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

The EPA originally issued a permit for the Desert Rock facility on July 31, 2008 – just one day before the deadline negotiated between the EPA and Desert Rock due to litigation over the EPA’s delay. Under the Bush administration, the EPA did not consider carbon dioxide emissions under PSD, which requires new and modified plants that increase emissions to use BACT to control emissions. Under the Obama administration, however, the EPA is seeking to regulate greenhouse gas emissions via the Clean Air Act, including consideration of greenhouse gas emissions under PSD.

Proponents of the EPA’s request to remand the permit argue that the EPA should be allowed to take back the permit and consider it in light of the new information regarding IGCC and the agency’s new approach to PSD and controlling carbon dioxide emissions. Environmental groups also have argued to the EAB that Desert Rock's lawsuit regarding alleged delay in issuing the PSD permit forced the EPA to issue the permit before the review was complete.

Those in favor of reinstating Desert Rock’s permit counter that the EPA’s ability to rescind a previously issued permit under these circumstances has serious ramifications. On June 11, 2009, Desert Rock filed its opposition to the EPA’s voluntary remand. “The matter now before the Board is unprecedented,” argued Desert Rock Energy Co. in its brief filed with the EAB. “Although it arises in the context of a challenge to a Clean Air Act permit, the Board's decision in this case will reflect on the integrity of EPA as an institution and its respect for basic notions of fairness and due process.”

Desert Rock argues that the EPA is trying to apply rules that do not yet exist to a permit that has previously been issued, which it describes as arbitrary and capricious. As such, Desert Rock argues that the EPA is seeking to bind Desert Rock today to the prospective change in the agency’s energy policy of tomorrow. And according to Desert Rock, the EPA is seeking to change long-standing agency positions without public notice and comment. Finally, Desert Rock asserts that if the EAB grants the EPA’s request for a voluntary remand of the permit, it would effectively be withdrawing Desert Rock's PSD permit without hearing or review, in violation of due process.

In addition to the EPA’s reputation, the due process concerns, and the potential Clean Air Act violations, Desert Rock is concerned about the financial investment and economic risk to the Navajo people. Argued the power plant’s owner, “At immediate stake are the millions of dollars already invested in the Desert Rock Project, hundreds of millions of dollars in revenue and thousands of jobs for the Navajos, and a reliable source of energy for an area of the country that desperately needs it.”

On June 22, 2009, the appeals board issued an order granting the EPA’s request to file a reply brief to Desert Rock’s June 11th opposition. The EPA’s reply is due to the appeals board no later than June 29, 2009.