
Tuesday’s argument was the latest episode of a saga of litigation that has hindered EPA’s efforts to regulate the interstate transport of ozone and particulate matter pollution. In 2005, EPA issued the Clean Air Interstate Rule (“CAIR”) to address the same issue. The D.C. Circuit remanded that rule, in part because it deemed CAIR insufficiently protective of downwind states. After EPA issued the Transport Rule in 2011, the D.C. Circuit vacated the new rule. This time, the court reasoned in part that the new rule could impose overly stringent restrictions on some upwind states.
Litigation arising from EPA’s implementation of the good neighbor provision reflects how regulating the interstate transport of air pollution pits the economic interests of upwind states against the environmental and public health concerns of downwind states. In the instant case, several upwind states from the South and Midwest have filed a brief urging the Supreme Court to affirm the D.C. Circuit’s latest decision, whereas downwind states from the Northeast have filed a brief in support of EPA.
Adding another layer to that dispute, on Monday eight Northeastern states petitioned EPA to add nine upwind states to the Ozone Transport Region (“OTR”) established by Section 184 of the CAA. Being designated as part of the OTR may subject a state to heightened emissions control requirements for ozone-causing pollutants, even if that state is in attainment of EPA’s ozone air quality standards. In support of their petition, the Northeastern states submitted a technical support document that relies heavily on EPA’s analysis of cross-state transport of pollution in the Transport Rule.
Given the stakes of this cross-regional dispute, we can expect that it will continue, whether the Supreme Court sustains the Transport Rule or strikes it down.
For more information on the Transport Rule litigation and related Clean Air Act issues, please contact Jeffrey Gracer, Jonathan Kalmuss-Katz, or Ed Roggenkamp.
 42 U.S.C. § 7410(a)(2)(E).
 42 U.S.C. § 5711c(a).
 42 U.S.C. § 5711c(b)–(c).
September 27, 2013
On September 20, 2013, the United States Environmental Protection Agency (“EPA”) proposed carbon dioxide emissions standards for new coal- and gas-fired power plants, the latest in a series of EPA initiatives regulating greenhouse gas (“GHG”) emissions under the Clean Air Act (“CAA”).
The proposal marks EPA’s second attempt to reduce carbon dioxide emissions from new power plants. In March 2012, EPA proposed a rule that would have set a single emissions limit applicable to each new coal and gas-fired power plant. After receiving more than 2.5 million public comments, EPA withdrew that rule and has now replaced it with proposed standards that vary based on fuel source.
The proposed limit of 1,100 lbs of carbon dioxide per megawatt hour (“CO2/MWh”) for new coal-fired power plants, compared to 1,800 lbs CO2/MWh for an average existing plant, is expected to require the installation of carbon capture and sequestration technology at any new coal-fired power plants. However, EPA projects that no conventional coal-fired plants will be built in the U.S. through 2022, even in the absence of the proposed standards, based on the relative price of coal and natural gas.
EPA’s proposed limits of 1,000-1,100 CO2/MWh for new natural gas-fired power plants reflect the emissions levels attained by many modern natural gas facilities.
While EPA’s proposal does not affect any existing power plants, or plants that commenced construction before the rule was proposed, EPA is currently in the process of developing the first federal limits on carbon dioxide emissions from existing power plants. In a recent Presidential Memorandum, President Obama directed EPA to propose such standards by June 1, 2014, and to finalize them by June 1, 2015.
For more information on EPA regulation of greenhouse gas emissions, contact Jeffrey Gracer.
February 13, 2013
The D.C. Circuit Court of Appeals recently denied rehearing en banc in cases involving two major Clean Air Act issues: the Cross-State Air Pollution Rule (“CSAPR” or the “Transport Rule”) and a suite of four rules regulating greenhouse gas (“GHG”) emissions from vehicles and stationary sources. The denials set the stage for petitions for Supreme Court review in one or both of the cases, with significant implications for federal regulation of GHGs and conventional air pollutants.
On January 24, 2013, in EME Homer Generation v. EPA, the D.C. Circuit denied EPA’s requests for reconsideration and rehearing en banc of the panel decision striking down CSAPR. As previously discussed on this blog, EPA issued CSAPR in 2011 as its latest effort to address interstate transport of sulfur dioxide (“SO2”) and nitrogen oxides (“NOx”). CSAPR was intended as a replacement for the Clean Air Interstate Rule (“CAIR”), EPA’s previous attempt to implement the “good neighbor” provisions of the Clean Air Act, which prohibit upwind states from causing or contributing to noncompliance in downwind states. Both programs established an emissions trading program for covered states.
CAIR was issued in 2004 and struck down by the D.C. Circuit in 2008, but in a twist on the usual course of events, the Court left CAIR in place while directing EPA to promulgate a new rule that complied with the Clean Air Act. On August 21, 2012, however, the D.C. Circuit vacated CSAPR and the Federal Implementation Plans (“FIPs”) that EPA issued along with it, and directed EPA to continue to enforce CAIR while it promulgates a replacement rule. As a result, CAIR remains in place despite the 2008 ruling that it, too, does not comply with the Clean Air Act. It remains to be seen whether EPA will petition for review by the Supreme Court, or craft another regulation on the interstate transport of air pollution.
On December 20, 2012, the D.C. Circuit also denied rehearing en banc of the Court’s June 26, 2012 decision upholding four rules regulating GHGs: (1) a threshold finding that GHG emissions endanger public health and welfare and are thus subject to regulation under the Clean Air Act (the “Endangerment Finding”); (2) a rule limiting GHG emissions from cars and light trucks (the “Tailpipe Rule”); (3) a rule governing the trigger of GHG emission limits for stationary sources, such as power plants (the “Timing Rule”); and (4) a rule increasing the regulatory threshold for GHGs above the threshold in the Clean Air Act itself, so that only the largest new and significantly modified emitters of would initially be required to seek Clean Air Act permits for their GHG emissions (the “Tailoring Rule”).
Because the thresholds in the Tailoring Rule depart from the regulatory floor contained in the Clean Air Act itself, it was widely viewed as the most vulnerable to challenge of EPA’s GHG regulations. In June, the D.C. Circuit sidestepped the issue by ruling that none of the petitioners had standing to challenge the Tailoring Rule, since, by increasing regulatory flexibility and decreasing regulatory burdens, that rule actually mitigated any potential injury stemming from EPA regulation of GHG emissions.
While the panel opinion upholding the four GHG rules was unanimous, the denial of rehearing en banc drew two separate dissenting opinions – one taking issue with all four rules and another aimed more specifically at the Tailoring Rule – as well as a concurrence supporting the denial from the three judges that initially decided the case. Counsel for one of the trade associations that challenged the rule confirmed that a petition for Supreme Court review would follow “as surely as the climate has been changing since the Earth had an atmosphere.”
For more information on the Court’s rulings, contact Jeffrey Gracer, Jonathan Kalmuss-Katz or Ed Roggenkamp.
August 23, 2012
Four years after overturning a major Environmental Protection Agency (“EPA”) air pollution rule as inconsistent with the Clean Air Act, this week the D.C. Circuit Court of Appeals vacated the program that EPA had tailored to take its place, ruling that the replacement rule “exceeds the agency’s statutory authority” and imposes “impossible” burdens upon covered states. As a result, hundreds of power plants in 28 states are once again subject to the very rule the same court rejected in 2008.
The regulations in question implement the Clean Air Act’s “good neighbor” provisions, which prohibit states from significantly contributing to unsafe levels of air pollution, or interfering with Clean Air Act compliance, in downwind states. In 2005, EPA finalized the Clean Air Interstate Rule (“CAIR”), establishing an emissions trading program for Eastern and Midwestern power plants aimed at reducing interstate air pollution transport. However, in North Carolina v. EPA, the D.C. Circuit identified “more than several fatal flaws” in CAIR, including EPA’s failure to ensure emissions reductions from all covered upwind states. Instead of striking the rule immediately, the Court granted a rare remand without vacatur, leaving CAIR in place while the agency developed a replacement.
In 2011, EPA issued the Cross-State Air Pollution Rule (“CSAPR”) as a substitute for CAIR. In response to the Court’s concerns, EPA provided more details on what portion of upwind states’ emissions “significantly contribute” to cross-state air pollution problems and set state-specific emissions budgets. To implement the rule, EPA issued Federal Implementation Plans (“FIPs”) for all of the covered states, which were to be subject to revision by the states as early as 2013.
In its recent 2-1 decision, however, the D.C. Circuit held that CSAPR too overstepped EPA’s Clean Air Act authority. Specifically, the majority opinion faulted EPA for authorizing emissions limits in upwind states that were more stringent than the state’s contribution to specific downwind non-attainment. The Court also disapproved of EPA’s issuance of FIPs, holding that the agency was required to first alert states of their new regulatory requirements and give them the chance to issue or revise their own State Implementation Plans. Finding these deficiencies “too fundamental to permit us to ‘pick and choose portions’ of the rule to preserve,” EPA vacated the rule in its entirely, instructing EPA to “continue administering CAIR pending the promulgation of a valid replacement.”
In a 40-page dissent, Judge Judith Rogers wrote that the majority “disregards limits Congress placed on [the Court’s] jurisdiction, the plain text of the Clean Air Act, and this court’s settled precedent interpreting the same statutory provisions at issue today.” In additional to disputing the claim that EPA could not set emissions limits more stringent than a state’s contribution to downwind nonattainment, Rogers argued that since none of the Petitioners had raised the complaint in their public comments on CSAPR, the Court did not have jurisdiction to even decide the issue.
EPA has said that it is “reviewing the court decision” on CSAPR, and it may seek leave to appeal the panel’s decision either to the entire D.C. Circuit or to the Supreme Court. In the interim, the CAIR program remains in place. For more information on the Court’s decision or Clean Air Act compliance, contact Jeffrey Gracer or Jonathan Kalmuss-Katz.
June 27, 2012
The nation’s first limits on greenhouse gas (“GHG”) emissions survived a major legal challenge yesterday, as the District of Columbia Circuit Court of Appeals upheld two Environmental Protection Agency (“EPA”) climate change regulations on the merits and dismissed challenges to two others for lack of standing. The unanimous ruling from a three-judge panel (which included one of the Court’s most conservative members) resolved consolidated lawsuits filed by states, industry trade associations, and other opponents of the embattled climate regulations.
The litigation challenged four separate, but inter-related, rules: (1) EPA’s threshold finding that GHG emissions endanger public health or welfare, and are thus properly subject to regulation under the Clean Air Act (the “endangerment finding”); (2) a rule limiting car and light truck GHG emissions (the “tailpipe rule”); (3) a rule governing the timing of implementation for stationary source GHG limits (the “timing rule”); and (4) a rule increasing the initial regulatory thresholds for stationary source GHG controls, so only the largest emitters are covered first (the “tailoring rule”).
The Court decisively rejected scientific and legal challenges to the endangerment finding and tailpipe rule, relying heavily upon the Supreme Court’s 2007 Massachusetts v. EPA decision affirming EPA’s authority to regulate GHGs under the Clean Air Act. The Court brushed away claims that EPA had improperly relied upon prior studies and surveys by non-EPA scientists in defending its endangerment finding – with a robust endorsement of EPA’s reliance on the scientific method: “This is how science works. EPA is not required to re-prove the existence of the atom every time it approaches a scientific question.” The Court also observed that EPA could properly make its endangerment finding as a precautionary measure, to protect public health and the environment, despite alleged uncertainty about the predictive accuracy of climate change models.
The Court proceeded to find that, in light of the endangerment finding, the tailpipe rule was compelled by Massachusetts v. EPA, and that implementation of vehicle emission limits required EPA to control stationary source GHG emissions as well under the Clean Air Act. Rejecting three alternate statutory interpretations advanced by the various Petitioners – which would have limited regulation to mobile sources only – the Court held that “EPA’s interpretation of the governing CAA provisions is unambiguously correct.”
Finally, the Court ruled that because the timing and tailoring rules increase flexibility and relieve regulatory burdens, they actually serve to “mitigate Petitioners’ purported injuries.” As a result, none of the Petitioners had standing to challenge these rules. Although the Petitioners invited the Court to create regulatory chaos by subjecting even small businesses to immediate regulation, thereby inviting Congressional reform of the Clean Air Act, the mere possibility that Congress might enact corrective legislation were the tailoring rule to be overturned was considered too speculative to confer standing. This holding may have been the Court’s most significant, as the tailoring rule – which departed from the Clean Air Act’s express regulatory thresholds – was widely viewed as the most vulnerable on the merits.
The challengers could still seek to appeal the panel’s decision to the full D.C. Circuit or the Supreme Court. They are also expected to pursue legislation curtailing or eliminating EPA’s climate change authority. The ruling may also reignite discussions of comprehensive climate legislation, which has languished since the House approved a broad-reaching global warming bill on June 26, 2009 – three years to the day before the Court’s recent climate change decision.
For more information on the Court’s ruling or U.S. climate regulation, contact Jeffrey Gracer or Jonathan Kalmuss-Katz.
June 5, 2012
On May 31, a federal judge in the District of Columbia issued an order giving the EPA one final week to issue its proposed rule updating standards for particulate matter air pollution. The American Lung Association, the National Parks Conservation Association, and 11 states, including New York and California, had asked the court to compel EPA to review the standards and to propose any revisions based upon the latest scientific data. (American Lung Ass’n v. EPA, D.D.C., No. 1:12-cv-243, 5/31/12). The proposed regulations are more than six months overdue according to the October 2011 statutory deadline, and they must meet requirements set by a federal appeals court in 2009.
Particulate matter is a form of air pollution consisting of small particles suspended in air, such as dust or soot. It is a common byproduct of combustion processes, like those conducted in power plants and factories. Diesel truck exhaust is also a notable source of airborne particulate matter. Inhalation of particulate matter can cause asthma, lung cancer, cardiovascular issues, birth defects, and premature deaths in humans.
The Clean Air Act requires EPA to review and consider revising air quality standards every five years. EPA last revised the particulate matter standards in 2006, which means the new standards were due in 2011. Additionally, in 2009, EPA had been ordered to revisit its 2006 particulate matter standards to provide a better explanation of why particular standards were sufficient to protect the public health while providing an adequate margin of safety for children and other vulnerable subpopulations. Since that court’s finding, the EPA has not produced new standards and has allowed the 2011 statutory deadline to pass by without publication of a proposed rule.
Last week’s order states that EPA must sign a proposed rule by Thursday, June 7, 2012. It also requires that EPA seek expedited publication of the rule in the Federal Register, and that the agency hold a public hearing within two weeks of such publication. This hearing has already been scheduled for June 11. Following the hearing, the agency will accept comments for seven weeks. The court order did not set a deadline for the final rule; the EPA has said it needs until August 2013, while the ALA, Earthjustice, and NPCA are vying for its publication this December. The federal judge who issued the order has encouraged both sides to reach an agreement on a deadline before the June 11 hearing.
Priya Murthy is a Summer Associate at Sive, Paget & Riesel.
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