Perhaps EPA’s NSR Enforcement Initiative Is Now Dead? EPA Loses Another

Last year, after a string of defeats for EPA in its NSR enforcement initiative, I suggested that the initiative was in trouble, but that EPA was probably not yet ready to concede defeat.  After the latest blow, earlier this month, EPA has to be reconsidering.  I assume that EPA won’t give up completely until it has lost everywhere or the Supreme Court has weighed in, but the NSR initiative is definitely on life support at this point.

In United States v. Luminant Generation Company, lake martinEPA may have suffered its worst defeat yet (albeit not in a court of appeals). Here’s the essence:

  • EPA’s damage claims were time-barred by the general five-year statute of limitations.
  • EPA’s injunctive relief claims were barred, for two separate reasons:

First, because the Clean Air Act permits injunctive relief for PSD/NSR claims prior to construction, it impliedly precludes injunctive relief after construction is complete.

Second, because the concurrent remedy doctrine bars injunctive relief where underlying legal claims are barred by the statute of limitations.

  • EPA’s Title V claims fail because “the Clean Air Act does not authorize a collateral attack on a facially valid, but allegedly improper, state permit.”

It only adds insult to injury that EPA had another claim dismissed, notwithstanding a tolling agreement, because the tolling agreement applied only to violations alleged in a specific notice of violation issued by EPA, and EPA later issued an “amended” NOV, and sued under the amended NOV, without ensuring that the tolling agreement was amended to cover the new NOV as well.

Not a good day for EPA.

Two Days, Three Decisions, One Big Mess: Welcome to Judicial Review of the Waters of the United States Rule

On Wednesday, Judge Irene Keeley of the Northern District of West Virginia held that district courts do not have jurisdiction to hear challenges to EPA’s rule defining waters of the United States, because courts of appeal have original jurisdiction over “any effluent limitation or other limitation.”  Yesterday, Judge Lisa Wood of the Southern District of Georgia agreed.

Later yesterday, Judge Ralph Erickson of the District of North Dakota disagreed.  Finding that a definitional rule is not an effluent limitation and is not any “other limitation”, because it “places no new burden or requirements on the States”, Judge Erickson concluded that the district courts do have jurisdiction.  Addressing the merits, Judge Erickson concluded the states were likely to prevail, and would suffer irreparable harm in the absence of an injunction.  He thus enjoined enforcement of the rule in the 13 states involved in the case before him.

I’ll go out on a limb and assert that Judge Erickson’s decision is not likely to survive.  Why not?

  • Both the Georgia and West Virginia opinions cogently explain why the WOTUS rule is an “other limitation under existing CWA cases.
  • Judge Erickson was clearly trying to have his cake and eat it, too. Ihave-your-cake-and-eat-it-too-1t is, to put it mildly, internally inconsistent for Judge Erickson to conclude that he had jurisdiction to hear the case, because the “rule places no new burden or requirements on the States”, while ruling on the merits that the States will suffer irreparable harm if the rule goes into effect.  If they will suffer harm, it is precisely because the rule will limit them in new ways – which is pretty much what his own opinion says.
  • As Judge Keeley noted, providing consolidated jurisdiction over all challenges to the rule in one court of appeals furthers

“the congressional goal of ensuring prompt resolution of challenges to EPA’s actions.”  That scheme would be undermined by … a “patchwork quilt” of district court rulings.

Based on these three decisions in just the last two days, it would seem that truer words were never spoken.

No Short Cuts Allowed: The FWS Must Comply with NEPA Before Extending Programmatic Take Permits to 30 Years

Earlier this month, the Judge Lucy Koh set aside the Fish & Wildlife Service’s decision to extend its programmatic permit for bald and golden eagle SOARING EAGLE-1000 pixels widetakes from five to 30 years.  The extension was sought by the wind industry for the obvious reason that the uncertainty attached to a five-year permit makes financing a 20- or 30-year project very difficult.  I agree with the concern and support the extension, but the FWS’s attempt to short-circuit NEPA requirements in order to get the extension done quickly was doomed from the start.

Indeed, this case mostly stands for the proposition that bureaucratic overreach is almost always counterproductive.  The extension was not just opposed by environmental groups and native American tribes.  It was also opposed by the National Park Service – and FWS’s own staff, including the writer of the rule!  Eliza Savage, described by the Court as having “’responsibility for overseeing the drafting and revision’ of the Proposed 30-Year Rule,” was the source of the following nuggets from the administrative record:

  • It was a “no-brainer that [FWS] needed to do a NEPA analysis,” (referring to the rule’s “critical NEPA deficiencies”).
  • The [30-year] permits will be inherently less protective for eagles than 5-year permits
  • The regulatory process for the extension of the permit was a “train wreck” that “no one could be proud of”

Ms. Savage and others at FWS warned that the permit was on legally tenuous ground.  Consistent with that, staff’s final recommendation to FWS director Dan Ashe was to “shelve the … rule and do an EIS.”  Director Ashe rejected the recommendation.

Bad idea.  If FWS had bitten the bullet in 2012 and prepared the EIS, it would be done now.  An effort to accelerate permit protection for wind farms has only increased the uncertainty for wind farm developers.

Short cuts almost never work.

Stop the Presses: RGGI Works

When the Regional Greenhouse Gas Initiative RggiLogo2was first implemented, there were questions regarding how much of an impact it would actually have on GHG emissions.  I recall Ian Bowles, then Secretary of Environmental Affairs in Massachusetts, saying that, while reductions would happen, the main purpose was to provide a template and to demonstrate that an emissions trading program could be implemented successfully.

Those doubts were only heightened when a combination of cheap gas and the Great Recession were understood to have caused low allowance prices in the RGGI auction.  If allowance prices are consistently at the RGGI floor, how much of an impact could RGGI be having?

The answer, it turns out, is much more than we thought.  According to an econometric analysis reported in a recent article in Energy Economics (fee required), RGGI states’ GHG emissions would have been 24% higher without RGGI, and RGGI explains about half of the region’s GHG emissions reductions over the 2009-2012 period.

ClimateWire reports that Brian Murray, the lead author, was surprised by the results, having assumed that RGGI’s impact would indeed be limited.  Murray speculates that the impact may stem more from the mere fact of RGGI’s existence than from the immediate price signals provided by the auctions.

If that’s true, it will be interesting to see what the econometric analyses of the Clean Power Plan performed in 2022 say about its early impact on GHG emissions.

Is Superfund a Machine for Manufacturing Tea Party Members?

A group of PRPs received an oversight cost bill pursuant to a CERCLA consent decree.  (The following details are intentionally vague to protect both the innocent and the guilty.)  The bill was for several hundred thousand dollars.  During the year covered by the bill, the PRPs spent no money cleaning up the area of the site covered by the invoice.  They spent little or no money monitoring the area of the site covered by the invoice.  They spent no money preparing plans for the area of the site covered by the invoice.superfund_process

It would be bad enough if EPA’s oversight costs were of the same magnitude as the PRPs’ direct response costs.  Unfortunately, EPA’s oversight costs were more than the PRPs’ direct costs.  Indeed, they were not just more than the PRPs’ costs.  They were substantially, if not infinitely, more than the PRPs’ costs.

And so I ask again:  Is Superfund a machine for manufacturing Tea Party members?

Obama’s Climate Action Plan: Next Step, Landfill Methane

Having gotten the Clean Power Plan out the door, EPA has moved on to another target of President Obama’s Climate Action Plan:  landfill methane emissions.  landfill methaneLate last week, EPA proposed both new emission guidelines for existing landfills and a supplemental proposal to modify the new source performance standards for new or modified landfills.  The landfill rule is a somewhat easier lift than the Clean Power Plan.

Under EPA’s proposal, the trigger for installing a landfill gas collection/control system at existing facilities would decrease from 50 metric tons/year to 34 metric tons/year.  EPA would define the best system of emission reductions as being a well-operated collection/control system.  Landfill owners may also use an alternative, site-specific approach to determining applicability.  Under the site-specific approach, landfills would avoid the collection/control requirement if methane emissions are below 500 ppm for four consecutive quarters.

Similar changes are proposed to the NSPS.  The supplemental proposal would reduce the threshold from 40 metric tons/year proposed last year to the same 34 metric tons/year applicable to existing facilities under the emission guidelines.

EPA has not proposed revising the design capacity thresholds, which would remain at 2.5 million metric tons and 2.5 million cubic meters of waste for both new and existing facilities.

One final note.  EPA has estimated that the climate-related benefits of both rules would far exceed their costs.  EPA also asserts that the rules would have ancillary benefits from reductions in emissions of other compounds, including air toxics.  However, EPA has not attempted to quantify those benefits and they do not factor into EPA’s cost-benefit analysis.  Readers familiar with the Supreme Court’s decision on EPA’s MATS rule will hear echoes of that case here.  Different sections of the Clean Air Act are involved, but it will certainly be interesting if EPA takes a different position on remand of the MATS rule – relying on ancillary benefits to justify the rule – than it is taking in the landfill methane proposals.

Massachusetts Governor Charlie Baker Releases Solar Net Metering Bill

One week after the Massachusetts legislature departed for its summer recess, Governor Charlie Baker released net metering legislation to rival the Massachusetts Senate’s recent bill on August 7, 2015.

Where the Senate bill would have simply raised the net metering cap to 1600 MWs and largely retained the current net metering credit calculations, the Governor’s bill would increase the metering cap but would substantially reduce the calculation of net metering credits. In some instances, the value of net metering credits could potentially be more than halved.

Big Picture:

Many of… More

The Clean Power Plan. Is Better Good Enough? Is More Defensible Defensible Enough?

So the Clean Power Plan is out.  It’s difficult to be pithy about such a big, sprawling, mess, 2014-09-08-401kfeedisclosureother than to say that it’s probably about as good as it could be, though that may not be enough.  Here are a few items that have caught my eye so far:

  • Although the initial deadlines have been eased, the goal of 32% reduction over 2005 emissions by 2030 is a slight increase over the 30% in the draft.
  • The CPP appears to have deemphasized natural gas in favor of renewables. The plan assumes 28% of generation will be renewable by 2030, rather than the 22% assumed in the draft rule.
  • Building Block 4 – energy efficiency programs – is no more. EPA seems to have concluded that such programs are just too far outside the fence line to survive judicial review.  Whether this will be enough to get five Supreme Court votes in favor won’t be known before the end of the 2016-17 term, at the earliest.  I will note now that Building Block 4 is an obvious casualty of Congress’s unwillingness to legislate, since it’s pretty clear that energy efficiency is one of the most cost-effective ways to reduce carbon emissions.
  • EPA is poking a stick in the eye of states that are “just saying no” to the CPP. The draft Federal Implementation Plan will likely include a cap-and-trade component, which is anathema to these states.  God forbid the states should be forced to use the most cost-effective, market-friendly, approach towards compliance.

In short, ironies abound.  Notwithstanding the Pope’s Encyclical, it’s nuts to try to undertake something as massive as shifting our economy away from fossil fuels without using market-based approaches.  Someday this madness will end.  Until then, we have the Clean Power Plan.

The Problem With Using Economic Incentives to Reduce Water Use? People

Earlier this month, I noted that demand side management policies need to take human behavior into account if they are going to be successful.  The same is apparently true for policies to reduce water consumption in drought-stricken areas.  According to the Los Angeles Times, the Metropolitan Water District of Southern California provides economic incentives for certain water conservation measures, including installing water efficient toilets and ripping out grass to install landscaping that does not consume as much water.  Cordelia-detailsAll good, right?

Well, apparently the water savings from installing water-efficient plumbing is about 10 times greater than from removing grass from lawns.  However, having natural landscaping has now become the latest must-have among SoCal landowners, and everyone is applying for the rebate to remove their grass, thus rapidly exhausting the MWD budget for these types of rebates.  According to the Times, MWD General Manager Jeffrey Kightlinger explained the problem as follows:

The toilet is somewhere buried in your house. No one knows if you did the right thing or not.… People want that “Yeah, I did the right thing for the drought, and I want people to see it.”

We were willing to throw a bunch of money, even if it’s not maybe the most cost-effective tool. I think in the long run, changing that mindset is going to pay off.  If it was just saving water, we’d have preferred to put everything, every dollar into devices.

Maybe the MWD should pay some well-known designer to develop a low consumption toilet that everyone in fashion-conscious SoCal will want to buy.

The D.C. Circuit Sends EPA Back to the Drawing Board to Fix Its Transport Rule Emissions Budgets

The Clean Air Act’s good neighbor national_good_neighbor_day_zps2a06b34b (1)provision prohibits upwind states from emitting air pollutants in amounts that will “contribute significantly to nonattainment” of a national ambient air quality standard in a downwind state.  On Wednesday, the D.C. Circuit Court of Appeals held that, while upwind states have to be good neighbors, EPA cannot force them to be extraordinarily super-special neighbors.  Just good enough will have to do.

Following the Supreme Court’s decision affirming EPA’s Transport Rule against facial challenges in EPA v. EME Homer City Generation, the Supreme Court remanded the case to the D.C. Circuit for consideration of as-applied challenges.  Various upwind states argued that the Transport Rule went too far, by requiring emissions reductions that were not necessary to attain compliance with NAAQS in downwind states.  The Court agreed.  As the Court noted, the opinion in EME Homer City stated that:

EPA may not require “an upwind State to reduce emissions by more than the amount necessary to achieve attainment in every downwind State to which it is linked.”

Since EPA did not defend the budgets on the ground that they were the minimum necessary to ensure NAAQS attainment in downwind states, the Court gave EPA short shrift in its policy arguments trying to justify the budgets.  The Court must have repeated the quote from EME Homer City about a half-dozen times.  It viewed EME Homer City as leaving EPA no room to deviate from the minimum necessary formulation.

EPA did win two small victories.  First, with respect to the 2014 emissions budgets, the Court remanded without vacatur, an approach becoming more and more common in these cases.  That leaves the 2014 budgets in effect, but EPA still has very little wiggle room.  It is pretty clear going forward that EPA’s emissions budgets under the Transport Rule are going to have to be the minimum required to result in NAAQS attainment in the downwind states.

The Court also rejected various remaining challenges to the Transport Rule.  This is certainly good news for EPA, but all of those challenges were doomed from the get-go, so EPA can’t be too excited.  This case was all about the emissions budgets on remand, and the loss has to hurt.

EPA Hubris, July 2015 Edition

Anyone who reads this blog must have seen the explosion of reports in the trade press that EPA ignored significant criticism from the Army Corps of Engineers in promulgating its Waters of the United States rule.  I have not seen the memoranda, but, based on the press reports, it appears that EPA ignored criticism both that it was too stringent in some areas and that it was not sufficiently stringent in others.  If EPA’s purpose wasn’t simply to make the rule more – or less – stringent, why did it ignore the Corps and try to bury the disagreement?

How about hubris?

I noted earlier this year and as far back as 2010, EPA’s tendency towards self-righteousness.  I also pointed out how counterproductive that self-righteousness is; it makes it more difficult for EPA to achieve its goals.  While I still think that EPA is self-righteous, hubris seems the apt description today.

DOE Releases Draft Environmental Impact Statement for Northern Pass Project

The U.S. Department of Energy (DOE) recently released a Draft Environmental Impact Statement (DEIS) for Northern Pass Transmission, LLC’s proposed 187-mile transmission line across the United States-Canada border in New Hampshire.

If approved, the line would have the ability to deliver 1200 MW of hydroelectric power from Quebec into southern New England—a potentially tantalizing amount of power for policymakers seeking to diversify the region’s generation portfolio and lower its GHG emissions. At the same time, it may have unintended consequences such as causing existing zero-emission nuclear facilities to retire prematurely as market-clearing prices in the region decrease.

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The Earth Once More Spins Calmly On Its Axis; EPA’s Updated Hex Chrome MACT Rule Is Affirmed

On Tuesday, the D.C. Circuit Court of Appeals affirmed EPA’s update of its hexavalent chromium Hex chromeMACT rule.  Suffice it to say that this was a little easier than review of the power plant MACT rule.

The Court rejected both industry and environmental group challenges, in what was largely a straightforward application of Chevron.  The opinion is nonetheless useful in laying out what EPA must have in the record to justify ratcheting down MACT standards.

The key element was the Court’s rejection of the industry position that EPA must identify how each specific “development” that has occurred since the prior promulgation of the applicable MACT standard is tied to the new standard:

It suffices for EPA to assess and discuss the collective impact of the developments it has identified, and to revise standards appropriately in light thereof. The agency explained that it had examined what emissions levels could be achieved using various add-on control devises and fume suppressants, including developments the agency had previously identified. EPA went on to provide details regarding the costs and emissions reductions identified, and evaluated in the course of arriving at its conclusion that specified, best-available control technologies could cost-effectively meet more stringent emissions standards. The statute does not require EPA to identify a nexus between each distinct development and the revised standards. EPA’s decisionmaking was sufficiently clear and rational.

Game over.

Two Strikes and Oklahoma’s Out (For Now): Another Challenge to the Clean Power Plan Is Rejected

On Friday, Judge Claire Eagan dismissed Oklahoma’s latest challenge to EPA’s Clean Power Plan.  ghg-chartYes, that plan.  The one that hasn’t been promulgated yet.

Following rejection  by the D.C. Circuit Court of Appeals of a prior law suit, Oklahoma tried again, this time on what it presumably hoped would be more friendly ground, the Northern District of Oklahoma.  Not so much.

At this point, Oklahoma was facing a judge who knew that the D.C. Circuit had already concluded that EPA has not yet taken final agency action.  Moreover, district courts have no jurisdiction to hear challenges to EPA Clean Air Act rulemaking.  Oklahoma tried to get around all this by arguing that EPA’s action in proposing the rule was ultra vires, justifying immediate suit in the District Court.  I don’t think so.  Even if EPA’s authority is questionable – an issue that will obviously be litigated when the final rule is promulgated – there’s a big difference between being wrong and acting ultra vires.

As Judge Eagan noted:

Plaintiffs’ claims are exaggerated. The D.C. Circuit noted that the EPA is expected to announce a final rule this summer, and there is no reason to believe that plaintiffs will have to wait for long before renewing proceedings in the D.C. Circuit if they intend to challenge the final rule. Plaintiffs can request a stay of any final rule issued by the EPA to avoid incurring costs while litigation is pending. The Court also finds that plaintiffs’ argument concerning the EPA’s authority to promulgate emission standards for coal-fired power plants pursuant to § 7411(d) simply highlights the complex nature of the CAA’s regulatory and administrative scheme….

I’m sorry, but this case was absurd.  I’m sure EPA wishes that it were possible for the prevailing party to be awarded its fees.  If ever there were a case in which it would be justified, this was it.

The Baker Administration looks to Hydropower to meet GHG goals

The Baker Administration announced on July 9 that it filed a bill for sourcing long-term hydroelectric power in the Commonwealth.  Hydroelectric power currently provides a small portion of electricity consumed  in Massachusetts. According to the Energy Information Administration, it ranks behind natural-gas, nuclear, coal and other renewable energy sources.

The bill, titled “An Act Relative to energy sector compliance with the Global Warming Solutions Act,” would require the State’s electric distribution companies  to solicit proposals for hydroelectric contracts spanning 15 to 25 years.  Such solicitations would begin no later… More