March 5, 2012
On February 28 and 29, the D.C. Circuit Court of Appeals heard oral arguments in a series of challenges to the Environmental Protection Agency’s (“EPA’s”) regulation of greenhouse gasses (“GHGs”) under the Clean Air Act, far-reaching litigation spanning dozens of parties and at least four separate rules. Decisions from the panel of Judges David Sentelle, David Tatel and Janice Rogers Brown are expected later this year.
The rare, two-day argument began with a challenge to EPA’s December 7, 2009 finding that emissions of six GHGs, including carbon dioxide, “may reasonably be anticipated both to endanger public health and to endanger public welfare.” This “endangerment finding” is the cornerstone of all subsequent action by EPA to regulate GHGs. The Court appeared reluctant to second-guess the science behind EPA’s determination or to consider non-scientific factors as a basis for overturning it, noting that the Supreme Court had already rejected such lines of argument in its 2007 Massachusetts v. EPA decision. As Judge Sentelle remarked: “Reading some of the briefs, I’d gotten the impression that Massachusetts was not decided.”
Arguments then turned to EPA’s April 1, 2010 “tailpipe rule,” which limits GHG emissions from cars and light trucks. Notably, the auto industry was not among the challengers , as it had participated with EPA in a negotiated rulemaking; instead, it intervened in support of EPA’s regulation. The challenge from some states and trade associations was motivated less by the substance of the tailpipe rule than its role in triggering GHG permitting requirements for power plants and other stationary sources, which took effect once GHGs became “subject to regulation” under the Clean Air Act.
Some of the petitioners contested whether the tailpipe regulations governing mobile sources of GHGs necessarily triggers GHG regulation of stationary sources, arguing that EPA’s historic interpretation of the Clean Air Act to that effect, dating back to 1978, was flawed. Because the 60-day period for challenging EPA’s 1978 regulation had long passed, the petitioners characterized the new GHG rules as “grounds arising after” that prior rule, which raised issues that could not have been previously litigated. At oral argument, the judges focused heavily on this claim and other jurisdictional issues relating to this challenge.
Finally, the arguments closed with a discussion of EPA’s “tailoring rule,” which increased the regulatory threshold for new and modified stationary sources from 250 tons to 75,000 tons of GHGs per year. This is generally considered to be the most vulnerable of EPA’s rules, because the lower thresholds are expressly set forth in the Clean Air Act itself, while EPA’s tailoring rests upon its authority to interpret the statute in a way that avoids the “absurd” result of regulating thousands of smaller emitters. Judge Sentelle, however, questioned the petitioners’ standing to challenge the tailoring rule, stating to industry counsel: “The harm you allege is a regulatory burden. The remedy you seek is a heavier regulatory burden.”
Since the D.C. Circuit previously declined to stay the rules, they will remain in effect while the Court deliberates, with a widely anticipated decision expected later this year. For more information on EPA’s GHG rules and the pending litigation, contact Jeffrey Gracer
December 21, 2011
EPA has announced the issuance of a final rule limiting emissions of mercury and other air toxics, including metals and acid gases, from coal- and oil-fired power plants. The rule applies to new and existing power plants larger than 25 megawatts that burn coal or oil to produce electricity for sale through the national electric grid. It does not apply to natural gas-fired power plants unless the fuel for those plants is produced by gasifying coal or oil.
Existing sources will have three years to comply with the new emissions limits. State permitting authorities may grant individual sources an additional year to comply under certain circumstances.
The rule also includes revisions to the New Source Performance Standards; these revisions apply to new coal- and oil-fired power plants and set standards for emissions of particulate matter, sulfur dioxide, and nitrogen oxides.
EPA’s web page on the rule may be found here; a press release is available here. In addition, EPA has prepared, broken down by state, a list of facilities that it anticipates will be covered by the new air toxics rules.
For additional information, contact Ed Roggenkamp.
November 14, 2011
Earlier this month, the D.C. Circuit Court of Appeals announced the panel of judges that will determine the legality of the Environmental Protection Agency’s (“EPA”) suite of challenged greenhouse gas (“GHG”) regulations, and EPA sent a major GHG rulemaking proposal – covering new and existing power plants – to the Office of Management and Budget (“OMB”) for review. This pending litigation and rulemaking are likely to set the course forU.S. climate policy, given the limited prospects for congressional action or climate tort lawsuits in the immediate future.
In response to the Supreme Court’s 2007 Massachusetts v. EPA decision, which affirmed EPA’s authority to regulate GHGs under the Clean Air Act, EPA finalized a series of regulations limiting GHG emissions from motor vehicles and certain new or modified major stationary sources. Four such rules are currently being challenged in the D.C. Circuit – the “endangerment finding” declaring that GHG emissions may endanger public health or welfare; the “tailpipe” rule regulating car and light truck GHG emissions; and the consolidated “timing” and “tailoring” rules that began phasing in stationary source GHG limits as of January 2010, while increasing emissions thresholds to limit the number of facilities covered.
Briefing in those cases is underway, and the D.C. Circuit recently announced that all of the GHG-related challenges would be heard by Judges David Tatel, David Sentelle and Judith Rogers, with oral arguments scheduled for February 28-29, 2012. Tatel is well known for his defense of EPA’s regulatory authority in the D.C. Circuit’s consideration of Massachusetts v. EPA, a dissenting opinion whose reasoning was subsequently adopted by the Supreme Court. Sentelle wrote the D.C. Circuit’s plurality opinion in Mass. v. EPA, holding that states lacked standing to challenge EPA’s inaction on climate change. Rogers was not on the Mass. v. EPA panel, though she joined Tatel in dissenting from the denial of a rehearing en banc.
Rogers also authored a 2008 opinion overturning EPA’s weakening of power plant mercury rules, which criticized the agency for “deploy[ing] the logic of the Queen of Hearts, substituting EPA’s desires for the plain text of [the Clean Air Act].” While celebrated by environmental organizations at the time, such textual analysis could pose problems for EPA’s tailoring rule, which departs from the emissions thresholds enumerated in the statute.
Even as its legal authority is being challenged in the courts and Congress, EPA continues to move forward with new GHG regulations. Pursuant to a settlement with several environmental groups and states, includingNew York, EPA recently submitted proposed New Source Performance Standards (“NSPS”) for power plant GHG emissions for OMB review – generally the final step before the proposal is published. The NSPS rule is likely to expand GHG limits for new and existing power plants, most of which are not covered under existing EPA regulations.
September 7, 2011
On Friday, September 2, 2011, the White House directed the Environmental Protection Agency (“EPA”) to withdraw and reconsider a proposal to strengthen National Ambient Air Quality Standards (“NAAQS”) for ground-level ozone, the primary ingredient in smog. The announcement marked the first time that the Obama Administration formally returned one of its own agencies’ proposals, and it could indicate heightened executive scrutiny of forthcoming rules’ economic impacts.
The “heart of the Clean Air Act,” NAAQS set maximum levels for six “criteria” pollutants at levels necessary to protect public health and welfare, implemented through State Implementation Plans covering a broad range of sources. The ozone NAAQS were last revised in 2008, when the Bush Administration set a primary standard of .075 parts-per-million (“ppm”) – more lenient than the .06-.07 ppm range recommended by EPA’s Clean Air Scientific Advisory Committee.
In response to a lawsuit filed against the 2008 standards, the Obama administration agreed to reconsider the ozone NAAQS in September 2009 and proposed adopting a standard with the .06-.07 ppm range shortly thereafter. EPA held three public hearings on its proposal, and as recently as July 26, 2011, EPA stated that it “look[ed] forward to finalizing this standard shortly.”
As the last step before finalization, EPA submitted the rule to the White House Office of Information and Regulatory Affairs (“OIRA”) for review. Last week, in a surprising turn of events, OIRA returned the rule to EPA, explaining, “The President … has made it clear that he does not support finalizing the rule at this time.” The return letter, OIRA’s first since January 6, 2009, stated that, in the interest of regulatory consistency, EPA should hold any proposed ozone revisions until 2013 – when the standards are once again due to be revisited under the Clean Air Act.
While the letter did not mention economic considerations, and the Supreme Court has held that EPA cannot consider compliance costs in setting NAAQS, the ozone proposal had attracted substantial attention due to its projected compliance costs exceeding $19 billion. According to EPA’s Regulatory Impact Analysis, the benefits of the standards were projected to outweigh the costs. Nonetheless, the NAAQS proposal topped a list of the most expensive proposed regulations that the White House released on August 30, 2011.
The second, third, and fourth rules of that list are also pending EPA proposals, including forthcoming rules governing hazardous air pollution from commercial and industrial boilers and coal ash disposal. While the White House plans to move forward with those rules, they too must ultimately pass through OIRA – opening the door to potential revisions or delay.
August 8, 2011
With the Environmental Protection Agency (“EPA”) largely barred from regulating hydraulic fracturing (“fracking”) under the Safe Drinking Water Act, regulatory proponents have turned their attention to alternate means of controlling the industry’s environmental impacts. Last month, EPA proposed the first federal rules limiting air emissions from fracking operations, and on August 4, a coalition of environmental groups petitioned EPA to require the testing and disclosure of fracking fluids under the Toxic Substances Control Act (“TSCA”). Others have turned to the courts to compel greater environmental review of fracking’s impacts, with a new suit filed in the United States District Court for the Eastern District of New York late last week.
On July 28, 2011, EPA proposed a suite of new Clean Air Act rules governing the emission of volatile organic compounds (“VOCs”), sulfur dioxide, and air toxics from oil and gas extraction and transmission activities, including the first federal air standards for hydraulically fractured wells. During fracking, VOC emissions are often elevated during “flowback” periods, when fluids injected into wells return to the surface carrying contaminants that can evaporate into the air. EPA’s proposed rules would require wells to separate and capture natural gas and hydrocarbons during flowback, reducing emissions of VOCs by an estimated 95 percent.
Additional EPA rules may be forthcoming in response to a petition filed last week by Earthjustice on behalf of over 100 non-profit groups. The petition asks EPA to issue regulations under TSCA requiring manufacturers and processors of “chemical substances and mixtures used in oil and gas exploration or production,” including fracking fluids, to conduct testing on the toxicity and environmental and health impacts of their products and disclose the results to EPA. If the petition is denied, Earthjustice has suggested it would challenge EPA’s determination in court.
Fracking regulation is also moving forward on the state and regional level, with the Delaware River Basin Commission (“DRBC”) – a regional body consisting of four states and the Army Corps of Engineers – proposing rules governing hydraulic fracturing siting and operations in New York, New Jersey, Pennsylvania, and Delaware. New York Attorney General Eric Schneiderman has filed suit in federal court seeking to enjoin the finalization of those rules pending the preparation of an Environmental Impact Statement under the National Environmental Policy Act (“NEPA”). On August 4, the Delaware Riverkeeper Network, Hudson Riverkeeper, and National Parks Conservation Association brought a similar suit in the same court. Unlike New York, however, the environmental groups named DRBC as a defendant.
The U.S. Department of Justice (“DOJ”), on behalf the Army Corps of Engineers and other federal defendants, recently announced its plans to move to dismiss New York’s lawsuit on sovereign immunity, standing and ripeness grounds. There are also questions as to whether the proposal of a regional body is a “major federal action” governed by NEPA – an argument that DOJ reserved the right to raise at a later date as an additional ground for dismissal. A pre-motion conference on DOJ’s request for dismiss is scheduled for Wednesday, August 10.
April 19, 2011
On April 19, 2011, the U.S. Supreme Court heard oral arguments in American Electric Power v. Connecticut, a highly anticipated case that will determine whether states and land trusts may pursue reductions in power plant greenhouse gas (GHG) emissions under a federal common law public nuisance theory. The Supreme Court is reviewing a 2009 Second Circuit decision that found no jurisdictional bar to the climate change tort suit.
At oral argument, the Supreme Court justices focused largely on whether legislative and regulatory action on climate change had displaced federal common law remedies and whether the federal courts were competent to make the policy determinations required for the states’ desired injunction, lines of questioning that could present obstacles for the state plaintiffs. Justice Ginsburg, who joined a prior Supreme Court decision holding that the Environmental Protection Agency (EPA) could regulate GHGs under the Clean Air Act, noted skeptically that “the relief [the states are] seeking seems … to set up a district judge, who does not have the resources, the expertise, as a kind of super EPA.”
In what may be a silver lining for the plaintiffs, the industry defendants acknowledged that a decision under Article III standing or displacement grounds could allow future plaintiffs to pursue similar relief in state courts under state common law theories. Of course, any such challenges would be subject to potential standing and preemption constraints. As explained in a prior post, the Obama Administration also argued for reversal of the Second Circuit decision on behalf of defendant Tennessee Valley Authority, albeit on different grounds than the other defendants.
New York Solicitor General Barbara D. Underwood argued the case on behalf of the states and land trusts. Justice Sotomayor, who sat on the Second Circuit panel that originally heard the case but was nominated to the Supreme Court before the appellate court’s decision, has recused herself from the Supreme Court’s review and did not participate in the oral argument.
March 17, 2011
On March 16, 2011, the Environmental Protection Agency (“EPA”) proposed long-anticipated limits on power plant emissions of mercury and other hazardous air pollutants (“HAPs”) under Section 112 of the Clean Air Act (“CAA”). Along with recent emissions standards for industrial and commercial boilers and a new proposal for power plant GHG controls due out in July, EPA is undertaking a series of major CAA rulemakings at the same time its authority under that statute is facing legal and legislative attacks.
EPA’s latest rule would establish the first nationwide standards for power plant emissions of mercury, arsenic and other HAPs, with numeric limits based upon “maximum available control technology” as required under the 1990 CAA Amendments. The George W. Bush administration attempted to create a cap-and-trade program for power plant mercury emissions, which the D.C. Circuit Court of Appeals struck down in 2008. EPA’s new proposal would reduce mercury from approximately 525 coal and oil-fired power plants by 91 percent once fully implemented, and it covers a range of other pollutants that were not regulated under the Bush-era mercury rule.
Last month, under the pressure of a court deadline, EPA also finalized new emissions regulations for more than 200,000 industrial, commercial, and institutional boilers, covering sources ranging from power plants and refineries to apartment buildings and hospitals. Owners of smaller boilers with a heat input capacity of less than 10 million Btu per hour will not need to install new pollution controls, but are instead required to perform and document biennial boiler “tune-ups.” Moreover, while EPA released its boiler regulations pursuant to its judicially-imposed deadline, it simultaneously announced that it is formally reconsidering parts of those rules and that further changes may be forthcoming.
Finally, under a settlement with New York and other states, cities and non-profit organizations, EPA committed to proposing New Source Performance Standards (“NSPS”) for power plant greenhouse gas emissions (“GHG”) by July 26, 2011. The EPA is currently holding listening sessions to solicit input for that proposal, although legislation recently passed by the House Energy and Commerce Committee would preempt this and other EPA efforts to regulate GHG emissions under the CAA.
EPA’s upcoming NSPS proposal may also factor into a pending case before the Supreme Court, which will determine whether a coalition of states and land trusts may sue power plants to compel GHG reductions under a public nuisance theory. Responding to arguments that recent EPA climate regulations had displaced federal common law remedies, this week the state plaintiffs conceded that implementation of NSPS covering power plants GHG emissions would bar their suit, but argued that until such rules were finalized the case should be returned to the lower court and stayed pending EPA’s regulatory decision. Oral arguments in American Electric Power v. Connecticut are scheduled for April 19, 2011.
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