On Friday, in GenOn REMA v. EPA, the 3rd Circuit Court of Appeals ruled that, in response to a petition from a downwind state under § 126 of the Clean Air Act, EPA may issue a rule imposing emission limits on a source in the upwind state without waiting for the upwind state to complete its own SIP process, which would presumably result in appropriate controls to protect the downwind state. This firm has represented GenOn (though not in this case), so I’m not going to get into the merits. However, if the decision stands, it is important and worth understanding.
The basis for GenOn’s challenge to the rule was pretty simple. In June 2010, EPA revised the national ambient air quality standard for sulfur dioxide, imposing a new one-hour limit. In September 2010, New Jersey EPA alleged that GenOn REMA’s Portland Generating Station in Upper Mount Bethel Township, Pennsylvania was causing exceedances of the new NAAQS in New Jersey and petitioned EPA to order GenOn REMA to reduce SO2 emissions from the facility. Under the CAA and EPA’s promulgation of the revised SO2 NAAQS, states had until June 2013 to revise their state implementation plans to provide for attainment of the SO2 NAAQS.
To GenOn, the § 126 petition process was plainly an attempt to short-circuit the SIP process, thus subverting the “cooperative federalism” that is at the heart of the CAA’s implementation structure. The Court had two responses to GenOn. First, the Court concluded, under Step 1 of Chevron, that the statute unambiguously provides § 126 petitions as a separate way, independent of the SIP process, to impose limits on facilities causing NAAQS exceedances in downwind states. Second, the court nonetheless proceeded to step 2 of the Chevron analysis, and concluded that EPA’s interpretation was reasonable.
I have not reviewed data on the use of the § 126 process over time and a quick Google search did not provide anything useful, but my anecdotal sense is that the use of § 126 petitions is increasing. Particularly as some states become, shall we say, more attuned to the costs than the benefits of environmental regulation, and given the avenue of attack provide by this decision, my crystal ball tells me that we could be in for a boom in § 126 petitions. One doesn’t have to believe in Murphy’s law to conclude that a raft of § 126 petitions, followed by a raft of EPA site-specific emissions limitations, may not be the most efficient way to regulate and, given current resource constraints, could end up creating real problems for EPA.