Academic journal article Energy Law Journal

Report of the Environmental Regulation Committee

Academic journal article Energy Law Journal

Report of the Environmental Regulation Committee

Article excerpt

The following is the initial report of the Energy Bar Association's Environmental Regulation Committee, the successor to the Climate Change and Emissions Committee. In this report, the Committee summarizes key developments in Federal and State environmental regulation from June 2010 to August 2011 that may be of particular interest to practitioners.*


A. Regulatory Developments

1. New Source Performance Standard Settlement Agreements

The U.S. Environmental Protection Agency's (EPA) development of proposed New Source Performance Standards (NSPS) for greenhouse gas emissions (GHG) from new and existing steam electric generating units (EGU) and petroleum refineries continued after years of litigation and delays. On December 23, 2010, the EPA entered into a pair of proposed settlement agreements that established a schedule for the agency to promulgate GHG performance standards for EGUs and refineries under Clean Air Act (CAA) section 111.1 While the settlement agreements shed little light on the ultimate design of the standards, they effectively resolved lawsuits brought by a number of states and environmental groups in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) that challenged a pair of agency rulemakings amending existing performance standards for EGUs and refineries under section 111.

CAA section 111 authorizes the EPA to regulate emissions of air pollutants from stationary sources. Section 111(b) requires the EPA to set emission standards for any category of new or modified stationary sources that "causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare."2 For all listed source categories, the EPA must establish "standards of performance" (NSPS) based on the best demonstrated technology (BDT).3 Once proposed, these standards apply to all sources, described as "affected sources," that are constructed, modified, or reconstructed. Under section 111(d), subject to certain exceptions, the EPA has authority to regulate existing sources of listed source categories.4 Rather than authorizing the EPA to directly set national standards, this provision authorizes the EPA to issue "emission guidelines" that states must meet when they regulate emissions of existing sources in a source category.5

The two settlement agreements affect separate rulemakings under section 111 for EGUs and refineries. The first agreement applies to certain new source and existing EGUs that burn fossil fuels.6 The agreement addresses a rule issued by the EPA in February 2006 amending the standards of performance for EGUs subject "to 40 C.F.R. part 60, subpart Da."7 In response to the rule, several states and environmental groups filed petitions for judicial review contending that the Clean Air Act required the EPA to include NSPS for GHG emissions from EGUs.8 The settlement agreement requires the EPA to issue rules addressing GHG emissions from EGUs.9 If the EPA does so, the agreement forecloses any further action by state and environmental petitioners to compel the EPA to act.10 In the agreement, the EPA commits to issue a proposed rule to establish "standards of performance for GHGs for new and modified EGUs . . . subject to 40 C.F.R. part 60, subpart Da" under section 111(b).11 The agency also agreed that the proposed rule would include emissions guidelines pursuant to section 111(d) "for GHGs from existing EGUs that would [qualify under] 40 C.F.R. part 60, subpart Da if they were new sources."12

The settlement agreement originally set the deadline for the proposed rulemaking as July 26, 2011.13 However, on June 13, 2011, the parties entered into a modified settlement agreement that changed the deadline for the proposed rule to September 30, 2011.14 The May 26, 2012 deadline established by the original agreement for the EPA to sign final rules for new or modified and existing EGU stationary sources, respectively, remains in effect. …

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