THE LEGAL
TIMES
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Circuit
Reviews New EPA Rules on Pollution
Critics say
revised regs allow plants to escape federal emission limits.
Lily Henning
Legal
Times
The most recent episode in the
protracted fight over controversial air pollution regulations governing
industrial and power plant emissions played out in a packed courtroom in
At issue before the U.S. Court of Appeals for
the D.C. Circuit are key elements of one of the longest-running environmental
squabbles in
New rules proposed by the Bush Environmental
Protection Agency would reduce the burden on industrial polluters to report
changes made to their plants that could raise emissions — a measure supported by
industry. But states and environmental groups say the proposal will harm the
public health and undermine a law aimed at controlling pollution from the oldest
and dirtiest of more than 20,000 power plants and factories nationwide.
The hearing stemmed from one of several cases
about the EPA's revised air pollution rules; two more are on the D.C. Circuit's
docket. The battle involves more than 50 parties and a dizzying duel between the
interests of environmental groups, states, and big industry, which says that the
old rules deterred expansion.
"It's pretty unwieldy," says Russell Frye of the
litigation, in which he represents the Steel Manufacturers Association, which
has sided with the EPA. "It's fairly clear to me that a lot of people won't get
what they're asking for."
Frye, a partner with Collier Shannon Scott in
the District, is part of what a decade ago
would have made for an unlikely alliance: industry groups siding with their
federal environmental watchdog.
It's a role that lawyers who
represent corporate interests in environmental matters are becoming more
accustomed to under the Bush administration. "Environmental lawyers in D.C. have
found themselves in the relatively unfamiliar position of defending EPA actions
as often as we're challenging them," Frye says.
The appeals court hearing was unusual in that
lawyers from multiple parties — including the federal government, states,
environmental groups, and industry — argued the case for roughly four hours.
Normally, each side is allotted from
The three-judge panel that heard the arguments
was made up of Judges Judith Rogers and David Tatel, both Bill Clinton
appointees, and Senior Judge Stephen Williams, a Ronald Reagan appointee.
GOING TO THE SOURCE
At the heart of the dispute is the perpetual struggle over how
agencies interpret and enforce the rules that Congress directs them to write.
The coalition of environmental groups and 14
states contend that rule changes proposed by the Bush administration, which
involve an EPA permitting program called New Source Review, will help some
companies do a dramatic end run around agency inspections and emissions-control
requirements that would have been mandatory under former regulations.
Three years ago, the EPA issued a revision to a
1978 rule about when and how the agency reviews and calculates emissions from
existing sources of air pollution — such as coal-fired electrical utilities, oil
refineries, and factories — and how it responds to increases in these emissions.
The proposed revisions would alter how the agency would enforce these New Source
Review provisions of the Clean Air Act.
When
first passed by Congress during the Carter administration, New Source Review was
interpreted by the EPA to require that the best available pollution-control
technologies be installed when plants are built or when they are modified in a
way that significantly increases emissions of pollutants like sulfur dioxide and
nitrogen oxides. Both of these pollutants contribute to acid rain and can
aggravate or cause serious health problems, including emphysema and asthma.
The Bush administration has proposed new rules
that give plants more leeway to make modifications without triggering New Source
Review and, therefore, the need for added pollution controls.
For roughly the last 25 years, which included
the Reagan and George H.W. Bush presidencies, and the eight years of
"There was great ambiguity as to what the rules meant and how they
were interpreted," says William Lewis, a Morgan, Lewis & Bockius D.C.
partner who represents the American Chemistry Council and others who support the
EPA.
The industry complains that the EPA ramped
up enforcement of the industrial emissions rules in the 1990s and started
seeking to reduce emissions from existing plants through the program.
The EPA did not respond to calls for comment.
F. William Brownell, a Hunton & Williams
attorney in the District who represented industry groups in oral arguments Jan.
25, believes that the Bush administration is on the right track by narrowing the
scope of New Source Review. "New Source Review is a program about managing new
emissions growth, not an emission-reduction program for existing facilities,"
Brownell says.
According to a report released in
September by the EPA Office of the Inspector General, the Clinton EPA took a
tougher line on enforcing New Source Review of existing facilities. The reason,
according to the report: An increasing number of plant owners were modifying
their facilities and emitting more pollution. Yet they weren't going through
permit review and were potentially not adding new pollution-control technology.
MONEY, MONEY, MONEY
One of the roots of industry's historical resistance to the New
Source Review rules is cost. Putting new pollution controls on old plants is
expensive.
Among the biggest polluters, say
those who are challenging the Bush administration, are the coal-fired plants
built in the 1950s and 1960s that were expected to operate for only 20 to 30
years. As those plants neared retirement age, the companies realized how
expensive it was going to be to build new ones, says Robert Reiley, an attorney
for the Pennsylvania Department of Environmental Protection, one of the parties
challenging the Bush rules.
Building a new power
plant could cost nearly a billion dollars, says Reiley. But it can cost up to
$500 million to add state-of-the-art pollution controls to an existing plant.
Under the proposed Bush rules, old plants could
be perpetually "grandfathered" into an exemption from having to build better
pollution controls, critics say.
Lisa Rector, a
policy analyst with Northeastern States for Coordinated Air Use Management, an
interstate association of air-quality-control divisions in eight states, says
the new regulations also give companies alarming leeway in reporting their
emissions.
For example, under the original 1978
rules, plant owners must notify the EPA if they want to modify facilities in
ways that could increase pollutants. The owners are allowed to go forward with
modifications, as long as they do not increase emissions beyond the peak
production levels of the prior two years.
The
new Bush regulations allow a plant owner to go back 10 years to make that same
determination — often to a time when the plants were functioning at a higher
capacity and producing pollutants at a greater volume. Environmental groups and
some states warn that this could encourage plants to backslide to previous,
higher emission rates.
IN THE COURTROOM
Last fall, the composition of the D.C. Circuit
panel reviewing the case changed when Judge Harry Edwards, a Jimmy Carter
appointee, was replaced by Reagan appointee Williams. The court gave no
explanation for the change. But the swap of the Democratic appointee for the
Reagan pick may not be as significant as some might think.
Williams and panel member Tatel in 1999 handed a defeat to the EPA
when, as part of a three-judge panel, they set aside new air-quality standards
issued by the
The D.C. Circuit is expected to hear
a second case later this year about another major component of the EPA's
emissions-control rules that environmentalists say would allow companies to
essentially rebuild key parts of their plants and increase emissions — and
sidestep EPA review.
Under that new regulation,
companies can spend up to 20 percent of the value of a plant each year on
modifications, allowing them to rebuild and replace worn equipment and, in turn,
potentially increase emissions under looser federal oversight, says Victor
Flatt, a professor of environmental law at the University of Houston Law Center,
who represents lawmakers, including Sens. Hillary Rodham Clinton (D-N.Y.), John
Kerry (D-Mass.), and Patrick Leahy (D-Vt.) in support of Northeastern states
that have filed suit against the EPA.
CLEARING THE AIR
The D.C.
Circuit isn't the only forum where the Bush administration is pressing its
environmental agenda. The president's Clear Skies Act would eliminate New Source
Review for many plants. But it has been stalled in the Senate, and many say it
is unlikely to pass, leaving critics to suggest that the administration is
trying to nudge forward its agenda through agency rule making.
"They are trying to do administratively what
they couldn't do legislatively," says Flatt, the
In briefs, the state challengers call the Bush
administration's revision of New Source Review "a radical departure from
judicial and agency precedent," saying that even while the new rules are still
tied up in litigation, enforcement of the older and what they say is a
more-stringent rule has effectively been stalled as well.
The September report from the EPA Office of the Inspector General to
an extent agreed with them.
The inspector
general's report found that the rule change harmed the agency's ability to
enforce pollution actions against coal-fired electric utilities, saying that the
change has "seriously hampered EPA settlement activities, existing enforcement
cases, and the development of future cases."
The
report stated that three of nine utilities in active litigation with the EPA
have used the modified rules as an argument to halt or reduce EPA enforcement,
saying the emissions in question wouldn't violate the new EPA rules.
The report also concludes that nearly all of the
projected emission reductions of 1.75 million tons of sulfur dioxide and 629,000
million tons of nitrogen oxides resulting from recent sanctions under the old
rule wouldn't be realized under the Bush administration's new approach.
Lily Henning can be contacted at lhenning@legaltimes.com.