Global Climate Law Blog : Global Climate Law Blog : Published by Howrey Law Firm : Climate Attorneys and Environmental Lawyers

In this instance, the issue arose during an appeal of EPA Region 8’s grant of a PSD permit on August 30, 2007, authorizing the construction of a waste-coal-fired electric generating unit near Bonanza, Utah (In re Deseret Power Electric Cooperative). In briefing submitted to the Agency’s Environmental Appeals Board, the Sierra Club argued that because the Supreme Court had found in Massachusetts v. EPA that carbon dioxide is an air pollutant under the Clean Air Act, and the EPA regulated carbon dioxide by imposing monitoring and reporting requirements, a PSD permit for the Bonanza facility must require Best Available Control Technology (“BACT”) for carbon dioxide emissions. Region 8 disagreed, arguing that the Clean Air Act phrase requiring BACT for “each pollutant subject to regulation” was ambiguous, and that the Agency had “historically interpreted the [ambiguous] term … to describe pollutants that are presently subject to a statutory or regulatory provision that requires actual control of emissions ….”

On November 13, 2008, the Environmental Appeals Board rejected both parties’ positions:

The Board rejects Sierra Club’s contention that the phrase “subject to regulation” has a plain meaning and that this meaning compels the Region to impose a CO₂ BACT limit in the permit. On the contrary, the Board finds that the statute is not so clear and unequivocal as to preclude Agency interpretation of the phrase “subject to regulation under this Act,” and therefore the statute does not dictate whether the Agency must impose a BACT limit ….

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The administrative record of the Region’s permitting decision … does not support the Region’s view that it is bound by an Agency historical interpretation of “subject to regulation” as meaning “subject to a statutory or regulatory provision that requires actual control of emissions of that pollutant.” The Region did not identify … any Agency document expressly stating that “subject to regulation under this Act” has this meaning.

Although the Board concluded that the matter should be remanded to Region 8 so that it could reconsider a CO₂ BACT limit, the Board also suggested that the Agency might be best served through “an action of nationwide scope, rather than through this specific permitting proceeding.”

EPA’s recent partial grant of the Sierra Club petition stated that EPA would publish a Notice of Proposed Rulemaking in the near term to open the interpretative memorandum and the Environmental Appeals Board’s determinations to public comment. Although the Administrator refused to stay the memorandum, she did strongly suggest that it could not be used as support for interim permit decision making on a state level:

In the meantime, the Agency emphasizes a point noted in the memorandum itself: the memorandum does not bind States issuing permits under their own State Implementation Plans. In addition, given the Agency’s decision to grant reconsideration … other PSD permitting authorities should not assume that the memorandum is the final word on the appropriate interpretation of Clean Air Act requirements.

This uncertainty created by the former Administration’s interpretative memorandum and the current EPA’s move away from that interpretation will be a critical issue to watch.