The Committee on Environmental Law’s report for Spring 2022 summarizes key environmental law developments at the United States Environmental Protection Agency (EPA) and in the federal courts between October 2021 and March 2022, with a particular focus on developments of interest to the aviation, electric, and natural gas industries. You’ll find hyperlinks to relevant articles, rulemakings, statutes, regulations, and other documents throughout the report. Quotes in this report are taken from the nearest hyperlinked source in the report unless otherwise stated or indicated. Dates in this report are from this year unless otherwise stated.
In the final days of the Trump Administration, EPA finalized greenhouse gas emission standards for certain types of jet engines and turboprop engines that were “equivalent to” the International Civil Aviation Organization’s 2017 carbon dioxide standards. As described in the Federal Register notice, the rules generally apply to civil “subsonic jet airplanes with a maximum takeoff mass (MTOM) greater than 5,700 kilograms and subsonic propeller-driven (e.g., turboprop) airplanes with a MTOM greater than 8,618 kilograms.” The standards will apply to covered airplanes already in production beginning in 2028, unless their designs are changed in a way that increases their greenhouse gas emissions, in which case the standards wo;; apply beginning in 2023. For new type designs, the standards “apply to covered airplanes for which an application for certification is submitted to the FAA on or after” the date the rule was published in the Federal Register, or in 2023, “for new type designs that have a maximum takeoff mass (MTOM) of 60,000 kilograms MTOM or less and have 19 passenger seats or fewer[ ].”
Days after those standards were finalized, three environmental groups (Center for Biological Diversity, Friends of the Earth, and Sierra Club) filed a petition for review of that final action in the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) (Case No. 21-1021), arguing that the 2016 ICAO’s standards were “outdated” and that airplanes were expected to meet those standards even without the EPA rule. Twelve states and the District of Columbia filed a separate petition for review (Case No. 21-1018), which was consolidated with the first.
After the Biden Administration came into office, the D.C. Circuit agreed to hold those petitions in abeyance while the new Administration reviewed the rule. And in September 2021, the White House released an “Announcement on Sustainable Aviation,” in which the Biden Administration announced it was “taking steps … to advance the use of cleaner and more sustainable fuels in American aviation” to help achieve “a fully zero-carbon aviation sector by 2050.” Among other actions, the White House stated that EPA would work with the Department of Energy “to support newly developed fuels and feedstocks that may be viable for inclusion … in the Federal Renewable Fuel Standard (RFS) program” and work with the Federal Aviation Administration “to identify ways … to reduce or eliminate lead from aviation gasoline.” Then, in November, the Biden Administration informed the D.C. Circuit that it did not “plan[ ] to commence a reconsideration proceeding or new rulemaking pertaining to the Airplane Rule.” Accordingly, the court returned the consolidated cases to the court’s active docket and set a briefing schedule. The petitioners’ opening briefs were filed in late February. The respondents’ briefs are due in May; the petitioners’ reply briefs are due in late June; and final briefs are due July 12, 2022.
Most recently, on February 3rd, EPA released proposed particulate matter (PM) emission standards for “civil subsonic jet aircraft engines with rated output of greater than 26.7 kN” and “civil jet engines for use on supersonic airplanes with a rated output at or below 26.7 kN.” The standards would match the International Civil Aviation Organization’s 2017 and 2020 standards. For subsonic aircraft engines, the standards would apply to in-production engines and new type designs submitted for certification starting in 2023. EPA is also proposing new testing and measurement procedures for the new standards. EPA will accept comments on the proposed rule through April 4th.
On February 18th, EPA released information on the nitrogen oxides (NOx), sulfur dioxide (SO2), carbon dioxide (CO2), and mercury emitted last year from power plants in the United States (excluding Alaska and Hawaii). Emissions in all categories were higher than in 2020, which EPA attributed to “a rebound in coal-fired generation as natural gas prices and energy demand increased.” In particular, EPA noted “a one-year 16% increase in coal generation and a 3% decrease in natural gas generation” between 2020 and 2021. Nonetheless, EPA reported significant long-term decreases in SO2 and NOx since 1990, and decreases of 21% in power plants’ CO2 emissions between 1995 and 2021.
On the day before President Biden took office in 2021, the United States Court of Appeals for the D.C. Circuit issued its ruling in in American Lung Association v. EPA, which vacated the Trump Administration’s greenhouse gas standards for existing coal-fired power plants (the Affordable Clean Energy (ACE) Rule). Last October, the United States Supreme Court granted certiorari to four petitions seeking review of the D.C. Circuit’s opinion, which were consolidated with West Virginia v. EPA (Case No. 20-1530). And on February 28th, the Court heard two hours of oral argument in those appeals.
The ACE Rule, like President Obama’s Clean Power Plan before it, was issued pursuant to EPA’s authority under Clean Air Act § 111, 42 U.S.C. § 7411. Section 111(b) of the Act directs EPA to develop “a list of categories of stationary sources” whose “air pollution ... may reasonably be anticipated to endanger public health or welfare,” and then publish emissions standards for new sources in those categories. For existing sources in those same categories, EPA takes a different approach. As the United States Supreme Court explained in American Electric Power Co., Inc. v. Connecticut, 564 U.S. 410 (2011), EPA “issues emissions guidelines,” which states then follow to “issue performance standards for stationary sources within their jurisdiction.” But under Section 111(a), both New Source Performance Standards and existing source emissions guidelines must be based on the “best system of emission reduction” that EPA “determines has been adequately demonstrated,” taking into account cost “and any nonair quality health and environmental impact and energy requirements … .”
The breadth of this language, and the flexibility it provides EPA, is the subject of West Virginia v. EPA. In the ACE Rule, the Trump Administration concluded that “system of emission reduction” means something that can be applied to, or undertaken at, a particular source (i.e., “inside the fenceline”), such as control equipment. The D.C. Circuit rejected that interpretation, holding that EPA could also consider “systems of emission reduction” for the industry as a whole, such as shifting generation from coal-fired electric generating units to cleaner, natural gas-fired or renewable generation. In West Virginia, the Court granted certiorari to consider whether Section 111(d) truly allows EPA to determine the best system of emission reduction “at a generation-sector-wide level, instead of at the individual source level” (as the question was put in the State of North Dakota’s petition), and whether the Act “clearly authorizes EPA to decide such matters of vast economic and political significance as whether and how to restructure the nation’s energy system” (per the petition from Westmoreland Mining Holdings).
This latter question implicates the “major questions” doctrine. In a partial dissent in American Lung, D.C. Circuit Judge Walker wrote that “EPA lacked the authority to promulgate” existing source emissions guidelines like the Clean Power Plan that relied on “off-site solutions like generation shifting” and, as such, “implicate[d] ‘decisions of vast economic and political significance[ ]’” (quoting Utility Air Regulatory Group v. EPA, 573 U. S. 302 (2014)), without “a clear statement [in the Clean Air Act] unambiguously authorizing the EPA” to consider such solutions. The majority opinion, on the other hand, held that the “major questions” doctrine did not apply to the Clean Power Plan, because EPA had clear authority to regulate greenhouse gases and the Plan did not truly mandate generation shifting. In the Fall 2021 issue of Infrastructure, the Chair and a co-Chair of this Committee described the “major questions” doctrine in more detail and explained how it relates to the Chevron doctrine of deference to agencies’ interpretations of their governing statutes. The authors further discussed how Justices Gorsuch, Kavanaugh, and Thomas have expressed concerns that allowing administrative agencies to interpret ambiguous statutes according to the agencies’ policy judgments may violate the nondelegation doctrine, and how that might ultimately affect their ruling in West Virginia v. EPA.
Several members of the electric utility industry appeared as parties or amici curiae in the United States Supreme Court action, on both sides of the case. America’s Power (a trade association for coal-fired generation) filed a brief in support of the petitioners that argued that the “major questions” doctrine had required EPA to repeal the Clean Power Plan. A group of power companies that included Consolidated Edison, Inc., Exelon Corporation, and Pacific Gas and Electric Co. filed a brief that argued against the application of the “major questions” doctrine and in favor of allowing EPA to interpret “best system of emission reduction” flexibly. And the Edison Electric Institute filed an amicus curiae brief along with the National Association of Clean Water Agencies that implored the Court to rely on “traditional tools of statutory construction and interpretation” and not apply “the nondelegation or major questions doctrines in ways that could strip EPA of all authority to regulate GHGs under §7411(d)” or otherwise “undermine the Clean Air Act’s displacement of federal common law tort actions against electricity providers, clean water utilities, and other greenhouse gas (GHG) emitters … .”
During the oral argument on February 28th, the Justices questioned the petitioners’ counsel regarding the meaning of “inside the fenceline” and whether it makes a difference if EPA selects a “best system of emission reduction” that more directly requires generation shifting or “incidental[ly]” forces generation shifting by increasing the costs to operate coal-fired generators. They questioned the petitioners about the states’ flexibility to permit emissions trading, if EPA cannot select a “best system of emission reduction” that effectively requires emissions trading. They also questioned the petitioners’ counsel regarding the contours of the major question doctrine; the relationships between it, the “clear statement” canon of construction, and the “non-delegation” doctrine; under what circumstances the Court should apply each; and whether the Court must actually apply the major questions doctrine to find for the petitioners. Justice Kagan questioned whether the major questions doctrine truly limits EPA to inside-the-fenceline systems of emission reduction, or alternatively whether such systems could be more expensive or costly than industry-wide systems. The Justices also questioned whether the petitioners had standing, given that the Biden Administration has said that it will not seek to resurrect the Clean Power Plan but, instead, will propose its own greenhouse gas emissions guidelines for existing coal-fired electric generating units.
The Justices questioned the respondents’ counsel about the contours and application of the major questions doctrine, and whether EPA could select a “best system of emission reduction” that violated the doctrine without also disregarded the limiting factors in Section 111(a), such as cost. They questioned the respondents about the status of the Clean Power Plan following the D.C. Circuit’s decision vacating the ACE Rule and how that status affects the petitioners’ standing. They questioned the respondents about whether the Obama Administration had imposed more stringent greenhouse gas limits on existing units than on new units, and whether that made sense under the Act. And they also questioned whether the Clean Power Plan effectively required the states to adopt generation shifting, even if it ostensibly gave the states choices in developing their performance standards.
At oral argument, EPA’s counsel stated that EPA “expects to issue a notice of proposed rulemaking” for a rule to replace the ACE Rule “this year” and to finalize that rule by 2023.
In April 2015, EPA promulgated its Coal Combustion Residuals rule under Subtitle D of the Resource Conservation and Recovery Act (RCRA). The rule established numerous requirements for the disposal of coal combustion residuals (CCR) in landfills and surface impoundments, including: structural integrity design criteria and safety assessment requirements; liner requirements for new and expanded impoundments and landfills; site restrictions for new landfills and surface impoundments; groundwater monitoring requirements; requirements for closing CCR units; and more.
In July 2018, EPA finalized amendments to the 2015 CCR Rule. The amendments permitted EPA (or states with approved programs) to “[s]uspend groundwater monitoring requirements if there is evidence that there is no potential for migration of hazardous constituents to the uppermost aquifer during the active life of the unit and post-closure care … .” They allowed permitting authorities, and not professional engineers, to certify that facilities are complying with the CCR Rule’s requirements. They established risk-based groundwater protection standards (GWPS) for the four constituents in 40 CFR Part 257, Appendix IV, without maximum contaminant levels (MCLs) under the Safe Drinking Water Act. And they extended to October 31, 2020, the deadline by which surface impoundments were required to stop accepting CCR and close if they could not comply with the requirement in 40 C.F.R. § 257.60 to place facilities at least five feet above the upper limit of the uppermost aquifer, or are unlined and leaking, causing a statistically significant increase over the GWPS. The 2018 rule was challenged in the D.C. Circuit, and ultimately remanded without vacatur for reconsideration.
In August 2018, the D.C. Circuit issued its ruling in Utility Solid Waste Activities Group v. EPA, 901 F.3d 414 (D.C. Cir. 2018), which granted in part certain environmental organizations’ challenges to the 2015 CCR Rule and remanded certain provisions of the Rule at EPA’s request. The court found that the rule’s provisions allowing “existing, unlined surface impoundments to continue operating until they cause groundwater contamination” were “arbitrary and contrary to RCRA” because groundwater contamination would not be “promptly detected,” “promptly stopped,” or able to be remedied “once it occurs.” The court struck down provisions treating clay-lined impoundments as if they were lined with geomembranes, finding those provisions “failed to ensure ‘no reasonable probability’ of adverse effects to the environment, as RCRA requires.” It also struck down the rule’s exemption of “legacy ponds” (“inactive impoundments at inactive facilities”) from its preventative regulations.
On August 28, 2020, EPA finalized a rule (referred to as “Part A”) to respond to the D.C. Circuit’s ruling in Utility Solid Waste Activities Group. Among other changes, the rule reclassified clay-lined impoundments as “unlined” impoundments, and extended the deadlines in 40 C.F.R. § 257.101(a)(1) and (b)(1)(i) by which unlined impoundments (and those that cannot comply with the aquifer location requirement) must stop accepting waste and begin closure to “as soon as technically feasible, but not later than April 11, 2021.” The “Part A” rule also revised the alternative closure standards in 40 C.F.R. § 257.103 to allow impoundments to continue to receive both CCR and non-CCR waste if the impoundment’s owner or operator demonstrates that there is no alternative disposal capacity on- or off-site and either: (1) “it was technically infeasible to complete the measures necessary to obtain alternative disposal capacity … by April 11, 2021”; or (2) the facility is permanently closing a coal-fired boiler. Impoundments qualifying under option (1) could continue to operate until October 2023 or, for impoundments closing as a result of the Utility Solid Waste Activities Group ruling, October 2024. Impoundments qualifying under option (2) could continue to operate until October 2023 (if 40 acres or smaller) or October 2028 (if larger than 40 acres).
EPA’s website lists the 57 facilities that submitted demonstrations under options (1) and (2). On January 11th, EPA announced that it was proposing to determine that four of the extension applications were incomplete; to determine that one facility (Greenidge in Dresden, NY) was ineligible for an extension under option (2) (because its boilers were natural gas-fired, not coal-fired); to deny the extensions required by Clifty Creek Power Station (Madison, Indiana), Gavin Power Plant (Cheshire, Ohio), and Ottumwa Generating Station (Ottumwa, Iowa); and to grant the extension request from H.L. Spurlock Power Station (Maysville, Kentucky) with conditions. EPA is accepting comments on one of the proposed findings of incompleteness (the one for Dallman Power Station in Springfield, Illinois), and on the proposed denials and the conditional approval, through March 25th.
In November 2020, several environmental organizations, including Labadie Environmental Organization and Sierra Club, filed a petition for review of the “Part A” rules in the D.C. Circuit. That case, Labadie Environmental Organization v. EPA (Case No. 20-1467), is being held in abeyance by agreement of all of the parties, while the petitioners review EPA’s decisions on the demonstrations submitted under options (1) and (2).
Also in November 2020, EPA finalized a rule (referred to as “Part B”) that amended 40 C.F.R. § 257.71(d) to create a process for EPA or a participating state to approve an alternate liner for CCR surface impoundments “constructed without a composite liner or alternate composite liner … .” The rule allows unlined surface impoundments to continue to operate so long as the owner or operator can demonstrate that the unit will pose “no reasonable probability of adverse effects to human health or the environment.” This demonstration requires a two-step process. Initially, a facility would be required to submit an application November 30, 2020 (subsequently extended to December 14, 2020) that demonstrates the unit meets the minimum requirements, including the existence of sufficient monitoring wells. If approved, the facility would then submit a “demonstration package … certified by a qualified professional engineer” by November 30, 2021, presenting evidence that “there is no reasonable probability that operation of the surface impoundment will result in concentrations of constituents listed in appendix IV to this part in the uppermost aquifer at levels above a groundwater protection standard.” On January 11th, EPA announced that it had received eight applications, and all were deemed complete.
In October 2020, EPA released a final rule revising the effluent limitations guidelines for two waste streams commonly produced by coal-fired steam electric plants: bottom ash transport water and flue gas desulfurization (FGD) water.
For FGD wastewater, the “Steam Electric Reconsideration Rule” generally promulgated effluent limitations for mercury, arsenic, selenium, and nitrate/nitrite as nitrogen based on a determination that the “Best Available Technology Economically Achievable” (BAT) was “a combination of chemical precipitation and low hydraulic residence time biological treatment” (LRTR), including ultrafiltration. For high FGD flow plants (those with FGD wastewater flows over 4 million gallons/day, after accounting for the ability to recycle wastewater) and low utilization electric generating units (those with a capacity utilization rating below 10%), the rule set effluent limitations for mercury and arsenic based on chemical precipitation as BAT. And for electric generating units that will permanently stop firing coal by 2028, the rule set “limitations for total suspended solids (TSS) in FGD wastewater” based on surface impoundments as BAT.
For bottom ash transport water, the rule generally established BAT as “a high recycle rate system [(HRR)] with a site-specific volumetric purge … which cannot exceed 10 percent of the bottom ash transport water system’s volume … .” For low utilization electric generating units, the rule set “BAT limitations for [bottom ash] transport water for total suspended solids (TSS)” based on surface impoundments as BAT and required implementation of a best management practices (BMP) plan. And for electric generating units that will permanently stop firing coal by 2028, the rule again set numeric TSS limitations based on surface impoundments as BAT.
For indirect dischargers (discharges to publicly owned treatment works), the rule set pretreatment standards (PSES) identical to the BAT limitations (except for TSS), which indirect dischargers must meet by October 13, 2023. For direct discharges, where the rule’s BAT limitations were more stringent than a particular source’s previous Best Practicable Control Technology Currently Available (BPT) limitations, local permitting authorities were generally required to set deadlines for compliance no earlier than October 13, 2021, and no later than December 31, 2025. Compliance with the BAT limits for the high flow and low utilization subcategories is generally required by December 31, 2023. Under the rule’s “Voluntary Incentives Program,” however, plants that agree to “achieve more stringent limitations on mercury, arsenic, selenium, nitrate/ nitrite, bromide, and TSS in FGD wastewater” that are “based on membrane filtration preceded by pretreatment” have until December 31, 2028, to meet the new requirements.
Units that intended to take advantage of the alternative limits for low utilization electric generating units or for electric generating units that will permanently stop firing coal by 2028 were required to submit a “Notice of Planned Participation” to their permitting authorities or control authorities by October 13, 2021. In November 2021, the Associated Press reported that “at least 26 plants in 14 states” had told state regulators that “they will stop burning coal.” Of those plants, 21 said they plan to close, while the remainder plan to convert to natural gas. (For purposes of comparison, EPA estimated that 75 coal-fired power plants might incur compliance costs under the Steam Electric Reconsideration Rule.)
Various environmental organizations filed petitions for review of the Steam Electric Reconsideration Rule in the United States Courts of Appeals for the Fourth Circuit and for the D.C. Circuit. These were consolidated in the Fourth Circuit (Appalachian Voices v. EPA, No. 20-2187). The case was placed in abeyance in March 2021 to allow the new Biden Administration to review the rule. In August 2021, EPA published a notice that it had “decided to initiate a notice-and-comment rulemaking in which the Agency will determine whether more stringent limitations and standards are appropriate” and “intends to sign the notice of proposed rulemaking … in the Fall of 2022.” Radhika Fox, Assistant Administrator for EPA’s Office of Water, filed a declaration in the Fourth Circuit appeal explaining that “EPA is concerned that some pollution control technologies that the 2020 Rule found not to be technologically available, such as membrane filtration for control of pollutants in flue gas desulfurization wastewater, may, in fact, be able to be used by many steam electric power plants.”
Clean Air Act § 110(a)(2)(d) (42 U.S.C. § 7410(a)(2)(D)) requires state implementation plans (SIPs) to contain “adequate provisions” to prevent any State’s sources or other emissions activities from contributing significantly to nonattainment with, or interfering with maintenance of, a NAAQS in another state, or interfering with another state’s prevention of significant deterioration (PSD) measures.
In October 2016, EPA published updates to its Cross-State Air Pollution Rule (CSAPR) “to address interstate transport of ozone pollution with respect to the 2008 ozone NAAQS.” The 2016 CSAPR Update promulgated federal implementation plans (FIPs) that set statewide “budgets” (caps) for emissions of nitrogen oxides (NOx) from twenty-two states’ electric generating units (EGUs) during ozone season (May to September) and set up an allowance trading program among those states. In December 2018, EPA revised the SIPs for twenty of those states (Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Mississippi, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Virginia, West Virginia, and Wisconsin) to reflect EPA’s determination that the FIPs would “fully address[ ]” their “good neighbor obligations for the 2008 ozone NAAQS ... .” In that rulemaking, which EPA called the “CSAPR Close-Out,” EPA found the 2016 CSAPR Update would allow downwind states to attain the 2008 ozone NAAQS by 2023. EPA further found that it was reasonable to look at attainment in 2023, given the time it would take for upwind states to reduce their NOx emissions.
In September 2019, the United States Court of Appeals for the D.C. Circuit issued an opinion in Wisconsin v. EPA (Case No. 16-1406), which held that the 2016 CSAPR Update impermissibly “permit[ed] upwind States to continue their significant contributions to downwind air quality problems ... past the statutory deadlines for nonattaining downwind areas to meet the NAAQS for ozone.” The court stopped short of holding that the Clean Air Act permitted no “deviation between the upwind and downwind deadlines,” suggesting that “such deviation” might be permissible if it were “rooted in” the framework of the Act.
Then, in October 2019, the D.C. Circuit issued its judgment in New York v. EPA (Nos. 19-1019 et al.), which held that Wisconsin also required it to vacate EPA’s CSAPR Close-Out rule. EPA had conceded that, “under the rule, upwind states will continue contributing significantly to downwind nonattainment in 2021” (the attainment deadline for areas in serious nonattainment of the 2008 ozone NAAQS). Accordingly, the court vacated the rule, holding that EPA had failed to demonstrate that “it would be impossible to eliminate excess upwind emissions by the downwind deadline” or that “some deviation between upwind and downwind deadlines” was necessary.
In response to the Wisconsin and New York rulings, in April 2021, EPA issued a Revised CSAPR Update. As explained in EPA’s fact sheet for the rulemaking, the Revised CSAPR Update promulgated new or revised FIPs for twelve states whose “projected 2021 emissions were found to contribute at or above a threshold of 1% of the NAAQS” to downwind nonattainment or maintenance problems.” In particular, the Revised CSAPR Update created a new “CSAPR NOX Ozone Season Group 3 Trading Program” for those states, with new, more stringent emission budgets that began with the 2021 ozone season and with further adjustments through the 2024 ozone season. As with the earlier rulemakings, EPA’s Revised CSAPR Update focused on reductions in ozone season NOx emissions from EGUs, finding that reducing emissions from non-EGUs was not necessary “to eliminate significant contribution or interference with maintenance under the 2008 ozone NAAQS … .”
The Midwest Ozone Group filed a petition for review of the Revised CSAPR Update in June 2021. Briefs have been submitted, and oral argument, which was originally scheduled for May 13, 2022, is in the process of being rescheduled.
On February 28th, EPA issued a pre-Federal Register proposed rule stating its intention to issue FIPs for twenty-five states that EPA believes are “significantly contributing to downwind nonattainment or [significantly] interfering with maintenance of the 2015 ozone NAAQS in other states based on projected nitrogen oxides (NOx) emissions in the 2023 ozone season.” As with prior CSAPR rulemakings, states were considered to “significantly contribute” to downwind nonattainment or maintenance issues if their contributions “equaled or exceeded 1 percent of the NAAQS.” EPA previously approved an ozone transport SIP for Oregon under the 2015 ozone NAAQS. It also previously approved an ozone transport SIP for Delaware, although it is now proposing, based on updated air quality modeling, to find that Delaware still “has unresolved interstate transport obligations for the 2015 ozone NAAQS.”
Starting in 2023, the proposed rule would modify the existing FIPs and emissions budgets for the twelve states currently in the CSAPR NOx Ozone Season Group 3 Trading Program (see supra); transition eight states currently in the CSAPR NOx Ozone Season Group 2 Trading Program to the Group 3 Program; and bring five states that are not currently in any NOx ozone season trading program into the Group 3 Program. The NOx ozone season emissions budgets would be set to reflect the emissions reductions possible if certain covered electric generating units in the subject states optimize existing selective catalytic reduction controls (SCRs) and selective non-catalytic reduction controls (SNCRs) in time for the 2023 ozone season; install “state-of-the-art NOx combustion controls” in time for the 2024 ozone season; and (for all of the states except Alabama, Delaware, and Tennessee) install new SCRs on coal steam units with a capacity of at least 100 MW (except circulating fluidized bed units), install SCRs on oil/steam units with a capacity greater than 100 MW and historical NOx emissions of at least 150 tons per ozone season, and install SNCRs on coal steam units with a capacity less than 100 MW and circulating fluidized bed units, in time for the 2026 ozone season. EPA has proposed “preset” emissions budgets for 2023 and 2024, with budgets for the following years to be set one year in advance and based on “the latest available information on the composition and utilization of the EGU fleet at the time … .” EPA is also proposing to set “backstop daily emissions rates of 0.14 lb/MMBtu for coal steam units greater than or equal to 100 MW in covered states.” These backstop rates would require increased allowance surrenders for units exceeding the daily rates, thereby assuring “continuous operation of installed pollution controls” throughout the ozone season. The backstop rates would go into effect in 2024 for units with SCRs and in 2027 for those currently without SCRs.
Unlike the more recent CSAPR update rulemakings, EPA is also proposing to impose NOx emission limits for certain categories of sources beyond electric generating units in twenty-three states, starting with the 2026 ozone season. Of particular interest to this Section, the covered categories of sources include “reciprocating internal combustion in Pipeline Transportation of Natural Gas sources.” The proposed NOx limits are 1.0 g/hp-hr for natural gas-fired four stroke rich burn engines; 1.5 g/hp-hr for natural gas-fired four stroke lean burn engines; and 3.0 g/hp-hr for natural gas-fired two stroke lean burn engines.
The deadline for comments on the proposed rule will be 60 days from its publication in the Federal Register.
Under Section 112 of the Clean Air Act, at 42 U.S.C. § 7412(n)(1)(a), EPA was required to study the public health hazards “reasonably anticipated to occur” as a result of hazardous air pollutant (HAP) emissions from electric utility steam generating units, and then regulate those emissions if EPA concluded that doing so was “appropriate and necessary.” In 2000, EPA issued its finding that it was “appropriate and necessary” to regulate HAP emissions from coal- and oil-fired electric generating units. And in 2012, EPA issued the Mercury and Air Toxics Standards (MATS) rule, which set limits on mercury and other HAP emissions from those units.
In June 2015, the U.S. Supreme Court issued Michigan v. EPA, 576 U. S. 743 (2015), which held that EPA had erred when it determined that regulating HAP emissions from electric generating units was “appropriate and necessary” without considering the cost of those regulations. Accordingly, in 2016, the Obama EPA issued a supplemental finding concluding that “the cost of MATS is reasonable” because “the power sector” would be “able to comply with the rule’s requirements while maintaining its ability to [generate, transmit, and distribute] reliable electricity at reasonable cost to consumers.” The supplemental finding also included a “formal benefit-cost analysis” that concluded that “the benefits (monetized and non-monetized) of the rule … far outweigh the costs.”
In May 2020, the Trump Administration reconsidered and rescinded the “appropriate and necessary” finding – but without rescinding the MATS rule. The Trump EPA concluded that the Obama EPA’s main finding “did not meaningfully consider cost,” and that the formal benefit-cost analysis was flawed because it gave “equal weight … to the non-HAP co-benefit emission reductions and the HAP-specific benefits of the regulation.”
Numerous environmental and health organizations filed a petition for review in the D.C. Circuit (Case No. 20-1221) challenging the rescission of the “appropriate and necessary” finding. That petition and other consolidated petitions have been held in abeyance since February 2021, pending the new Biden Administration’s review of the Trump EPA’s May 2020 rulemaking. Westmoreland Mining Holdings LLC also filed a petition for review (Case No. 20-1160), asserting that the rescission of the “appropriate and necessary” finding rendered it unlawful for EPA to continue regulating HAP emissions from electric generating units. That petition for review is held in abeyance pending a ruling on the first group’s challenges to the May 2020 rulemaking.
Now, the Biden Administration has proposed to reweigh the MATS Rule’s costs and benefits again. On February 9th, EPA issued a proposed rule in which it proposed to reaffirm that regulating HAP emissions from electric generating units is “appropriate and necessary.” EPA’s “preferred” benefit/cost analysis takes a “totality-of-the-circumstances” approach that considers “all of the advantages of reducing [HAP] emissions … regardless of whether those advantages can be quantified or monetized,” and the benefits of such reductions to environmental justice communities, among other factors. EPA also undertook a “formal benefit-cost analysis” that considered only those benefits from regulating electric generating units’ HAP emissions that can be monetized, including ancillary benefits such as reductions in PM2.5 and SO2. EPA is accepting comments on the proposed rule through April 11th.
On November 15, 2021, EPA proposed New Source Performance Standards (NSPS) and existing source emissions guidelines for greenhouse gas (specifically, methane) and volatile organic compound (VOC) emissions from the production and processing and transmission and storage segments of the oil and natural gas sector. The NSPS (to be codified at 40 CFR part 60, subpart OOOOb) would apply to “sources that commenced construction, modification, or reconstruction after November 15, 2021.” The existing source emissions guidelines (to be codified at 40 CFR part 60, subpart OOOOc) would apply to sources existing on or before November 15, 2021. The proposed rule would also reinstate portions of 40 CFR part 60, subpart OOOOa, pursuant to Congress’s disapproval (under the Congressional Review Act) of the Trump EPA’s 2020 rule that rescinded the 2012 and 2016 NSPS for VOC and methane emissions from “sources in the transmission and storage segment” of the oil and natural gas source category. EPA has indicated that it intends to issue a supplemental proposal later this year that may include requirements to reduce methane and/or VOC emissions from pipeline “pigging” operations.
The National Environmental Policy Act (42 U.S.C. § 4321 et seq.) declares, at § 4331, that “it is the continuing policy of the Federal Government ... to use all practicable means and measures ... to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans.” It instructs “the Federal Government to use all practicable means, consistent with other essential considerations of national policy, to improve and coordinate Federal plans ... to the end that the Nation may ... fulfill the responsibilities of each generation as trustee of the environment for succeeding generations ... .” And, at § 4332, it requires all federal agencies to “insure that presently unquantified environmental amenities and values may be given appropriate consideration in decisionmaking along with economic and technical considerations,” and to take into account environmental impacts and possible alternatives when recommending or commenting on legislative proposals or “other major Federal actions significantly affecting the quality of the human environment ... .”
In July 2020, under the Trump Administration, the Council on Environmental Quality (CEQ) finalized extensive changes to the NEPA rules that CEQ said would “simplify[ ] and clarify[ ] the requirements” and reduce “excessive paperwork, litigation, and delays.” On October 7, 2021, under the Biden Administration, the CEQ proposed to begin “restor[ing] [the] regulatory provisions that were in effect for decades before being modified in 2020.” CEQ explained that this rulemaking is only “Phase 1” of its efforts and that it intends to issue a “Phase 2” proposed rule that will “more broadly revisit the 2020 NEPA Regulations and propose further revisions … .” The proposed “Phase 1” rulemaking focuses on three specific changes.
The first proposed change relates to the “purpose and need” section of the environmental impact statements (EISs) that federal agencies prepare for major federal actions. Before the 2020 amendments, 40 C.F.R. § 1502.13 stated that an EIS “shall briefly specify the underlying purpose and need to which the agency is responding in proposing the alternatives including the proposed action.” The Trump CEQ amended the rule and added a sentence that stated, “When an agency's statutory duty is to review an application for authorization, the agency shall base the purpose and need on the goals of the applicant and the agency's authority.” The Biden CEQ proposes to revert to the prior language, stating that it believes the Trump amendment “could be construed to require agencies to prioritize the applicant’s goals over other relevant factors, including the public interest.”
The second proposed change relates to the requirements for agency NEPA procedures in 40 C.F.R. § 1507.3. The Trump CEQ amended that rule to state that the NEPA implementing regulations would generally control if there were inconsistencies between the amended NEPA regulations and agencies’ existing NEPA procedures, and that agencies would have until September 2023 to revise their procedures to make them consistent with the revised NEPA implementing regulations. The Biden CEQ proposes to remove this language and give agencies “the discretion and flexibility to develop procedures beyond the CEQ regulatory requirements” that “address their specific programs and the contexts in which they operate.”
The third proposed change relates to the definitions of “effects or impacts” in 40 C.F.R. § 1508.1(g). The Trump CEQ removed the definition of “cumulative impact” from the rules along with references to “direct” and “indirect” effects. The amended rule currently directs agencies to focus on “changes … that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives.” It states that “[a] ‘but for’ causal relationship is insufficient to make an agency responsible for a particular effect under NEPA.” And it also generally directs agencies to disregard effects that are “remote in time, geographically remote, … the product of a lengthy causal chain[,]” or “that the agency has no ability to prevent due to its limited statutory authority or [that] would occur regardless of the proposed action.” The Biden CEQ is proposing to reverse those changes to “ensure that the NEPA process fully and fairly considers the appropriate universe of effects, such as air and water pollution, greenhouse gas emissions that contribute to climate change, and effects on communities with environmental justice concerns.” In particular, the proposed amendments to § 1508.1(g) would make clear that the terms “effects” and “impacts” include “direct effects,” “indirect effects,” and “cumulative effects” and would add definitions of all three terms.
On his first day in office, President Biden issued an Executive Order establishing an Interagency Working Group on the Social Cost of Greenhouse Gases to help “agencies to accurately determine the social benefits of reducing greenhouse gas emissions when conducting cost-benefit analyses of regulatory and other actions.” The executive order directed the Interagency Working Group to publish an interim Social Cost of Carbon (SCC), Social Cost of Nitrous Oxide (SCN), and Social Cost of Methane (SCM) within 30 days and final SCC, SCN, and SCMs by January 2022.
In February of 2021, the Group announced that it would “replac[e] the previous Administration’s estimates with the estimates developed prior to 2017, adjusted for inflation” and posted a Technical Supporting Document identifying the new interim estimates. Several states filed suit in the Eastern District of Missouri (Case No. 4:21-cv-00287), arguing that developing a social cost of greenhouse gases is a policy decision that the Executive Branch lacks the authority to make and that the estimates were arbitrary and capricious. The court dismissed that complaint last August for lack of subject matter jurisdiction, holding that the states “lack[ed] standing and that their claims are not ripe for adjudication.” The court held that the states were required to wait until a federal agency actually relied on the new social costs in a rulemaking and then challenge that rulemaking. The states appealed to the Eighth Circuit (Case No. 21-3013). The states filed their reply brief on March 16th.
A second, more successful challenge to the interim social costs was filed by ten states in the Western District of Louisiana (Case No. 2:21-cv-01074). There, the states filed a motion asking the court to enjoin the federal government from relying on the interim SCC, SCN, and SCM until their legality could be determined. On February 11th, that court issued a memorandum ruling that the states had standing to challenge the draft social costs of greenhouse gases because those new estimates “impose[ ] new obligations on the states and increase[ ] regulatory burdens when they participate in cooperative federalism programs[,]” and because federal agencies are already relying on these estimates in rulemakings. The court also found that the states’ challenges – including challenges to the Interagency Working Group’s consideration of greenhouse gases’ global effects, rather than their domestic effects -- were likely to succeed on the merits. Accordingly, the court enjoined the federal government from relying on the “the work product of the Interagency Working Group … .”
The United States moved to stay the preliminary injunction, arguing that it had “caused significant disruption to rulemaking and other proceedings of federal agencies across the Executive Branch.” The motion attached a declaration from a Deputy Administrator of the Office of Information and Regulatory Affairs stating that the injunction would affect five pending EPA rulemakings, twenty-one rulemakings at the Department of Energy, nine rulemakings at the Department of Transportation, and approximately eight-seven environmental impact analyses under the National Environmental Policy Act. (Among other rulemakings, EPA relied on the interim social cost estimates in formulating the proposed NSPS and existing source emissions guidelines for the oil and gas industry.) The district court denied that motion on March 9th.
However, the states also appealed the court’s ruling to the U.S. Court of Appeals for the Fifth Circuit (Case No. 22-30087) and moved there for a stay of the district court’s injunction. On March 16th, the Fifth Circuit granted that motion, holding that “[t]he Government Defendants are likely to succeed on the merits because the Plaintiff States lack standing” and that the district court’s preliminary injunction would irreparably harm the Government Defendants.
The reach of the Clean Water Act is “notoriously unclear.” Sackett v. EPA, 132 S. Ct. 1367, 1375 (2012) (Alito, J., concurring). It can be difficult for a landowner to understand whether wetlands or a small creek on his or her parcel, for example, are federal waters that require a Clean Water Act (CWA) permit before the landowner can begin work to build a home, develop the property, or cultivate the land. The definition of “waters of the United States” may also affect pipeline projects, as noted in a Congressional Research Service report from last September, because it determines the numbers of waters and wetlands into which discharges of dredged or fill material require permits under CWA Section 404.
In April 2020, EPA and the U.S. Army Corps of Engineers published the Navigable Waters Protection Rule in an effort to streamline and clarify the geographic scope of federal CWA jurisdiction. The Navigable Waters Protection Rule was the culmination of the Trump Administration’s efforts to repeal and replace the controversial 2015 Clean Water Rule, which established a broader definition of “waters of the United States” (WOTUS) that are subject to federal CWA jurisdiction.
On August 30, 2021, in Pasqua Yaqui Tribe v. EPA (Case No. CV-20-00266), the United States District Court for the District of Arizona issued an order vacating and remanding the Navigable Waters Protection Rule. In response, EPA and the Army Corps of Engineers announced that they would “interpret[ ] ‘waters of the United States’ consistent with the pre-2015 regulatory regime until further notice.” Subsequently, on December 7, 2021, EPA and the Army Corps of Engineers formally proposed “to re-establish the pre-2015 definition of ‘waters of the United States[.]’” Under that pre-2015 definition, WOTUS included:
However, the United States Supreme Court is also taking up the definition of WOTUS once again. On January 24th, the Court granted certiorari in Sackett v. EPA (Case No. 21-454). The petitioners, Michael and Chantell Sackett, have been before the Court before. In Sackett v. EPA, 566 U.S. 120 (2012), the Court held that the Sacketts could challenge an administrative compliance order that asserted that they had unlawfully discharged fill material into jurisdictional wetlands when they conducted site preparation activities to build a house on property they owned in Idaho. In that challenge, Sackett v. EPA (Case No. 2:08-cv-00185), the U.S. District Court for the District of Idaho ultimately ruled in favor of EPA in March 2019. The U.S. Court of Appeals for the Ninth Circuit, in Sackett v. EPA (Case No. 19-35469), affirmed in August of 2021. In doing so, the court applied the “significant nexus” test set out in Justice Kennedy’s concurring opinion in Rapanos v. United States, 547 U.S. 715 (2006). The Ninth Circuit found that “the wetlands on the Sacketts’ property” were waters of the United States because they “are adjacent to a jurisdictional tributary and … together with the similarly situated Kalispell Bay Fen, … have a significant nexus to Priest Lake, a traditional navigable water[,]” in that they “significantly affect the integrity of Priest Lake.” The Sacketts, in contrast, had argued that the Ninth Circuit should apply the test in Justice Scalia’s plurality opinion from Rapanos. The Supreme Court granted certiorari to determine whether the Ninth Circuit applied the proper test. Merits briefing has not yet begun.
