ACOEL : American College of Environmental Lawyers : ACOEL : Environmental Law, Ethics, Administration of Justice

We are not going to have Congressional action on a regime for reducing greenhouse gas emissions by the time EPA will feel compelled to respond to the Supreme Court's direction in the Massachusetts case and announce whether CO2 emissions endanger public health or welfare. If endangerment is found under Section 109 or 202 of the Act, it appears to lead to ambient air quality standards for CO2 which are then to be met through state implementation plans. By controlling the sources of CO2 within its borders, no state is likely to be able to reduce CO2 to whatever ambient level is established. This is the practical result of the fact that greenhouse gases are a global problem not a local or regional problem. Moreover, the regulation of CO2 under other portions of the Act will likely follow. Perhaps the chaos likely to ensue from following this course will push Congress to pass legislation addressing greenhouse gases. But relying on Congress to do the sensible thing may well be an imprudent course.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In a decision that will have far-reaching implications for coal-fired power plants, EPA's Environmental Appeals Board ("EAB") ruled on November 14, 2008 that EPA's Region 8 must reconsider whether carbon dioxide ("CO₂") is a regulated air pollutant covered by the Clear Air Act's Prevention of Significant Deterioration ("PSD") permitting program. Because there is so little time left for EPA to finalize its decision, the EAB's ruling effectively drops this hot button issue squarely on the doorstep of the incoming Obama administration.

            The procedural posture of this case is a bit unusual. Deseret Power Electric Cooperative ("Deseret") operates a coal-fired power plant, the Bonanza Power Plant, on the Uintah and Ourah Indian Reservation in Utah. Deseret wants to build a new waste-coal-fired plant at the same location. The new plant needs a "PSD permit" to regulate its emissions under the Clean Air Act. A PSD permit requires the installation of "Best Available Control Technology", or "BACT", for regulated pollutants.

            Most PSD permits are issued by state environmental agencies. However, because Deseret's power plant is located on an Indian reservation, EPA's Region 8 is the permitting authority. EPA issued the PSD permit to Deseret on August 30, 2007. The Sierra Club, which had submitted comments to EPA on the proposed permit, appealed the permitting decision to the Environmental Appeals Board. Sierra Club argued that the permit violated the Clean Air Act because the Act requires BACT for each pollutant "subject to regulation" under the Act. [Clean Air Act §§ 165(a)(4), 168(3); 42 U.S.C. §§ 7475(a)(4), 7478(3)].

            The EAB rejected the Sierra Club's argument. The EAB carefully reviewed the Supreme Court's landmark decision in Massachusetts v. EPA, 549 U.S. 497 (2007), which held that CO₂ is within the Clean Air Act's definition of "air pollutant". The EAB noted that the Massachusetts decision did not address whether carbon dioxide is a pollutant "subject to regulation" under the Clean Air Act. The EAB therefore rejected the Sierra Club's argument that the phrase "subject to regulation" has a plain meaning that requires Region 8 to establish a CO₂ limit in Deseret's permit.

            But that was pretty much the end of the good news for EPA and Deseret. In making its permit decision on CO₂, EPA Region 8 relied on prior EPA interpretations addressing when a pollutant is considered to be "regulated". The EAB ruled that the reasons cited by Region 8 for its decision were not sufficient. The EAB then sent the case back to Region 8 to 'reconsider whether or not to impose a CO₂ BACT limit in light of the Agency's discretion to interpret, consistent with the CAA [Clean Air Act], what constitutes a "pollutant subject to regulation under the Act."' [Deseret decision at p. 63]. Recognizing the potential impact of its ruling and of Region 8's further consideration, the EAB observed that because the issue "has implications far beyond this individual permitting proceeding", Region 8 should decide whether it would be better to address the matter in "an action of nationwide scope". [Deseret decision, pp. 63-64].

            Clearly, then, the Sierra Club was denied the clear victory it sought; namely, to require BACT for carbon dioxide in all coal-fired power plant PSD permits. On the other hand, Deseret and other electric utilities seeking PSD permits are left hanging as to whether CO₂ will be a regulated pollutant under the PSD program. Although EPA probably wants to resolve this case before the expiration of President Bush's term, as a practical matter, it simply cannot get it done in little more than a month. Thus, the incoming Administration must squarely confront an issue that could shape the climate change debate and, ultimately, energy policy in this country. EPA most likely will take the hint from the EAB and handle the matter through "an action of nationwide scope". How it turns out is anyone's guess, but it is fair to say that the new EPA will have more climate change hawks in policy positions than the current Agency.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

On October 18, 2007, the head of the Kansas Department of Health and Environment (KDHE), Secretary Roderick Bremby, denied an air quality permit application for two proposed 700-megawatt coal-fired generating units to be constructed in Holcomb, Kansas. The application was submitted by Sunflower Electric Power Company as part of a planned $3.6 billion expansion of an existing facility. The Secretary’s decision to deny the permit was based solely on the projected carbon dioxide emissions from these units and the impact of such emissions on climate change. Carbon dioxide is not specifically regulated as an air pollutant in Kansas.

In announcing his decision, which rejected the recommendation of agency staff that the permit be granted, the Secretary stated “I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing.” The expanded facility was projected to release an estimated 11 million tons of carbon dioxide annually. The Secretary did not indicate at what level projected carbon dioxide emissions would, in his opinion, threaten human health and the environment. Thus, the Secretary left open the question of how other CO₂ emitting facilities would be regulated in Kansas in the future. Although a number of states have entered into regional initiatives or enacted legislation designed to reduce greenhouse gas emissions over time, it is believed that KDHE’s outright denial of an air quality permit based solely on perceived “excessive” emissions of an unregulated greenhouse gas is a first in the nation.

The cited legal support for the decision is an opinion of the Kansas Attorney General that, notwithstanding specific statutes or rules regulating air emissions, K.S.A. 65-3012 gives KDHE the broad authority to take any permitting or other action deemed necessary should the Secretary make a factual determination that a particular emission constitutes an air pollutant and that such emissions threaten health or the environment. The “factual determination” supporting the Secretary’s conclusion that carbon dioxide is an air pollutant and that this particular facility’s projected carbon dioxide emissions would constitute a threat to health and the environment is not apparent from the permit denial decision.

On November 16, 2007, Sunflower Electric Power Corporation filed two lawsuits seeking to overturn KDHE’s permit denial decision challenging the legal authority for the agency’s decision.

Not surprisingly, the KDHE’s permit denial decision has generated substantial controversy. A media campaign was immediately launched by those opposing the KDHE’s decision. The theme of that campaign is that the Secretary’s claimed authority could logically be extended to other facilities and potentially other unregulated emissions to the general detriment of the state and its ability to attract and retain business.

In a subsequent action perceived as an attempt to diffuse this criticism, the Secretary announced the decision to approve an air quality permit for an ethanol plant, notwithstanding the facility’s carbon dioxide emissions. Although the projected CO₂ emissions from the ethanol facility are substantially less than those of the proposed coal-fired generating plant, the KDHE’s approval of the ethanol plant permit did not elaborate on the specific factual and scientific bases for distinguishing the facilities. Thus, it remains unclear in Kansas what quantity of projected carbon dioxide emissions may exceed the unspecified level deemed by KDHE to constitute an unacceptable global warming threat.

State law-makers in both chambers of the legislature are presently considering several bills directed at the Secretary’s permit denial decision. Provisions of the various bills include legislation specifically “over-turning” the Secretary’s decision, the enactment of phased-in limitations on CO₂ emissions with a “carbon tax” penalty for violators, and a variety of alternative energy incentives and requirements. Most of the bills being considered are being opposed by the governor and environmental groups as being hastily conceived and inadequate to meet the future health and regulatory challenges of greenhouse gas emissions in the state.

For more information please contact Charles Efflandt, practice group leader of the Environmental and Natural Resources team, Foulston Siefkin L.L.P., Wichita, Kansas http://www.foulston.com.

• Email This
• Print
• Comments
• Trackbacks
• Share Link