The Nickel Report

EPA sets and implements primary and secondary National Ambient Air Quality Standards (NAAQS) for six common air pollutants. Primary NAAQS protect the public health, while secondary NAAQS protect the public welfare. Secondary NAAQS have traditionally not been more stringent than primary ones, yet EPA’s staff and science advisors are developing recommendations that EPA promulgate such standards. Any new, more stringent secondary NAAQS would raise significant implementation questions.

Building on the Biden Administration’s strategy to achieve net-zero greenhouse gas (GHG) emissions by 2050, and as world leaders begin gathering in Glasgow, Scotland, yesterday, the US Environmental Protection Agency (EPA) issued a proposal under the Clean Air Act to significantly expand regulation of methane from oil and gas operations in the United States. The proposal—issued in conjunction with measures proposed by at least five other cabinet-level agencies to address GHG emissions—is part of President Biden’s “whole of government” approach to addressing climate change and represents EPA’s most ambitious regulatory effort to date to curb oil and gas sector emissions. EPA estimates compliance costs of $12 billion (present value, 3% discount rate) for existing sources, which it indicates would be offset by an estimated $4.7 billion (present value) through the capture of natural gas pursuant to the fugitive emission requirements in the proposal.

Recent federal court decisions continue to show that Article III standing can be a formidable defense to environmental citizen suits, particularly following the Supreme Court’s decision Spokeo v. Robins, 578 U.S. 330 (2016) (vacating decision below and emphasizing that an alleged injury in fact must be “concrete and particularized”).  Just last week, for example, a North Carolina federal court dismissed on standing grounds almost all of the plaintiffs’ Clean Air Act citizen suit claims asserted against the University of North Carolina at Chapel Hill (UNC).  Center for Biological Diversity v. University of North Carolina, No. 1:19-CV-1179, 2021 U.S. Dist. LEXIS 163459 (M.D.N.C. Aug. 30, 2021).  In their complaint, the plaintiffs asserted nine claims, including seven for alleged failures to maintain records, inspect equipment, report permit deviations to government authorities, and monitor pollution controls, as required by UNC’s Title V permit.  On summary judgment, the plaintiff citizen groups offered declarations from two members who alleged “health, aesthetic, and recreational interests in air quality in Chapel Hill and the areas around UNC’s campus.”

In response to judicial remand of its Cross-State Air Pollution Rule (CSAPR) Update, EPA published a revised CSAPR Update – the latest of EPA’s interstate transport rules using its CSAPR methodology – at the end of April 2021, slashing ozone-season budgets for emissions of nitrogen oxides (NOx) for a dozen states.[1]  By the end of the 60-day period for filing petitions for judicial review on June 29, a single petition for judicial review had been filed in the US Court of Appeals for the DC Circuit.

On Wednesday, June 16, 2021, EPA held the first of two public “listening sessions” to inform its review of the Risk Management Program (RMP) regulations pursuant to Executive Order 13990.  According to Carlton Waterhouse, EPA Deputy Assistant Administrator for the Office of Land & Emergency Management (OLEM), the listening sessions are “a first step in considering improvements to the RMP rule, so EPA can better address the impacts of climate change on facility safety and protect communities from chemical accidents, especially vulnerable and overburdened communities living near RMP facilities.”

On October 8, 2020, Wyoming federal district court Judge Skavdahl struck down the Bureau of Land Management’s (BLM) “Waste Prevention Rule,” otherwise known as the “Venting and Flaring Rule,” which had been promulgated on November 18, 2016, in the closing months of President Obama’s second term (“2016 Rule”).  See Order on Pets. for Review of Final Agency Action, Wyoming v. U.S. Dep’t of Interior, No. 2:16-CV-0285-SWS (D. Wyo. Oct. 8, 2020) (Order vacating 2016 Rule).  The detailed fifty-seven-page decision concludes that in issuing the 2016 Rule, BLM exceeded its statutory authority and acted arbitrarily.  The core of the court’s holding was that the 2016 Rule was grounded in air quality motivations, which was the purview of the Environmental Protection Agency (EPA) and, therefore, beyond BLM’s statutory authority to promulgate.

As I have reported previously, the US Court of Appeals for the DC Circuit issued a significant decision in September 2019 on EPA’s implementation of the so-called “Good Neighbor Provision” of the federal Clean Air Act (CAA). That is the CAA’s principal provision addressing what is often termed “interstate transport,” the physical process in which emissions from cars, trucks, factories, power plants, and myriad other sources—and the resulting air pollution—are carried by prevailing winds across state borders. The main purpose of the Good Neighbor Provision (section 110(a)(2)(D)(i)(I) of the CAA) is to prevent “significant contribution” by “upwind” states’ emissions to violations of national ambient air quality standards (NAAQS) in “downwind” states. Although states have the principal responsibility to implement this provision, EPA periodically has invoked its CAA authority to impose requirements to curb interstate transport when it determines upwind states have not adopted adequate controls.

Company Boards of Directors and senior executives of oil and gas companies should take notice of a May 14, 2020, guidance document issued by the Chemical Safety Board (CSB) entitled, “CSB Best Practice Guidance for Corporate Boards of Directors and Executives in the Offshore Oil and Gas Industry for Major Accident Prevention.,”  And don’t be deceived by its title reference to offshore activities.  Companies also need to pay mind to the guidance for onshore operations.  Why?  If there is an accident, government agencies will likely argue that the principles articulated apply equally as well on dry land.

On June 30, 2020, Democratic members of the House Select Committee on the Climate Crisis unveiled a 538-page report that calls for reaching net-zero greenhouse gas (GHG) emissions economy-wide by 2050. The report, titled “Solving the Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy and Just America,” includes over a hundred policy recommendations to meet the 2050 goal.

Recent press reports note that air quality has improved worldwide and in the United States during the ongoing pandemic¹. Shortly prior to the pandemic, though, stories lamented declining American air quality². What’s really going on?  Is the news good or bad?

[caption id="attachment_2123" align="aligncenter" width="735"] Hydrofluorocarbons (HFCs)[/caption]

This article was originally published on Law360.

On March 11, the U.S. Environmental Protection Agency completed an important rulemaking under Title VI of the Clean Air Act Amendments of 1990, revising its requirements applicable to the management of refrigerants in appliances and industrial process refrigeration.

The rulemaking corrects what the EPA states was an incorrect Obama-era interpretation of the Clean Air Act, that would have allowed the agency to issue sweeping and costly regulations for refrigerants that companies had invested in to alleviate the problem of ozone-layer depletion pursuant to the 1987 Montreal Protocol.

How can sitting still in the Northeast potentially land you in a world of trouble under the Federal Clean Air Act (CAA) and corresponding state laws? Quite easily, if you happen to be in or leave a vehicle with its engine on and the vehicle itself is not in motion for more than a few minutes. That is the definition of “unnecessary vehicle idling” in many jurisdictions.

Across the Northeast and elsewhere, unnecessary vehicle idling is, subject to certain nuances and exceptions, generally prohibited. Recently, violators have come under attack by non-governmental organizations. State penalties vary, but the potential exposure can be severe, especially when the statutory maximum available penalties are calculated pursuant to the Federal CAA and compounded on a per-violation/per-day basis. Accordingly, owners and operators of all forms of trucking and transit companies should not sit still and should take proactive measures to educate or reeducate vehicle schedulers and operators alike on these anti-idling requirements.

Over the last decade, phase one of the Clean Air Act’s regional haze program cost companies (primarily electric generating companies) hundreds of millions of dollars in compliance costs and caused the early closure of a number of facilities. The program is just now entering the initial stages of its second planning period, with major implementation activities expected over the next few years. Unsuspecting companies are finding themselves the targets of the program’s requirements for the first time. In states that have taken early action—Arizona, New Mexico, North Dakota, Oregon and Washington—there has been a shift in attention from older power plants to oil and gas operations and manufacturing facilities in the pulp and paper, cement, and minerals sectors, among others. Even companies that have been through this regulatory process before are facing difficult new questions due to major rule changes enacted in 2017, changes to guidance and key technical documents, and a new focus on statutory provisions addressing “reasonable progress” that were not often used in the past. Hunton Andrews Kurth LLP partner Aaron Flynn has assisted numerous clients in dealing with regional haze issues. In this video, partner Allison Wood interviews Aaron regarding the recent developments in the regional haze program and regarding how companies can best position themselves as states and EPA decide on the next round of emission control requirements.

In August 2018, the US Environmental Protection Agency announced it was rebranding its National Enforcement Initiatives as National Compliance Initiatives, and specifically stated it was no longer targeting oil and gas sources as deserving of extra scrutiny. In addition, since taking office in January 2017, the Trump administration has aggressively rolled back many environmental regulations promulgated under the Obama administration. Despite what some may perceive as a kinder, gentler EPA and the Trump administration’s “deregulatory” agenda, however, the EPA has continued to pursue enforcement cases against many of the same businesses believed to benefit the most from the administration’s policies. Notably, this includes midstream oil and gas sources, as recently evidenced by EPA’s September 2019 Enforcement Alert (EA) titled, “EPA Observed Air Emissions from Natural Gas Gathering Operations in Violation of the Clean Air Act.”

Policy makers in California have pledged to resist Trump administration policy changes on environmental and other issues. Senate Bill 1 (SB 1), proposing the California Environmental, Public Health and Workers Defense Act of 2019, is the California legislature’s current preemptive response to the administration’s attempts to modify certain federal environmental and worker safety laws.

SB 1 has passed the California Senate. It is awaiting a final hearing in the State Assembly’s Appropriations Committee, likely sometime in mid‑to‑late August. After that, it moves to the Assembly floor, where a final vote is required by the end of California’s legislative session on September 13, 2019.

Standing may seem like an arcane concept, but, as lawyers, we know that this term has special legal meaning—and that it affects whether our clients or our clients’ opponents can successfully bring a lawsuit. In the field of environmental law, understanding standing (a little alliteration) is no easy task. In a decision by the DC Circuit last week, the Sierra Club was reminded just how important standing can be when challenging, or more to the point attempting to challenge, environmental laws.

State environmental regulators are beginning to develop plans designed to meet more stringent air quality standards under the Clean Air Act (CAA), including standards to protect against unhealthful levels of ground-level ozone. In doing so, many states are looking more closely at a factor that contributes to their air quality problems but that they lack any authority to address: the phenomenon of air pollution carried by prevailing winds into their jurisdictions from emission sources located not only outside their own state borders but outside the US itself. The issue of international contributions to air quality concerns has gained currency in part due to the many challenges states face in meeting the stringent nationwide air quality standards for ground-level ozone that the US Environmental Protection Agency (EPA) adopted in 2015.

The US National Ambient Air Quality Standards (NAAQS) are the centerpiece of the US Clean Air Act (CAA) and establish allowable concentration levels for six "criteria air pollutants": ozone, particulate matter, lead, carbon monoxide, nitrogen dioxide, and sulfur dioxide. The CAA requires the US Environmental Protection Agency (EPA) to review and, as appropriate, revise the NAAQS at least every five years, and EPA has, since 1970, regularly adopted increasingly stringent standards. Whether those revisions have gone far enough or too far has become a predictably contentious issue, with each review involving debates over science, the role of EPA's Clean Air Science Advisory Committee (CASAC), the discretion of the EPA Administrator, and the format of the review process itself, among many other issues.

In my April 2, 2018, post, I asked whether the US Court of Appeals for the Fifth Circuit would put another nail in the coffin of NSR enforcement for projects completed a long time (some of them, decades) before EPA or other plaintiffs filed a complaint alleging NSR violations. A three-judge panel of the Court of Appeals answered in United States v. Luminant, No. 17-10235 (5th Cir. Oct. 1, 2018), by unanimously ruling that the statute of limitations bars civil penalties for NSR violations that allegedly occurred more than five years before the filing of the complaint. But in a 2-1 decision, the majority ruled that, while injunctive relief is also barred in those circumstances for non-government plaintiffs (Sierra Club, in this case), injunctive relief is still “available” when the government is seeking to enforce the Clean Air Act. In her dissent in part, Judge Elrod said she would have affirmed the district court’s dismissal of the case in all respects, characterizing any “injunctive” relief sought by the government as “really just time-barred penalties in disguise.”

When most Americans think about the traditions of presidential transitions, they recall the oath of office, the prior president and family leaving the White House, the inaugural parade, the balls with their beautiful gowns and sharp tuxedos, and more. What they more than likely don’t think about, much less even know about, are other happenings in the White House and in the agencies that run our government. While the peaceful transfer of power is a hallmark of the American political system, it is not without controversy, particularly where the outgoing president is a member of a different political party with remarkably different political views than the incoming commander in chief.

New lawsuits filed in the US Courts of Appeal are seeking to upend a fundamental tenet of the Clean Air Act (CAA or the Act) Title V operating permit program—i.e., that the program does not itself impose new substantive requirements but rather has the purpose of identifying, in a single document, the CAA requirements that apply to a source. These lawsuits have been filed in the D.C. Circuit, the Fifth Circuit, and the Tenth Circuit challenging EPA orders issued in response to various third-party professional environmental advocacy groups’ requests that EPA object to Title V permits proposed for several industrial facilities in Utah and Texas. In the orders, EPA clarified that the Title V permitting and petition process set forth in 42 U.S.C. § 7661d(b)(2) is not the appropriate forum to second-guess preconstruction authorizations issued under Title I of the Act and incorporated into a facility’s Title V permit. 

On May 9, the White House released its Spring 2018 update to EPA’s regulatory agenda. Agency watchers quickly dove into the document to check the status and timelines for high-profile rulemakings and gain insights on the Trump administration’s priorities. But aside from any revelations about the administration’s own initiatives, this latest document was also notable for showing just how much EPA’s regulatory agenda can be driven by forces outside of the executive branch.

The New Source Review (NSR) Program of the Clean Air Act (CAA) requires large new plants (in the parlance of the Act “major” “stationary sources”) to go through an extensive, time consuming and expensive review and permitting process prior to construction. Such sources are required through these permits, among other requirements, to install the best available control technologies (BACT) to reduce levels of specific regulated pollutants. The NSR program also applies to existing facilities if they are modified in substantial ways and if, as a result, emissions increase by significant amounts (these are known as “major modifications”).

As we have noted previously (An Opportunity for a New Federal-State Relationship Under the Regional Haze Program, July 17, 2017; A New Perspective on Regional Haze Regulation?, February 14, 2017), the US Environmental Protection Agency (EPA) recently signaled a new openness to recognizing state prerogatives and flexibility in implementing the regional haze program under the Clean Air Act (CAA). That program addresses impairment of visibility in the skies over protected national parks and wilderness areas that is attributed to widespread haze resulting from emissions to the air from varied sources.

We are serious.  And don’t call us Shirley.

So EPA sent your company a dreaded Request for Information (“RFI”).  What do you do now?  If you’ve never been through this process before, you likely have a lot running through your head:

• Did our company do something wrong?  Is my company under investigation?
• Is this EPA’s way of asking for my help to improve its regulations?
• Do I have to answer this?
• How can I possibly compile all this information in 30 days?
• Do we need a lawyer to help us respond?
• What about confidential information?  EPA is asking for customer or supplier information.  Isn’t that private?

The US EPA released its draft strategic plan for 2018-2022 on October 5, 2017.^[1] Not surprisingly, the draft plan differs greatly from the Obama EPA’s last strategic plan. The change in administrations has produced innumerable shifts in the policies, goals and operations of the federal government. EPA’s draft strategic plan is emblematic of these shifts.

In October 2015, EPA reduced the level of the National Ambient Air Quality Standards (“NAAQS”) for ozone from 75 parts per billion (“ppb”) to 70 ppb. What is happening concerning implementation of those NAAQS?

Although litigation over EPA’s decision to lower the ozone NAAQS remains in abeyance as the Trump Administration continues to consider whether the Agency should reconsider the rule or some part of it, the 2015 standard itself has not been stayed. Thus, the Clean Air Act requires that implementation of the standard proceed. One key step in implementation is promulgation by EPA of a list of areas where the standard is violated, including areas that contribute to standard violations in nearby areas. EPA’s identification of these “nonattainment” areas is a trigger for many of the Act’s control requirements.

As is almost always the case following a change in administration, many EPA policies and interpretations are being reviewed and, depending on your point of view, either appropriately reconsidered or “rolled back.” Front and center in this debate is the practical reality that such reviews take time, including in some cases the time necessary to comply with procedural requirements for notice and comment rulemaking. The extent to which the EPA can take the time it believes is necessary is currently playing out in courts across the country, which are grappling with questions of the degree to which the EPA can postpone regulatory compliance deadlines or delay statutorily required actions while it conducts that review.

Since President Trump’s inauguration and the beginning of Scott Pruitt’s tenure as administrator of the U.S. Environmental Protection Agency (EPA), much of the focus of Clean Air Act activity in the new administration has been on global climate change issues. As more time passes, however, EPA is beginning to address other areas of Clean Air Act regulatory policy, and, in some respects at least, charting a new course that departs from the record of the Obama administration. One of the areas to which EPA has started to give renewed attention is the regional haze program.

Earlier this week, July 4, 2017, was the nation’s 241st birthday. In Washington, DC, and in countless other places across the country, the event was celebrated with dazzling fireworks displays. My childhood days are long behind me. But, a good fireworks display still evokes awe and gives me goose bumps. Although fireworks are synonymous with the 4th of July, Americans are not alone in their appreciation of fireworks. All across the globe—from Europe, to Asia, to South America and back again—fireworks are a universal symbol of celebration.

The New Source Review (NSR) Program of the Clean Air Act requires large new plants (in the parlance of the act, “major” “stationary sources”) to go through an extensive, time-consuming and expensive review and permitting process prior to construction. Such sources are required through these permits, among other requirements, to install the best available control technologies (BACT) to reduce levels of specific regulated pollutants. The NSR program also applies to existing facilities if they are modified in substantial ways and if, as a result, emissions increase by significant amounts (these are known as “major modifications”).

For the first two decades of the NSR program, existing sources rarely triggered it. That is because EPA applied it in a way to be triggered only by unusual projects that would expand the capacity of the source. It is also because NSR is so time-consuming and expensive that sources generally avoided activities that would expand their capacities because they could trigger NSR.

That all changed drastically in the late 1990s.

The fiscal year 2018 budget blueprint released by the Trump administration on March 16, 2017, proposes to zero out funding for the Chemical Safety Board (CSB or the Board). Elimination of CSB funding would reduce federal government expenditures by approximately $12 million annually.

During much of the Obama administration, states and EPA were in conflict about how to craft Clean Air Act plans to reduce “regional haze” impairment of visibility in national parks and wilderness areas. The technical and policy issues are daunting. Regional haze forms in the atmosphere from many sources’ air emissions — emissions from cars and trucks, construction equipment, factories and power plants (among others), plus natural sources like wildfires and dust storms. Developing regional haze implementation plans entails complex policy choices and weighing sometimes heavy compliance costs for emission controls — costs that may total in the hundreds of millions or even billions of dollars — against improvements in visibility that can be hard to measure and in some cases are even imperceptible to the human eye.

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.)

Executive Branch agencies write vague rules.  Then they give them meaning through interpretation.  That meaning may change over time through re-interpretation.  Indeed, it is not hard to find examples of rules that meant one thing one day and the opposite the next.  See, e.g.,  Perez v. Mortgage Bankers Association, 135 S. Ct. 1199 (2015).  This is a problem for regulated entities that face penalties for failure to comply.  Reflecting such concerns, the deference doctrine has eroded slowly over the past two decades, with pronounced critical commentary from conservative Justices.  In October 2016, the Supreme Court granted review  in a case from the Fourth Circuit -- GG v. Gloucester County School Board (cert. granted Oct. 28, 2016)—where the court gave “controlling weight” to a staff interpretation of a Department of Labor (“DOL”) regulation.  In Gloucester County, the Court will have an opportunity to rein in a particularly aggressive use of agency deference.  Does this case presage more comprehensive review of the Court’s deference jurisprudence?  And what does it portend for the Trump Administration’s efforts to reverse Obama Administration regulatory priorities?