Teacher’s Manual – Chapter 4 Air Pollution Control (4th Ed. 2015):
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
The Problem of Air Pollution
The Clean Air Act – Overview
The National Ambient Air Quality Standards (NAAQS) program
A. Criteria Pollutants
B. Establishing the NAAQS
C. Meeting the Standards (SIPs)
D. Non-compliance
The Clean Air Act – Direct Controls on Sources
A. Introduction
B. New Source Performance Standards (NSPS)
C. New Source Review (PSD and non-attainment NSR)
D. National Emissions Standards for Hazardous Air Pollutants
E. The Visibility Program
The Clean Air Act – General Enforcement and Permits for Regulated Stationary
Sources
The Clean Air Act –Mobile Sources
The Clean Air Act – Acid Deposition Control and Market Based Mechanisms
The Clean Air Act – Regulation of Greenhouse Gases
INTRODUCTION
This chapter provides the student with coverage of the different parts of the Clean Air
Act, including the setting of health based standards, the enforcement of those standards
through State Implementation Plans (SIPs), the direct regulation of stationary sources, the
regulation of air toxics, an overview of the control of mobile sources, and the CAA
activity directed at the regulation of greenhouse gases.
Because the CAA is so complex and utilizes many of the regulatory mechanisms found in
other environmental laws, this chapter can also be used as a way of explaining the various
benefits and drawbacks of different kinds of regulatory mechanisms.
Last, in this chapter, we focus intensely on the importance of the administrative process
and the executive branch to how the CAA actually works. This chapter provides
coverage of the battles over New Source Review and climate change. In the Fourth
edition, we also can examine the entire sweep of the cross state air pollution battles,
ending with the Supreme Court’s 2014 case, EME v. Homer City Generation, upholding
the broad outlines of the Cross State Air Pollution Rule.
Overall, we have simplified some cases and put in well edited versions of the most recent
CAA cases. The Professor can also use the CAA chapter as an introduction to the
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administrative process in environmental law, and it also illustrates how policy differences
can play out in the implementation of environmental law.
I.
The Problem of Air Pollution and II. Overview
A. “When Smoke Ran Like Water,” the Story of Donora Pennsylvania
[pp. 1-16].
The story of Donora Pennsylvania is a fitting introduction to the Clean Air Act. This
excerpt from “When Smoke Ran Like Water,” from Devra Davis, provides a compelling
look at the human costs of air pollution. Donora is a mill town on the Monongahela
River in Pennsylvania, which was established to support the steel industry in that area.
Its name has become famous and synonymous with air pollution because of an air
inversion which trapped many toxic pollutants over the town, killing scores of people.
Students appreciate this story because many of them are too young to realize the
immediate danger of air pollution and because Ms. Davis’s writing connects it to real
people that we all relate to.
Most interesting about Donora though, is not the description of the “incident” which
killed so many and made the town famous, but the underlying story of the chronic air
pollution which afflicted those who grew up and lived in the town. This is the story of
the trade-offs between economic development and pollution, which many people still feel
is at the heart of problems with environmental protection.
This is also a good place to note that the statutory CAA made a choice to enhance human
health above other interests (ambient air quality goals are to be set at a level “requisite to
protect human health and the environment, with an adequate margin of safety”), and how
that goal remains elusive today. One can also point to current examples of similar issues
that exist in other countries such as China, with its intense development and severe
environmental pollution problems. You might ask the students why this is so. Is
pollution control and economic development a trade-off? Is there a different way to think
about it? Can we hearken back to the introductory lessons that maybe it is simply
internalizing harms, and that we must do this before we think of how we can make tradeoffs between interests?
These questions lead directly into a discussion of the overview of the CAA, as you can
examine how these questions are answered by the structure of the act itself. One can note
that the fact that ambient standards are set to protect human health indicate the
importance of this interest compared to others.
II.
The National Ambient Air Quality Standards [pp. 19-44]
A. Control of Criteria Pollutants [19-29]
This section discusses the heart of the CAA’s protection of human health: the
identification and control of the criteria pollutants – common pollutants that are
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widespread. The chapter starts with the chemical reaction of oxidation (burning) of fossil
fuels, which illustrates hoe much our air pollution is related to fossil fueled energy.
This section next moves to NRDC v. Train. This case is the seminal case exploring the
EPA’s non-discretionary duty to designate air pollutants under section 108(a) if they meet
the criteria set out in the statute.
Massachusetts v. EPA follows. While this case is justly famous for its importance in the
climate change debate and its contribution to the law of standing, the case is also about
whether the EPA could and should list CO2 as a pollutant that contributed to human harm
under the control of mobile sources, Sec. 202. Since the language of Section 202 and
Section 108(a) (designating criteria pollutants for stationary sources is so similar), this
case provides a good example of how the Supreme Court will review the EPA’s
determination of the use of its power to designate pollutants and the way it examines
scientific evidence.
The part of the case that we reproduce here first examines whether the EPA can regulate
CO2 if it determines that it is a pollutant under Sec. 202 [and by analogy, Section 108].
This is a case of straightforward statutory interpretation. The court has no trouble
declaring that CO2 can be a pollutant under the broad language of the CAA, even if
Congress never directly intended to regulate CO2. Congress did mean to regulate
pollutants, and CO2 may fit that definition.
The second part of the case involved the EPA’s discretion to NOT regulate CO2 even if it
is a pollutant. Again, at first the question is statutory interpretation. The regulation of a
pollutant is a mandate if it causes or contributes to air pollution if it may reasonably
anticipate to endanger public health.
Interestingly, it is in this part that the majority gives a strong indication that the court, at
least, is convinced of the science of climate change and that the EPA will have little
evidence to offer that CO2 is not a pollutant, though it is technically allowed to do so.
The dissent interestingly focuses on the majority’s determination that the EPA must reply
to a rulemaking petition. The dissent acts as if this is a major extension of administrative
law, when in fact it is simply the logical follow-up to the APA’s command that the
agency may not act arbitrarily and capriciously. The rest of the dissent focuses on
statutory interpretation arguments regarding the definition of “pollution.”
Notes and Comments [pp. 27-28]
1. This excerpt from Utility Air Regulatory Group v. EPA illustrates how one
statutory term need not mean the same thing throughout a piece of legislation.
Though experts agree that the language could just as easily supported the opposite
conclusion, as we will see at the end of the chapter, the impact of the decision has
been relatively small in the greenhouse gas regulatory sphere.
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2. Train makes clear that if the EPA makes an endangerment finding under Section
108, it must regulate. Mass. v. EPA seems to add to this the fact that the court
will independently examine the scientific evidence to determine whether the EPA
(or any other agency for that matter) has appropriately analyzed and studied the
science or has acted arbitrarily and capriciously. Under this formulation, a person
could petition an administrative agency to make a scientific finding, which it must
then do reasonably, to force the regulation of a substance that has a mandatory
regulatory policy.
3. The definition of air pollutant is certainly unambiguous enough with respect to
CO2 that it could historically fit in with the court’s Chevron jurisprudence. While
the term might be ambiguous with respect to some things, Congress’s overall
intent is not ambiguous. The court’s determination that the EPA does have to
respond to a petition is consistent with the APA’s command of avoiding the
arbitrary and capricious. It appears that the EPA must eventually respond to a
position in a somewhat reasonable time. It might not have to reply to a petition
on flatulence or Frisbees if not responding is reasonable due to the nature of the
proposal.
4. Petitioners asked that the agency be forced to make a finding on whether or not
CO2 met the statutory definition for regulation. Asking for the court to make the
determination might have been met with more skepticism, since generally the
court should allow the agency to weigh evidence and make a determination.
Nevertheless the majority strongly indicated that it believes the evidence for
regulation is there.
5. The issuance of the endangerment finding has caused consternation among many
in industry and Congress. The EPA claimed at the time that once the
endangerment finding had been issued and automobile pollution regulated, that
sources of greenhouse gases (primarily CO2) are subject to regulation and must
be regulated under PSD program (discussed later). To mollify critics the EPA
proposed a “tailoring rule” to only regulate the largest sources, but this too is
subject to criticism as violative of statutory language. The Supreme Court
rejected the EPA’s position in Utility Air Group v. EPA (see note 1)
B. Establishment of Standards [pp. 29-].
Section B focuses on what ambient background level must be established for the criteria
air pollutants to protect human health. The first section reproduces materials that discuss
the general health impacts of the various criteria pollutants, and ends with the current
levels which have been established regulatorily. In particular, there is an examination of
effects on children, which highlights the question of which subgroup of the population
the CAA must protect. The statutory language has generally been understood as
protecting all, including the most vulnerable. Another way to think of this is in the
externality context of torts…the CAA may be designed to internalize externalities that
could cause harm to human health.
The establishment of the “safe” level of a criteria air pollutant brings up the issue of how
such determinations are made. Many students do not realize that though there is general
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agreement that many pollutants can have a negative impact on health, the determination
of a “safe” level may be extremely difficult. Additionally, these levels are revisited
every five years, and in general, the levels continue to be pushed down. If the Professor
wishes, she can focus on a current analysis or a new standard for a criteria pollutant,
currently being considered.
In Whitman v. American Trucking, the Supreme Court addresses what evidence is
sufficient to justify the regulation of pollutants at a particular level under the CAA.
Whitman v. American Trucking
[pp. 40-43]
Though this case is primarily famous in administrative law for its rejection of a nondelegation challenge to the CAA, it is also the most recent Supreme Court case
concerning the setting of the NAAQS, which must be revisited every five years. It arose
when the Clinton administration undertook a revision of the ozone and fine particulate
standard. The professor might ask the students why the statute requires that the NAAQS
be revisited every five years. This provides a good jumping off point for the uncertainty
that accompanies the scientific basis for these standards.
This case reaffirms the holding of Lead Industries, that Congress did not intend for
economic factors to play any basis in the setting of the NAAQS. Note, in this case, the
court rejects the argument that economic factors can be re-characterized as “health based”
because poor economic conditions can hurt the health of the public.
The court also states again that the level must be set in a manner “requisite” to protect the
public health, based on the “latest scientific knowledge.” The Professor might here ask
the students how this statutory term interacts with Chevron (or even Skidmore/Mead)
deference, then explaining how complex scientific determinations are given very strong
deference under both Chevron (if part of a rulemaking) or under Skidmore (if not).
Notes and Comments [pp. 43-44].
1.
2.
The issue of non-delegation arose because the court characterized the standard
“to protect the public health” as too broad and open-ended to be an
“intelligible principle.” The Supreme Court indicated that there is indeed an
intelligible principle – it defines it in the last paragraph (requisite to protect
the public health). Given this, it is easy to note that the agency did not act
arbitrarily in setting the standard of .08 since it is supported by the studies and
meets the standard. Similarly, as long as sufficient evidence supported a
finding and other evidence did not overwhelmingly indicate otherwise,
changing standards are likely to be approved.
This note illustrates the continuing controversies surrounding the NAAQS
(particularly ozone) and how critics continue to argue that economic factors
should be considered though it clearly is not allowed under precedent
(Whitman). The Professor might want to ask students how many people may
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3.
4.
have died prematurely due to the delay in updating the ozone standard. [The
best estimates are in the tens of thousands].
Setting a NAAQS for greenhouse gases at pre-industrial levels might be
suggested assuming any increase in greenhouse gases causes harm. But it
might be possible to suggest that some level above natural is not “harmful.”
The likely candidate of 450 ppm suggested by international negotiations might
be hard to justify since that choice recognizes that harm “will occur.”
It would be hard to prove that the EPA was taking cost into account without
direct testimony to that fact. Therefore, political considerations (avoiding
huge costs to industry) might be at play in the EPA’s regulatory decisions.
C.
State Implementation Plans
[pp. 45-58]
The Train case excerpt at the beginning of this section specifies that the states are given
the responsibility of implementing the NAAQS in the CAA. The case also provides a
history of why there were to be specific timetables in the establishment of the NAAQS by
the states. This is a good point to note the difficulties that state governments might face
in establishing standards. Would there be a race to the bottom if the states could set their
own “health” standard, or more likely, if the states were able to determine the time
schedule for the enforcement of the national standards?
The states have not been successful in meeting the NAAQS, and this will be addressed
again in the section on non-compliance, where specific penalties are set out for failure to
do so.
Notes and Comments [p.46]
This collection of comments fleshes out what a state’s SIP practically looks like, and how
much discretion the state has in its SIP. In view of EPA challenge of current state SIPs
(such as Texas), it is important to emphasize that the EPA must approve a SIP if it meets
the requirements, including bringing about compliance in the appropriate time frame. A
good exercise at this point is to have students look up a state SIP in class online, and
have them identify an airshed, a controlled pollutant, and the control mechanisms.
Transport of criteria pollutants [pp. 47-58].
This section focuses on the state’s responsibility in its SIP for ensuring that pollutants in
its own state do not cause another state to violate the NAAQS. This is accomplished
legally primarily through several statutes. The first, section 7410, which deals with the
establishment of the SIPs, explicitly notes that a state is NOT to cause any other state to
violate the NAAQS. The students will likely note that a mere precatory statement
requiring the states to do something may not mean it will actually occur, though the EPA
can request that a state change its SIP for just this reason.
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In the early 2000s, the EPA sought to address ozone pollution by simultaneously
requiring states that it believed to be causing other state violations to address this by
changing their controls on the ozone precursor NOx. This was later labeled the NOx SIP
call and it required the states to conform their SIPs to the plan.
The CAA has an additional section (added through amendment) which seeks to enforce
this requirement. In Section 126 (42 U.S.C. Sec. 7426) a state that believes that
particular sources in other states might be causing it to fail to meet the NAAQS within
the state, can petition the EPA for a finding that this is so, which then requires the host
state to correct the problem for the particular source. This may run into the problem of
uncertainty. It is not easy to trace pollution to a particular source, and if the EPA refuses
to make such a finding, challenging them will be difficult.
The Appalachian Power case, (not reproduced here), addressed the complexity of reading
these statutes together and the difficulty that the EPA has had in trying to reduce NOx in
upwind states.
In that case, the court generally upheld the EPA’s findings about which sources cause
downwind states to violate the NAAQS, and what controls the EPA then requires these
sources to adopt (which must then be made part of the host state’s SIP). This case, as do
so many others, turns on the deference that the court grants to the EPA. The court
handles some challenges to the statutory interpretation language by holding that section
126 essentially means what it says, and then upholds the EPA’s discretion in setting
remedial measures to correct these sources and the state implementation plans under 110.
EPA v. EME Homer City Generation [pp. 48-57]
This case takes us through the problem of air pollution transport, and the stages and
setbacks of the EPA’s attempt to control this problem. It illustrates the difficulties of
melding different parts of a statute and the practicality of such complex regulation. It
also illustrates the modern EPA preference for trading programs. Trading is a low cost
way to reduce ozone and particular precursors because so many sources remain
uncontrolled under the emissions limitations, which only apply to new or modified
sources. (see NSR section, next)…Reducing these sources’ pollution is much cheaper
than continuing reductions of newer sources.
Notes and Comments [pp. 57-58]
1. The main structure of the program is upheld.
2. These sections indicate that a state can demand reductions from any sources (126)
or states (110) that cause it to be non-compliant. Assuming that the downwind
states are protected, the statute would only require that the EPA’s method of
reduction be reasonable. (though 126 is source specific). This case shows the
Court understanding the incredible complexity of the pronlem and thus finding
the EPA’s solution allowable (as it is not in violation of the statutory language.
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3. The state of Texas wishes to suggest that since the SIP program in 110 allows the
state to determine the best way to meet required reductions (including here
reductions that would contribute to another state’s non-compliance (110(d)), that
this suggests that the EPA itself cannot require only one method of reduction.
However, the EPA had of course allowed the states to come up with their own
plan, all of which had failed.
4. The fatal problem is that it may not ensure that each state received its fair share of
reductions. It would not ensure compliance with either 110(d) or 126.
D. Non-compliance
[pp. 58-71]
Non-compliance with the NAAQS by the states has been a persistent problem. As we
have just seen, some of this can be blamed on the movement of air pollution across state
boundaries which have remained uncontrolled, but part of the problem has also been that
the choices required to meet the NAAQS have been painful ones that many states are
unwilling to meet (choices such as requiring stationary sources to impose more costly
controls, taking cars off of the road, zoning areas to reduce traffic, etc . . . ).
Miss. Commission on Env. Quality v. EPA provides a good review of the entire process of
designating NAAQS and requiring enforcement (which is why we have reproduced more
of the case than is normally necessary). It also spells out how the EPA makes such
determinations of non-compliance. Additionally, it shows how states have continued to
challenge the EPA’s non-compliance designations and methodologies. This case broadly
upholds the EPA’s process. It too is a statutory interpretation case for which the court
gives the EPA Chevron deference.
In 1990, the U.S.Congress finally required some mandatory sanctions for states that had
areas that were non-compliant for ozone, the most intractable problem. This has helped
move many non-compliant areas forward, but many are still problematic.
Notes and Comments [pp. 66-67]
2.
It seems that states could require ports to require mandates for vessels, but the
interference this might have with international trade and interstate commerce
create interesting questions of statutory and constitutional interpretation. This
suggests that a federal standard might be more appropriate and the federal
government has implemented a new low sulfur diesel and cleaner fuel
requirement for all vessels coming into US ports.
3. Congress has a role in requiring effective pollution control. Faced with
inadequate incentives for compliance, specific hammers may be the only way to
get any compliance.
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South Coast Air Quality Management District [pp. 67-71]
Of particular concern is what happens to the 1990 mandatory deadlines, when the
regulatory standard for ozone was changed from the one on which the statute was based
(recall that the EPA must revisit the NAAQS every five years.) For ozone, the standard
was changed from a .12 ppm one hour standard to a .08 ppm 8 hour standard. Many
states have tried to use this change to avoid the requirements of the statute based on the
earlier standard. In American Trucking, the Supreme Court tried to give effect to these
seemingly different requirements by mandating that the EPA “read the statute” so as to
give effect to both the changing ozone standards and also the purpose of Congress setting
statutory deadlines for compliance.
The Bush Administration EPA attempted to fill this gap with a 2004 rulemaking which
allowed the states to ignore the possibly more stringent standard as long as progress was
being made under the 1990 amendments. The DC Circuit disagreed, stating that the
Supreme Court’s opinion in American Trucking required that some effect be given to
Congress’s timetable intent even as the ozone standard changed over time, and that the
2004 rule failed to do that.
IV.
Direct Control of Sources
[pp. 71-134]
One of the most important innovations of the 1970 Clean Air Act Amendments was the
requirement that known sources of air pollution add technology controls to control the
pollution they produce. This is set in the New Source Performance Standards found in
Section 111 (42 U.S.C. Sec. 7411), and in technological requirements in the mobile
source controls. This is important because it represents a particular philosophy of
environmental control. In more recent times, there have been claims that the cheapest
way to control pollution is to let the polluter decide how best to meet a certain level. In
such a case, one gets the economic advantage of choosing the cheapest control, which
may change over time. This is often called market incentives and is characterized by the
Sulfur Dioxide Trading program (discussed infra). Direct controls take an opposite
approach, requiring all sources to control their pollution in a particular way, even if it is
not the most “efficient” way to control pollution. This question is revisited at the end of
the chapter, but it might be good to ask the students at this point why it might be a good
idea to require all sources to use the same kind of pollution control. There are really two
answers to this question. One is philosophical, that pollution is a bad thing, and that we
should require sources to control it as much as possible, meaning that they should not be
given a choice but do what they maximally can. The other reason is more practical, and
that is that enforcement of uniform standards is often easier, cheaper, and thus more
effective.
The first part of this section lists all of the technology standards that are present in the
Clean Air Act. The student will probably be understandably confused by the different
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standards, and this is a good point to note that different parts of the Act have different
purposes and reflect different balancing of values (we control hazardous air pollutants
more than criteria pollutants because they are more dangerous). The practitioner can
simply take an organized approach be asking which standard or standards apply, and then
finding out what those standards are. The actual standards are set by regulation and
depend on the application of different factors depending on the standards.
New Source Performance Standards
[pp. 74-88]
The NSPS apply only to new or modified sources. At the time of the passage of the CAA
in 1970, it was felt that it would be inequitable to require older sources to retrofit
pollution control equipment, but that eventually all existing sources would wear out,
requiring them to be replaced with new sources which would all be controlled. This
theory of regulating only the “new” generally has applied to most of the direct control of
sources throughout the CAA. There are exceptions in particularly bad areas (noncompliant areas), which must retrofit existing sources, but even in such a case, the
requirement is less stringent than for new sources. Importantly, these requirements for
“new” sources also apply to those sources that are modified. Obviously if “modified”
sources were not addressed, old sources would go on forever because they could keep
modifying so as not to cease operation.
This section illustrates the long running battle about what kinds of modification means a
source is “new” for purposes of the application of technology standards. Many billions
of dollars rely on this question and needless to say, it has been the subject of intense
regulatory and court battles. It has also been the crux of arguments favoring pollution
trading transport areas like the CAIR (discussed, supra) and strict application of these
requirements to modified sources.
This section can be used as an example of the administrative process from start to finish
in environmental law, and it features excerpts from the federal register and students can
evaluate historic comments. Many students may not realize the centrality of the
administrative process to environmental law, and may be interested in the notice and
comment process and its effects. Alternatively, the professor may just focus on the law
and cases and skip over the regulatory exercise.
The main battleground in this area has been what modifications trigger the application of
Prevention of Significant Deterioration (PSD) controls and controls on new sources in
non-attainment areas (jointly referred to as new source review or NSR) as well as the
application of NSPS. These actual technological standards for PSD and non-attainment
areas will be discussed in the next section which explains the 1977 CAA amendments
that added PSD and non-attainment requirements, but here we examine them for the
purpose of determining when modifications rise to the level of “new” for purposes of
triggering the requirements.
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Thus whether a modification has occurred is important to determining whether
performance standards apply.
The first case, Wisconsin Electric, [pp. 74-83] describes the general application of NSPS
to existing sources. The court first goes through the statutory requirement that
“modified” sources are considered “new” for purposes of the requirement and then
reviews the statutory and regulatory definition of “modified.” The most important of
these definitions concerns the regulatory “safe harbor” of the routine maintenance and
repair rule (RMRR), which states that simple “routine” changes are not modifications
requiring the addition of the technology controls. At the time of the case, the EPA made
this determination on a case by case basis, and not unexpectedly the court upholds the
EPA’s determination of the application of this standard as a valid exercise in its
discretion. The case importantly emphasizes the statutory definition of modification as
“any physical change” that causes an increase in pollutants.
Notes and Questions
1.
2.
3.
The first question focuses on whether allowing RMRR modifications to
escape technology requirements can ever be valid if the life of the facility is
increased (thus prolonging the operation of “dirty, older” sources).
Although this might be against the “spirit” of the new source controls, one
can certainly see that there could be some instances in which this might be
allowed under the CAA, particularly if de minimis.
This question will be answered in future text, but this points out how
important this question is in determining the actual application of these
requirements.
This note details the interesting case of section 111(d). This is a relatively
short part of the CAA that has not been interpreted. It would be a useful
exercise to have students examine it and have them explain how it could be
used to control greenhouse gases. In terms of the specific EPA approach,
that is being litigated as the book goes to press.
The NSPS Standard setting [pp. 84-88].
The Lignite Energy case [pp. 84-87] involves a challenge to the setting of a New Source
Performance Standard (NSPS) for a particular industry.
The facts of the case involve the best way to control Nitrogen Oxides (NOx), which are
precursors to ozone pollution. The two major ways of controlling it are with combustion
control technologies (essentially controlling the temperature at which combustion occurs)
and selective catalytic reduction (which involves the use of a chemical catalyst to
“capture” the unwanted NOx). Though the EPA may revisit technological standards as
the standards change or improve, this change in particular is in response to an
amendment to the CAA in 1990, which statutorily required this revisit. In this case the
EPA has revised the new source performance standard which requires the “degree of
emission limitation achievable through the application of the best system of emission
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reduction, etc . . .” for boilers, the place where fossil fuels are burned to produce steam to
produce electricity. The standard is often shortened to the “best demonstrated system.”
Since Section 111 requires consideration of cost, the industry petitioners who want to
avoid the requirement of more expensive selective catalytic reduction (SCR) claim that it
is not the best demonstrated system because its marginal costs are out of proportion to the
benefits that it will produce.
The court (as usual) defers to what it says is a reasonable exercise of the EPA’s
administrative discretion, noting that the EPA does not have to consider only marginal
costs and that there were sufficient findings of the affordability of the standard overall.
It is important to note from this case exactly how the standard is proscribed. Although
based on the amount of reduction that the EPA believes is available when a source
applies this “best demonstrated technology” of SCR and combustion control
technologies, the standard is set as the amount of pollution that should come from a unit
of energy produced when using this standard. Therefore, the standard does not say that a
source MUST use SCR, but instead that the source must limit its emissions to .15
lb/MMbtu (pounds of NOx emitted per million BTU burned), which at the time the
standard is promulgated is only achievable through the use of SCR.
Interestingly this works against the petitioners who claim that combustion control
technology should be used because it is improving. The court notes that if that is the
case, then eventually the petitioners will be able to meet the standard through combustion
controls, and therefore have even less reason to complain.
This case provides a window into how the EPA generally sets statutorily required
standards through regulation and should illustrate to the students the deference that the
EPA is given in such cases.
Notes and Questions: [p. 343]
1.
EPA’s decisions are given great deference by the court as long as they don’t
seem illogical or arbitrary. The reasons put forward by the EPA in the case
seem more than sufficient.
New Source Review (non-attainment and PSD) [pp. 88-116].
New Source Review encompasses additional requirements for new or modified stationary
sources in non-attainment (“non-attainment” new source review – NNSR) areas or
sources in attainment areas (PSD new source review). It is important to note that these
are in addition to requirements posed by NSPS. As with NSPS, the most important
question concerns what is a modification of a source. Modification is defined as in NSPS
as something that adds pollutants. But in addition to the controversy surrounding what is
an increase in pollutants, there is the additional question of what baseline is to be
considered – that is, what are the sources that we are examining to determine whether
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emissions have increased. One of the most important cases in administrative law deals
with this question.
a. What is a Source? Chevron v. NRDC, [pp. 89-98]
Stripped of its administrative law significance, this case is about an interpretation of the
Clean Air Act, specifically, whether a source is an individual smokestack or a building or
facility with multiple smokestacks. In the Reagan administration, the EPA had gone
through rulemaking to define “source” administratively as a whole building or facility.
This position generally favors industry since a polluter can modify one smokestack
(emission point), and even if pollution from that smokestack increases, can reduce
emissions elsewhere so that there is not “an increase in pollution at the source” which
would trigger NSR.
Notes and Comments [pp. 95-96]
1. One possibility for the difference is that facts of the NSPS case occurred before the
1977 amendments, wherein Congress seems to grant the EPA more discretion.
Additionally, NSPS applies with any level of pollutant, not just major sources. The
current court might today give Chevron deference to the EPA if attempted to add the
“bubble” concept to NSPS. Also, the triggering language for major sources under NSR
uses a tons per year thresh-hold.
3.Many environmentalists believe that the “bubble” concept has prolonged
grandfathered plants, which has allowed air pollution to continue longer than necessary.
But the statutory definition does have some ambiguity. Given that, the EPA could decide
to change its approach to “bubbling” if it were to go through another rulemaking. In
theory, Chevron deference posits that if Congress is unhappy with the agency exercise of
discretion, it may change the law; and when it does not, it has acquiesced in the agency’s
decision.
b. What is a modification….New York v. EPA I [96-103]
Both New York v. EPA cases involve challenges to substantial rulemaking changes
proposed by the Bush administration, which had the effect of simplifying some of the
application of NSR and expanding the “safe harbor” of routine repair and maintenance.
The case first goes through the convoluted and tortured history of defining what an
“increase” is for purposes of NSR. The case explains why industry historically fought
for “actual to expected actual” comparisons as opposed to “actual to potential”
comparisons. “Actual to Potential” will of course require upgraded pollution control
equipment for almost any change or repair that increases efficiency (because more
production and thus pollution will occur with the upgraded changes); whereas the “actual
to expected actual” may not; meaning that companies could increase efficiency and
profitability without incurring the large cost of new source pollution compliance. The
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Bush administration fully came down on the side of the “actual to projected actual,”
which the Clinton administration had also proposed at one time, and proposed other
applicability determinations that are beneficial to industry.
Industry challenged the rulemaking preferring a “potential to potential” test. This is
even more helpful to industry since it means that sources could be continuously
modernized AND increase actual pollutants without triggering NSR because potentiality
would never increase as long as the same equipment were replaced.
The court rejected this challenge. Stripped of verbiage, this is a straightforward
application of statutory interpretation and administrative deference. Congress has not
spoken directly on this issue and it is within the EPA’s power to adopt the position it did.
Even if the EPA had adopted this position, “potential to potential” runs the risk of going
too far and running afoul of the agency’s broad discretion.
Similarly, the environmentalists challenge to how the baseline is measured fails. While it
is clear that the new baseline calculation is proposed to give a source the ability to avoid
NSR as much as possible by cherry-picking data most favorable to it, it isn’t outside the
realm of the EPA’s discretion.
What is a modification - New York v. EPA II [pp. 103-108]
The second NY v. EPA case deals with the more direct question of whether the EPA can
administratively define a routine repair and maintenance as change that costs less than a
certain portion of capital cost. In this case, the EPA loses under Chevron, step 1. Here,
the DC Circuit, under Chevron, Step 1, notes that the term “increase” in pollution is not
ambiguous in the way the EPA suggests, and that this rule thus violates the Clean Air
Act.
Notes and Comments:
1.The thresholds were not challenged presumably because they were not exempting
heavily polluting sources and it made the program more effective. A similar proposal
was put forward by the EPA for greenhouse gases under the tailoring rule, discussed in
the last case, infra.
2.As noted above, a “potential to potential” test would allow industry to continue
replacing old equipment in perpetuity without ever triggering NSR.
3.Annual emission rates must be used if one is using an “actual to projected actual”
test. This also comports with real amounts of pollution, and can be seen as consistent
with the Act. Certainly nothing in the Act would require the EPA to only use hourly rate
comparisons; but the Bush proposal to use that might have been allowed under Chevron.
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4.After New York II, industry and the EPA are back to where they started, essentially
with a case-by-case analysis of whether something is a routine repair and maintenance. It
seems that this process really cannot be simplified without eliminating the routine
exception, grandfathering or changing the statute in another way.
2. Substantive Requirements [pp.109-113]
We next discuss the substantive provisions of the two NSR programs….non-attainment
requirements and prevention of significant deterioration (PSD) requirements.
Understanding the allowed increments of PSD may seem complicated to the student at
first. Doing simple exercises on allocating allotments and whether new ones can be
permitted (i.e. are there enough allotments left) are often helpful.
Notes and Comments [p. 113].
2.Procuring offsets from competitors assures that they capture any surplus profits, but
in a free functioning market, if a new competitor is a more efficient producer, presumably
the old competitor will sell.
4.There may be an incentive to “lock up” increments, but there must be a real
proposal to do so. Sources can purchase increments among themselves.
D. Hazardous Air Pollution Control [pp. 114-125].
This section briefly describes the history of regulating hazardous air pollutants and the
difficulty that the EPA had in doing so before Congress altered the legislation in 1990.
National Mining Association v. USEPA, in the notes involves the EPA’s attempt to
implement the new 1990 amendments for Hazardous Air Pollutants. It defines the
thresh-holds for regulation and notes that the EPA can pull all sources together in making
the calculation.
NRDC v. USEPA [pp. 116-125] sets out a summary of the 1990 law. The case focuses
on challenges to the EPA’s implementation of the second part of the HAP program, the
regulation of residual risk remaining after the implementation of technological control on
major sources.
The primary challenge involves statutory construction, which in turn evinces an
important policy decision. At what health based level does the statute require EPA to set
residual risk levels? This is somewhat confusing because a 1 in 1 million excess cancer
deaths triggers the need for a residual standard, but references in the Act to existing cases
and programs at the time of adoption could be construed as saying that the EPA only has
to regulate to a 100 in 1 million excess cancer deaths per year. These are obviously very
different (by an order of 100) and reflect different cost structures for compliance.
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While it is arguable that Congress may have intended the 1 in 1 million standard, given
the ambiguous parts of the statute, the court gives Chevron deference to the lesser
standard.
The last part of the case deals with a challenge to data under the arbitrary and capricious
standard. This is a hard standard under which to overturn and agency decision and the
court here upholds the agency as reasonable because though the data may be somewhat
flawed it is not arbitrary and capricious to rely on it.
Notes and Comments [pp.123-125]
4.The discretion may be based on the very differing cost structures and other risk
sources in an area. The EPA probably has more discretion for area sources also for
practical reasons. It might be difficult to administer specific technology requirements for
numerous small sources.
9.Sources in some industries (such as electricity generating units) may make
capital expenditures that last more than 25 years. These industries would be interested in
trying to get as much predictable changes in the design as necessary.
E. The Visibility Program (pp. 125-132)
The 1977 CAA amendments also included a special provision to protect visibility in
pristine airshed areas such as national parks. This indicates a policy initiative not just
based on health, but on aesthetics as well. Progress on this front has not been great, and
the Utility air group is a challenge to one of the first effective iterations of the program.
Utility Air Regulatory Group v. USEPA, [pp. 128-132]
This case provides a good review of the problems with visibility and the purposes of the
visibility requirements in the statute. In order to deal with the visibility problem more
effectively, the EPA has tried many times to get the state to agree to joint reductions. As
the court notes, the states can AGREE to make this commitment as long as it does no
worse than installing the technical requirements (Best Available Retrofit Technology –
BART) otherwise required. In this case the EPA decided to rely on its “Clean Air
Interstate Rule” (CAIR) - which is authorized to assist in transport of pollutants between
states – to also assist in visibility achievement. The court upholds the EPA decision,
noting that it is a reasonable way to address the problem as along as the states still have
the ability (and indeed the obligation) to make all contributing sources make reasonable
future progress, in addition to CAIR requirements.
Notes and Comments [pp. 133-134]
2.The time between 1962 and 1977 encompasses some of the time that grandfathered
plants were allowed, but not all of the time. Since 1977, PSD should require that no
additional degradation occur in Class I areas.
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3.States could hide behind scientific uncertainty though generally states may have
incentives to cooperate with other reductions. Also, in the face of overwhelming
scientific consensus, a state must act reasonably, i.e. it cannot deny what is
overwhelmingly true, and thus must act.
5.A reviewing court is likely to defer to the EPA since it has expertise in this issue
(though not necessarily Chevron deference). The EPA also has Congressionally
delegated authority to make SIP discretionary decision.
6.The result is a study in practicality. While one reading of the statute might suggest
BART only, it is open to interpretation which the EPA may take advantage of. The court
seems swayed by the practical logic of actually making improvements after so many
years.
V. Enforcement and Permits [ pp. 132-151]
This section discusses the historic problems with enforcement and describes what is
necessary for a state to be authorized to run the CAA’s Title V permit program. It then
shows the EPA’s oversight power even with an approved program.
Public Citizen v. USEPA, [pp. 134-140].
In this case, a citizen’s group, worried about the effectiveness of the state of Texas CAA
enforcement, challenges the EPA’s approval of the program. In particular, the petitioners
claim that the program cannot be approved with existing, identified deficiencies; and that
in any event the pre-identified deficiencies have not been corrected.
In a petition for Title V approval, the EPA is to review the program, and identify
deficiencies. It may grant a provisional approval and make a final approval conditional
on correcting the deficiencies. What the statute does not specify, however, is what is to
occur if the original deficiencies are corrected, but then others come to the fore. In this
case, the EPA granted Texas full approval after it corrected identified deficiencies even
though new deficiencies were identified. In trying to interpret the statute, the court noted
that the EPA had this power, and that if it did not, approval might be postponed
indefinitely.
As to the petitioner’s claim that the state of Texas had not corrected its deficiencies with
respect to gathering data from polluters in the face of an audit privilege law, the court
upheld the EPA’s determination that the state had clarified that it always had the right to
data for criminal prosecutions. While, from a practical perspective, this doesn’t seem to
meet the standard, the court noted that technically, it does.
One should note that the EPA seems anxious to approve the programs, which make sense
since it does not have the capability to run them all.
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Notes and Comments [140].
1.
BLANK
2.Chevron is probably the appropriate standard of review of the EPA’s approval
decision since the statute is not clear on its face.
3.This is a harder issue. From a practical perspective, it is not clear that the audit
position will allow the state of Texas all of the information necessary to effectively run
the program, in spite of the legal power to do so.
EPA Oversight, Enforcement [140-151]
Over-filing is an important concept that the Professor may wish to amplify. ADEC v.
EPA is set out more fully in other parts of the textbook on general enforcement. In this
excerpt, the Court upholds the EPA’s legal right to reject the states determinations under
the EPA’s authority to only permit sources that are consistent with the PSD requirements.
This is so in addition to the state’s duties and state control under its delegated authority.
This case is also a good reminder of the PSD’s “top-down” method of operation.
Mobile Source Control: [151-162]
While the student may not have much practice with mobile source pollution regulation,
this area has become important in the policy realm with the decision in Mass v. EPA
and the desire of other states to adopt the California standards. California was allowed to
go forward on its own fuel efficiency standards for greenhouse gases as well though new
US standards will not be as high and by agreement California has withdrawn differing
standards.
Acid Deposition Control and Market Trading Schemes [pp. 162-166].
This section deals with an important policy question and an examination of the use of
market based trading schemes. Generally, the SO2 trading program has been a success,
but the ability to replicate it for other pollutants may not be as appropriate. In particular
the professor may want to explore with students the advisability of a CO2 cap and trade
program to control climate change.
Greenhouse Gas Regulation Under the CAA [ pp. 166-180]
Utility Air Regulatory Group v. EPA
This case has a good review of statutory source permitting and describes how the EPA
tried to regulate GHGs under the PSD program despite the statutory difficulties. Along
with NY v. EPA, this case shows the extent to which an agency (the EPA) will try to
bend or dismiss statutory criteria to accomplish its policy goals.
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The court addresses only 3 questions. Whether the EPA 1) must or 2) can control GHG
sources alone under PSD, or whether 3) if a source is subject to PSD because of
production of other pollutants, GHGs can also be regulated.
The first two questions are answered by the court in the negative, applying “statutory
interpretation” to hold that PSD couldn’t contemplate GHGs as pollutants to be regulated
give the thresh-hold numbers in the statute.
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