Should Courts Defer to EPA’s Scientific Expertise if EPA Gets Rid of Its Expertise?

Posted on April 6, 2017 by Seth Jaffe

Earlier this week, the 9th Circuit Court of Appeals rejected challenges to the Federal Implementation Plan EPA promulgated after finding that Arizona’s regional haze State Implementation Plan was inadequate.  I think that the result is both correct and unsurprising.

However, one part of the opinion – a recitation of black-letter law – caught my eye.  In discussing the standard of review, the court noted that the arbitrary and capricious standard is “highly deferential.”  No surprise there.  It also noted that courts are particularly deferential when reviewing agency scientific determinations.  Also no surprise.

And yet….

What happens if EPA eliminates all of its climate science expertise, and then eliminates the Endangerment Finding?  Certainly, a court could still recite the traditional level of deference, but then note that “deference is not abdication” and rule that EPA’s decision must be reversed even under the deferential threshold.

And yet….

What happens if the Trump administration repeatedly makes regulatory decisions based on a “scientific” viewpoint that is so broadly rejected by the scientific community that “scientific” must be put in quotation marks?  Might courts at some point conclude that EPA has forfeited the deference normally given to agency scientific decisions?

Just asking.  It’s purely a hypothetical, of course.

Startup, Shutdown and Malfunction – The Saga Continues

Posted on June 19, 2015 by Carolyn Brown

On June 12, 2015, EPA’s final rule calling for 35 states and the District of Columbia to revise their regulations on excess emissions during startup, shutdown and malfunction was published.  This rulemaking saga dates back to a June 30, 2011 petition filed by the Sierra Club.  The vast majority of these regulations have been part of State Implementation Plans (SIPs) since the 1970s or early 1980s.  As EPA sets out in the rule, the question of how to deal with emissions during startup, shutdown and malfunction (SSM) has also been the subject of guidance issued in 1982, 1983, 1999, 2001, and now 2015.  This is a tough issue.

EPA  found that a majority of the states have regulations that impermissibly allow a source to assert affirmative defenses to avoid a determination that excess emissions due to SSM events are violations of the Clean Air Act.  Similarly, EPA also concluded that regulations providing discretion to the state agency to determine whether excess emissions are violations are improper.  Because such provisions deprive EPA or citizens of the ability to pursue enforcement action, EPA concludes the provisions are impermissible.  The preamble also points out that broad SSM exclusions under state law would effectively allow state agencies to usurp the authority given to the federal courts by Congress to enforce SIPs and determine penalties.  In response to concerns voiced by the regulated community, EPA emphasizes that sources can assert any common law or statutory defenses they believe are supported by the circumstances when they get to court. 

With respect to startup and shutdown provisions, the rule reiterates that different emissions limitations can apply to particular modes of operation and the preamble discusses the use of work practice standards rather than numerical emission limitations.  EPA recommends seven criteria as appropriate considerations for States as they consider SIP revisions to address startup and shutdown provisions in response to the SIP Call.  The criteria seem designed to encourage a series of source category-specific rules to replace regulatory provisions that apply to all types of emission sources.  However, EPA also emphasized that each state has discretion to determine the best means by which to make a revision so long as the revisions are consistent with the Clean Air Act.  It remains to be seen how states will choose to respond and the extent of administrative burden this process will impose on agency staff.   

Affected states have until November 22, 2016 to respond to the SIP Call.  Until EPA takes final action on the SIP submittals, the existing SIP provisions remain in effect.  SIP calls were issued for Maine, Rhode Island, New Jersey, Delaware, District of Columbia, Virginia, West Virginia, Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Illinois, Indiana, Michigan, Minnesota, Ohio, Arkansas, Louisiana, New Mexico, Oklahoma, Texas, Iowa, Kansas, Missouri, Colorado, Montana, North Dakota, South Dakota, Arizona, California, Alaska, and Washington.   

Death of the Malfunction Affirmative Defense (and Common Sense): Can EPA Actually Expect Facility Operators to Predict Future Malfunctions?

Posted on November 24, 2014 by John Jacus

Last September, EPA proposed to supplement a proposed SIP Call to effect the wholesale elimination of “malfunction” affirmative defense provisions in numerous states’ SIPs under the Clean Air Act (CAA).  This supplemental proposed rulemaking was a direct response to a decision of the D.C. Circuit in NRDC. v. EPAEPA’s alarming reaction to the decision in that case is unwarranted, reverses long-standing policy with regard to startup, shutdown and malfunction (SSM) events that has been affirmed by multiple reviewing courts as rational, and would effectively require facility operators to predict future malfunctions and permit for them or prevent them if they are to avoid civil penalties for malfunction-derived excess emissions.  If unable to do so, operators would incur penalties intended to deter their noncompliance, arising from their failure to predict and account for future malfunctions. 

The portion of the NRDC v. EPA decision that addressed affirmative defenses only considered EPA’s authority to create them in private suits under Section 304(a) of the CAA.  The D.C. Circuit found that federal courts, not EPA, have authority under Section 304(a) to apply affirmative defenses in such private suits, on important separation of powers principles.  The court specifically limited its holding to affirmative defenses in the context of citizen suits, noting that “[w]e do not here confront the question whether an affirmative defense may be appropriate in a State Implementation Plan.”  Of course, the vast majority of enforcement actions alleging violations of emissions limits and seeking penalties for such excess emissions are brought by state permitting authorities with delegated programs established in their SIPs.  Most SIPs contain some SSM affirmative defenses, including in cases of a qualifying “malfunction,” which will insulate the operator from civil penalties (though not injunctive relief) if the affirmative defense is properly invoked.  See prior ACOEL blogs on this important topic for more background (“Partners?,” by Steve McKinney, and “5th Circuit Upholds…” by Karen Crawford). 

EPA has long interpreted the CAA to allow states to include at least a limited affirmative defense for malfunctions in their SIPs, and Circuit Courts reviewing challenges to such affirmative defenses have agreed that this is a permissible interpretation of the statute.  More recent cases have narrowed SSM affirmative defenses in response to environmental group petitions, by (1) requiring continuous compliance with permit limits for scheduled, i.e., foreseeable, startup and shutdown emissions, so as not to result in or contribute to a violation of the NAAQS, and (2) clarifying that the protections of the affirmative defense from the imposition of civil penalties for excess emissions do not preclude regulators from seeking injunctive relief in response to a malfunction.  This balance was struck by EPA in the 2013 proposed SIP Call, although many industry stakeholders and states have opposed the elimination of affirmative defenses for excess emissions during startup and shutdown.

EPA’s sole justification for now completely abandoning SSM accommodations is the conclusion that an affirmative defense for malfunctions renders any and all of the seventeen SIPs containing such provisions “substantially inadequate” in the wake of NRDC v. EPA.  Yet that decision does not extend to affirmative defense provisions in SIPs, as noted above, and is therefore not a good reason for disregarding longstanding agency SSM policy.  Indeed, EPA’s wholesale reversal of its SSM Policy is directly contrary to numerous other federal appellate courts that have squarely addressed the issue and held that SIP and Federal Implementation Plan (“FIP”) affirmative defense provisions for malfunction events are consistent with the CAA.  See Luminant Generation Co. v. EPA; Mont. Sulphur & Chemical v. EPA; Ariz. Public Service Co. v. EPA.

Many facilities requiring air permits to operate have complex mechanical and electronic equipment with countless components that, by their nature, may inevitably fail or malfunction at some point, despite an operator’s best efforts and regular maintenance.  Most remaining affirmative defense provisions, based on EPA’s historical direction (and the efforts of Sierra Club and other environmental groups to eliminate all SSM provisions as somehow being illegal), would now be sufficiently tailored (following the 2013 SIP Call) to balance the practical realities of unforeseen component failure and the responsibility of facility operators to minimize excess emissions through adherence to good air pollution control practices.  Indeed, a malfunction affirmative defense may only be invoked in most states when the excess emissions were caused by a sudden, unavoidable breakdown of equipment, or a sudden, unavoidable failure of a process to operate in the normal or usual manner, beyond the reasonable control of the operator. See, e.g., Colorado Air Quality Control Commission Common Provisions Regulation Sect. II.E.1.  SSM affirmative defenses also typically require that operators make repairs as expeditiously as practicable, minimize the amount and duration of excess emissions, and take all reasonably possible steps to minimize the impact of the excess emissions on ambient air quality.  These important and material qualifying pre-conditions to availing oneself of a malfunction affirmative defense ensure that air quality is being protected to the maximum extent practicable, even during malfunctions, consistent with good air pollution control practice. 

Expecting operators to predict the future and imposing stiff penalties when they can’t defies common sense, and ignores centuries of jurisprudence that recognize the need for exceptions due to circumstances beyond one’s reasonable control, such as the universally understood concept of force majeure.  It is perhaps ironic that an agency that has focused upon the use of improved emerging and available technologies to create Next Generation or “NextGen” Compliance requirements simply doesn’t “get it” when a technology or device fails to operate as designed and intended, and then gets a hammer out to whack the operator, as if that will “deter” future malfunctions…bad machine! 

Arkansas Legislature Takes Pre-Emptive Strike At New NAAQS Implementation

Posted on July 10, 2013 by Charles Nestrud

In April of 2013 the Arkansas legislature put an end to the ad hoc policy of implementing the NAAQS through stationary source permitting based upon source specific NAAQS modeling.  The Arkansas legislature did not need a crystal ball to predict the chaos that was about to occur when the new NAAQS (PM2.5, one hour SO2 and one hour NO2) were swept into the existing Arkansas regulatory program.  Arkansas’ environmental agency, the Arkansas Department of Environmental Quality (ADEQ) has relied upon its stationary source permitting program to implement the NAAQS for years, as opposed to relying upon state implementation plan (SIP) development.  ADEQ has required every permit applicant to submit air dispersion modeling, and thereby demonstrate that the source will not cause a NAAQS violation.  By comparison, EPA generally requires only PSD permit applicants to submit NAAQS dispersion modeling, and requires the states to otherwise address NAAQS compliance through their SIPs.

When Arkansas’ SIP permit procedures were last updated in 2000, minor (non-Title V) sources, and “minor modifications” at major sources were not required to undertake NAAQS modeling.  Arkansas’ policies regarding NAAQS modeling were generally in sync with the Clean Air Act and most other states.  Over the ensuing years regulatory creep expanded Arkansas’ NAAQS modeling program to the point that nearly every stationary source permit application was involved.  ADEQ permit engineers required NAAQS dispersion modeling for minor sources, for minor mods at major sources, and then for any permit renewal—even no change renewals, “just to make sure that the source is still OK.”  For example, a facility that had operated in full permit compliance for decades, without any modifications, could face permit renewal problems for no reason other than background conditions or recent meteorological data changed the NAAQS modeling results.  Suffice to say this development was unpopular, making permitting expensive, time consuming, and uncertain.   

The uncertainty was predicted to become chaos in September of 2012 when ADEQ proposed to drop the new NAAQS into its existing SIP. ADEQ’s “plan” was that the new NAAQS would also be implemented through stationary source permitting, including ADEQ’s expansive NAAQS modeling policies.  Of particular concern is the PM2.5 standard, which, at 12 ug/cm3, is already near or exceeded by the background levels measured at the majority of the ambient monitoring stations throughout the state—background that is rarely, if ever, the result of any stationary source activity, but more likely the result of rural road dust and other non-stationary sources.  

It became apparent to the regulated community that each permit review following adoption of the new NAAQS would generate ad hoc findings of modeled exceedances of the new NAAQS.  By implementing the NAAQS through stationary source permitting rather than SIP planning, ADEQ eliminated any evaluation of regional cause and effect, and precluded any consideration of comprehensive solutions that involve all contributing sources. Under ADEQ’s “plan,” the unwitting permit applicant is forced to stand alone and face the consequences of a failed NAAQS modeling exercise.  Concerns raised by the regulated community fell on deaf ears.

The Arkansas legislature stepped in, and in April of 2013 it enacted Act 1302, which required ADEQ to stop “protecting the NAAQS” by requiring stationary source permit applicants to undertake dispersion modeling, except in enumerated circumstances. Act 1302 prohibits ADEQ from using modeling for stationary source permit decisions or requiring retrofit pollution control technology.  With the exception of PSD and other limited situations, dispersion modeling can only be used when there is a source or pollutant-specific SIP requirement.  The Clean Air Act requires states to develop a SIP “for maintenance and protection of the NAAQS,” and Act 1302 requires ADEQ to implement the NAAQS as required by the Clean Air Act.  The legislature did not neuter the agency’s efforts to protect clean air (which was the agency’s unsuccessful lobbying position).  The legislature just said quit implementing the NAAQS through ad hoc permit decisions based on source specific air dispersion modeling.  The legislature told ADEQ to use its ambient monitoring network, area modeling, and other tools to evaluate NAAQS compliance, and where non-attainment occurs, do the comprehensive planning that is required by the Clean Air Act  to address it.  Act 1302 was carefully drafted to compliment the Clean Air Act, and serves as a good model for any state facing similar NAAQS implementation issues.    

During the two months since Act 1302 has been the law in Arkansas the agency has gone through some needed growing pains. The proposed rulemaking to enact the new NAAQS in Arkansas is being re-evaluated in light of the requirements of Act 1302.    Much of the regulatory creep that occurred over the past decade has been curtailed, such that minor sources, minor modifications and no change permit renewals are no longer being required to submit dispersion modeling or demonstrate NAAQS compliance.  

There is nothing like the heavy hand of the legislature to bring reason back into agency decision making.  It appears that ADEQ now recognizes (much like most other states) that modeling has its limitations, and these minor stationary source projects are not causing, nor are they likely to cause any NAAQS problems. There is still a lot of work to be done as the new NAAQS are adopted, and real SIP planning commences.  But sometimes it takes a pre-emptive strike to get the process started on the right track.

Partners?

Posted on June 25, 2013 by Steve McKinney

Congress said EPA and the States are partners in implementing the Clean Air Act.  It’s simple: EPA sets pollutant-by-pollutant standards for clean air (NAAQS) and each State develops and implements a state-specific plan to meet and maintain those NAAQS.  Each partner is well-positioned and equipped to perform its assignment and Congress included appropriate “carrots and sticks” in the Act to ensure that both do their job.  The Supreme Court has extolled Congress’s partnership approach and EPA routinely professes its deep appreciation of its State partners and their important role.  So wassup with EPA suddenly demanding that thirty-six States delete rules about excess emissions during startup, shutdown and malfunction (SSM) that have been EPA-approved for 30 to 40 years?

On February 22, in response to a 2011 petition by Sierra Club, EPA proposed to “call” thirty-six state implementation plans (SIPs) because they contain affirmative defense, exemption, or director’s  discretion rules for excess emissions during periods of SSM. EPA’s previous approval of the offending rules wasn’t even a speedbump.  EPA also rejected any obligation to connect the offending rules with air pollution problems in the affected States.  EPA’s legal position on how the States should enforce their CAA permits was enough to shuck the partnership and impose the federal will.  And EPA didn’t even ask nicely.  State requests for information about EPA’s consideration of their SIPs were ignored and States were given 30 days to comment on a proposal EPA took more than a year to develop.  EPA gave its State partners another 45 days only after more than a dozen State Attorneys General jointly asked for more time and the Senate Committee considering the new Administrator’s confirmation made the same request.

When comments were filed on May 13, thirty affected States filed comments; none of them supported EPA’s proposed call of their SIP.  Not even EPA’s regular supporters on issues like tougher NAAQS thought EPA’s dictation was a good idea.  Complaints from EPA’s partners ranged from being wrongfully excluded from EPA’s evaluation of their SIP to EPA trampling on the States’ planning and implementation responsibilities to EPA creating a lot of work that could have been avoided if EPA had just talked to them.  No amount of spin can make this look good for state–federal relationships.

So why?  Well, Sierra Club did ask for it.  Maybe because an obvious compliance impact is on emission limits with continuous monitoring and short averaging times like opacity.  And maybe because coal-fired power plants always have opacity limits and deleting common excess emission rules will set those sources up for widespread enforcement litigation.  Or, maybe the States and the previous EPAs had it wrong for all these years and someone finally straightened everyone else out.  Like so many conundrums of this type, it might take some judges to give us the answer.

Pursuant to a settlement agreement with Sierra Club, EPA must finalize the SSM SIP Call by August 27, 2013.