1. Art and Diseño

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Clean Air Report
An exclusive biweekly report on the Clean Air Act and U.S. air policy
Vol. XXVI, No. 3 — January 29, 2015
EPA Places Onus On States To Curb Ozone Interstate Transport
EPA in a new policy memo is placing the onus on states to meet their Clean Air Act “good neighbor”
obligations to curb interstate transport of ozone-forming air pollution that the agency will then review,
a break from an earlier decision to impose federal transport plans on states through its Cross-State
Air Pollution Rule (CSAPR). The policy memo also appears to suggest that several Western states
will face air transport reduction mandates for the first time. Meanwhile, EPA is offering a broad legal
defense of its methodology for developing and implementing CSAPR. Interstate Pollution, Page 3.
EPA Defends Deferral Of Methane Air Rules
For Existing Oil & Gas Drilling
EPA Administrator Gina McCarthy is defending the agency’s
decision to defer regulation of the greenhouse gas methane from
existing oil and gas development and instead focus on imposing
direct methane limits on new drilling, saying new sources have the
greatest emissions and there is no legal deadline to regulate existing
sources. EPA is seeking direct regulation of methane from new and
modified oil and gas production sources in order to help meet
President Obama’s new goal of reducing the sector’s methane
emissions 40 to 45 percent from 2012 levels by 2025. Methane,
Page 7.
HEI Data May Aid Bid To Replace Older
Diesel Engines To Cut Cancer Risk
New research by the Health Effects Institute (HEI) says there is
no evidence of carcinogenic lung tumors in rats that were exposed to
diesel exhaust from engines with emissions control technology,
which could boost EPA’s efforts to replace older diesel engines with
newer models in order to significantly cut potential human cancer
risks. “These results confirm the great strides that government and
industry have made to reduce diesel risk — and argue for even
greater efforts to accelerate the replacement of older diesel
engines,” said HEI President Dan Greenbaum in a statement on the
research unveiled Jan. 27. Diesel Exhaust, Page 10.
EPA Bid To Revise Haze Air Planning
Deadline Receives Mixed Response
EPA plans to revise its deadline for states to submit air quality
compliance plans for its regional haze emissions reduction program
and craft additional guidance to ease implementation of the program,
prompting support from states that have struggled to meet existing
deadlines but concern from advocates about possible delays to
pollution cuts. The agency says it has recently informally reached out
to state air regulators to alert them of its pending work to amend the
deadline for submitting state implementation plans that will detail the
haze pollution cuts states will impose. Regional Haze, Page 11.
Groups Fight Utility MACT
Power sector groups and states
opposed to EPA’s landmark utility
maximum achievable control technology
(MACT) rule are urging the Supreme
Court to scrap it because, they argue,
the agency failed to meet a Clean Air Act
requirement based on legal and
regulatory precedent to consider costs
in determining whether the rule was
“appropriate.” Page 12.
ESPS Review May Spur Fight
EPA’s planned review of the
potential adverse impacts to small
business from its greenhouse gas rules
for existing power plants could ease
requirements on smaller companies at
the expense of greater burdens on bigger
utilities, raising the potential that the
review could result in a “food fight” pitting
larger utilities against smaller entities.
Page 16.
Groups Debate Ozone Science
Ahead of EPA’s public hearings on
its proposal to tighten its ozone air
standard, environmentalists and
industry officials are debating the
science underpinning the agency’s
plan, with advocates touting data to
bolster EPA’s proposal while industry
is emphasizing research that it says
justifies retaining the existing ozone
standard. Groups will make their
competing claims over the merits of
EPA’s proposed rule at three hearings
in coming days, taking place Jan. 29
in Washington, D.C., and Arlington, TX,
and Feb. 2 in Sacramento, CA. EPA
late last year proposed to tighten the
2008 ozone standard. Page 19.
Background Documents For This Issue
Subscribers to InsideEPA.com have access to hundreds of documents, as well as a searchable archive of
back issues of Clean Air Report. The following are some of the documents available from this issue of Clean
Air Report. For a full list of documents, go to the latest issue of Clean Air Report on InsideEPA.com. For more
information about InsideEPA.com, call 1-800-424-9068.
Documents available from this issue of Clean Air Report:
„ API Files Suit Over EPA’s Oil Sector GHG Reporting Rule (177858)
„ ‘Clean’ Utilities, States Defend CSAPR From Legal Attacks (177816)
„ D.C. Circuit Ruling Creates Uncertainty For Transportation Planning (177477)
„ D.C. Circuit Sets Dates For California Industry Challenge To EPA Waivers (177774)
„ Environmentalists Urge Quick EPA Action To Curb Aircraft GHGs (177797)
„ Environmentalists, Industry Seek Revisions To Cement MACT (177860)
„ Environmentalists, Industry Spar Over Boiler, Incinerator Rules (177729)
„ EPA Announces Plan To Reduce Oil, Gas Sector’s Methane Emissions (177518)
„ EPA Details Procedural Flaws With States’ Climate ESPS Suit (177854)
„ EPA Finalizes Nonattainment Designations For 2012 PM2.5 NAAQS (177524)
„ EPA Grants Aluminum Sector’s Bid To Extend Comment Deadline On NESHAPs (177575)
„ EPA Issues Ship Fuel Rule Enforcement Policy (177633)
„ EPA Memo Details Future For Interstate Ozone Policy (177809)
„ EPA Offers Broad Defense Of CSAPR In D.C. Circuit Litigation (177648)
„ EPA Unveils 2013 Toxics Release Inventory Data (177527)
„ Groups Raise Competing Criticisms Over EPA’s Ozone NAAQS Science (177476)
„ HEI Study Finds No Lung Cancer Threat From New Diesel Exhaust (177881)
„ Industry Urges EPA To Extend Wood Furnace NSPS Compliance Deadline (177879)
„ Industry, States Say Utility MACT Rule Not ‘Appropriate’ (177731)
„ Inhofe Reorganizes Senate Environment Panel Subcommittees (177744)
„ NFIB Seeks EPA Small Business Review Of Proposed Climate ESPS (177658)
„ Oregon Adopts LCFS Rules (177565)
„ STB Tells EPA California Railroad Rules Likely To Be Preempted (177567)
„ UARG Sues EPA Over Utility MACT Startup Emissions Rule (177748)
„ White House Threatens Veto Of House Regulatory Review Bill (177450)
Not an online subscriber? Now you can still have access to all the background documents referenced in this issue
through our new pay-per-view Environmental NewsStand. Go to www.EnvironmentalNewsStand.com to find out more.
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Interstate Pollution
EPA Places Onus On States To Curb Ozone Interstate Transport Problems
EPA in a new policy memo is placing the onus on states to meet their Clean Air Act “good neighbor” obligations to
curb interstate transport of ozone-forming air pollution that the agency will then review, a break from EPA’s earlier
decision to impose federal transport plans on states through its Cross-State Air Pollution Rule (CSAPR).
The policy memo, dated Jan. 22 and signed by Office of Air Quality Planning and Standards Director Stephen Page,
also appears to suggest that several Western states will face air transport reduction mandates for the first time compared
to previous interstate pollution policies. Based on new EPA emissions modeling, Arizona, California, Utah and Wyoming would all have to craft good neighbor plans for the first time. The memo is available on InsideEPA.com. See page
2 for details. (Doc. ID: 177809)
Page does not specify any regulatory successor to CSAPR that EPA will develop. Rather, EPA identifies which
states are likely to be “contributing significantly” to downwind pollution problems, and plans an ongoing dialog with
states on how they can craft plans for meeting their air law good neighbor obligations.
The memo was released the same day that acting EPA air chief Janet McCabe held a call with state air regulators to
update them on the agency’s next steps to address transport of emissions across state lines.
EPA is currently working to reinstate CSAPR, an emissions trading program affecting 28 states that requires them to
reduce ozone-forming nitrogen oxides (NOx) and also emissions of sulfur dioxide (SO2) that lead to fine particulate
matter (PM2.5) formation. The U.S. Court of Appeals for the District of Columbia Circuit in a 2-1 ruling in 2012
vacated CSAPR, saying EPA exceeded its air law power by imposing the rule on states.
The majority said the agency’s approach of imposing federal implementation plans on states to implement the rule
was wrong, and that EPA should have first determined their contribution to air quality problems in other states and given
them the chance to craft their own state implementation plans (SIPs) for CSAPR compliance.
The Supreme Court in April then reversed the D.C. Circuit and backed the overall legal basis for CSAPR, remanding litigation over the rule to address various challenges to technical aspects of the rule and other provisions left
unaddressed in the original CSAPR appellate decision. EPA is moving to reinstate the trading program on a delayed
timeline, but is also weighing future policies on air transport to help meet stricter air standards.
CSAPR is designed to help states attain EPA’s 1997 ozone national ambient air quality standard (NAAQS) expressed as 84 parts per billion (ppb) and 2006 PM2.5 standard, but the agency has already tightened both limits. In a
2008 rulemaking EPA tightened the ozone NAAQS down to 75 ppb. And it has proposed to further tighten the limit to a
range between 65 and 70 ppb, with a final version of that rulemaking due in October.
EPA is now seeking steps to help states curb transport of NOx and help reduce ozone levels to ease attainment of
the newer, stricter ozone limits. The agency has further indicated that it does not see ongoing problems with interstate
pollution involving PM2.5, and hence would not include PM2.5 in another interstate transport rule.
In the new policy memo, Page writes that “EPA’s goal is to provide information and to initiate discussions that
will inform state development and EPA review of ‘Good Neighbor’ SIPs, and, where appropriate, to facilitate state
efforts to supplement or resubmit” such SIPs. He notes that several states have not submitted the requisite SIPs for the
2008 ozone standard, and others are waiting for EPA to review their plans and approve them.
“While our goal is to facilitate SIP development, the EPA also recognizes its backstop rule in the SIP development
process — that is, our obligation to develop and promulgate federal implementation plans, as appropriate,” Page writes.
He adds that “it is our intention that any federal rule developed to satisfy this obligation would provide ample opportunity for states to pursue alternatives.”
EPA was thought by most sources to still be developing a CSAPR replacement rule, but Page’s memo suggests that
an overarching rule or trading program may now be unlikely.
At a workshop EPA intends to hold with state air regulators in the spring, Page says the agency plans to discuss:
available emission controls; potential state-by-state electric generating unit (EGU) NOx reductions based on those
controls; and potential EGU emissions budgets informed by those reductions.
Page notes that “EPA and states are behind schedule” in addressing the interstate transport issues associated with
the 2008 ozone standard, in large part because of the litigation over CSAPR.
Although the CSAPR methodology is still under attack by states and industry groups opposed to the rule in the
lingering D.C. Circuit challenges to the trading program, EPA has nonetheless calculated which states would have an
obligation to reduce emissions, using the CSAPR method.
Under CSAPR, EPA considered which states contribute to at least 1 percent of the NAAQS in downwind states that
are either in “nonattainment” for the standard, or which once were in nonattainment and have now been reclassified as
“maintenance,” meaning they meet the standard but must take measures to ensure continued compliance. CSAPR also
considered cost-effectiveness of emissions control measures when deciding which states to include in the trading
program.
EPA’s preliminary computer modeling analysis shows that many of the same 28 states in the eastern half of the
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INTERSTATE POLLUTION
country that were covered by CSAPR would again have to act to curb interstate emissions. The agency used 2011
emissions data for its modeling from the most recent modeling platform available, and projected nonattainment and
maintenance areas in 2018, the attainment deadline for many areas of the country.
With the tougher ozone standard, some Western states would for the first time be implicated as well with having to
craft plans to reduce interstate air transport. Arizona, California, Utah and Wyoming are listed as states that would
contribute above the significance threshold to downwind areas classed as either nonattainment or maintenance. These
states would have to craft good neighbor SIPs for the first time.
However, Page’s memo appears to downplay this finding, saying, “There are a few receptors in the West where 1 to
3 western states may contribute amounts potentially exceeding the 1 percent threshold. . . . Due to the possibility that
additional considerations may impact the EPA’s and state’s evaluation of transport from these potentially linked states . .
. we expect that the EPA and states will continue to evaluate these western transport linkages . . . on a case-by-case
basis.” — Stuart Parker
EPA Offers Broad Defense Of Method For Developing, Implementing CSAPR
EPA is offering a broad legal defense of its methodology for developing and implementing its contested Cross-State
Air Pollution Rule (CSAPR) emissions trading program, saying the agency was justified in its approach for rejecting or
approving state interstate air plans and did not exceed its authority with the pollution caps it imposed on states.
The arguments, outlined in a Jan. 16 brief filed by the Department of Justice (DOJ) on EPA’s behalf, is the agency’s
latest bid to defend CSAPR. The U.S. Court of Appeals for the District of Columbia Circuit is hearing a suite of
lingering legal challenges to technical provisions and other aspects of the rule following a Supreme Court ruling last
year that upheld the overall legal structure of CSAPR but remanded fights over the rule to the D.C. Circuit. Relevant
documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177648)
In the consolidated litigation known as EME Homer City Generation, et al. v. EPA, several states opposed to
CSAPR and various power industry groups are urging the court to either scrap various provisions of the rule or to vacate
it entirely — although observers doubt any of the remaining suits run the risk of a ruling vacating CSAPR.
The D.C. Circuit first ruled on CSAPR in a 2-1 decision in 2012 that said EPA’s process of imposing federal
implementation plans (FIPs) on states to implement the rule violated the agency’s air law authority, and found that EPA
should first have allowed states to craft state implementation plans (SIPs) for compliance with the rule.
But the high court in its 6-2 ruling issued in April reversed the D.C. Circuit majority and said that the approach was
legally sound, although it did not address the various issues being contested in the remanded suit.
In the remaining litigation, utility industry groups are urging the court to partially scrap the emissions “budgets,” or
caps, in the rule by saying the caps are too stringent and EPA should lower them.
Several states and public utility commissioners meanwhile have urged the court to vacate the rule, reiterating
arguments that the agency’s FIP approach is unlawful and therefore dooms CSAPR.
EPA in the new brief, however, outlines a wide-ranging defense of its methodology in developing its CSAPR. For
example, the agency argues as an initial matter that it was justified in disapproving various SIPs by states designed to
limit interstate transport of emissions, and imposing FIPs on them to implement CSAPR instead.
The Supreme Court in its ruling upheld the “FIP-first” principle, but did not address the specific disapprovals of
SIPs that states submitted prior to CSAPR, which replaced the Bush-era Clean Air Interstate Rule (CAIR). The Obama
EPA developed CSAPR to replace CAIR after the D.C. Circuit found fault with parts of CAIR.
States opposed to CSAPR claim that EPA’s approval of prior SIPs that relied on CAIR meant that those plans were
valid and EPA lacked authority to rescind them as it did with the CSAPR FIPs.
DOJ on the agency’s behalf counters in the brief that “the claim that EPA’s approval of SIPs allowing some
States to implement CAIR abrogated EPA’s authority to promulgate the Transport Rule FIPs is meritless.”
DOJ says that the D.C. Circuit’s earlier ruling vacating, then remanding CAIR, meant that the earlier SIPs contained
an “underlying deficiency” — they were designed to meet a court-remanded rule — and, “Because CAIR was invalid ab
initio, EPA continued to have the obligation to promulgate FIPs to address interstate transport.”
DOJ broadly defends EPA’s methodology in determining which states upwind must participate in the rule and cut
their emissions of ozone-forming nitrogen oxides and fine particulate-matter (PM2.5) forming sulfur dioxide in order to
ensure downwind states can attain EPA’s national ambient air quality standards (NAAQS). CSAPR aims to cut air
pollution to help states meet the 1997 ozone NAAQS and 2006 PM2.5 NAAQS.
The Supreme Court left open the possibility of “as-applied” challenges to CSAPR over such issues as the specifics
of how upwind states are linked to downwind states on emissions impacts.
Several states, notably Texas, contest the “significant contribution” analyses EPA conducted, saying that because of
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INTERSTATE POLLUTION
inaccurate air quality modeling or monitoring data, they do not belong in the trading program.
One accusation the rule’s detractors make is that EPA failed to give distinct meaning to Clean Air Act (CAA)
requirements that it address significant contribution to both NAAQS nonattainment and problems that “interfere with
maintenance” of the NAAQS in downwind areas.
DOJ in the new brief counters, however, that, “the Supreme Court in EME Homer City explicitly held that the CAA
delegates to EPA authority to define ‘interfere with maintenance,’ and that nothing in the statute ‘provides the criteria by
which EPA is meant to apportion responsibility.’”
“Nothing in the statute limits upwind States’ responsibility to address interstate transport to areas in downwind
States that have been formally designated nonattainment, and EPA reasonably based its linkages on whether areas were
projected to be in nonattainment, regardless of designation,” DOJ says.
DOJ defends EPA’s methods in determining the emissions budgets of states, and also their linkage to air quality
problems downwind. “EPA’s air quality modeling reasonably excluded air quality data reflecting emission reductions resulting from CAIR — a rule this Court ordered EPA to replace in North Carolina,” DOJ says. The D.C.
Circuit first vacated, then remanded CAIR, in North Carolina v. EPA in 2008, after finding flaws with the trading
program.
“EPA’s air quality model was, however, anchored with several years of monitored ambient air quality data and
verified against actual monitored air quality data. Petitioners fail to show that EPA’s modeling was unreliable,” DOJ
says. Further, “EPA’s model for setting emission budgets relied on reasonable assumptions related to transmission
constraints and co-generation sources. Petitioners fail to show that EPA’s assumptions were wrong or otherwise produced results that are inconsistent with real-world data.”
DOJ further rejects the accusation that EPA allowed unlawful “overcontrol” of upwind sources, or pollution
reductions larger than required to attain or maintain the NAAQS downwind.
The Supreme Court said that this is only permissible where overcontrol at one downwind site benefits NAAQS
attainment at another. Some states, such as Texas, argue that they are overcontrolled for all downwind sites and should
have their pollution reduction mandates reduced or eliminated entirely.
DOJ says, “the record shows that [CSAPR] requires covered upwind States to reduce emissions only as necessary
for downwind States to attain and maintain the relevant NAAQS, consistent with the Supreme Court’s holdings in EME
Homer City. EPA selected reasonable uniform cost thresholds that efficiently and equitably allocate emission reduction
responsibilities among upwind States.”
Oral argument in the case is set for Feb. 25. — Stuart Parker
‘Clean’ Utilities Attack Bid To Cite High Court Ruling To Undermine CSAPR
“Clean” utilities that generate much of their power from lower-emitting natural gas or other alternatives to coal are
attacking coal utilities’ push to use the Supreme Court’s ruling upholding EPA’s Cross-State Air Pollution Rule
(CSAPR) as a basis for reopening challenges to various provisions of the rule, saying the effort misreads the ruling.
In a Jan. 23 brief filed with the U.S. Court of Appeals for the District of Columbia Circuit in EME Homer City
Generation, L.P., et al. v. EPA, et al., the clean utilities Exelon Corporation and Calpine Corporation argue that opponents of the rule are erroneously trying to use language in the high court’s 6-2 ruling from April to bolster their claims in
lingering legal challenges to various technical aspects of CSAPR and other provisions. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177816)
The D.C. Circuit originally vacated the emissions trading program in a 2-1 ruling in 2012, saying EPA exceeded its
Clean Air Act authority by imposing the rule on states through federal implementation plans (FIPs) without first allowing states to determine their contribution to interstate air quality problems, and to craft state implementation plans (SIP)
to curb emissions before facing the risk of a FIP.
The Supreme Court then last year reversed that decision and found that EPA’s overall approach for the rule was
legally sound, remanding EME Homer City to the D.C. Circuit to address various challenges that the original appellate
ruling and the high court’s decision did not address. Power companies and states opposed to CSAPR are now hoping
that those remaining challenges will prompt the appeals court to once again vacate the rule.
EPA is weighing steps for future air transport policies, likely placing the onus on states to satisfy their Clean Air Act
“good neighbor” obligations to cut pollution that hinders air quality in other states. But it is working to reinstate CSAPR
on a delayed timeline to account for the suit, and is fighting the lingering litigation.
EPA recently filed a brief offering a broad legal defense of its methodology for developing and implementing the
air cap-and-trade program, saying the agency was justified in its approach for rejecting or approving state interstate air
plans and did not exceed its authority with the pollution caps it imposed on states.
In their intervenor’s brief on EPA’s behalf, Calpine and Exelon seek to boost the agency by arguing that CSAPR’s
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opponents are misreading the high court’s opinion in order to undermine the rule.
Central to the argument of utilities and states opposing CSAPR is the idea of “overcontrol,” under which upwind
states are forced to reduce their emissions of ozone-forming nitrogen oxides (NOx) or particulate matter (PM)-forming
sulfur-dioxide (SO2) more than is required for downwind states to attain or maintain federal ozone or PM standards.
CSAPR aims to cut NOx and SO2 emissions to help states meet the standards for ozone and PM.
The high court in its 6-2 ruling found that while overcontrol is undesirable, it is permissible under certain circumstances. The clean utilities say that their opponents are intentionally minimizing the high court’s tolerance of overcontrol
in an effort to undermine the program’s pollution caps and to scrap the rule.
“The Supreme Court explicitly held that some degree of what petitioners characterize as ‘overcontrol’ is permissible; it is not enough for petitioners to show that the Rule would require a state to reduce pollution ‘by more than is
necessary to achieve attainment in every downwind State or at odds with the one-percent threshold [EPA] has set,’” the
clean utilities say, citing the high court opinion written by Justice Ruth Bader Ginsberg.
EPA determined which areas make a “significant contribution” to states’ problems attaining national ambient
air quality standards (NAAQS) in downwind areas based on whether they contribute 1 percent or more of the NAAQS
in downwind areas classified in NAAQS “nonattainment” or “maintenance” status. Upwind states meeting this threshold
were included in CSAPR’s emissions trading program, which included 28 states in all.
“Petitioners must also demonstrate that such ‘overcontrol’ is not merely ‘incidental to reductions necessary to
ensure attainment elsewhere,’” Exelon and Calpine say. “That is, petitioners must show that the incremental reductions
they complain of are ‘unnecessary to downwind attainment anywhere.’”
The clean utilities fault EPA’s critics for making the claim that just because downwind areas are now attaining the
NAAQS according to the latest air quality monitoring data, upwind areas cannot be linked to them for the purposes of
CSAPR compliance. “Petitioners’ arguments are premised on the incorrect assumption that EPA is prohibited from
requiring further upwind reductions once the monitors in any downwind state measure below the applicable standards,”
they say. “This is not the case. Re-designation to attainment can be demonstrated only through sustained compliance
protected by force of law, and backed by an approved maintenance plan.”
Further, the two utilities say that their opponents’ criticisms of EPA’s use of uniform cost-effectiveness thresholds in
the rule is misplaced. EPA set a cost-effectiveness threshold of $500 per ton when crafting CSAPR — emissions cuts
costing more would not be required when EPA set state “budgets,” or emission limits, for the trading program. Petitioners challenging the rule say it is arbitrary because some states can achieve emissions cuts for a lower price, and should
be allowed to do so without being penalized with emission reduction mandates.
The high court “explicitly addressed the central issue in this case of EPA’s use of uniform costs to determine the
emission reductions required of upwind states. It not only upheld EPA’s use of uniform costs, it endorsed the approach,”
they say. The uniform cost-effectiveness threshold is vital, they say, as it “places the same value on allowances regardless of the state in which they originate. This allows sources to trade allowances across state boundaries, ensuring the
most cost-effective compliance across states.” Without the “equitable approach” to cost-effectiveness “lauded” by the
Supreme Court, “power generation would shift to the states where the lowest cost was used, increasing emissions in
those states and putting linked downwind states at increased risk.”
The clean utilities also defend EPA’s computer air quality modeling using its “IPM” model, which they say is well
within the agency’s realm of technical expertise and is due deference by the courts.
“EPA properly used IPM to predict emissions on a state-by-state basis under multiple scenarios. IPM is recognized
as the most comprehensive, sensitive model for predicting the operation of generation units based on factors including
electricity demand, emission controls and economic conditions,” they say.
Nor does IPM have to be perfect, they argue, for CSAPR to be considered legitimate, as estimating air emissions
and costs to control emissions to the best of the agency’s ability is neither “arbitrary,” nor “capricious,” the twin
characteristics of Clean Air Act rules that courts can legitimately vacate, they argue.
Meanwhile, states and cities supporting EPA in EME Homer City also filed a brief Jan. 23, in which they
defend the agency against two other arguments raised by the rule’s opponents.
EPA’s critics claim that the agency failed to give independent effect to the requirement that upwind states not
“interfere with maintenance” of NAAQS downwind. They have also argued that EPA cannot disapprove existing “good
neighbor” SIPs by claiming it committed an “error” in approving them originally.
The states argue it was legitimate for EPA to identify distinct lists of areas that either contribute significantly to
nonattainment of a NAAQS downwind or interfere with maintenance of attainment status, but otherwise to employ the
same significance thresholds and cost-effectiveness criteria to determine such linkage.
They further argue EPA had no obligation to take into account the “maintenance” SIPs of areas classified maintenance, because such SIPs deal only with emissions that downwind states can control themselves.
With respect to error correction, the states and cities argue that the air law’s SIP error-correction mechanism is not
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restricted to technical and clerical errors, as the rule’s critics claim. They say that it can be used with broad discretion by
EPA to disapprove prior plans approved based on an erroneous reading of the air law.
In the case of CSAPR, SIPs previously approved that were based on the Clean Air Interstate Rule (CAIR) — the
Bush-era predecessor of CSAPR — must have been approved in error because the D.C. Circuit itself remanded CAIR
for various legal failings, the states and cities argue. — Stuart Parker
Methane
EPA Defends Deferral Of Methane Air Rules For Existing Oil & Gas Drilling
EPA Administrator Gina McCarthy is defending the agency’s decision to defer regulation of the greenhouse gas
(GHG) methane from existing oil and gas development and instead focus on imposing direct methane limits on
new drilling, saying new sources have the greatest emissions and there is no legal deadline to regulate existing
sources.
The agency “felt it was entirely appropriate to start with what we knew we could deal with effectively, which are the
new sources,” McCarthy told a Jan. 16 reporters’ roundtable at EPA headquarters in Washington, D.C.
EPA’s recently announced oil and gas sector methane reduction plan says the agency will issue a proposed rule in
the summer to impose first-time direct methane limits on new sources, but not on existing sources. The agency has said
repeatedly that steps taken to reduce volatile organic compounds (VOC) from production have an indirect co-benefit of
also reducing methane.
EPA’s plan is to “not allow the emissions to increase, which is why we’re getting at the new sources, but also
eventually achieve the same kind of reductions in the existing sources,” McCarthy said.
She said if drilling operators work through voluntary measures and take other steps to reduce existing sources’
methane emissions within the next several years, it could negate the need for regulation of those sources, since the Clean
Air Act mandates that regulations must be based on the best technology that is economically achievable.
“The most important thing to realize is if existing sources aggressively reduce their emissions then it’s not clear that
there will be cost-effective reductions that will necessitate regulation on existing facilities,” she said. “But most importantly, I think, this sends a signal to the entire sector and the investment community” on these practices.
“We did not decide to defer regulating existing just to give time for things to happen in the industry although that’s
a tremendous benefit,” she said, noting the complexity of regulating oil and gas operations.
In addition to making the regulatory case for focusing controls on new drilling as the largest source of the sector’s
methane emissions, McCarthy also offered a legal defense for not pursuing existing source rules. She noted that the
Clean Air Act does not include a deadline for EPA to develop existing source regulations.
EPA will impose the new source methane limits with an air law section 111(b) new source performance standards
rulemaking. Under the law, once EPA sets regulations for new and modified sources under section 111(b), the agency
“shall prescribe regulations” that would require states to craft plans for meeting standards for existing sources — as the
agency is doing in its existing source performance standards for the power sector.
The law only says EPA “shall” issue existing source rules and does not set a deadline for such regulations.
“There is no time deadline in the statute for us to look at existing,” McCarthy said, adding EPA “felt it was entirely
appropriate to start with what we knew we could deal with effectively, which are the new sources.”
Industry sources similarly argue that even if — as environmentalists have vigorously argued — EPA is required to
promulgate existing source standards after it has issued rules for new and modified sources, the agency has broad
discretion in terms of when it decides to develop an existing source rule under air law section 111(d).
But environmentalists say EPA cannot indefinitely hold off on existing source regulations, suggesting that one
option to force the rulemaking might be a lawsuit claiming an “unreasonable delay” under the Administrative Procedure
Act for the existing source rules. That could tee up a legal debate likely to play out as EPA works to issue its proposal to
curb methane from new and modified sources by its anticipated summer target.
“EPA is legally required to set methane standards for existing sources when it has set the standards for new
sources,” one environmentalist says of the relevant language in the air law.
A second environmentalist says the air law does not give EPA “unfettered discretion” to hold off on addressing
existing sources once a new source rule is promulgated, and that an unreasonable delay suit is certainly an option. The
source says EPA must also meet an eight-year time frame to revise its new source regulations, and it would be “silly” to
revise standards for new sources when the existing source obligation had not yet been met.
White House and EPA officials Jan. 14 announced that the administration this summer will propose new rules
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
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METHANE
covering both methane and VOCs, likely in the form of an NSPS for new and modified sources.
The NSPS — along with more limited guidelines covering smog-forming pollutants from existing sources, steps
from other agencies and voluntary efforts — is expected to help meet the Obama administration’s new goal of cutting
the sector’s methane emissions 40-45 percent from 2012 levels by 2025.
The expected NSPS will build off EPA’s 2012 NSPS for the sector, which the agency issued under court deadline,
updating older regulations for the industry to include first-time controls for new natural gas wells where hydraulic
fracturing is used. In the 2012 rules, EPA targeted VOCs from a range of production and upstream sources, but punted
on the issue of setting methane standards, saying it would gather more data on the GHG.
Environmentalists in petitions urging reconsideration of the 2012 rules argued that the agency erred in failing to
formally evaluate whether to set methane standards, because the Clean Air Act requires the agency to review the NSPS
every eight years to determine whether additional pollutants should be regulated or other revised controls are necessary,
and because the administration has already concluded that methane, as a GHG, endangers public health.
Industry groups argue methane controls are not necessary because the sector’s emissions are already dropping and it
is economically beneficial to capture any leaked gas and sell it. One source says that voluntary measures, or alternatively, a VOC-based approach that expands on the 2012 rules would be more effective in curbing methane in time
to meet the reductions outlined by the administration, given that the rulemaking is likely to be embroiled in
litigation.
“I’d imagine once they go the 111(b) route, environmentalists will start petitioning for 111(d), and if one objective
is to get this done quickly, a methane-based approach will be embedded in litigation,” that source says.
Industry fears that EPA’s plans to issue an NSPS for methane and VOCs means that EPA will eventually have to
regulate existing sources — though when the agency must do that is not entirely clear.
“EPA appears to have some flexibility on the timing of a 111(d) rule, but they have put themselves in the path of
nondiscretionary responsibility to eventually issue the rule,” the industry source says.
Kyle Danish, of the industry firm Van Ness Feldman, writes in a Jan. 14 blog post that while some argue that
promulgation of a section 111(b) methane rule for new sources would compel EPA to follow up with a section 111(d)
rule addressing existing sources in the same category, “even if that is so, case law suggests that EPA has discretion as to
the timing and prioritization of such a rule, at least in the near term.”
Danish is referring to a May 13, 2014, U.S. Court of Appeals for the District of Columbia Circuit ruling in
WildEarth Guardians v. EPA, et al., where the appellate court upheld EPA’s decision to deny a petition requesting that it
add coal mines to the list of section 111 sectors, finding EPA that “has discretion to determine the timing and priorities
of its regulatory agenda” under the air law.
But an environmentalist involved in the WildEarth Guardians case says that the D.C. Circuit only considered the
narrow question of whether EPA may deny a petition for a section 111 rulemaking based on workload constraints, and
does not see the case as granting any additional leeway to the agency on timing.
“When the statute doesn’t have a clear deadline, the agency does have a fair amount of discretion,” but a decision to
hold off indefinitely would likely face an unreasonable delay challenge, the source says.
The first industry source says that while the case seems to grant flexibility to EPA on how and when it will address
actions under section 111, it does not appear to addresses constraints on EPA once it decides to act under 111. “That is,
if EPA acts under 111(b) to create a[n] NSPS on a non-criteria, non-hazardous air pollutant, this does not appear to then
define its latitude with regard to 111(d),” the source says, pointing out that there is “very little legislative history on
111(d)” and that the provision is relatively vague.
Under the Clean Air Act, EPA may only promulgate a 111(d) rule for existing sources of pollutants for which there
are no national ambient air quality standards (NAAQS), meaning the agency did not have to consider a section 111(d)
rule in 2012 because its rule targeted VOCs, which are regulated under the ozone NAAQS.
The Natural Resources Defense Council’s David Doniger writes in a Jan. 14 blog post that the agency has the
authority to target existing sources, saying “EPA is legally required to do so once it issues the new source standards”
and that the approach the agency has announced is “indirect and much less effective.”
Environmentalists are seeking regulations for emissions from existing sources because they argue it is necessary to
capture a majority of emissions from the sector. They say there is less development actively occurring in the downstream sources of emissions, such as processing and transmission equipment that EPA is proposing to regulate, meaning
they would not be subject to new source standards.
A second industry source says this “puts a lot of pressure on how EPA defines ‘modified’ in its NSPS proposal,”
given that downstream sources often emit far more methane than VOCs. — Bridget DiCosmo
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METHANE
EPA Seeks Direct Methane Limits On New Drilling To Help Meet GHG Goal
EPA is seeking direct regulation of the greenhouse gas (GHG) methane from new and modified oil and gas production sources in order to help meet President Obama’s new goal of reducing the sector’s methane emissions 40 to 45
percent from 2012 levels by 2025, while avoiding direct regulation of existing drilling operations.
The plan, outlined in a Jan. 14 administration fact sheet and a conference call with reporters, will see EPA publish a
proposed rule this summer to build on its 2012 new source performance standards (NSPS) for the sector to set standards
for methane and ozone-forming volatile organic compound (VOC) emissions from new and modified oil and gas
production sources, and natural gas production sources. A final rule is slated for issuance in 2016. Relevant documents
are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177518)
“As it did in the 2012 standards, the agency, in developing the proposal and final standards, will focus on in-use
technologies, current industry practices, emerging innovations and streamlined and flexible regulatory approaches to
ensure that emissions reductions can be achieved as oil and gas production and operations continue to grow,” the White
House says in its fact sheet. The 2012 NSPS did not include direct methane limits.
During the call with reporters, acting EPA air chief Janet McCabe touted the plan to cut methane and said, “The
details of all of this will become more clear as we move through the rulemaking process.”
For existing oil and gas operations, the agency plans to develop guidelines to help states curb ozone-forming
pollutants such as VOCs in areas currently out of attainment with the agency’s ozone national ambient air quality
standards (NAAQS), and in the Ozone Transport Region of states with high ozone levels.
“The guidelines will help states that are developing clean air ozone plans by providing a ready-to-adopt control
measure that they can include in those plans,” according to the fact sheet. EPA plans to issue the Control Techniques
Guidelines in proposed form during the summer, and a final version in 2016.
EPA has proposed to tighten its ozone NAAQS from the 2008 limit of 75 parts per billion (ppb) down to a range
between 65 and 70 ppb, which could create new nonattainment areas. If those areas house existing oil and gas systems
then they too could potentially be covered by EPA’s plan for existing operations.
On the call with reporters, Dan Utech — Obama’s special assistant to the president for energy and climate change
— said “we are making clear that we agree that we need to get reductions from existing sources.”
He said the administration is starting “in terms of our regulatory tools” with EPA crafting its rule for new and
modified sources, as those operations are where investments and emissions increases are occurring. The administration
will work with states and industry “in a collaborative way” on existing sources, he added.
EPA is also touting voluntary efforts with industry to reduce emissions, for example its Natural Gas STAR Program
that promotes methane cuts and a proposed Natural Gas STAR “Gold” Program.
According to the fact sheet, “Methane emissions accounted for nearly 10 percent of U.S. greenhouse gas
emissions in 2012, of which nearly 30 percent came from the production, transmission and distribution of oil and natural
gas. Emissions from the oil and gas sector are down 16 percent since 1990 and current data show significant reductions
from certain parts of the sector, notably well completions.
“Nevertheless, emissions from the oil and gas sector are projected to rise more than 25 percent by 2025 without
additional steps to lower them. For these reasons, a strategy for cutting methane emissions from the oil and gas sector is
an important component of efforts to address climate change.”
To address the concerns about methane, the administration announced Obama’s new goal of reducing methane
emissions from the sector 40 to 45 percent from 2012 levels by 2025.
“Achieving the Administration’s goal would save up to 180 billion cubic feet of natural gas in 2025, enough to heat
more than 2 million homes for a year and continue to support businesses that manufacture and sell cost-effective
technologies to identify, quantify, and reduce methane emissions,” the White House says.
The American Petroleum Institute (API) in response says that new hard limits on methane from the industry would
be unnecessary — and could hinder industry’s existing efforts to curb emissions. “As oil and natural gas production has
risen dramatically, methane emissions have fallen thanks to industry leadership and investment in new technologies,”
said API President and CEO Jack Gerard. “And even with that knowledge, the White House has singled out oil and
natural gas for regulation, where methane emissions represent only two percent of total greenhouse emissions.”
“Emissions will continue to fall as operators innovate and find new ways to capture and deliver more methane to
consumers, and existing EPA and state regulations are working. Another layer of burdensome requirements could
actually slow down industry progress to reduce methane emissions,” Gerard said.
Environmentalists, however, have long pushed for direct regulation of the sector’s emissions, and the Sierra Club’s
Executive Director Michael Brune offered some praise for the administration’s announcement. He called the plan to
regulate methane from new and modified sources a “critical step” in reducing GHGs.
But he said the administration “must act quickly to reduce methane emissions from all new and existing sources of
methane pollution in the oil and gas sector, including the transmission and distribution of natural gas.” — Anthony Lacey
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
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Diesel Exhaust
HEI Data May Aid Bid To Replace Older Diesel Engines To Cut Cancer Risk
New research by the Health Effects Institute (HEI) says there is no evidence of carcinogenic lung tumors in rats that
were exposed to diesel exhaust from engines with emissions control technology, which could boost EPA’s efforts to
replace older diesel engines with newer models in order to significantly cut potential human cancer risks.
“These results confirm the great strides that government and industry have made to reduce diesel risk — and argue
for even greater efforts to accelerate the replacement of older diesel engines,” said HEI President Dan Greenbaum in a
statement on the research unveiled Jan. 27. HEI is funded jointly by EPA and the auto industry. Relevant documents are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 177881)
An EPA Office of Transportation & Air Quality official in a presentation last May noted that ongoing research
efforts by HEI and others “underscore the importance of programs to reduce diesel emissions,” particularly from older
engines that are seen as posing a much higher health risk than cleaner, newer diesel engines. EPA has established strict
air rules for highway and non-road diesel engines, and funds programs to replace older engines with newer ones.
HEI’s release of the Advanced Collaborative Emissions Study (ACES) into what it calls new technology diesel
exhaust (NTDE) could provide a further boost to both the regulatory and diesel grant efforts.
The peer-reviewed study exposed lab rats 80 hours a week, for up to 30 months, to emissions from model-year
2007 heavy-duty diesel vehicles, which use new filters and other control technology to reduce emissions. It found that
lifetime exposure to diesel emissions from 2007 engines did not induce tumors or pre-cancerous changes in the lungs of
rats and did not increase tumors related to new technology diesel exhaust in any other tissue.
The study did find a “few mild changes” in the lungs, “consistent with long-term exposure” to nitrogen dioxide,
which is a component of exhaust from new technology diesel that has been “further substantially reduced in 2010- and
later model year engines” that comply with EPA rules, according to an HEI press release.
But the finding of no lung cancer risks contrasts with results of previous studies done on traditional, older diesel
engines (TDE), according to HEI, signaling that NTDE poses much lower risks to humans than TDE. The study aimed
to “test the emissions of new-technology diesel engines to determine not only whether they are achieving the expected
substantial reductions in emission and health effects, but also whether the new control technologies (that include particle
filters and ultra-low-sulfur diesel fuel) are resulting in unintended increases in some components of emissions.”
Earlier reports in the ACES research found “substantial reductions” in particulate matter and other pollutants in the
emissions from EPA’s 2007 diesel engines air standards and stricter 2010 emissions rules.
The study received support from EPA, the U.S. Department of Energy, the U.S. Federal Highway Administration,
California Air Resources Board (CARB), the Engine Manufacturers Association, the American Petroleum Institute, the
Coordinating Research Council (CRC) and manufacturers of emission control equipment.
Greenbaum in his statement said that more than 30 percent of the trucks and buses in use today in the United States
are meeting the new 2007 standards, and that the “trend is growing in Europe as well.”
The ACES study ran engines at a very high rate of potential emissions and exposed the rats for a longer time, to
“make sure” HEI gave the research “every opportunity to show an effect,” Greenbaum told Inside EPA. HEI took these
measures, he explains, “to say if there’s an effect from new engines, can we show it, and we didn’t see anything.”
In an interview with Inside EPA, Greenbaum suggested EPA “might try and restart and strengthen efforts to replace
older diesels” through the agency’s Diesel Emissions Reduction Act (DERA) program that provides grants for diesel
engine retrofit, replacement, idle reduction and the application of fuel-saving technologies.
Still, Greenbaum said he would be “surprised” if HEI’s study spurred EPA to do a new risk assessment of NTDE,
because newer engines are still transitioning onto the marketplace.
EPA issued a 2002 risk assessment deeming diesel exhaust a “likely” carcinogen, but said a lack of data meant it
could not provide a cancer risk value. Environmentalists have urged EPA to reassess the finding based on new data that
they say highlight major risks from TDE. And the International Agency for Research on Cancer in June 2012 upgraded
its classification of diesel exhaust from “probable” carcinogen to carcinogen.
Future EPA actions to reduce diesel emissions include full implementation of present standards for all types of
diesel engines, including new Tier 3 emissions standards for light-duty vehicles, and continuing to reduce emissions
from older diesels built before EPA’s current standards, according to the presentation that OTAQ official Chad Bailey
gave in May 2014 and that was recently circulated to an agency air toxics advisory group.
Additionally, the presentation says EPA has several legacy fleet programs in place to reduce emissions from older
vehicles, including DERA and the SmartWay Transport Partnership, which works with fleets to improve efficiency in the
freight sector and use fuel-saving technologies, which also reduce emissions.
The presentation says EPA is responding to new diesel studies by “continuing to move forward aggressively to
reduce diesel emissions and exposure” while working with HEI on ongoing diesel research efforts — such as the ACES
study, which was conducted by researchers at the Lovelace Respiratory Research Institute in Albuquerque, NM; Litron
Laboratories in Rochester, NY; the University of Texas Medical Branch in Galveston, TX; and the University of
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DIESEL EXHAUST
Louisville in Kentucky, and was overseen by HEI and the CRC.
California is also taking steps to force reductions in emissions from diesel engines, using its Clean Air Act authority
to pursue more-stringent mobile source air rules than the federal government. CARB has in place a rule in place that
requires truck owners to generally upgrade their engines to newer model years and add particulate matter filters in many
cases. Older trucks must be retrofitted with filters or have their engines replaced with model year 2007 or newer
engines. HEI’s study “would reinforce their rationale for having that rule,” Greenbaum said.
One knowledgeable source says EPA might use the conclusions of the new ACES study and a pending HEI diesel
epidemiology review, slated for release later this year, to justify further regulation of nonroad vehicles, such as construction vehicles and locomotives, as these “are not as stringent as highway” vehicles.
There is an “active conversation going on” among EPA, California and manufacturers about “if there should be
another round of those rules to make nonroad engines as clean as highway ones,” the source says.
EPA did not respond to a request for comment by press time. — Lea Radick
Regional Haze
EPA Bid To Revise Haze Air Planning Deadline Receives Mixed Response
EPA plans to revise its deadline for states to submit air quality compliance plans for its regional haze emissions
reduction program and craft additional guidance to ease implementation of the program, prompting support from states
that have struggled to meet existing deadlines but concern from advocates about possible delays to pollution cuts.
The agency says it has recently informally reached out to state air regulators to alert them of its pending work to
amend the deadline for submitting state implementation plans (SIPs) that will detail the pollution cuts states will impose
in order to cut haze-forming emissions. The agency’s regional haze program has faced major delays in implementation,
as well as litigation over various SIPs and federal air plans in states where EPA has rejected SIPs.
An EPA spokeswoman in an email to Inside EPA says on Jan. 13 the agency “began informally notifying state air
agencies of plans to revise the Regional Haze Rule and develop additional guidance that will aid in the implementation
of the regional haze program. The planned revisions will shift the deadline for submitting [SIPs] for the second planning
period, allowing states to integrate regional haze planning with several other ongoing programs.”
The haze program — which aims to cut air pollution and restore visibility in national parks and wilderness areas —
is divided into different air planning periods. The first period required SIPs to be submitted by no later than 2008,
depending on when EPA designated an area as being in “nonattainment” with the fine particulate matter (PM2.5)
national ambient air quality standards (NAAQS), and the current deadline for states to submit their SIPs for the second
planning period is 2018.
Tom Powers, senior policy advisor in EPA’s Office of Air & Radiation, told EPA’s Clean Air Act Advisory Committee in October that the agency is weighing haze program changes, including a potential three-year deadline extension for
submitting revised haze SIPs for the latest phase of the haze program from July 2018 to July 2021, which could allow
states to better plan how their haze reduction strategies will comply with non-haze SIP mandates.
Several states are behind schedule in writing SIPs for the first period, which has resulted in EPA imposing contested
federal implementation plans on those areas after they either failed to meet the deadline to have a federally approved
SIP or submitted a SIP that EPA found fell short of best available retrofit technology (BART) requirements.
EPA now appears to be trying to avoid such a situation in the second planning period by revising the deadline to an
unspecified new date that would aim to better coincide with deadlines states face writing SIPs for compliance with other
agency programs, such as its ozone or PM2.5 NAAQS. Some states have long urged EPA to coordinate the various SIP
mandates, as pollution controls that states might impose on power plants in order to cut NAAQS pollutants could also
be used to reduce haze-forming emissions.
The haze program requires updates to SIPs every 10 years and also mandates that states every five years update
their goals and strategies for meeting requirements to make “reasonable progress” in reducing haze. To determine
reasonable progress, states must take into account four factors: the costs of compliance, time necessary for compliance,
energy and non-air impacts and the remaining useful life of the industrial source of haze pollution.
One Western state official says “we think we know EPA agrees” that the five-year progress reports, currently
required as a SIP amendment, “should be instead something less than SIP requirements.”
SIPs are “problematic” for states in terms of the internal steps required “when in fact this is something more than
[a] check-in,” the source says. Referencing EPA’s plan to shift the deadline and write new guidance, the source says, “I
think they agree with that and are going to somehow address that issue in this package of guidance.”
“EPA is trying to be responsive to our request for them to see if there’s a way to integrate planning requirements for
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REGIONAL HAZE
regional haze with planning requirements for some other programs,” such as the proposed stricter ozone NAAQS and
state air planning requirements for EPA’s proposed greenhouse gas rule for existing power plants.
The source believes a SIP deadline change — potentially from 2018 to 2021 — is a “good idea” as long as it does
not change the next 10-year SIP revision date of 2028. States are required to submit revisions to their SIPs in 2018 in
which they set new progress goals and strategies to meet those goals, and every 10 years thereafter.
But EPA’s plan is drawing initial concern from a source with the environmental group WildEarth Guardians, who
describes any deadline extension for the haze program as “incredibly worrisome.” Implementation of the haze rule has
been “delayed already for years,” the source says, adding “so it’s worrisome that EPA falling back on more delays is
somehow [a] solution to reducing air pollution and protection of irreplaceable landscapes.”
Although the source acknowledges EPA “wants to try to harmonize various Clean Air Act requirements” to make it
easier for states to reduce emissions, “I think that’s wishful thinking.”
The EPA spokeswoman also said in the email that the agency is reviewing the process for states to submit reasonable reports. “Policy and technical guidance will include approaches for determining reasonable progress controls and
will focus on the framework for setting reasonable progress goals focused on controllable emissions. EPA is
currently working to develop the proposal and guidance and will provide further updates on timing,” the spokeswoman says. — Lea Radick
Air Toxics
EPA’s Critics Urge High Court To Scrap Utility MACT As Not ‘Appropriate’
Power sector groups and states opposed to EPA’s landmark utility maximum achievable control technology
(MACT) rule are urging the Supreme Court to scrap it because, they argue, the agency failed to meet a Clean Air Act
requirement based on legal and regulatory precedent to consider costs in determining whether the rule was “appropriate.”
“Every time that the Act calls upon EPA to consider establishing emission standards, EPA is required to consider
cost in some fashion,” argues the Utility Air Regulatory Group (UARG) in a Jan. 20 brief. Relevant documents are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 177731)
The group says the air law requires the agency to consider whether MACT standards are “appropriate and necessary” and to distinguish the two requirements by focusing on health risks for the “necessary” finding and to consider
costs and other factors in the “appropriate” finding — an approach UARG says EPA did not take with the rule.
Similarly, Michigan and other states opposed to the MACT in a separate Jan. 20 brief say EPA failed to give
independent meaning to the word “appropriate” under the air law’s appropriate and necessary requirement. EPA merely
found utilities present air toxics health risks and regulation is therefore “necessary,” the states argue.
The appropriate and necessary determination is a prerequisite to regulating the sector under a unique provision in
the Clean Air Act devoted specifically to utilities, separate from general MACT rules for other sectors.
The Jan. 20 opening briefs in three related cases over the rule — National Mining Association v. EPA, et al., Utility
Air Regulatory Group (UARG) v. EPA, et al. and State of Michigan, et al. v. EPA, et al., aim to overturn the utility
MACT, which sets air toxics standards for power plants. Critics argue that by not considering costs in deciding to
regulate the sector with a MACT, EPA has written a rule that will impose billions of dollars in costs on the sector.
Opponents of the rule are urging the justices to overturn a 2-1 U.S. Court of Appeals for the District of Columbia
Circuit ruling from April that upheld the agency’s decision not to consider costs in the appropriate and necessary
finding. Instead, the court said EPA could justify the rule under the air law due to its health benefits.
But Judge Brett Kavanaugh in his dissent noted that the estimated MACT compliance cost is $9.6 billion per year.
Although the judge noted that EPA predicts the benefits of the rule will far exceed the costs, at $37 billion to $90 billion
per year, Kavanaugh said this cost-benefit approach should have been used by the agency in making the initial finding
on whether it was appropriate and necessary to regulate power plants under air law section 112.
Most of the projected benefits are indirect and flow from reduction of fine particulate matter, a pollutant not
targeted by the rule, but EPA’s critics say the agency cannot rely on such “co-benefits” to justify a rule.
UARG and the states are pushing back on the D.C. Circuit majority’s finding that because the Clean Air Act is silent
on consideration of costs in the appropriate and necessary determination, EPA should have discretion not to consider
costs if it wishes under the Chevron legal doctrine granting deference to agencies’ statutory interpretations.
The doctrine holds that courts defer to federal agencies on regulatory matters where the agency’s interpretation is a
reasonable construction of a statute, and the statute does not directly address the matter at hand.
But Kavanaugh disagreed in his dissent, saying any consideration of what is “appropriate” to regulate must consider
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AIR TOXICS
costs. Industry and allied states rely on his dissent to make their high court case.
In a Jan. 20 merits brief, Michigan on behalf of several states says that EPA failed to give independent
meaning to the word “appropriate.” The agency merely found that power plants present air toxics health risks and
regulation is therefore “necessary,” Michigan argues.
“[I]f, as EPA contends, the word ‘appropriate’ hinges solely on whether there are public-health hazards that could
be reduced — just as it says the word ‘necessary’ does — then the word ‘appropriate’ would be mere surplusage,” the
brief says. It asserts that EPA’s position “deprives Congress’s command that EPA decide whether regulation is appropriate of any meaning and instead allows EPA to impose costs that are wholly disproportionate to their benefits.”
UARG in its Jan. 20 brief makes similar arguments. “Both ‘appropriate’ and ‘necessary’ are terms that call for
qualitative judgments influenced by a broad range of factors,” UARG says.
Because the air law provisions governing air toxics emissions from power plants aim to reduce “residual risk,” —
the health risks remaining from the utility sector after various other Clean Air Act programs have already reduced
pollution and therefore health risks — the appropriate and necessary finding must consider costs as other “residual risk”
programs do, the organization claims.
Further, UARG says that all other air law programs that require emissions controls on sources demand that EPA
take costs into consideration. “Every time that the Act calls upon EPA to consider establishing emission standards, EPA
is required to consider cost in some fashion,” UARG says.
The group says that the D.C. Circuit majority’s reliance on a key Supreme Court case, Whitman v. American
Trucking Associations, is misplaced. In that case, the Supreme Court found that EPA cannot consider costs when setting
national ambient air quality standards (NAAQS), in the face of statutory silence on the issue, which the D.C. Circuit
majority in the utility MACT relied on in part to justify backing EPA’s approach to that rule.
However, UARG now argues that Whitman applies only to NAAQS, and not to regulations such as air toxics rules
placing direct limits on pollutant emissions. For EPA now to ignore costs entirely in the appropriate and necessary
finding, claiming discretion to do so, is a failure of “reasoned decision-making,” UARG says.
EPA’s position is “not only unreasonable, it borders on the irrational. Cost here is an ‘important aspect of the
problem’ that EPA was required to consider in any exercise of reasoned decision-making,” UARG says, citing legal
precedent that prohibits an agency from ignoring an important aspect of a problem when regulating.
UARG cites Kavanaugh’s dissent, where he asserts that “consideration of costs” is commonly understood to be “a
central and well-established part of the regulatory decisionmaking process.” UARG says, “In refusing to consider cost,
EPA erred. The economic consequences of its error are overwhelming.”
Many legal observers expressed some surprise that the high court agreed to hear the case, given the seeming lack of
novel legal issues at hand and the narrow application of the air law provisions governing power plants.
Sources previously said that they believed the rule’s sheer costs and economic implications — blamed by industry
for numerous coal plant closures — motivated the court to grant certiorari. EPA is being defended in the case by
environmental groups that have for years sought air toxics regulations for power plants, which they argue were many
years overdue. — Stuart Parker
Industry Sues EPA Over Revisions To Utility MACT Startup Provisions
Utilities are suing EPA over its recent rule finalizing changes to provisions in its maximum achievable control
technology (MACT) air toxics rule for the sector affecting power plant startups and shutdowns, which created a compliance alternative for utilities who said the provisions in the original rule were too hard to meet.
The Utility Air Regulatory Group’s (UARG) lawsuit filed Jan. 20 with the U.S. Court of Appeals for the District of
Columbia Circuit does not explain the group’s criticism of the rule. It is unclear whether UARG also filed a petition for
reconsideration of the rule with EPA, and UARG did not respond to a request for comment. Relevant documents are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 177748)
EPA’s rule, released Nov. 7 and published in the Federal Register Nov. 19, created the compliance alternative after
industry complained that the original MACT was too onerous.
EPA established the compliance alternative to its existing requirements that utility boilers operate on “clean” fuels
during startup, and activate their pollution controls once certain criteria are met. Clean fuels are fuels with lower
emissions than the coal or oil that is the primary fuel of the boilers in question, and include natural gas and propane.
EPA is allowing an alternative definition of startup and the conditions for when clean fuel must be combusted and
when numeric pollution limits apply under the rule. Utility boilers take time to reach operating temperatures where
pollution controls are effective and emissions can be reliably monitored, EPA acknowledges in the rule.
Power plants that choose to comply with the alternative standards will have to comply with numeric limits within
four hours of the end of startup, defined as “the generation of electricity or thermal energy for use either on site or for
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AIR TOXICS
sale over the grid” and to continue to maximize clean fuel use throughout that period. EPA had previously required that
plants comply as soon as steam for electric generation was generated, with certain exceptions.
Plants that chose to comply with the alternative work practice “will be required to have sufficient clean fuel
capacity to startup and warm the facility to the point where the primary [particulate matter, or PM] controls (e.g., fabric
filters . . . and electrostatic precipitators . . . ) can be brought on line at the same time as, or within 1 hour of, the
addition of the primary fuel (i.e., coal, residual oil, or solid oil-derived fuel)” to the plant, EPA says.
“If a facility does not have sufficient clean fuel capacity to enable initiation and operation of the PM controls within
1 hour of addition of primary fuel, then the source will have to increase its clean fuel capacity or take other action to
comply with the work practice requirements in this final rule,” EPA says.
EPA’s TRI Sees Metals Mining Release Increase Despite Overall Toxics Cut
EPA’s just-released Toxics Release Inventory (TRI) data for 2013 finds an increase in persistently high releases
from the metals mining sector of 15 percent over the previous inventory results from 2012, although the agency says
that overall toxics releases from various industry sectors have been cut by seven percent in the last decade.
The 2013 TRI data released Jan. 14 is the latest annual announcement of the total toxic releases from the various
industry sectors that are required to report their land, air and water releases of chemicals under TRI. Congress enacted the
program in the 1986 Emergency Planning and Community Right-To-Know Act, requiring reporting of more than 650 chemicals from a host of industries. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177527)
“Over the past 10 years, total disposal or other releases to the environment have decreased 7 percent, despite a 15
percent increase from 2012 to 2013. The most recent increase was primarily due to increases in on-site land disposal
from the metal mining sector, as has been the case in previous years,” EPA says in a statement.
EPA says metal mines typically handle large volumes of material and “a small change in the chemical composition
of the deposit being mined can lead to big changes in the amount of toxic chemicals reported nationally.”
Agency officials have said public release of TRI data gives companies an incentive to improve their environmental
performance, though environmentalists have recently pushed EPA to expand TRI to cover additional sectors and
chemicals, and promote use of alternate chemicals. For example, environmentalists are suing EPA to force a decision on
their long-standing petition seeking to add the oil and gas drilling sector to TRI.
In the statement announcing the 2013 analysis, EPA emphasized that the data informs efforts to reduce waste
generation, and that the newest report shows industrial facilities managing most production-generated toxic waste by
recycling or energy recovery rather than by releasing it to the environment.
“We all have a right to know what toxic chemicals are being used and released into our environment, and what steps
companies are taking to reduce their releases to the environment or, better yet, prevent waste from being generated in
the first place,” EPA Administrator Gina McCarthy said. “I’m pleased to see that TRI data show such a commitment to
release reductions and pollution prevention on the part of many industrial facilities.”
While disposal or other releases reported to the agency’s inventory increased 15 percent between 2012 and 2013,
much of the increase was driven by the metals mining industry, which EPA says accounted for 47 percent of toxic
releases across all industry sectors, and 71 percent of all releases to land.
Releases from the sector increased significantly over the last decade, prior to a drop between 2011 and 2012. The
mining industry’s releases jumped again between 2012 and 2013.
Emissions from electric utilities also increased, driving a slight 1 percent rise in air releases overall. From 20122013 releases from electric utilities increased 5 percent, though releases from the sector have declined significantly over
the last decade, by 49 percent, including a 73 percent decrease in on-site air releases.
As a result of the decrease, EPA says the sector now treats two-thirds of waste generated, releasing one-third, while
in 2003, the reverse was true. The agency attributes the long-term decline largely to an increase in scrubbers at utilities,
which destroy acid gases before they are released to the air.
Releases from two other major industry sectors — chemical manufacturing and petroleum refining — held relatively steady between 2012 and 2013. Releases from the chemical manufacturing sector increased 1 percent between
2012 and 2013, continuing a trend of fluctuating only slightly over the last four years.
During the past decade, the sector’s releases dropped 9 percent, EPA says, adding that in 2013, 21 percent of
chemical manufacturing facilities began source reduction activities to decrease use of toxic chemicals and waste
generation. Commonly reported reduction activities include good operating practices, such as better maintenance
scheduling and record-keeping, as well as minimizing equipment and feedstock changes.
Releases from petroleum refineries also held relatively steady between 2012 and 2013, while releases from the
sector decreased 11 percent between 2003 and 2013. The releases comprise only 4 percent of the sector’s waste, with
the rest being managed through treatment, energy recovery and recycling. — Dave Reynolds
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EPA Grants More Time For Public Input On Aluminum Air Toxics Standards
EPA is extending the deadline for public comment — from Jan. 22 to Feb. 6 — on two aluminum production
national emissions standards for hazardous air pollutants (NESHAPs) following requests from industry groups who said
they needed more time to weigh the complex air toxics rules in order to provide adequate input on them.
In two notices published in the Jan. 15 Federal Register, the agency says that it is extending the previous comment
deadline by 15 days in order to “help ensure that the public has sufficient time to review the proposed rule, the supporting technical documents and data available in the docket.”
EPA in the Dec. 8 Register proposed a revised NESHAP for the primary aluminum production sector and a separate
NESHAP for secondary aluminum production. The proposals result from risk and technology reviews (RTRs), which
require EPA to evaluate industry sectors eight years after they are first regulated to see if they still pose health risks
requiring further mitigation, and if better technology exists to reduce emissions.
The revisions to the 2011 primary aluminum NESHAP include new and revised emission limits that would result in
reduced polycyclic organic matter emissions, hazardous air pollutant metals and fine particulate matter.
The rule is based on a revised RTR, newly obtained emissions test data and comments EPA received on the 2011
proposal, including certain revisions to the technology-based standards reflecting MACT performance, EPA says.
Additionally, the supplemental proposes new compliance requirements to meet the revised standards.
EPA is separately proposing its RTR for the 2012 secondary aluminum production NESHAP, which does not float
revisions to the numeric emissions standards based on the agency’s revised RTR analysis. However, it does supplement
and modify several of the proposed technical corrections and rule clarifications in the 2012 proposal.
The rule withdraws a previous proposal to include “affirmative defense” provisions in the rule. An affirmative
defense provides industry with protection against civil liability in the event of a malfunction deemed unavoidable by
EPA, but such provisions have been found illegal by the U.S. Court of Appeals for the District of Columbia Circuit.
The rule would provide alternative compliance options for operating and monitoring requirements for sweat
furnaces, which reclaim aluminum from scrap, and provides a revised cost analysis for compliance testing.
In two Dec. 15 letters to EPA, the Aluminum Association — representing U.S. and foreign-based producers of
aluminum and others — had urged the agency to grant more time for it to weigh in on the rule. Relevant documents are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 177575)
Member companies were “very limited” in their ability to comment over the recent holiday period, the letters said,
adding that “opportunities for needed consultations by corporate staff with technical and compliance staff” located at the
primary and secondary aluminum reduction facilities were to be “constrained” during that time.
Additionally, the letters said that many of the same member company staff will be developing comments on both the
primary and secondary NESHAPs “on a parallel timeline,” and that the “significant technical and regulatory issues
presented in the proposed rule(s) require careful scrutiny and sufficient time to analyze, assess, and digest in order to
develop meaningful comment to the agency on this rulemaking.”
The group asked for a 32-day comment period extension, but EPA’s Jan. 15 Register notices falls short of that
request by instead granting the additional 15 days for input.
Environmentalists, Industry Seek Changes To EPA’s Cement Air Toxics Rule
Environmentalists and the cement industry are urging EPA to make a series of revisions to its recent proposed
revisions to its air toxics rule for the sector, with advocates urging the agency to drop plans they say would weaken air
reporting requirements and the industry seeking clarifications to resolve various unclear definitions.
The agency in a Nov. 19 Federal Register notice proposed changes to its rule setting maximum achievable control
technology (MACT) standards to control air toxics emissions from kilns used in Portland cement production. Among the
changes is EPA’s plan to scrap an “affirmative defense” shielding the industry from liability for some Clean Air Act
violations, following an appellate court ruling that found the defense to be unlawful.
In their comments on the proposal, however, environmentalists and industry only address the rule’s technical
corrections that EPA claims “do not affect the standards” or the costs of compliance with the MACT. The comments are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 177860)
In Jan. 20 comments, law firm Earthjustice says that “EPA’s proposed amendments to the reporting requirements
would weaken them for no reason.”
EPA is proposing to require only that failures to do the inspections be reported to the public, rather than reporting
the results of inspections that are conducted, without justifying the move, Earthjustice says.
Also, “EPA should reinstate the opacity standard” that is stripped from an earlier iteration of the cement MACT in
2010, Earthjustice says. Opacity, a measure of visibility, serves as a measure of particulate matter emissions. EPA
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AIR TOXICS
eliminated the requirement in 2010 because it was then requiring continuous emissions monitoring (CEM) at cement
plants. However, the agency in 2013 then replaced the CEM requirement with less-onerous stack testing and “parametric” monitoring. EPA should therefore reinstate opacity monitoring because “it would provide an important backstop
against harmful bursts of emissions from cement kilns,” Earthjustice says.
Earthjustice further says that a proposed change to the definition of “rolling average” of emissions is technically
inconsistent with other provisions in the rule.
The Portland Cement Association (PCA), representing cement makers, in its Jan. 20 comments, makes a similar
observation, saying, “The proposed definition of rolling average is unclear, in part because it can apply to operating
limits that take various forms as well as limits that take different forms. There is also a problem with the use of the word
‘average’ in specific places where averaging may or may not apply. Lastly, the definition includes a twelve-month
rolling average, but the rule contains no twelve month limits.”
PCA also asks EPA to make an extensive list of other technical corrections. — Stuart Parker
Climate ESPS
EPA’s ESPS Small Business Review Spurs Fear Of Industry ‘Food Fight’
EPA’s planned review of the potential adverse impacts to small business from its greenhouse gas (GHG) rules for
existing power plants could ease requirements on smaller companies at the expense of greater burdens on bigger
utilities, raising the potential that the review could result in a “food fight” pitting larger utilities against smaller entities.
The upcoming Small Business Advocacy Review (SBAR) panel, announced first by acting EPA air chief Janet
McCabe, and launched Jan. 27, will comply with the agency’s requirements under the Small Business Regulatory
Enforcement Fairness Act to consider — and potentially take steps to mitigate — harm to small businesses resulting
from the existing source performance standards (ESPS) for power plants.
EPA declined to pursue a SBAR review for the original ESPS proposal by claiming that the rule imposes mandates
for GHG cuts on states, not businesses. Under the rule, EPA would set overall GHG reduction targets for states and then
defer to them on crafting plans for reducing emissions and meeting the targets. “After emission guidelines are promulgated, states establish standards on existing sources, and it is those state requirements that could potentially impact
small entities,” according to the agency’s proposal.
EPA is also crafting a rule on how it would impose a federal implementation plan (FIP) to implement the ESPS in
states that refuse to write compliance plans, and will hold the SBAR review for the FIP rulemaking. EPA’s original
rationale for not conducting an SBAR panel for the proposal likely leaves it little room to avoid a panel for its pending
FIP proposal, as a federal plan would impose direct requirements on regulated entities.
McCabe told a Jan. 7 press call that the agency would convene the SBAR panel for the FIP rulemaking this month,
giving power companies an opportunity to try and influence the policy.
Although industry sources say the review gives them a chance to try and soften some of the ESPS’ impacts, there is
some wariness in the industry that they any such relaxations will lead to greater GHG reduction burdens on larger
utilities to compensate.
“Whatever we put forward or our members put forward [in the SBAR panel], we would certainly want it to get done
in a way that doesn’t make it a zero-sum game,” one industry source says. “It’s a little unfair for them to ramp up the
burden on others if they were to lighten the burden” on small utilities.
The source says industry suggestions would seek to ensure the panel “doesn’t turn into an industry food fight, but
turns into a real way of helping to address what are some very significant problems.”
The National Federation of Independent Business (NFIB) previously criticized EPA in Dec. 1 comments for not
convening an SBAR panel on the ESPS. NFIB, which has joined litigation filed by states and the coal industry to block
the rule, argued the agency incorrectly determined the proposed ESPS would not substantially impact small business.
“Even the proposed rule acknowledges its impact for small businesses, including higher energy prices,” NFIB says,
noting the rule’s estimates that average retail energy prices would increase between 6-7 percent by 2020. Relevant
documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177658)
On the announcement that EPA would conduct an SBAR panel, an NFIB source says, “While we are glad they are
doing a panel at this stage, this is evidence they should have done a panel for the initial rule.”
SBAR panels are held jointly with the Small Business Administration once EPA determines a proposed rule
would have a “significant economic impact on a substantial number of small entities,” which can include businesses,
nonprofits or local government agencies.
A public power source says the ESPS proposal — crafted under its Clean Air Act section 111(d) authority —
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acknowledges the potential for disproportionate impact on small utilities.
EPA notes that “in formulating their compliance plans, states will be in a position to recognize the distinctive
attributes of smaller utilities — and, of course, may consider participating in integrated multi-state compliance strategies
to increase the flexibility and cost-saving opportunities that would be available to the covered” power plants.
While municipal utilities and cooperatives with smaller fleets might have limited ability to re-dispatch to loweremitting generation among their own units, EPA says, those entities can use long-term capacity planning strategies to
reduce GHGs, and in many cases could take advantage of tax-advantaged or subsidized interest rates.
The source points to utilities that might have one generating station that, to meet its share of a state’s compliance
obligation, would have to shutter or significantly curtail operations, while also buying higher-priced replacement power.
“That could have a disproportionate adverse impact on that utility because of its size,” the source says.
While the options crafted in the pending SBAR panel would be tailored to EPA’s FIP, the source says EPA could
also include them in its final ESPS guidelines for states. “We’re hopeful, for example, that they would say where you
have entities like that — EPA in essence signals that it would be OK for a state to include in its compliance plan some
relief for that entity,” the source says.
Under that scenario, “the compliance obligation is not necessarily spread on a pro rata basis across every entity,”
the source says. Smaller utilities might be able to “run that plant for a longer period of time, get a bit more of its
remaining useful life out of it.”
Similarly, a small utility might be required to make a smaller-than-usual investment in renewable or energy efficiency programs, the source says. “With the FIP, EPA might do the same thing,” the source says, adding that EPA would
tell states, “If we have to FIP you, when we come in then we’re mindful of small utilities in that circumstance. Therefore, we would treat them a little differently.”
Asked if such an approach would comport with the Clean Air Act, the source says, “Given the length to which EPA
has extrapolated their authority already under 111(d), yeah. Where there’s a will, there’s a way. If they wanted to do that,
I think could find their way clear to do that.”
The source notes that section 111 of the air law — unlike many other sections of the statute — specifically says
regulators must consider costs when setting performance standards. “If you can still make the state’s goal by putting out
a compliance plan that also provides a little bit of cost relief for small utilities . . . that would be perfectly legal.”
Beyond its recent announcement that it would convene the SBAR panel, EPA has not released details on when
the panel would begin.
“I would assume they would start that process very, very soon if they’re going to propose a model federal implementation plan before they get to finalizing the 111(d) or (b) regulations,” the first source says. “We’re sort of eager to
hear more ourselves.”
Generally, the source welcomes any ideas that could mitigate compliance burdens on small utilities, adding that the
model federal plan stems from comments from many stakeholders seeking an outline of what such a plan would look
like.
But due to the early stage of the process, the source could not point to specific options that could be raised in the
SBAR panel but said that generally, discussion would focus on the ESPS’ interim and final targets. “The fact that EPA
has gone outside the fenceline is certainly one of the drivers of the fact that we’re seeing some heavy impacts on small
entities,” the source says.
The source notes that utilities with only one or two power plants — especially if they have recently installed
pollution controls for other EPA rules — will “find themselves in a really, really difficult situation” of having to pay off
existing debt for a facility that might be shuttered early, as well as finding replacement power. — Lee Logan
EPA Outlines Slew Of Procedural Flaws With States’ Suit Over GHG ESPS
EPA is outlining a slew of procedural flaws in a suit filed by 12 states over the agency’s proposed greenhouse gas
(GHG) standards for existing power plants, arguing the suit should be dismissed because the states lack legal standing
and that the court lacks jurisdiction to hear the novel challenge because the proposed rule is not yet final.
The agency, in its most expansive discussion to date of the complicated legal issue, also argues in a Jan. 23 brief
that the states, which are led by West Virginia, have not “cornered the market” on the meaning of a critical Clean Air Act
provision authorizing EPA’s existing source performance standards (ESPS), and that the agency should get the first
chance to interpret the “ambiguous” statutory language. Relevant documents are available on InsideEPA.com. See page
2 for details. (Doc. ID: 177854)
Instead of targeting the proposal directly, the states are seeking to target a lapsed settlement agreement between
EPA and another group of states that was driving development of the ESPS. In two related cases, coal mining firm
Murray Energy Corp. is arguing that EPA has already made a “final” decision that it has legal authority, and that the
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CLIMATE ESPS
proposal should be blocked by the All Writs Act.
All three suits focus on the thorny legal question of whether the agency may regulate GHG emissions from existing
power plants under section 111(d) of the Clean Air Act if it is already regulating their air toxics under section 112 of the
air law.
The question is complicated because House and Senate amendments to section 111(d) on the issue were never
reconciled in a conference committee before the 1990 air act amendments were signed into law.
The Senate amendment would explicitly allow EPA’s proposed ESPS by limiting section 111(d)’s “112 exclusion”
to pollutants already regulated under that section. The House amendment could be read as prohibiting it because the
focus of the exclusion is on source categories, not pollutants.
The issue is further complicated because the Supreme Court is currently considering a case, National Mining
Association, et al., v. EPA, et al., that challenges the legality of EPA’s air toxics rules for power plants, litigation that
could eliminate the states’ legal argument if the high court were to vacate the rule — though few observers expect the
high court to go that far.
EPA is seeking to dismiss the suit before a U.S. Court of Appeals for the District of Columbia Circuit panel considers the merits of the petition to block the rule, offering a handful of reasons why the case should be dismissed on
procedural grounds. It says that regardless of how urgent the states believe their concerns are, “they have chosen both
the wrong context and the wrong time in which to raise them.”
EPA says West Virginia and its allied states lack standing to sue because the 2010 settlement agreement — which
set deadlines for EPA to propose and “take final action on” power plant GHG rules — did not cause them an injury
because the agreement did not limit EPA’s ability to ultimately decline to issue rules and did not dictate the form or
content of the rules.
EPA notes several court rulings, including the 2013 D.C. Circuit opinion in Defenders of Wildlife v. Perciasepe
that said “non-settling parties lack standing to seek judicial review of settlements that set schedules for federal
agency rulemaking without limiting the agency’s administrative discretion concerning the substance of the final
action.”
Further, EPA says that states’ injury from expending staff time and resources to prepare for state compliance plans
is “self-inflicted” because EPA is not requiring any state to conduct planning and is only “encouraging” such efforts.
EPA adds that the states cannot show how vacating the settlement agreement would redress their injuries, because
the ESPS is part of President Obama’s Climate Action Plan and would have been proposed “whether or not this Agreement existed, or were vacated.”
Regarding other procedural hurdles, EPA says the agreement is not a “final action” subject to court review
because it does not require a final GHG rule, and the challenge is moot because the pact’s deadlines have long since
passed. It also says the challenge is untimely and that the claim is not ripe for review because the proposal is not final.
“Reviewing the merits of this case, at this time, would lead the Court into the very pitfalls against which it warned”
in the 2012 D.C. Circuit case, American Petroleum Institute v. EPA. In that case, the court said it declined to review
tentative agency positions because “the integrity of the administrative process is threatened by piecemeal review of the
substantive underpinnings of a rule.”
EPA says its legal memorandum outlining its view of the statute is tentative and subject to public comment, and that
the air act requires it to consider and respond to any significant comments on the proposal.
Industry groups have been split on the procedural questions in the ESPS suits, with a coalition of manufacturing
groups in a recent amicus filing in the Murray litigation supporting the underlying legal argument while taking “no
position on whether this Court has jurisdiction over petitioners’ suit.”
Other industry groups representing the coal, small business and power generation sectors, however, in recent filings
in the Murray litigation offer such procedural support.
West Virginia and other critics say that a “literal” reading of section 111(d) of the air law prohibits the GHG
regulation because EPA regulates utilities’ mercury and other air toxics.
But EPA in its new brief says that West Virginia must prove that no other interpretation other than its own “could
possibly be reasonable. . . . They cannot.”
EPA cites the Supreme Court’s Chevron precedent, which gives deference to agencies’ reasonable interpretations of
ambiguous statutes. The agency says the section is clearly ambiguous in part because it is “a grammatical mess” that is
“[o]verburdened with dependent clauses and lacking in punctuation.”
EPA says the states’ reading of the House amendment — focused on source categories rather than pollutants
regulated under section 112 — “would largely eviscerate EPA’s authority under” 111(d) because EPA regulates 146
source categories under the air toxics section.
“Even if Petitioner’s convoluted take on section [111(d)] is a possible interpretation of that text, it is hardly the only
possible interpretation,” EPA says, arguing the House amendment alone is subject to multiple readings, and the exist-
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ence of two different amendments “further complicates the task of interpreting the provision.”
EPA notes that the “112 exclusion” modifies the phrase “any air pollutant.” Citing the Supreme Court’s recent
ruling in Utility Air Regulatory Group v. EPA, which narrowed the scope of EPA’s GHG permit program, the agency
notes that phrase is routinely given a “context-specific meaning.”
“Here, context suggests that the phrase ‘any air pollutant’ ‘emitted from a source category which is regulated under
section [112]’ should be understood as referring only to any hazardous air pollutants, since hazardous pollutants
are what the section [112] program addresses,” EPA says.
EPA adds that it is “in the middle of the rulemaking process” and has not yet determined how best to reconcile the
amendments and interpret the section. “But it is at least plausible that EPA could reach a reasonable final conclusion that
the statute allows it to regulate [carbon dioxide] emissions from power plants, whether because the House amendment should
be interpreted as having the same effect as the Senate amendment, or because the two amendments can be reconciled, or for
some other reason. Separation of powers principles require that EPA be given that chance,” EPA says. — Lee Logan
Ozone
Ahead Of EPA Hearings, Groups Debate Science For Stricter Ozone NAAQS
Ahead of EPA’s public hearings on its proposal to tighten its ozone air standard, environmentalists and industry
officials are debating the science underpinning the agency’s plan, with advocates touting data to bolster EPA’s proposal
while industry is emphasizing research that it says justifies retaining the existing ozone standard.
Groups will make their competing claims over the merits of EPA’s proposed rule at three hearings in the coming
days, taking place Jan. 29 in Washington, D.C., and Arlington, TX, and Feb. 2 in Sacramento, CA.
EPA late last year proposed to tighten the 2008 ozone national ambient air quality standard (NAAQS) of 75 parts
per billion (ppb) down to a range between 65 and 70 ppb, with a final rule slated for release in October.
The agency based its decision on a review of the latest science on ozone’s impacts on public health and welfare, and
on input from its Clean Air Scientific Advisory Committee (CASAC) that recommended a NAAQS in the 60 to 70 ppb
range in order to adequately protect human health from adverse impacts of ozone pollution.
Sources note that EPA’s proposal and eventual final rule will be based on scientific information that was considered
in the review of the standard, and that research on ozone published since then cannot guide the final rule. “EPA closed
the door on what new research is under consideration” with the publication of the Integrated Science Assessment (ISA)
— a broad review of policy-relevant ozone science — in February 2013, a public health advocate says.
According to the current ozone ISA published in February 2013, literature searches for it focused on studies
published from 2005 — the closing date for the previous scientific assessment — through July 2011.
Groups will use the upcoming public hearings, as well as written comments to EPA that are due by March 17, to
promote existing data they believe boost their claims on the NAAQS. “[W]e’re building the same case that CASAC
provided,” says the public health advocate, who plans to speak at a hearing.
There is “plenty of good evidence” that makes the case for tightening the 75 ppb ozone standard, the source says,
such as evidence presented in EPA’s policy assessment (PA) as part of its NAAQS review. The PA outlines the conclusions on ozone science and options for revising the standard. For example, the PA cited multiple epidemiological studies
of U.S. and Canadian cities that premature deaths from ozone occur even if the cities would have met alternative ozone
standards of 70 and 65 ppb, and far fewer deaths at meeting a standard of 60 ppb.
In addition to the science, which an environmental group attorney says is “compelling,” EPA at the hearings will
hear from professional medical societies, such as the American Thoracic Society, that have backed a standard as strict as
60 ppb. “I think you’re going to see a huge number of comments from ordinary folks out there who have asthma . . .
who are demanding better protection for themselves” the source says.
Industry groups that oppose a tightening of the ozone standard plan on reiterating their stance at the public
hearings. They will tout industry-backed research that they say bolsters their position, and also raise questions about
EPA’s and CASAC’s conclusions on science in the ISA that led to calls for a stricter NAAQS.
There “may be opportunities for people to reanalyze information or present existing information already included in
the underlying regulatory impact analysis,” says an industry source.
Industry opponents of EPA’s proposal continue to analyze the ISA and its information on risks of ozone pollution,
“trying to digest what is included in there and implications for the general public and for any specific subset community,” such as the elderly, young or environmental justice communities.
And they will use the hearings to push studies that refute claims raised by environmentalists and public health
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advocates over the need for a more stringent NAAQS, including a study written by industry consultant Julie Goodman
and co-authors. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177476)
One industry lawyer also reiterates arguments that critics of a stricter standard made before CASAC, for example
comments submitted in March by industry consultant Ann Smith on behalf of the Utility Air Regulatory Group, representing the power sector. Those comments “called into question a lot of statistics EPA used” in its February 2014 draft
of the Health Risk and Exposure Assessment (HREA), another key scientific document for the NAAQS review.
For example, Smith says long-term mortality risk estimates are subject to a “very large” sensitivity not highlighted
in the draft HREA. She writes, “rather than discussing the implications of this large sensitivity when risks are considered
at the regional level, the HREA dismisses them.” She also says the majority of EPA’s risk estimates are “irreducible,”
among other criticisms designed to undermine the case for a stricter ozone limit.
Although EPA by law cannot consider costs when setting the level of NAAQS — it must do so based solely on
scientific data on health risks from a pollutant — the lawyer says that industry officials and others critical of EPA’s
ozone proposal will use the hearings to also warn about massive costs from a stricter NAAQS.
A second industry attorney also expects comments at the hearings on concerns about setting a standard so strict it
would be at the same level as naturally occurring background levels of ozone.
The concern among industry and some states is that setting a NAAQS that is at or close to background levels of
ozone in some areas will make the standard impossible to meet in those locations, because background ozone cannot be
regulated or reduced. As a result, those areas will have no options to curb ozone and come into attainment with a stricter
standard, and risk sanctions including the threat of withholding of federal highway funds.
The second industry attorney cites a Nov. 25 letter that Utah Republican Sens. Orrin Hatch and Mike Lee and Utah
Republican Reps. Rob Bishop, Chris Stewart and Jason Chaffetz wrote to EPA Administrator Gina McCarthy that
outlined their concerns with the background ozone issue.
“[We] ask you and your staff to place a primary emphasis on ozone background levels in the intermountain West as
the Agency moves forward with the ozone review, and to make it clear that background levels will be a significant
consideration in determining whether and how to revise the standard,” says the letter. — Lea Radick
Particulate Matter
EPA Defers PM2.5 Air Standards Attainment Designations For Three States
EPA is deferring a decision on issuing fine particulate matter (PM2.5) national ambient air quality standards
(NAAQS) attainment designations for three states while it waits for additional air monitoring data to inform its eventual
decision, but is moving to designate 14 areas in six other states as being in NAAQS nonattainment.
In a Jan. 15 Federal Register notice, EPA issues final designations for areas being out of attainment with the 2012
PM2.5 NAAQS limit of 12 micrograms per cubic meter (12ug/m3), triggering the need for affected areas to craft state
implementation plans detailing the pollution cuts they will impose to reduce PM2.5. Relevant documents are available
on InsideEPA.com. See page 2 for details. (Doc. ID: 177524)
However, EPA is deferring designation of more areas than initially foreseen, leaving these areas in regulatory limbo
pending better air quality monitoring data. “The ten deferred areas include eight areas in the state of Georgia, including
two neighboring counties in the bordering states of Alabama and South Carolina, the entire state of Tennessee, excluding three counties in the Chattanooga area, and the entire state of Florida,” EPA says.
“For these areas, the EPA believes that additional air quality monitoring data will result in complete and valid data
sufficient to inform a designation determination,” the agency says.
EPA in the notice says that it had a statutory obligation to issue final designations in December 2014. The agency
designates areas lacking sufficient data as “unclassifiable,” meaning EPA cannot determine attainment with the data
provided, or “unclassifiable/attainment,” where data is lacking but EPA presumes attainment. Such areas avoid a
nonattainment designation. But the agency in its notice also says it has the authority to defer designation under Clean
Air Act section 107(d)(1)(B), a provision that allows up to a one-year delay.
All areas designated “nonattainment” will be placed in the “moderate” nonattainment category on EPA’s scale of
nonattainment severity. Pollution control requirements become tougher, but attainment deadlines are also extended, with
worsening attainment status, which ranges from “marginal” to “extreme.”
EPA has further classified the entire state of Illinois as “unclassifiable” for PM2.5 NAAQS attainment due to
perceived failings in the state’s data processing, pending resolution of the issue by the agency and the state. The St.
Louis area, including part of Missouri and Illinois, is also found to be unclassifiable.
Of the 14 areas classified nonattainment, five are in Pennsylvania, one (Louisville) includes part of Kentucky and
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PARTICULATE MATTER
Indiana, one (Cincinnati-Hamilton) includes part of Ohio and Kentucky, two are entirely in Ohio, four are in California
and one is in Idaho — mirroring the proposed version of the designation for those areas.
The agency used 2011-2013 air quality monitoring data when making its designations, but leaves open an option for
states to seek to change their designation based on 2014 air quality data if they have it available.
States have until Feb. 27 to submit full-year 2014 data, certified for quality, to EPA so that the agency can change
their attainment status before the published rule becomes effective on April 15.
Congress
McCarthy Pushes Major EPA Rules Despite Budget Threats, GOP Attacks
EPA Administrator Gina McCarthy is pushing ahead with major EPA climate and water rules despite push-back
from the Republican Congress and the threat of fiscal year 2016 budget cuts, saying existing FY15 funding will ensure
release of EPA’s power plant climate rules and other policies and that GOP attacks do not affect her work.
During a Jan. 16 roundtable discussion with reporters in her office at EPA headquarters, McCarthy said that in the
coming months the agency plans to finalize its plan to regulate greenhouse gas (GHG) emissions from new and existing
power plants, as well as a rule to define the scope of the Clean Water Act (CWA), and will propose a recently announced
rulemaking to reduce the GHG methane from new and modified oil and gas drilling.
McCarthy said her other top priority in the coming months is work on a proposed second round of heavy-duty
vehicle GHG and fuel economy rules, developed jointly with the Department of Transportation. The standards are
widely expected to at least seek comment on first-time regulation of truck trailers.
Asked how tight EPA funding and possible budget cuts under the GOP Congress might affect the rulemaking
agenda, McCarthy said, “I think we’re confident all of what I’ve discussed today, most of it’s going to be completed in
fiscal year 15 with the exception of the heavy duty vehicle rule, [which is] going to take a little longer.”
Despite the threat of budget restrictions, she added, “EPA’s always had budget challenges as every federal agency
has, but we’ll continue to do our job. Clearly we need to prioritize well, but all of these issues are a significant priority,
not just to us, but to the president. I think that we will get our job done no matter what.”
Republican critics of EPA have faulted the power plant GHG rules, CWA jurisdiction rule and others as regulatory
overreaches that will impose massive costs on the economy. Some lawmakers are vowing to pursue aggressive oversight
of the agency and potentially use appropriations riders to block various EPA regulations.
McCarthy said of the GOP criticisms of EPA, “I don’t think it does change my job. I’m operating within the laws
that Congress has given to me. That is their purview, but my job is to implement them within the authority they’ve given
me and do it in the best way I can consistent with the law and science. I’m just going to keep doing that, and they’ll
make their decisions, and I’ll certainly be talking to Congress, I would assume, in many hearings.”
“And frankly it’s my honor to do that. It’s a part of the job that sometimes you have to do an awful lot of prep work,
but you have to remind yourself who’d have thunk you’d have the honor of standing there giving testimony in front of
Congress. I’ll be honored to do it, and I’ll be honored to defend the agency and the work that we do.”
She added, “I can’t say I’m a person who worries a lot. I’m not. I try to do what I think the law tells me and what
the direction the science is heading so that I can do my job well. I have complete confidence in the work that we’re
doing . . . I’m very confident that the people in this country want us to keep doing our job just as we’re doing it.”
McCarthy said, “We’ll see how difficult that [budget] process is,” but EPA “will make our case” at hearings on the
FY16 budget proposal due in the coming weeks. “I am not seeing the American public have a taste for rolling back
public health protections, and I have never seen a Republican stand up and say they don’t want safe drinking water and
they don’t care about protecting their families, and that is the mission of EPA.”
For EPA’s agenda, “the president clearly has our back,” she said.
The agency’s plans for the next few months include the recently announced proposed rule due this summer to
set first-time direct limits on methane from new and modified oil and gas drilling in addition to limits on ozone-forming
volatile organic compounds (VOCs), and guidelines on curbing existing drilling operations’ emissions. The effort aims
to help achieve President Obama’s goal of reducing oil and gas methane emissions 40 to 45 percent from 2012 levels by
2025.
Environmentalists have urged the agency to also impose methane GHG limits on existing operations, citing language in the Clean Air Act that they say requires development of an existing source performance standard (ESPS) for
any emissions source category for which EPA issues a new source performance standard (NSPS).
Asked about the potential legal duty for the agency to issue existing source rules, McCarthy said, “There is no time
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
21
CONGRESS
deadline in the statute for us to look at existing. We felt it was entirely appropriate to start with what we knew we could
deal with effectively, which are the new sources. We know what they can do, they can build it to best management
practices and good technologies . . . we’ll have that back-and-forth with the industry.”
She said EPA is first focusing on new sources “so that we can not allow the emissions to increase, which is why
we’re getting at the new sources, but also eventually achieve the same kind of reductions in the existing sources.”
If the pending rule for new and modified drilling — with a final version due in 2016 — achieves sufficient cuts in
methane from the sector, McCarthy suggested rules for existing sources might be moot. “The most important thing to
realize is if existing sources aggressively reduce their emissions then it’s not clear that there will be cost-effective
reductions that will necessitate regulation on existing facilities. But most importantly I think, this sends a signal to the
entire sector and the investment community” on these practices, she told reporters.
The mix of voluntary and regulatory steps in the methane plan “continues to leave open work with industry to see whether
or not they continue to reduce emissions from existing [sources] to the point where regulations are unnecessary or to the point
where we can identify where those gaps are,” she said, while stressing that EPA continues to regulate the sector’s VOCs.
Another major climate plan due this summer is the release of the final ESPS and NSPS for reducing GHG emissions from power plants. EPA recently announced that it would delay issuance of the rules to a combined summer
release, and McCarthy reiterated that the agency is on track to finalize the regulations “mid-summer.”
EPA continues to assess the more than 3.9 million comments it has received on the rule, and McCarthy vowed that
the final regulations will pay attention to those comments and make “economic sense.”
The pending heavy-duty vehicle rule is “a complicated rule,” the administrator noted, but said that the agency has
held “numerous discussions” with the industry to craft a rule that is practical and effective. The proposed version of the
rule, which is due for release this spring, will be a “big deal for emission cuts.”
The major non-climate rule that EPA is advancing in the coming months is the final version of the rule to define the
scope of the CWA, slated for release in April. The rule aims to resolve competing Supreme Court tests for establishing
jurisdiction that have left uncertainty about which waters are subject to the law.
EPA’s critics argue that the rule vastly extends the law’s reach beyond what Congress intended, but the agency has
defended the regulation as necessary to resolve confusion about jurisdiction.
“The clean water rule has been challenging to us,” McCarthy said, noting the hundreds of thousands of comments
received on the rule, many of which have been “vocal and visible.”
She said there is some “confusion” over what EPA is proposing, but added, “I cannot tell you how important I think
this rule is simply for protection of drinking water. We believe that there is too much uncertainty out there today about
what waters actually impact drinking water and how we make sure that we’re protecting those under the Clean Water
Act. . . . [We] will try to do a better job at writing this in much more plain language.”
McCarthy said she has learned the importance of talking to states and other stakeholders about the rule to clarify
EPA’s intent, and the administrator will visit key states in the coming months to discuss the rule.
The administrator also said that for all of the rules that are a priority for the coming months — the power
plant GHG rules, the heavy-duty truck rule, the methane plan and the CWA rule — she will tout their economic benefits.
“Many people have asked me why I keep talking about the economy,” she said. “Just like James Carville said, it’s
all about the economy. I think the environment is all about the economy. I am going to keep making an economic
argument as I roll out each and every one of these rules.” She added, “I think this agency has proven that the environment can be bettered and we can improve public health” with benefits such as job creation.
On the economic impact of falling oil prices and whether that is affecting EPA’s rulemaking plans, McCarthy said
the low prices would not have a significant impact on future planning as prices often fluctuate.
Asked about the controversial Keystone XL pipeline — which advocates have warned will lead to GHG emissions
increases — McCarthy said EPA is waiting to receive from the Department of State a guidance document on a “national
interest” determination process that is key to the administration’s review of whether to approve the project. After that,
EPA will weigh whether to file comments on the final environmental impact review of the pipeline.
Meanwhile, she sidestepped a question on whether she thinks pending GOP efforts to move a bill revising EPA’s
coal ash disposal rule have merit, instead saying EPA would provide advice to Congress if asked.
She promised release in the coming months of EPA’s delayed final 2014 renewable fuel standard (RFS), which the
agency has suggested it will combine with its upcoming proposed 2015 RFS fuel production targets.
Finally, McCarthy said that sometime between February and March EPA will release long-awaited individual
studies on the potential relationship between hydraulic fracturing and drinking water.
McCarthy did not mention as an imminent priority the agency’s proposal to tighten its 2008 ozone national ambient
air quality standard from 75 parts per billion (ppb) down to a range between 65 and 70 ppb. But she said the only reason
it was not included in her list of priority rules is that the final will not come out until October. She said it is a “significant public health rule” on which EPA is focusing “considerable attention.” — Anthony Lacey
22
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
CONGRESS
Inhofe Reduces Senate EPW Subcommittees To Avoid Jurisdictional Fights
Sen. James Inhofe (R-OK), chairman of the Environment & Public Works Committee (EPW), has cut the panel’s
subcommittees from six to four in order to avoid jurisdictional fights between members over EPA oversight, which he
vows will include scrutiny of EPA’s power plant climate rules and its potential stricter ozone standard.
At a Jan. 21 EPW business meeting, all the members of the committee approved the changes to the subcommittees
as well as a separate revision to EPW’s rules that says seven panel members must be present including two from the
minority party in order to constitute a quorum or to approve subpoenas or committee resolutions. Under the prior EPW
rules, a quorum consisted of a third of the committee members with at least two from the minority.
Speaking to reporters after the business meeting, Inhofe said the reduction in subcommittees was necessary to
reduce the potential jurisdictional quarrels between the various panels. The new structure with fewer subcommittees
reflects how the GOP organized EPW the last time the party was in the majority, Inhofe said.
In the 113th Congress the six subcommittees were: Transportation and Infrastructure; Clean Air and Nuclear Safety;
Superfund Toxics and Environmental Health; Water and Wildlife; Green Jobs and the New Economy; and Oversight.
Inhofe’s rule change abolishes the green jobs subcommittee and the stand-alone oversight panel.
Following EPW’s approval of Inhofe’s change to the committee rules, the four subcommittees in the 114th Congress are: Transportation and Infrastructure, chaired by Sen. David Vitter (R-LA); Clean Air and Nuclear Safety, chaired
by Sen. Shelley Moore Capito (R-WV); Superfund, Waste Management and Regulatory Oversight, chaired by Sen.
Mike Rounds (R-SD); and Fisheries, Water and Wildlife, chaired by Sen. Dan Sullivan (R-AK). Relevant documents are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 177744)
Inhofe in his opening statement echoed recent criticisms of the administration’s environmental rules, saying, “I
strongly believe the President’s misguided agenda on climate change has led to an onslaught of new regulations that is
endangering future job creation, energy independence, and the reliability of our power grid.”
Earlier this month, Inhofe said that he would use his position as EPW chairman to try and block EPA’s power plant
greenhouse gas (GHG) rules and other policies, but would advance toxics law reform.
Asked by reporters for his reaction to the recent report from the National Oceanic and Atmospheric Administration,
which found that 14 of the 15 warmest years on record have all fallen in the first 15 years of this century, Inhofe
responded that changes in climate are part of 30-year cycles that predate the current GHG debate and that “everyone
likes to ignore.” Environmentalists have said the report underscores the need for climate rules.
EPW ranking member Sen. Barbara Boxer (D-CA) countered Inhofe’s statement in her remarks at the meeting,
saying that, “I come from a state where we have an incredible climate change program, and we are thriving.”
Inhofe said EPW will scrutinize EPA’s proposal to tighten its ozone national ambient air quality standards
(NAAQS) from the existing 2008 limit of 75 parts per billion (ppb) down to between 65 and 70 ppb.
“We will be looking at NAAQS,” he said, noting that under the proposed tougher standard, more than 600 counties
could be classified in “nonattainment” with the standard, including all 77 counties in his native Oklahoma.
Nonattainment status requires states to impose potentially costly pollution controls on industry, or risk losing federal
highway funds if they do not attain the NAAQS. Inhofe in his opening statement said the proposed stricter ozone
standard would cost $270 billion in compliance costs, and result in the loss of more than 7 million jobs.
EPW’s first hearing will be held Feb. 4 jointly with the House Transportation & Infrastructure Committee to
analyze EPA’s proposed rule to define the Clean Water Act’s scope.
Inhofe told reporters the water rule will be of paramount importance to farmers. Farmers are in general disadvantaged by EPA regulations, he claimed, but “the one that is most difficult for them to deal with, is the waters of the United
States.”
“It is a huge issue to a lot of people around the country, and it is a huge issue with me,” Inhofe said.
EPW will also conduct oversight of Endangered Species Act implementation, Inhofe said in his statement. “It is
time to restore local control to conservation efforts and expose ‘sue-and-settle’ tactics that are abusing the program,” he
said, saying that over 40 years the program “has demonstrated a 2% success rate.”
“Sue and settle” is a term used by EPA’s critics to describe binding legal settlements setting deadlines for EPA rules
driven by environmentalists’ litigation, which excludes input from industry groups.
Environmental groups say the term lacks any meaning, however, because the lawsuits at issue merely seek to
enforce the existing law, as for example when EPA misses a statutory deadline to regulate, then agrees to a timetable for
action once sued. And they point to a recent Government Accountability Office report that found that deadlines pacts the
GOP has criticized did not have a major impact on EPA’s agenda.
Although Inhofe in his opening statement criticized a host of EPA air, climate, water and other rules, both he
and Boxer emphasized a determination to craft a bipartisan Senate transportation reauthorization bill.
Inhofe described transportation as the biggest immediate issue facing the panel. “We need to do what we did in
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
23
CONGRESS
2005,” Inhofe told reporters, referring to the last time Congress approved a long-term bipartisan transportation reauthorization bill.
While a series of short-term bills have been passed since, “we need to have at least a five-year bill this time, and I
think we will,” Inhofe said, expressing confidence that House lawmakers would respond positively to an eventual Senate
bill. Inhofe said during the business meeting that the conservative position is in fact to pass a long-term bill, because
stop-gap measures are significantly more expensive, and conservatives can push for reforms in a long-term measure.
Boxer at the business meeting said that she was worried that House lawmakers don’t understand the urgency of the
issue, adding that uncertainty over the fate of the highway trust fund, due to expire in three months, is “dangerous.”
“I am a little concerned that they don’t sense that urgency” in the House, Boxer said. — Stuart Parker
Republicans, Democrats Name New Leaders For EPA Spending Panels
Republicans and Democrats have named the lawmakers that will serve as chairmen and ranking members of the
House and Senate appropriations panels that oversee EPA’s spending bill, just weeks ahead of President Obama’s fiscal
year 2016 budget proposal that sources doubt will result in major funding cuts or boosts to EPA.
In a Jan. 21 release, House Appropriations Committee ranking member Nita Lowey (D-NY) named Rep. Betty
McCollum (D-MN) as the head Democrat on the panel responsible for interior, environment and related agencies that
oversees EPA, replacing former Rep. James Moran (D-VA), who retired at the end of the 113th Congress.
Republicans had previously announced that Rep. Ken Calvert (R-VA) would continue to serve as the chairman of
the interior panel, giving him a prime slot to influence EPA policy through the FY16 spending bill.
Meanwhile, Senate Appropriations Committee ranking member Barbara Mikulski (D-MD) announced recently that
Sen. Tom Udall (D-NM) will be the new ranking member on the interior panel. He replaces Sen. Jack Reed (D-RI) who
was the panel’s chairman last year and is now the top Democrat on the appropriations panel’s transportation subcommittee.
Sen. Lisa Murkowksi (R-AK) was ranking member on the interior appropriations subcommittee in the Democraticled Senate last year, and will serve as the panel’s chairman this year in the GOP Congress.
For the energy and water development appropriations subcommittees, Rep. Michael Simpson (R-ID) will continue
as chairman in the House and Rep. Marcy Kaptur (D-OH) reprises last year’s role as ranking member. In the Senate, the
new chairman of the energy appropriations subcommittee is Sen. Lamar Alexander (R-TN) — who was ranking member
last year — and the new ranking member is Sen. Dianne Feinstein (D-CA), who chaired the panel last year.
The lawmakers on the appropriations committee will have a chance to try and either boost or scale back some of the
president’s upcoming FY16 funding proposals for EPA.
Obama is poised to deliver his proposed FY16 budget to lawmakers Feb. 2, which sources say is expected to
include a 7 percent overall spending increase, though little of that boost is likely to reach EPA. However, the proposal is
also expected to be largely ignored, leaving lawmakers on the interior and environment subcommittees to craft and
shepherd from scratch a bill funding EPA, as well as other environmental agencies.
Under full House and Senate Appropriations Committee Chairmen Rep. Hal Rogers (R-KY) and Sen. Thad
Cochran (R-MS), the appropriations bills that the panels produce are expected to push significant cuts to EPA’s Environmental Programs & Management account, which funds most agency rulemaking and regulatory efforts and is currently
set at $2.613 billion.
GOP lawmakers are also expected to push policy amendments to the upcoming FY16 bill that would specifically
bar EPA from using appropriated funds to develop or enforce policies they oppose, including a rule governing the scope
of the Clean Water Act (CWA) and power plant greenhouse gas standards, as well as an array of other climate regulations.
But Obama has promised to veto any bill that would block major climate rules or the CWA policy, setting up a
battle over which riders will survive.
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CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
CONGRESS
Environmentalists Warn House-Approved Bill Would Limit EPA Rules
Environmentalists are warning that legislation the House approved Jan. 13 would significantly limit EPA’s ability to
craft new regulations to protect human health and the environment, and are looking to President Obama to follow
through on his vowed veto of the measure if it also clears the Senate in the coming weeks or months.
In a 250-175 vote, the House approved H.R. 185, introduced by Reps. Bob Goodlatte (R-VA) and Collin Peterson
(D-MN), which would require agencies crafting new rules to conduct additional analysis, weigh alternatives and choose
the lowest cost alternative within statutory guidelines. Agencies would have to consider factors such as the problem the
rule would address and the risks and benefits involved in determining whether to issue new rules.
The Natural Resources Defense Council (NRDC) in a statement warns that the bill would make it difficult — if not
impossible — for EPA and other agencies to develop new rules. “Republican leaders are making it clear today: they’re
doing the work of Big Polluters and their allies by pushing a bill that aims to block — basically for all time — any new
health, safety and environmental safeguards for the American people,” NRDC’s Scott Slesinger said in the statement.
“This bill would impose overly complex and needless requirements on the EPA and other agencies and give industry
many more ways to tie up new rules in court, so they virtually never see the light of day.”
The League of Conservation Voters is also opposed to the bill, saying it seeks to delay future rules by saddling
resource-strapped agencies with dozens of new analytical and procedural mandates on rulemaking.
Similar regulatory review bills cleared the Republican House in the 113th Congress but failed to gain traction in the
then-Democratic majority upper chamber. But the GOP’s takeover of the Senate in the 114th Congress boosts prospects
for its consideration of H.R. 185, which has the backing of Republicans and industry groups.
For example, the American Coalition for Clean Coal Electricity (ACCCE) expressed its support for H.R. 185 and
said that it would help to reduce what the group sees as excessive regulation by the Obama administration.
“Time and time again, the Obama Administration has demonstrated utter disregard for the significant costs and
negative impacts associated with its regulatory agenda. Unfortunately, it is hard-working Americans who ultimately
shoulder this costly burden, straining family budgets and driving up costs for businesses,” said Laura Sheehan, senior
vice president for communications at ACCCE. “The ‘all pain, no gain’ regulations deck dealt by the President’s EPA has
been especially emblematic of the problem this important measure will remedy.”
Following the House vote, Rep. Candace Miller said that that many regulations are issued without public input or
consideration of costs. “American businesses pay an estimated $1.8 trillion to comply with costly, often unnecessarily
excessive, regulations imposed by the federal government,” she said. “Simply put, this legislation creates a
commonsense approach to implementing regulations that don’t put Americans out of work.”
However, even if the Republican Senate approves the measure over Democrats’ objections, the White House has
issued a Statement of Administration Policy (SAP) vowing to veto the measure. Relevant documents are available on
InsideEPA.com. See page 2 for details. (Doc. ID: 177450)
Obama’s advisors would recommend a veto because the bill, known as the Regulatory Accountability Act, “would
impose unnecessary new procedures on agencies and invite frivolous litigation” and would “impede the ability of
agencies to provide the public with basic protections, and create needless confusion and delay that would prove disruptive for businesses, as well as for State, tribal, and local governments,” the SAP says.
GOP Critics Of EPA Fault Adequacy Of GAO Study On ‘Sue And Settle’
GOP lawmakers and conservatives are faulting as inadequate a Government Accountability Office (GAO) report
finding little impact on EPA’s regulatory agenda from rulemaking deadline settlements that critics call “sue and settle,”
arguing that GAO failed to consider all such suits and relied too much on EPA’s statements in the study.
“The report’s fundamental flaw is that it plays the role of stenographer to the EPA. Virtually every conclusion
reached by the report starts with, ‘According to EPA officials…’ or some variant thereof,” William Yeatman, a member
of the conservative think tank Competitive Enterprise Institute, says in a Jan. 15 blog post.
And a spokeswoman for the House Energy & Commerce Committee’s Republican majority that asked GAO to
review the sue and settle agreements said the report was incomplete and will not deter the panel from seeking to reform
settlement practices. Energy panel Chairman Rep. Fred Upton (R-MI), along with panel members Reps. Ed Whitfield
(R-KY) and Tim Murphy (R-PA), requested the study in 2013.
“The report did suggest that these lawsuits do have some impact on the regulatory process, but the report’s scope
was limited and questions still remain. Most notably, the report did not address settlements in response to petitions. The
committee plans to continue its oversight of the transparency of EPA’s litigation strategy to determine the full impact on
rulemakings and other agency priorities,” the spokeswoman said.
In the report issued Jan. 14, GAO studied EPA’s responses to deadline pacts since 2008, but generally based its
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
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CONGRESS
conclusions on testimony from agency officials, and focused solely on settlements that grew out of deadline suits rather
than including those stemming from rulemaking petitions, which critics say constrained the scope and depth of the study.
The report found “limited” impact from the pacts on EPA’s rulemaking agenda.
EPA’s critics have charged that deadline suits allow EPA and environmentalists to agree on timelines for major rules
while denying members of the public and regulated entities the opportunity to comment on or negotiate the terms of the
settlements before they are finalized.
In particular, House Republicans in the 113th Congress floated legislation that would overhaul the settlement
process, easing third parties’ ability to intervene in the suits and creating new rules on the public comment process for
settlements the government reaches with outside groups — though the measures failed to gain traction in the Democratic-led Senate. The GOP-led 114th Congress is expected to revive such bills.
GAO’s report downplayed those concerns, and said the settlements neither drive EPA’s regulatory agenda nor
determine the substance of those rules. “[D]eadline suits impact the timing and order in which rules are issued . . . but
not which rules are issued,” the report says.
But in his blog post, Yeatman argues that the report’s conclusion is contradictory, in part because “EPA is out of
compliance with virtually all its Clean Air Act deadlines, which number well into the hundreds,” meaning citizen groups
can choose which rules will get priority simply by deciding which deadlines to sue over.
“I’ve read this sentence a hundred times, and I still don’t understand what it means. Aren’t ‘timing’ and ‘order’
integral to ‘which rules are issued,’ especially given the fact that [the] agency is out of compliance with virtually all its
responsibilities, and therefore subject to citizen suits to give priority to virtually all its responsibilities? This sentence
supposedly addresses the chief complaint regarding deadline suits, yet it makes no sense. I suspect it was intentionally
garbled by EPA, and I don’t understand why it wasn’t contested by the GAO,” he says.
NSPS
Industry Seeks Lengthy Delay For EPA’s Revised Final Wood Stove Air Rule
An industry association representing many manufacturers of wood-fired stoves and similar heaters is urging EPA to
delay by at least a year the application of its forthcoming tougher emissions standards for the sector as applied to
forced-air furnaces, though some state regulators are seeking swift issuance of the rule to help cut air pollution.
EPA’s proposed revised new source performance standards (NSPS) for wood stove manufacturing would
tighten emissions standards for the units and for the first time regulate particulate matter (PM) from some similar
devices. The proposal, issued in February last year, would also establish first-time emissions standards for indoor
and outdoor hydronic heaters, which are increasingly popular in certain regions including the Northeast and
Northwest.
The NSPS would set an initial limit for PM of 4.5 grams per hour (g/hr) for all wood stoves upon the rule
taking effect, down from the existing limit of 7.5 g/hr for non-catalytic stoves but higher than the limit of 4.1 g/hr
for those with catalysts. Five years from the rule’s implementation, the limit would be tightened to 1.3 g/hr for all
stoves.
EPA sent the final version of the rule for White House Office of Management & Budget (OMB) review Dec. 12,
ahead of a Feb. 3 consent decree deadline for issuing it agreed to with Northeastern and West Coast states which are
seeking new federal rules to cut PM emissions and help them attain the agency’s PM ambient air limit.
With the final rule under OMB review, the industry group Hearth, Patio and Barbecue Association (HPBA) met
with EPA and White House officials Jan. 8 to push for a delay of the final rule deadline.
At the meeting, HPBA representatives provided officials with comments addressed to acting EPA air chief Janet
McCabe, expressing the industry’s concern that wood furnace makers will not be able to certify their products in time,
precluding them from the market. HBPA has long urged EPA to extend by at least one year the compliance date for these
manufacturers, but EPA has replied that it lacks legal authority to grant such an exception to the legal deadline. The
comments are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177879 )
“The key concern is that the many small companies coming under the jurisdiction of the rule for the first time will
not be able to submit certification applications to [EPA] before the effective date of the rule. However, on the effective
date, these small businesses face a do not- make-or-sell deadline in the rule. This is clearly a death sentence for most of
these small companies, regardless of the attributes of their technologies,” HPBA writes.
The group disagrees with EPA’s claim that it lacks legal authority to extend the deadline. “Nothing in the Clean Air
Act prohibits EPA from issuing the sought extension,” the association says. Furthermore, any emissions standard
meeting the requisite criteria for a “best system of emission reduction” (BSER) must by definition take “lead time” into
26
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
NSPS
consideration — and for wood furnaces, EPA’s proposal does not, HBPA says.
“Because BSER determinations require consideration of costs and lead time, imposition of a step 1 standard
without any lead time is not BSER,” the association writes.
Furthermore, “It is arbitrary for EPA to interpret the same statutory provision as simultaneously (i) prohibiting it
from extending the effective date of the Step 1 standard for warm air furnaces by a modest one-year period, while (ii)
authorizing it to promulgate Step 2 standards in the same rulemaking for all appliance categories that do not become
effective for five years,” HPBA says.
Meanwhile, state organizations including the National Association of Clean Air Agencies and the Western States Air
Resources Council, and the states of Alaska, New Hampshire and New York, met with OMB and EPA officials Jan. 13.
A source with knowledge of the meeting says the states and groups pressed officials to issue the toughest standards
possible and not to delay issuance of the NSPS.
“There is a sense of urgency that the standards need to be tightened,” the source says, noting widespread problems
attaining federal PM standards throughout the West and Alaska because of wood stoves. The affected states want
EPA to close existing “loopholes” that exclude certain devices, such as hydronic heaters, from regulation, the
source says. — Stuart Parker
Mobile Sources
Environmentalists Urge EPA To Quickly Craft First GHG Limits For Aircraft
Environmentalists are urging EPA to quickly develop first-time regulations to limit greenhouse gas (GHG) emissions from aircraft, saying the agency needs to move beyond relying on international negotiations over a global pact on
curbing aircraft GHGs and propose domestic emissions limits by next year at the latest.
In a Jan. 22 letter to EPA Administrator Gina McCarthy, several major environmental groups say, “Greenhouse gas
emissions from aircraft are currently responsible for more than 3 percent of total U.S. emissions and are one of the
fastest-growing carbon pollution sources, on track to triple globally by 2050 under business-as-usual scenarios.” The
letter is signed by the Sierra Club, Earthjustice, Friends of the Earth, Center for Biological Diversity and the Natural
Resources Defense Council. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID:
177797)
At environmentalists’ urging and following years of litigation aimed at forcing agency action, EPA is currently
conducting research to support an “endangerment finding” that will determine whether aircraft GHGs threaten human
health or the environment, and hence whether EPA should regulate the sector.
An affirmative finding would trigger a Clean Air Act mandate for the agency to develop aircraft GHG rules, similar
to how its endangerment finding for vehicle GHGs led to development of its light-duty GHG and fuel economy rules.
EPA has indicated that it will issue the endangerment finding in May, alongside an advance notice of proposed
rulemaking that will discuss options for using the air law to limit emissions.
At the same time, the United States is working on a potential global agreement to curb GHGs from the sector, under
negotiation at the International Civil Aviation Organization (ICAO). Member states of ICAO hope to reach a deal in
2016.
But environmentalists are skeptical of the body’s ability to deliver meaningful pollution cuts, saying EPA should
push ahead with its U.S.-only rules. “Whether ICAO will act and if so, whether ICAO standards will actually reduce
emissions remains highly uncertain,” the groups say in the letter, because “on the subject of [GHG] gas reductions
ICAO has a 17-year old history of delay and broken promises.”
EPA, however, “has an acknowledged duty under the Clean Air Act to set domestic emission standards regardless of
whether ICAO proceeds,” the groups say. Because EPA in the vehicle endangerment finding found that GHGs should be
regulated, the groups consider it a foregone conclusion that it will reach the same conclusion for aircraft.
The agency has broad authority under the air law to regulate both new and existing aircraft, the groups say. They
note the potential for efficiency improvements among airlines, because the best-performing airlines are “an astounding
27 percent” more efficient than the worst performers.
In a press statement to accompany the letter, the groups say that if EPA determines that aircraft endanger the
environment, but does not then propose measures to reduce GHGs quickly, “regulations could be delayed for years.”
This prospect could push regulation into the next presidency, which might be less amenable to GHG regulation.
The groups say that EPA could mandate improvements to engines, aircraft design or operational changes, or
encourage these by setting progressively declining GHG limits.
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
27
MOBILE SOURCES
STB Advises EPA Of Likely Preemption For California Railroad Air Rules
The federal Surface Transportation Board (STB) is telling EPA that California’s South Coast air district regulations
to reduce air pollution from locomotives and other railroad sources likely would be preempted by federal law if the
agency approves the rules as part of the district’s plan to meet EPA’s national ambient air quality standards (NAAQS).
The STB opinion, released late last month, appears to be a setback for EPA, the South Coast air district, which
regulates air quality in metropolitan Los Angeles, and other states, including Massachusetts, that want to implement
their own novel rules to force reductions on railroad emissions that are tougher than federal regulations. States have
limited authority over mobile sources of air pollution, although California can apply to EPA for a Clean Air Act waiver
to set stricter rules than the federal government. The decision is available on InsideEPA.com. See page 2 for details.
(Doc. ID: 177567)
Even if the South Coast includes the rules in its state implementation plan (SIP) for complying with the NAAQS
and EPA approves it, railroad companies would likely petition the STB to preempt the rules.
A South Coast air district spokeswoman says following the STB opinion that the district is “looking into what our
next options will be,” presumably including whether to withdraw its rules from the state SIP. South Coast submitted the
rules to the state air board for inclusion in the SIP in August 2012. EPA had a deadline of 18 months later to approve or
deny the SIP, but that action has been delayed by the STB review, the spokeswoman says.
The district regulations are Rule 3501, which requires railroads to keep records of trains that idle 30 minutes or
more; and Rule 3502, which limits idling of unattended locomotives to 30 minutes under certain circumstances. The
district rules aim to reduce fine particulate matter (PM2.5) and nitrogen oxides and would assist in attaining both the
PM2.5 and ozone national air quality standards, the district spokeswoman says.
EPA Region IX is currently reviewing the STB decision and is not commenting further, a spokesman says.
The Dec. 30 legal opinion by three STB members assesses whether the South Coast’s locomotive idling rules are
preempted by the Interstate Commerce Act and the Interstate Commerce Commission Termination Act (ICCTA)
approved in 1995 — a law that railroad companies argue preempts such rules.
Last January, EPA filed with STB a “petition for declaratory order” requesting the board to institute a proceeding to
consider whether the two district rules would be preempted.
STB says in its decision that issuing such an order would be premature, and that instead it would “provide guidance” on the preemption issue.
EPA was faced with a Feb. 28, 2014, deadline to decide whether to approve or reject the South Coast rules being
included in the SIP, but the agency instead sought the formal legal opinion from STB on whether the rules are preempted. The railroad industry has long argued that the rules are preempted by federal law and that air districts cannot
impose their own local rules on railroads.
EPA, the California Air Resources Board (CARB), Massachusetts officials, the South Coast air district and environmentalists in 2014 filings to STB defended the district’s rules, arguing they are not preempted and are critical to help the
region meet federal Clean Air Act standards.
CARB officials are “reviewing the [STB] decision and considering our options,” a board spokesman says. “No
decision has been made yet on what, if anything, that [CARB] will do in response.”
The three-member panel of STB says in the opinion that exceptions to preemption can be possible in some
cases through a harmonization process involving ICCTA and another federal law, such as the Clean Air Act — arguments made by EPA, CARB, the district and others.
But it concludes that the district’s rules “likely cannot be harmonized with the purposes of [ICCTA provisions]. If
EPA were to approve the rules as part of California’s SIP, it is likely that the rules would be preempted because of the
potential patchwork of regulations that could result, contravening Congress’s purpose in enacting [ICCTA provisions].”
If the rules were adopted into the California SIP, “locomotives would be subject ‘to fluctuating rules as they cross .
. . state lines (and as they cross air quality regions), and the rules would therefore likely ‘directly interfere’ with the
purpose of [ICCTA provisions],” the STB decision states, citing previous federal court rulings.
Moreover, “it is not only the impact of the district’s rules that we must consider, but the fact that other states and
local districts throughout the country could follow suit and adopt their own emission rules,” STB says. “The district
claims that it is unlikely that approval of the rules into the California SIP would lead to similar proposed rules in other
states, but the record appears to indicate otherwise.”
According to the Association of American Railroads, “more than 100 nonattainment districts are spread across more
than 40 states,” the decision says. “Massachusetts and Rhode Island have previously enacted idling rules, and Maine,
Michigan, and New Hampshire have considered such laws,” STB says.
Approval of the South Coast air district rules in the SIP “would likely signal to other localities that they also could
propose their own rules on locomotive operations to meet localized concerns through the SIP process, thereby leading to
28
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
MOBILE SOURCES
the lack of uniformity of regulation that Congress intended to preclude in [ICCTA provisions].”
STB also disagrees with South Coast air district claims that the adoption of the rules in the SIP would not interfere
with rail operations. The district “argues that Rule 3501 is merely a record-keeping requirement and thus does not
impede the flow of transportation. However, Rule 3501 would potentially create a patchwork of localized, operational
recordkeeping requirements that would likely affect railroad operations,” the decision states.
South Coast also claims that Rule 3502 addresses unnecessary idling that has no transportation purpose, the
decision notes. “Here too though, adoption of Rule 3502 would likely affect the railroads’ ability to conduct their
operations, as it appears to decide for the railroads what constitutes unnecessary idling and also to influence the railroads’ choice of equipment and how to configure that equipment. Allowing potentially 100 different localities to adopt
their own idling rules also would likely disrupt uniformity in rail operations by opening the door to varying regulatory
operational and/or equipment requirements for locomotives across the country.”
Multiple railroad companies have filed comments in the proceeding, urging STB to find that the district’s rules are
preempted by ICCTA even if the rules are ultimately included in a SIP approved by EPA.
D.C. Circuit Sets Deadlines For California Truckers’ Challenge To EPA Waiver
The U.S. Court of Appeals for the D.C. Circuit has set a briefing schedule in a case where California industry
organizations are challenging EPA’s approval of a Clean Air Act waiver allowing California to implement a controversial non-road engine regulation.
The case, Dalton Trucking, Inc., et al. v. EPA, et al., was filed in November 2013 by the Pacific Legal Foundation
(PLF) on behalf of several companies and industry groups, including the Construction Industry Air Quality Coalition in
California. The lawsuit challenges EPA’s Clean Air Act waiver granted in September 2013 allowing the California Air
Resources Board (CARB) to enforce its non-road engine rule for reducing emissions of particulate matter (PM) and
nitrogen oxide (NOx).
A PLF attorney has said the main argument presented in the case is that EPA has failed to meet specific standards
under the Clean Air Act when granting waivers to California — mainly that there must be extraordinary and compelling
reasons why California should have stricter engine standards than the rest of the nation.
EPA for years has generally been “rubber stamping” California’s waiver requests and has ignored the details of
California programs, the attorney claims. “I think there is actually little case law on the standard that EPA has to use to
grant or reject a waiver. We’re opening up an issue that EPA has been given a free ride on this. Our position here is that
EPA has been doing it wrong for decades.”
The court Jan. 13 issued an order setting a briefing schedule for the case, with the industry petitioners required to
file an opening brief by Feb. 17; EPA to file an opening brief by May 18; and CARB to file an intervenor brief supporting EPA by May 26. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177774)
The order also notes that PLF’s brief must set forth the basis for the industry groups’ standing.
A joint reply brief is due June 17, according to the order.
An oral argument hearing has not yet been scheduled, but the order notes that the argument date will be a minimum
of 45 days after briefing is completed.
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29
Transportation Conformity
‘Conformity’ Ruling Spurs Fear Of Disarray For States’ Air Quality Planning
A federal appeals court’s ruling forcing states to assess whether transportation projects will hinder attainment of
EPA’s 1997 ozone standard prior to approving the projects could cause major disarray with states’ air quality planning,
an industry legal source says, because states may lack the resources for such “conformity” assessments.
However, environmentalists and some state air regulators say the appellate ruling provides a necessary safeguard to
review and address interstate air quality problems with ozone-forming emissions from transport projects.
The debate stems from a 2-1 ruling issued by the U.S. Court of Appeals for the District of Columbia Circuit late last
month that agreed with environmentalists’ arguments that the agency cannot extend statutory deadlines for states to craft
state implementation plans (SIPs), which are blueprints for how states will attain EPA’s national ambient air quality
standards (NAAQS). Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177477)
The majority decision, written by Judge Srikanth Srinivasan with Judge David Tatel’s backing, also overturns EPA’s
move to revoke its 1997 ozone NAAQS, expressed as 84 parts per billion (ppb), for “transportation conformity”
purposes. Transportation conformity requires that state air planners factor in the air quality impact of transportation
projects such as road building when crafting their SIPs for attaining the ambient air limits.
When EPA issued a rule in 2008 tightening its ozone standard to 75 ppb, it proposed to revoke the 1997 standard
transportation conformity requirements. But the D.C. Circuit said the conformity mandate for the old standard must stay
in place, in addition to the conformity obligations under the newer, stricter ozone standard.
One industry source says that the ruling creates confusion and likely will lead state air regulators to conduct
duplicative transportation conformity reviews for both NAAQS. Air quality projection required for this purpose requires
“a very sophisticated series of computations and [computer] modeling,” the source says.
Many state and local air quality agencies lack the means to conduct such analyses, the source says. “A lot of these
organizations don’t have the resources to do this,” the source says, adding, “the court never really took into account the
practical aspects” of its ruling, although the dissenting judge warned of adverse impacts.
Judge A. Raymond Randolph in his dissent in Natural Resources Defense Council (NRDC) v. EPA said, “Notably
absent from the majority opinion is any discussion of how exactly EPA and the States are expected to implement the
majority’s decision,” adding, “we do not know whether State and local transportation plans approved and implemented,
presumably after large effort and at great expense must be retroactively disapproved.”
Industry attorney Fred Wagner in a Jan. 7 blog post says the ruling “could throw any number of [SIPs] into question. The transportation industry, from planners to the construction trades to state and local agencies, should take notice
of this troubling ruling and be prepared to address the potentially messy aftermath.”
The NRDC case successfully challenged a 2012 EPA rule that extended SIP deadlines for the 2008 ozone NAAQS
and revoked the conformity requirements for the 1997 standard. In the rule, EPA said it could revoke the 1997 mandate
because it is now implementing a tougher ozone NAAQS, so areas meeting the tougher limit should not need to limit
vehicle emissions specifically to meet the older one — an argument backed by industry and several states.
However, the court’s majority agreed with NRDC that EPA has flouted the air law mechanism for rescinding such
“anti-backsliding” measures required by older NAAQS to prevent pollution increases. In a Dec. 12, 2012, brief for
NRDC, law firm Earthjustice said, “EPA has abrogated the Act’s unambiguous requirement that the Act’s transportation
conformity provision, [section]176(c), ‘shall apply’ in all nonattainment and maintenance areas.”
The brief continued, “As this Court has held, Congress has spoken clearly: so long as an area is nonattainment or
maintenance for a standard, the transportation conformity requirement applies.” EPA cannot pick and choose which
aspects of a NAAQS’ implementation apply, Earthjustice argued for NRDC.
Furthermore, environmentalists in the case said that because of how compliance with NAAQS is assessed — with
air quality monitoring over different periods of time showing different, and not always lower, levels of pollution —
some areas officially attaining the 2008 standard might in fact violate the 1997 limit. These areas would then have no
transportation conformity requirements at all, despite the legal requirement that they do so, having once violated the
older standard — another air law violation, environmentalists have argued.
States are divided on the merit of keeping transportation conformity plans in place for older NAAQS that
have been replaced by a newer, more stringent standard. For example, some state and local air regulators’ associations
in comments on EPA’s policies have praised the move as practical, while other officials are concerned that ozone
emissions, and specifically interstate ozone, will worsen as a result.
A California Air Resources Board (CARB) official in a Jan. 13 interview with Inside EPA said the D.C. Circuit
decision will lead to several areas in the state submitting conformity plans for both the 1997 and 2008 ozone standards.
“We will need to keep two sets of transportation conformity budgets in place,” the official said. But they expect the
conformity requirements for the 2008 standard to be more stringent, because the NAAQS is stricter.
The official said that the stricter requirements will be something they can “take in stride,” and will not pose an
excessive administrative burden for the state. California has some of the most intractable ozone problems in the country,
30
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
TRANSPORTATION CONFORMITY
and the vast majority of areas that were once or remain in nonattainment with the 1997 standard in the state are the same
areas that violate the 2008 standard. Therefore, the state generally does not have areas where conformity applied before,
but would not now if it were not for the D.C. Circuit’s mandate that it continue.
One Eastern state regulator says, “I don’t see a problem here.” So far, no states have been issued EPA-approved
“emissions budgets” for the 2008 ozone NAAQS — which means that no state currently has transportation conformity
requirements in place for the most recent standard, so the 1997 mandates are still valid. Moreover, EPA is behind
schedule issuing new guidance for implementation of that standard, the source notes.
Delaware in 2012 comments to EPA on the proposed version of the rule contested in NRDC said, “Delaware is
especially interested in ensuring against any backsliding relative to transportation conformity during the transition to the
2008 standard.” A very high percentage of the state’s ozone blows in from out of state, making Delaware, like several
other Northeastern and Mid-Atlantic states, especially sensitive to upwind states relaxing their ozone controls.
The state added, “without a complete implementation rule we are not certain what backsliding provisions EPA
intends to put in place to allay our concerns. . . . Delaware believes EPA’s proposal to revoke the 1997 standard is
premature and should not be done absent of approved implementation SIPs.”
It added, “We recommend that EPA delay this action now, and instead re-propose it in the near future with its
implementation rule, so that the transportation conformity issues can be evaluated carefully with thorough consideration
of all related issues, in particular with all necessary anti-backsliding provisions.”
EPA proposed a SIP requirements rule for the 2008 ozone standard in June 2013 that detailed anti-backsliding
provisions states would have to take, but has yet to issue a final version.
In the proposal, EPA floated a “re-designation substitute” procedure, which the California Air Pollution Control
Officers Association (CAPCOA) in 2013 comments called “a new route for satisfying anti-backsliding requirements tied
to a revoked standard that terminate when the area attains the revoked standard. Under this route, EPA would require
that the state show that it has attained the revoked standard, that attainment was due to enforceable and permanent
emission reductions, and that the area will continue to maintain the standard over the next ten years.”
CAPCOA noted that, “Essentially these are the same requirements as are currently applicable to obtain
redesignation as attainment for a standard that is currently in place. The difference is that EPA would not require a
formal SIP submittal from the state making the requisite showings, although EPA’s approval would occur through
notice-and-comment rulemaking,” and expressed doubts about the need for the plan.
“We are not sure why this more extensive showing is considered necessary, since when EPA revokes a standard, it
does so because it believes it is no longer needed. EPA should be trying to minimize the extra work and burdens
associated with a revoked standard. Nevertheless, we support the concept of a ‘redesignation substitute’ in the sense that
there needs to be a clear path for the states to follow in order to eliminate the anti-backsliding requirements attendant on
failure to attain a revoked standard,” according to the organization’s comments.
The CARB official said the state is crafting SIPs including transportation conformity provisions based on EPA’s
proposed version of the SIP rule contested in NRDC — but acknowledges that final issuance of that rule would be
helpful. “With SIPs coming due in 2016, we continue to move forward with the technical work,” the official said.
Earthjustice, however, in September 2014 comments on the proposal on behalf of itself, the American Lung
Association, Conservation Law Foundation, NRDC and Sierra Club, warned that the proposed SIP requirements rule
was flawed and based on the illegal premise that EPA can partially revoke an older NAAQS standard. The groups further
argue that there is no need to revoke older standards and their attendant anti-backsliding measures. — Stuart Parker
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CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
31
Greenhouse Gases
Obama’s State Of The Union Includes Vow To Push Climate Agenda Ahead
President Obama is vowing to push ahead with his administration’s climate change agenda and veto Congressional
measures to block EPA rules and other environmental policies, describing the threat of climate change as the
greatest risk to future generations and saying the United States’ efforts to curb global warming will spur international action.
“The best scientists in the world are all telling us that our activities are changing the climate, and if we do not act
forcefully, we’ll continue to see rising oceans, longer, hotter heat waves, dangerous droughts and floods, and massive
disruptions that can trigger greater migration, conflict, and hunger around the globe. The Pentagon says that climate
change poses immediate risks to our national security. We should act like it,” he said in his Jan. 20 State of the Union
address.
In addition to EPA’s Clean Power Plan to regulate greenhouse gas (GHG) emissions from power plants, the administration is also working on strategies to reduce emissions of methane from the oil and gas sector, including an EPA plan
to craft a first-time regulation to limits emissions of the potent GHG from drilling and other sources.
Obama did not mention the EPA policies by name, but said, “That’s why, over the past six years, we’ve done more
than ever before to combat climate change, from the way we produce energy, to the way we use it. That’s why we’ve set
aside more public lands and waters than any administration in history. And that’s why I will not let this Congress
endanger the health of our children by turning back the clock on our efforts.”
His remarks echo recent comments by EPA Administrator Gina McCarthy, who told a Jan. 16 reporters’ roundtable
that she will push ahead with finalizing the agency’s proposed GHG rules for new and existing power plants despite
vows by GOP lawmakers to block the regulations.
One of those lawmakers, Senate environment committee Chairman James Inhofe (R-OK), made the case to block
the agency’s rules, arguing they are costly and will do little to ameliorate the adverse climate impacts of carbon dioxide
(CO2) and other GHGs.
In a statement responding to Obama’s speech, Inhofe cited industry-funded studies on the proposed existing source
rule’s economic costs and environmental benefits to argue that the measure would result in the “largest tax increase in
the history of America.”
Obama also pushed back on long-standing claims by Inhofe and other climate skeptics to argue that the science
overwhelmingly shows GHG emissions are contributing to a warming planet. He said, “2014 was the planet’s warmest
year on record. Now, one year doesn’t make a trend, but this does — 14 of the 15 warmest years on record have all
fallen in the first 15 years of this century.”
The president added that, “I’ve heard some folks try to dodge the evidence by saying they’re not scientists; that we
don’t have enough information to act. Well, I’m not a scientist, either. But you know what — I know a lot of really good
scientists at NASA, and NOAA, and at our major universities.”
During a part of the speech that promoted the administration’s work on alliances with other nations, Obama
described efforts in the Asia Pacific region to develop new policies on trade, maritime disputes and other issues. “And
no challenge — no challenge — poses a greater threat to future generations than climate change,” he said.
“I am determined to make sure American leadership drives international action. In Beijing, we made an historic
announcement — the United States will double the pace at which we cut carbon pollution, and China committed, for the
first time, to limiting their emissions,” he said, citing a recent agreement with China to cut GHGs.
The United States and China in November announced a bilateral pact to require the U.S. to reduce economy-wide
GHGs by at least 26 percent from 2005 levels by 2025, while making “best efforts” to achieve a 28 percent reduction,
according to a White House fact sheet. China intends to achieve a peak in carbon dioxide emissions by “around” 2030,
while attempting to “peak early” and also significantly boost zero-emission energy.
“And because the world’s two largest economies came together, other nations are now stepping up, and offering
hope that, this year, the world will finally reach an agreement to protect the one planet we’ve got,” Obama said.
Meanwhile, the president made a passing reference to the controversial Keystone XL pipeline, although not by
name. GOP senators are trying to move a bill to force approval of the pipeline, which is slated to move high-carbon tar
sands crude oil from Canada to refineries in the Gulf of Mexico.
Obama has vowed to veto the bill, downplaying the pipeline’s potential economic benefits while warning of its
adverse climate impacts.
He refrained from explicitly reiterating the veto threat but suggested that Congress’ focus should be on broader
infrastructure efforts than just Keystone XL.
“21st century businesses need 21st century infrastructure? — ?modern ports, stronger bridges, faster trains and the
fastest internet. Democrats and Republicans used to agree on this. So let’s set our sights higher than a single oil pipeline.
Let’s pass a bipartisan infrastructure plan that could create more than thirty times as many jobs per year, and make this
32
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
GREENHOUSE GASES
country stronger for decades to come,” the president said.
In a statement on the president’s speech, the Natural Resources Defense Council’s President Rhea Shu said,
“President Obama hit the nail on the head by urging us to focus on expanding jobs in our nation’s infrastructure — and
stop looking to the Keystone XL pipeline, a dirty tar sands project that would sustain 35 permanent jobs. In just the last
three years, nearly a quarter-million clean-energy jobs were created — workers all across America building wind
turbines, solar power facilities and energy-efficient homes, cars and workplaces. That’s the 21st Century clean-energy
jobs infrastructure that will be good for the health of our children and our planet.” — Anthony Lacey
API Files Suit Over EPA’s Oil Sector Greenhouse Gas Reporting Regulation
The American Petroleum Institute (API) is suing EPA over its recently finalized revisions to its greenhouse gas
(GHG) reporting rules for the oil and natural gas sector, after the group last year raised concerns that the proposed
changes to the rules could be too expansive and not allow enough time for the sector to comply.
The suit, filed Jan. 23 in the U.S. Court of Appeals for the District of Columbia Circuit, does not explain the basis
for the challenge and API did not respond to a request for comment by press time. The suit is available on
InsideEPA.com. See page 2 for details. (Doc. ID: 177858)
EPA’s Nov. 25 final rule amended subpart “W” of the reporting rule, governing petroleum and natural gas systems,
which the agency says are aimed at improving clarity and consistency of the reported data it receives. The revisions,
which include elimination of best available monitoring methods (BAMM), alternative calculation methods EPA allowed
in the reporting rule to order to give facilities time to adopt the necessary methods, won praise from environmentalists,
who also want the agency to directly regulate GHGs from the sector.
API, however, raised criticisms over the proposed version of the revisions to the reporting requirements in April 30
comments. For example, the group urged the agency to include a “reasonable six month timeframe for ‘transitional
BAMM’” that would begin Jan. 1, the date that the revised rule took effect.
The comments said “if EPA adopts the proposed rule with respect to certain reporting requirements, the final rule
will significantly expand reporting requirements for some sources and require additional data collection that was not
previously required,” such as liquids unloading. “EPA should not utilize this proposed rule as an opportunity to further
expand reporting requirements and introduce new burdens on the regulated industry at this stage.”
API raised similar concerns on EPA’s proposal to amend subpart “W” to extend the GHG reporting rules to emissions from gathering and boosting stations, completions and workovers of hydraulically fractured oil wells, and
blowdowns of natural gas transmission pipelines, according to the agency’s website.
Speaking at a Jan. 8 public hearing on EPA’s proposal to extend the portion of the subpart W reporting rules to
several new energy sector sources, Karin Ritter, regulatory and scientific affairs manager for API, said the agency’s
estimates of 73,000 hours and $7.2 million in burdens are “arbitrarily low by orders of magnitude.”
Ritter urged EPA to consider “streamlining” the proposal to ease burdens on industry and ensure workability, such
as considering changes to its proposed requirement that operators would have to report well identification numbers
associated with individual wells and pare back some of its measures for reporting venting and flaring.
Fuels
Oregon Officials Adopt LCFS Rules In Step Toward West Coast Biofuels Market
Oregon environmental officials have adopted rules to implement a low-carbon fuel standard (LCFS) in the state
that, if supported by state lawmakers through legislation this year, would mark a significant step toward a West Coast
low-carbon fuels market anchored with California’s existing LCFS.
While the state’s program still faces hurdles, if promulgated it would expand California’s market and provide
producers of low-carbon biofuels additional assurances, given uncertainties with EPA’s renewable fuels standard (RFS),
which sets annual volumetric blend mandates for low-carbon biofuels.
The Oregon Environmental Quality Commission Jan. 7 approved rules that lay out the next phase of the Oregon
Clean Fuels Program, which seeks to cut greenhouse gases (GHGs) by lowering the carbon content of the state’s
transportation fuels, according to the commission. The rules are available on InsideEPA.com. See page 2 for details.
(Doc. ID: 177565 )
While the rules technically go into effect Feb. 1, the program will not be implemented unless the state legislature
approves a bill this year that extends the Clean Fuels Program, which is currently slated to sunset on Dec. 31.
“Phase 2” of the Oregon Department of Environmental Quality (DEQ) program, which requires fuel providers to
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
33
FUELS
reduce the carbon content of gasoline and diesel 10 percent over a 10-year period, was pursued under a directive issued
by Gov. John Kitzhaber (D).
State officials estimate the rules would represent a cut of about 280 million metric tons of GHGs through 2025.
The rule will help the state make good on its commitment to create a West Coast low-carbon fuel program. California, Oregon and Washington, along with British Columbia, last year created the “Pacific Coast Collaborative,” agreeing
to an “action plan” to reduce GHGs and promote clean energy.
The non-binding agreement in part commits the jurisdictions to implementing and maintaining LCFS programs in
each jurisdiction.
The Oregon DEQ says on its website that there is ongoing coordination between the jurisdictions on key issues such
as: availability of low carbon fuels for the West Coast region; quantifying direct and indirect emissions over the
lifecycle of fuels; development and use of a common reporting tool; and design of provisions to contain costs of
implementing the standards.
“Over time, these programs may lead to an integrated West Coast market for low carbon fuels,” DEQ claims.
California’s LCFS requires fuel producers to cut the carbon intensity of gasoline and diesel 10 percent by the end of
2020, though regulators are recommending that lawmakers extend the program to 2030 and require an additional 10
percent to 15 percent reduction in carbon intensity.
Washington state officials are further away in their effort to implement an LCFS, having released in late October an
analysis of such a regulation contained in the report, “A Low Carbon Fuel Standard in Washington State.” Washington is
considering an LCFS to reduce the carbon intensity of fuels 10 percent from 2012 levels by 2026, with reductions
beginning in 2017 at 0.25 percent, according to the report. However, neither legislation nor regulations to implement an
LCFS have been adopted in the state.
But U.S. corn ethanol-production companies are citing what they consider major flaws in California’s LCFS to
challenge the adoption of similar regulations in Oregon and Washington.
Regardless of the challenges, policymakers’ efforts to advance state-level programs are likely to boost many
biofuels producers, who have slowed development of new projects due to uncertainties with both EPA’s RFS and
California’s LCFS. But California’s LCFS is now on a firmer footing and a recent report suggested that West Coast fuel
markets may be a more certain bet for fuel producers than those that depend on EPA’s RFS.
“There remains some uncertainty as to how the industry will respond once EPA volumes are established,” says a
recent report from Environmental Entrepreneurs (E2), a group of businesses that advocate for environmental policies.
“Although some projects may never recover, we expect biofuel companies to have increased interest in West Coast
LCFS markets, where the policy outlook is more certain at this time,” the report adds.
EPA Unveils Policy For Enforcing Ship Fuel Rule In Low Emissions Areas
EPA has unveiled an enforcement policy for how it will penalize ship owners and operators for violating new fuel
sulfur limits for vessels steaming near U.S. coastlines with low emissions requirements, aiming to deter potential
violations with the threat of fines up to $25,000 per infraction and to quickly resolve non-compliance claims.
The policy memo, signed Jan. 15 by EPA Office of Civil Enforcement Air Enforcement Division Director Phillip
Brooks, aims to ensure adherence with an international pact to set a stricter 0.1 percent fuel sulfur limit, which came
into effect Jan. 1 and is significantly lower than the previous 1 percent cap on sulfur in ship fuel. Relevant documents
are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177633)
EPA issued a rule in 2010 to implement the agreement that applies the strict sulfur limit in the North American
Emissions Control Area (ECA), which extends up to 200 nautical miles off the U.S. and Canadian coasts.
The ECA was negotiated under the auspices of the International Maritime Organization (IMO), the United Nations
body that administers MARPOL Annex VI, the global treaty that governs environmental issues in international shipping.
Annex VI is implemented domestically through the Act to Prevent Pollution from Ships (APPS).
Cutting marine pollution is a key element of EPA’s strategy to curb air pollution from mobile sources, providing
health benefits hundreds of miles inland, and Brooks’ policy memo aims to ensure compliance.
“[T]he purpose of this Penalty Policy is to deter potential violators, ensure that the EPA assesses fair and equitable
civil penalties, and expedite the resolution of claims arising from certain categories of noncompliance with the APPS,”
the enforcement memo says.
Currently, the maximum penalty that EPA can levy is $25,000 per infraction of the APPS, per day, although under
the new policy, lesser amounts can be levied in accordance with the severity of the infraction.
Shipping industry sources say that EPA is planning a rule to increase the maximum level of fines, possibly to
$38,000 per violation per day, which could be proposed sometime later in 2015.
Brooks notes that while the policy is aimed primarily at enforcing the 0.1 percent fuel sulfur limit, “a ship burning
34
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
FUELS
non-compliant fuel may also be in violation of other requirements of MARPOL Annex VI.
“For example, pursuant to Regulation 14.6, ships are required to maintain a written procedure showing how the fuel
oil change-over is to be done, and a log recording change-over details, including recording certain measurements in fuel
tanks prior to the entry into, or commenced after exit from, an ECA.”
The policy details penalty assessment procedures for failures to properly document the type of fuel used on
board, and fuel switch-over operations. It set out technical formulas to calculate the scale of the violation according to
how long a ship was steaming in an ECA with non-compliant fuel and at what speed, in order to estimate the noncompliant fuel burned. Higher amounts of sulfur in the fuel correspond to more severe penalties.
It also takes into account such factors as a previous history of non-compliance, which increases the level of fines
that may be levied, or willingness to remedy non-compliance, which decreases penalties.
Industry sources say U.S. shippers must be treated fairly compared to their foreign counterparts, so effective and
even-handed enforcement by EPA and the Coast Guard will be essential. EPA will be primarily responsible for physical
inspections of fuel facilities on land, while the Coast Guard will be checking ships at sea.
In a direct final rule issued Nov. 9, EPA extended its rules of practice governing administrative enforcement
proceedings to enforcement actions under APPS to assess civil penalties. This was a procedural step to ensure consistency with other EPA enforcement policies, and guarantees that enforcement hearings be held on the record after
opportunity for a hearing. The rules of practice further establish procedures for appeals from decisions of EPA Administrative Law Judges and presiding officers to the agency’s Environmental Appeals Board.
EPA also recently granted an extended waiver from the fuel sulfur requirements for cruise line Royal Caribbean,
enabling the company to use sulfur dioxide “scrubbers” in lieu of low-sulfur fuel on more ships. The company initially
was using scrubbers on a trial basis on six ships under an EPA waiver from the fuel sulfur limit applicable last year, but
now will be able to use the devices on 19 ships and burn non-compliant fuel.
“Royal Caribbean’s research program has developed exhaust gas scrubber technology that has the potential to
provide greater emission reductions than would be achieved using only ECA compliant low-sulfur fuel, and at a much
lower cost, EPA said in a statement announcing the waiver extension. “This trial program will also provide valuable
information on developing advanced emissions control technologies for marine engines,” the agency said.
Cruise lines are more affected by ECA rules than international shipping generally because they spend more time in
coastal waters. Industry sources say the Royal Caribbean trial will be a useful development for the industry as a whole,
because in 2020, fuel sulfur limits are due to fall from 3.5 percent to 0.5 percent worldwide under IMO rules. It may
therefore be more cost-effective for ships to use scrubbers rather than pay for more expensive low-sulfur fuel, sources
have suggested. — Stuart Parker
Carbon Sequestration
California Launches Effort To Develop GHG Accounting For CCS Projects
California state air board officials are launching a rulemaking to develop a methodology to quantify greenhouse gas
(GHG) emission reductions from carbon capture and sequestration (CCS) projects, an effort that proponents of the
technology say is crucial for spurring new investment.
The rulemaking will also include new standards that must be followed by project developers to help ensure the
emission reductions are achieved, according to sources.
The California Air Resources Board (CARB) recently filled eight new staff positions that were authorized in its
fiscal year 2014-15 budget to develop and implement the quantification methodology in addition to other tasks, according to a board spokesman.
CCS advocates have said the budget plan shows that CARB is embracing CCS as a legitimate technology that can
generate substantial GHG emission-reduction credits in the coming years and that can be used to help companies
comply with the state’s cap-and-trade program and potentially other GHG standards.
The budget plan itself says the development of CCS projects in the state can cover a range of industries and play a
major role in helping the state meet its 2020 GHG-reduction mandate under AB 32, the state’s 2006 global warming
solutions law requiring the state to reduce GHG emissions to1990 levels by the end of 2020, as well as GHG-reduction
targets for 2030 and 2050.
CCS is already being proposed for a major petcoke-fired hydrogen power plant and fertilizer factory in the San
Joaquin Valley and is expected to be included in future enhanced oil recovery (EOR) projects, sources have said. In
addition, several companies are exploring projects to use CCS at existing natural gas-fired power plants, according to
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
35
CARBON SEQUESTRATION
sources.
While proponents see the technology as a viable means for managing GHG emissions, its deployment in the United
States has been limited in part because it is costly and few coal-fired power plants have been willing to install it —
especially given large supplies of cheap natural gas.
Mississippi Power’s Kemper County CCS project, a planned 582-megawatt power plant that has been under
construction for five years, is reported to be $3.2 billion over budget at $5.6 billion.
CARB plans to begin holding public workshops on the development of the methodology this summer, according to
sources. A draft proposal is scheduled to be released by mid-2016, with final approval by January 2017.
The rulemaking will include not only the methodology to calculate GHG emission reductions, but associated
requirements for projects to qualify for credit generation, such as system monitoring and process standards, sources say.
“Depending on those requirements, it could make a big difference as to whether or not someone looks at a project,” says
a CCS industry source. “There is a lot of uncertainty on what [CARB] is going to require in terms of all the different
monitoring and verification . . . liability, which is going to go into a methodology.”
CARB staff will be using a recently completed report it commissioned by Lawrence Berkeley National
Laboratory on quantification methodologies in addition to monitoring, verification and accounting protocols to help
develop its CCS rulemaking, according to sources.
The industry source says that developers have been hesitant to pursue CCS projects in California mostly because of
the lack of a GHG quantification methodology. “No one seems to be willing to come forward until there is a little bit of
signaling about what will be in the [CARB] methodology and what the requirements are going to be, and how that could
impact project design,” the source says. “But I feel very confident you will see a project with gas announced in the first
half of this year.”
CARB’s cap-and-trade regulations currently acknowledge the potential for GHG emission reductions from
CCS, but entities regulated under the program cannot gain credit for carbon dioxide (CO2) that has been sequestered because CARB has failed to adopt a quantification methodology for such reductions, despite mandates to do
so.
CARB’s new budget funding is also to be used for: developing and enforcing regulations relating to approved CCS
and offset projects; performing site characterization assessments for CCS projects; reviewing offset project data for
offset credit issuance; implementing audits and verification of emission reductions from CCS projects and in-state offset
projects; overseeing the implementation, review and adequacy of emissions monitoring, verification and assessment
plans for all approved CCS project applications and in-state emission reductions; and other tasks.
“These activities offer the potential to achieve a greater proportion of the GHG reductions needed to satisfy AB 32
and the governor’s executive orders within the state, supporting both existing major industries and new jobs in California,” last year’s budget change proposal says.
Industries that could benefit from CCS projects include “coal- and gas-fired power generation, petroleum
refining, iron and steel production, cement manufacturing and chemicals production,” according to the budget
plan.
CCS can provide benefits to contain costs of the cap-and-trade program, according to the state’s budget plan. If a
facility implements a project developed using a CARB-approved quantification methodology to sequester CO2 underground, “the facility can deduct that amount of carbon from its compliance obligation, which means it needs to purchase
fewer allowances. This ability to deduct the eligible project will result in lower costs for California businesses to
comply and provide the GHG reductions needed to meet AB 32 goals.”
Some of the other tasks to be carried out by CARB will focus on protecting the environment and public health,
officials note in the plan. “The regulation of geological CO2 storage sites must ensure both the safety of CCS operations
and the permanence of CO2 sequestration,” the plan states. “Because of the increased interest in sequestration through
CCS and EOR projects, the monitoring and control of air emissions from these activities are necessary to the protection
of California’s environment and public health.”
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CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
Personnel
President Obama Nominates Stan Meiburg As Deputy EPA Administrator
President Obama has announced his intent to formally nominate Acting Deputy EPA Administrator Stan Meiburg to
serve in the role permanently, setting up a potentially tough Senate Environment & Public Works Committee (EPW)
hearing for the nominee where senators will be able to question him about a host of contested agency policies.
The White House announced Meiburg’s nomination in a Jan. 22 press release. Meiburg previously served in EPA’s
air office and as deputy Region 4 administrator. The last Senate-confirmed deputy EPA chief was Bob Perciasepe who
left the agency in 2014.
Meiburg returned to EPA as acting deputy administrator Oct. 6, shortly after he retired from his long-running
position as deputy administrator in EPA’s Region 4, covering several southern states. Prior to joining Region 4, he was
deputy Region 6 administrator, and held a number of positions at EPA headquarters from 1977 to 1984.
If the Senate confirms Meiburg it will help ease EPA’s reliance on acting officials following the departure of many
assistant administrators and other top-level appointees in 2013 and 2014.
But Meiburg appears likely to face a hostile reception from GOP members on EPW, which will review his nomination, and those in the Senate at large, who have pledged to block major EPA regulations.
For instance, EPW Chair Sen. James Inhofe (R-OK) said during a Jan. 7 roundtable that he will seek to bar the
administration from implementing its rule to define the reach of the Clean Water Act and its greenhouse gas limits for
new and existing power plants.
Republicans could tie confirmation votes for Meiburg and other nominees to their opposition to those and other
measures — as happened during the 113th Congress, when such issues helped bring pending environmental nominees to
a standstill.
EPA is already relying heavily on career staff to serve as interim officials in top-level positions; the agency now has
seven such offices with no Senate-confirmed appointee. They include the deputy administrator; the assistant administrators for air and radiation, water, administration and resource management, research and development, and international
and tribal affairs; the chief financial officer (CFO); and the chief information officer.
Currently filling those spots as interim appointees are Meiburg; Janet McCabe as acting air chief; acting CFO
David Bloom; and acting research head Lek Kadeli. The information, tribal affairs and water offices have no formally
appointed acting leader, though Ken Kopocis, the deputy assistant administrator for water who spent three years as the
nominee to be assistant administrator, is serving as that department’s de facto head.
Stalled EPA Research Nominee Thomas Burke Takes On Dual Advisory Roles
Thomas Burke, whose nomination by President Obama to lead EPA’s Office of Research and Development (ORD)
stalled in the Senate during the 113th Congress, has stepped into key advisory roles at the agency.
Burke joined EPA Jan. 12 as ORD’s deputy assistant administrator and EPA science advisor, an agency spokeswoman says. Neither role requires Senate confirmation.
President Obama in November 2013 announced his intent to nominate Burke to be the assistant administrator for
ORD and sent the nomination to the Senate for consideration in January 2014. But the Senate failed to act on Burke’s
and other EPA nominations, and the nomination expired at the end of the 113th Congress.
Sen. James Inhofe (R-OK), the new chairman of the Senate Environment & Public Works Committee, told reporters
earlier this month that he expected the White House to submit re-nominations for four top-level EPA positions within
days and that he plans to move forward on many of them.
EPA last year named the long-pending nomination to head the agency’s water office, Ken Kopocis, to a deputy assistant
administrator position and said he would serve as the office’s de facto head. It is unclear whether Burke will hold a similar
position; EPA’s website continues to list career EPA official Lek Kadeli as the acting assistant administrator for ORD.
The science advisor position is one that in many administrations is given to the ORD assistant administrator as part
of a dual role assignment. Before Burke joined the agency, career EPA scientist and ORD’s Deputy Assistant Administrator for Science Robert Kavlock held the position as interim science advisor. Kavlock took on the interim position last
spring after the departure of former EPA Administrator Lisa Jackson and her Science Advisor Glenn Paulson.
Jackson was the only administrator in recent memory who separated the ORD assistant administrator and science
advisor positions between two people, a longstanding recommendation of the National Academy of Sciences intended to
strengthen EPA’s overall scientific portfolio management, including that performed outside the auspices of ORD.
Prior to joining the agency, Burke was a professor and associate dean at Johns Hopkins University’s school of
public health. He has also held leadership positions with New Jersey’s Department of Environmental Protection and
served as the chair of the National Academy of Sciences panel that wrote the influential 2009 report, “Science and
Decisions: Advancing Risk Assessment.” The report’s recommendations have led to several ongoing response projects
by EPA scientists.
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
37
Boiler MACT
Industry, Environmentalists Spar Over EPA’s Combustion Air Rule Package
Industry and environmentalists are sparring with competing claims on the legality of EPA’s package of combustion
emission rules including its boiler air toxics standards, with industry renewing a push to soften the regulations while
environmentalists say the policies are too weak and fall short of stricter limits the Clean Air Act requires.
EPA, various major industry groups, and advocates have filed several briefs recently in suits challenging different
parts of the combustion package, including the boiler maximum achievable control technology (MACT) air toxics rule
for large “major” source boilers and a separate boiler MACT for smaller “area” source boilers. Major sources emit more
than 10 tons per year (tpy) of hazardous air pollutants (HAPs) or 25 tpy of a combination of HAPs. Relevant documents
are available on InsideEPA.com. See page 2 for details. (Doc. ID: 177729)
Another lawsuit contests the agency’s related emissions rule for commercial and industrial solid waste incinerators
(CISWI), and a further suit over EPA’s definition of “fuel” to determine which rule facilities must meet.
In addition to those cases, at least two additional suits address issues severed from the original legal challenges, such as EPA’s use of an “affirmative defense” to shield industry from civil liability in the event of “unavoidable” malfunction. The U.S. Court of Appeals for the District of Columbia Circuit — hearing the combustion
air rules suits — has found the affirmative defense unlawful, and the agency is removing the provision from its
various air policies.
In the major source boiler MACT suit, United States Sugar Corporation v. EPA, industry groups reiterate their
criticisms of the rule, including that EPA does not have the right to ask for “energy assessments” for boiler operators
that go beyond just the boiler to include other aspects of a plant’s operation; EPA cannot impose the MACT on a
“pollutant-by-pollutant” basis; EPA must account for malfunctions when setting standards; and EPA erred by not
adopting a workplace standard for “non-dioxin organic HAPs” emitted by coal-fired power plants.
Industry groups in a Jan. 14 brief argue that the energy assessments (EAs) required for some boilers, which are
aimed at maximizing a facility’s energy efficiency, exceed the agency’s Clean Air Act authority under the air toxics
program, which they argue is restricted to the the boiler itself rather than other operations at a facility.
They also revive a long-running dispute with EPA over the agency’s practice of setting MACT “floors,” or minimum emissions reduction standards, for each individual pollutant emitted by an industrial source.
EPA sets the floor at the level of emissions achieved by the 12 percent least-polluting sources within a source
category. Industry has for years argued that the result is a MACT that no actual existing plant can achieve in practice,
although the D.C. Circuit has so far backed the approach in rulings in suits over MACTs.
Environmentalists in a corrected Dec. 24 reply brief refute all the industry’s arguments and defend EPA, and
in a separate Jan. 14 brief raise their own criticisms of the rule for being too weak.
In the brief they filed earlier this month they fault EPA’s approach of using carbon monoxide as a “surrogate”
pollutant for ensuring compliance with some of the rule’s air limits. “[C]arbon monoxide is not a reasonable surrogate
for organic hazardous air pollutants and . . . EPA exceeded its authority under Clean Air Act §7412(d)(1) by setting
different standards for boilers that are not different classes, types, or sizes of source,” they say.
EPA also wrongly excluded some of the best performing sources from analysis when calculating MACT floors, they
say, and also fault EPA’s use of the Upper Prediction Limit (UPL) when setting the MACT floors.
The UPL is a statistical approach common to several EPA air toxics rules that attempts to build in some prediction
of what emissions levels pollution sources will achieve, given variability in their performance. Environmentalists say
this is not permissible because the Clean Air Act demands that EPA set MACT floors based on the average emissions
actually achieved in practice by the top 12 percent of sources in terms of pollution abatement.
EPA has already provided a more detailed explanation of the UPL methodology to the D.C. Circuit in earlier
litigation in National Association of Clean Water Agencies (NACWA) v. EPA, a case over EPA’s air toxics standards for
sewage sludge incinerators, in which the court remanded the air rule to EPA to explain why the method is appropriate.
The agency is also reconsidering several UPL-based emissions limits in the context of the boiler MACT rules if
they depend on a very limited number of data points.
Environmentalists and industry are also sparring over EPA’s area source boiler rule in a flurry of recent
briefing in the primary litigation over that rule, American Chemistry Council v. EPA.
In a Dec. 23 brief, industry groups fend off criticism from environmental litigants over EPA’s approach in the rule,
defending EPA’s approach of setting generally available control technology (GACT) standards — a less-stringent
approach to reducing emissions — for the smaller boilers that emit below the major source thresholds
EPA’s GACT requirements consist of “work practice standards” that eschew numeric emissions limits in favor of
requirements that boiler owners operate their boilers according to industry best practices to minimize emissions.
Environmentalists say that this is too lenient, but industry is backing the approach.
“EPA acted within its discretion in electing to set [GACT] standards in lieu of MACT standards and fully
38
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
BOILER MACT
supported its decision in the record,” industry groups say in their filing late last month. “The work practice
standards for small coal-fired boilers and during startup and shutdown periods minimize emissions and are well
supported by the record.” Further, “The GACT management practice standards reflect GACT methodology and are
reasonable and within EPA’s discretion under the CAA to promulgate ‘generally available . . . management
practices,’” they say.
Environmentalists in their own Dec. 23 brief in the area source suit defend EPA against industry’s criticisms of the
boiler rule, raised earlier in the litigation. Industry says that EPA’s GACT and MACT standards under the area source
rule should allow for malfunctions in their setting of emissions limits, but do not.
In a Jan. 21 reply brief, industry petitioners insist that the EAs required in the area source rule go beyond the source
category — boilers — and are hence illegal. Nor do the assessments legitimately meet the requirements for “beyond the
[MACT] floor” standards, which are requirements that go beyond MACT floor standards where EPA considers that
necessary and cost-effective, according to the brief.
“In establishing the [EA], EPA lacked authority to regulate beyond the area source boiler category and to set a
beyond-the-floor [MACT] standard without first setting a MACT floor,” industry says.
Also, EPA must account for malfunction periods in setting its standards, industry petitioners say. “EPA’s treatment
of malfunction periods in the rulemaking was contrary to law and arbitrary because EPA failed to set either numeric or
work and management practice standards that account for those periods,” they say. The court should vacate the EA, and
vacate and remand numeric emissions standards as applied to malfunction events, they add.
In a Jan. 16 brief in American Forest and Paper Association, et al., v. EPA, industry and environmentalists’
consolidated challenge to the primary litigation over CISWI, EPA rebuffs numerous claims made against its incinerators
rule, several of which mirror those in the boiler litigation.
For example, the Department of Justice (DOJ) on EPA’s behalf in the brief says that EPA’s use of the UPL, and a
similar statistical method, the Upper Limit (UL), in the incinerator rule was legitimate.
The UPL/UL “is a standard statistical technique and provides a prediction of the emission level that the best
performing source, or the average of the best performing sources, achieves 99 percent of the time,” DOJ says, adding
that EPA has fully responded to the D.C. Circuit’s NACWA remand on this issue.
DOJ also rejects industry’s attack on pollutant-by-pollutant regulation, saying, “Petitioners’ ‘unitary-source’
approach is based on the lowest common denominator. It would require EPA to establish standards for at least some
regulated pollutants that are less stringent than levels actually achieved in practice,” in violation of the air law, DOJ
says.
The CISWI case differs from the boiler cases to the extent that industry in the case is pushing EPA to incorporate
not only malfunctions but also planned startup and shutdown events into the standards set by the rule. “There is no
statutory requirement to specially address startup, shutdown or malfunction events in the establishment of emission
standards and there is no factual basis to follow such a path in this case,” DOJ says.
Meanwhile, EPA in the Jan. 21 Federal Register published three proposed rules the agency quietly released
Dec. 1, that will strip affirmative defense provisions from the major and area source boiler MACT rules and the CISWI
rule, in addition to responding to issues raised by industry in petitions for reconsideration to ease compliance with the
rules.
Although industry groups generally welcomed the reconsideration proposals, they have called for EPA to delay the
boiler rules’ January 2016 implementation until the reconsiderations are finalized.
The major source boiler MACT reconsideration would change certain definitions to benefit industry, for
example an alternative definition of “startup” that is more permissive of test-firing boilers compared to the
narrower definition now included in the major source MACT. Similar changes are proposed for area source
boilers, for example allowing for an alternative particulate matter standard for new oil-fired area source boilers
that combust low sulfur oil, and establishing a new subcategory of source and separate requirements for “limiteduse boilers.”
Publication in the Federal Register starts a 45-day window for public comment on the reconsideration proposals,
which ends March 9. — Stuart Parker
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015
39
Index
INTERSTATE POLLUTION
EPA Places Onus On States To Curb Ozone Interstate
Transport Problems ...................................................... 3
EPA Offers Broad Defense Of Method For Developing,
Implementing CSAPR .................................................. 4
‘Clean’ Utilities Attack Bid To Cite High Court Ruling
To Undermine CSAPR ................................................. 5
METHANE
EPA Defends Deferral Of Methane Air Rules For
Existing Oil & Gas Drilling .......................................... 7
EPA Seeks Direct Methane Limits On New Drilling To
Help Meet GHG Goal ................................................... 9
DIESEL EXHAUST
HEI Data May Aid Bid To Replace Older Diesel Engines
To Cut Cancer Risk .................................................... 10
REGIONAL HAZE
EPA Bid To Revise Haze Air Planning Deadline
Receives Mixed Response .......................................... 11
AIR TOXICS
EPA’s Critics Urge High Court To Scrap Utility MACT
As Not ‘Appropriate’ .................................................. 12
Industry Sues EPA Over Revisions To Utility MACT
Startup Provisions ....................................................... 13
EPA’s TRI Sees Metals Mining Release Increase
Despite Overall Toxics Cut ........................................ 14
EPA Grants More Time For Public Input On Aluminum
Air Toxics Standards .................................................. 15
Environmentalists, Industry Seek Changes To EPA’s
Cement Air Toxics Rule .............................................. 15
CLIMATE ESPS
EPA’s ESPS Small Business Review Spurs Fear Of
Industry ‘Food Fight’ .................................................. 16
EPA Outlines Slew Of Procedural Flaws With States’
Suit Over GHG ESPS ................................................. 17
OZONE
Ahead Of EPA Hearings, Groups Debate Science For
Stricter Ozone NAAQS .............................................. 19
PARTICULATE MATTER
EPA Defers PM2.5 Air Standards Attainment Designations
For Three States .......................................................... 20
CONGRESS
McCarthy Pushes Major EPA Rules Despite Budget
Threats, GOP Attacks ................................................. 21
40
Inhofe Reduces Senate EPW Subcommittees To Avoid
Jurisdictional Fights .................................................... 23
Republicans, Democrats Name New Leaders For EPA
Spending Panels .......................................................... 24
Environmentalists Warn House-Approved Bill Would
Limit EPA Rules ......................................................... 25
GOP Critics Of EPA Fault Adequacy Of GAO Study
On ‘Sue And Settle’ .................................................... 25
NSPS
Industry Seeks Lengthy Delay For EPA’s Revised Final
Wood Stove Air Rule .................................................. 26
MOBILE SOURCES
Environmentalists Urge EPA To Quickly Craft First GHG
Limits For Aircraft ...................................................... 27
STB Advises EPA Of Likely Preemption For California
Railroad Air Rules ...................................................... 28
D.C. Circuit Sets Deadlines For California Truckers’
Challenge To EPA Waiver .......................................... 29
TRANSPORTATION CONFORMITY
‘Conformity’ Ruling Spurs Fear Of Disarray For States’
Air Quality Planning ................................................... 30
GREENHOUSE GASES
Obama’s State Of The Union Includes Vow To Push
Climate Agenda Ahead ............................................... 32
API Files Suit Over EPA’s Oil Sector Greenhouse Gas
Reporting Regulation .................................................. 33
FUELS
Oregon Officials Adopt LCFS Rules In Step Toward
West Coast Biofuels Market ....................................... 33
EPA Unveils Policy For Enforcing Ship Fuel Rule In
Low Emissions Areas ................................................. 34
CARBON SEQUESTRATION
California Launches Effort To Develop GHG
Accounting For CCS Projects .................................... 35
PERSONNEL
President Obama Nominates Stan Meiburg As Deputy
EPA Administrator ...................................................... 37
Stalled EPA Research Nominee Thomas Burke Takes
On Dual Advisory Roles ............................................. 37
BOILER MACT
Industry, Environmentalists Spar Over EPA’s
Combustion Air Rule Package .................................... 38
CLEAN AIR REPORT — www.InsideEPA.com — January 29, 2015