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A new federal regulation setting an emissions threshold for
limiting total greenhouse gases from all industries won't withstand
a legal challenge but is sure to cause a minor headache for the US
Environmental Agency (EPA) under the Biden administration.
Eight days before President Donald Trump leaves office, the EPA
published a rule on 13 January that sets 3%
of total gross US greenhouse gas (GHG) emissions as the significant
threshold at which the agency can regulate releases of these
pollutants. Below that level, the EPA said no endangerment of
public health would ensue.
The rule, which takes effect 21 March, applies not just to the
power sector, but to all industries, including oil and natural gas
wells and refineries as well as chemical and petrochemical
plants.
The EPA took this action in a final rule that was meant to
finalize the Trump administration's rewrite of 2016 GHG standards
for newly constructed or modified coal-fired power plants.
At least one legal scholar and two attorneys specializing in the
Clean Air Act told IHS Markit on 13 January that EPA's action could
result in challenges under the Administrative Procedure Act (APA),
the US law governing how federal agencies develop and issue rules
after giving the public advance notice and a chance to react and
comment. The Clean Air Act is designed to limit air pollution from
both stationary and mobile sources.
"The final rule violates the APA because it isn't a logical
outgrowth of EPA's 2018 proposal and the public didn't get a
meaningful opportunity to comment on the 3% threshold for
significance," Jack Lienke, regulatory policy director at the
Institute for Policy Integrity and an adjunct professor at NYU
School of Law, said.
Agreeing with Lienke, Megan Houdeshel, a Clean Air Act attorney
with Dorsey & Whitney LLP who focuses on compliance, said the
EPA, in its haste, may have failed to consider counterpoints
because there was no comment period. The 13 January rule is a "thin
slicing of the EPA's regulatory authority without any input from
the public on whether that 3% threshold makes sense or is in line
with congressional intent. It's likely this will get challenged in
court on this basis if not revisited by the Biden administration,"
Houdeshel said.
EPA said it derived its authority from Section 111(b)(1)(A) of
the Clean Air Act, which requires the agency administrator to
include source categories on a list for regulation "if in his
judgment it causes, or contributes significantly to, air pollution
which may reasonably be anticipated to endanger public health or
welfare."
"No comment," was EPA spokesman Ken Labbe's response when IHS
Markit asked whether the agency can set a specific emissions
threshold without seeking comment on it, and risk violation of the
APA.
The lawyers, however, agreed that EPA's rule will only result in
a speed bump in the Biden administration's path to reaching
net-zero carbon levels for the power sector by 2035 and across the
economy by midcentury.
"It's definitely a gnat of a headache" for the Biden
administration because it will require EPA to either take steps
administratively or go through the courts, said Eric Boyd, another
Clean Air Act attorney with Thompson Coburn LLP.
Lienke also likened it to "a headache," but not a
"migraine."
"I don't think the Biden administration will even need to do a
standalone rulemaking to repeal this policy. Instead, when the
Biden EPA proposes greenhouse gas standards for a new source
category—such as refineries—it can simply, as part of that
proposal, acknowledge the interpretation of 'significance' offered
in this week's rule, explain why the interpretation is
unreasonable, and announce that it will henceforth use a different
approach," he added.
The final rule, as
described by the EPA in its own regulatory agenda, was meant to
finalize the agency's proposal to set GHG standards for new or
modified coal-fired electric generating units, or EGUs based on the
best system of emissions reductions (BSER). At the time, EPA had
proposed the BSER to be "the most efficient demonstrated steam
cycle (e.g., supercritical steam conditions for large units and
subcritical steam conditions for small units) in combination with
the best operating practices."
Instead of finalizing that proposal, EPA said EGUs can be
regulated because they contribute 25% of total US GHG emissions
based on its significant pollutant contribution finding. It also
decided to ignore the basic premise of the 2018 proposal, contending it
would revisit it in a separate rulemaking.
"Any action regarding the proposal to revise the standards of
performance, including the underlying determinations of the BSER,
for new, reconstructed, and modified coal-fired EGUs, including
certain technical issues, is beyond the scope of this final rule
and comments received on the 2018 proposal will be addressed in a
separate future action," EPA wrote.
In a 12 January statement, which EPA issued a day before the
rule was published in the Federal Register, the agency acknowledged
the rule was the result of a finding for a completely separate 2020 final oil and gas rule,
which said "the EPA, as a predicate to promulgating [new source
performance standards] for certain air pollutants, must determine
that the pertinent pollutant causes or contributes significantly to
dangerous air pollution."
In 2020, EPA used this significant pollutant contribution
finding to rescind the Obama EPA's regulation of methane, a GHG
that is 80 times more potent than carbon dioxide, from new and
modified oil and gas production and processing units. At the time,
EPA indicated it would pursue a separate rule to determine the
criteria for determining significant pollution contributions.
Posted 13 January 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst
