The Nickel Report

The U.S. Environmental Protection Agency (EPA) published the Cross-State Air Pollution Rule “Update” for the 2008 national ambient air quality standards for ozone – the so-called CSAPR Update Rule – on October 26, 2016.  81 Fed. Reg. 74504.  The CSAPR Update Rule regulates emissions of nitrogen oxides (NOx) from power plants located in 22 states in the eastern half of the country by establishing statewide ozone-season NOx emission budgets scheduled to take effect beginning May 1, 2017.  (Under the Clean Air Act, the regulatory “ozone season” runs from May 1 through September 30 each year.)

The CSAPR Update Rule will largely replace the ozone-season NOx program established under the Cross-State Air Pollution Rule (CSAPR), which EPA published in 2011 and which took effect in 2015 following extensive litigation in the U.S. Court of Appeals for the D.C. Circuit and the Supreme Court.  CSAPR and the CSAPR Update Rule are intended to address interstate transport of emissions under section 110(a)(2)(D)(i) of the Clean Air Act, which is sometimes called the “Good Neighbor Provision.”  That provision requires that each state’s plan for attaining national ambient air quality standards (NAAQS) “contain adequate provisions . . . prohibiting . . . any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will . . . contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any [NAAQS].”

The 60-day period for filing petitions for judicial review of the CSAPR Update Rule closed on December 27.  By that date, a total of 16 petitions had been filed in the D.C. Circuit.  The first was filed jointly by five states – Wisconsin, Alabama, Arkansas, Ohio, and Wyoming – on November 23.  The court has consolidated all the other petitions for review under that first case.  The State of Texas and the State of Delaware’s Department of Natural Resources and Environmental Control each filed a petition for review.  One municipality – the City of Ames, Iowa – also petitioned for review.  In addition, several industry parties filed petitions for review.  Those petitioners include the Utility Air Regulatory Group (which Hunton & Williams LLP represents in the litigation), the Midwest Ozone Group, and Murray Energy Corporation, among others.  Environmental advocacy groups Sierra Club and Appalachian Mountain Club also have petitioned for review of the rule.

The nonbinding statement of issues that the five states in the lead case filed with the court in late December indicates that, in this litigation, those states plan to challenge certain aspects of EPA’s air-quality modeling for the CSAPR Update Rule.  That filing also suggests that the states intend to argue, for example, that EPA failed to account properly for effects of emissions from outside the United States, including from sources in Canada and Mexico.  Texas and industry petitioners may also challenge various aspects of EPA’s methodology and policy decisions reflected in the rule.  Based on positions Delaware has taken in the past, that state is expected to argue that the rule is not stringent enough.  And the Sierra Club and Appalachian Mountain Club can be expected to join Delaware in that position.

The D.C. Circuit has not yet set a briefing schedule in this litigation, but briefing in that court normally begins a few months after petitions for review are filed.