Court Remands on EPA PM 2.5 Rule, Leaving Industry in a Fog

DC Circuit Remands EPA PM 2.5 Rule

On January 22, 2013, in Sierra Club v. EPA, No. 10-1314, 2013 WL 216018, a three-judge panel of the DC Circuit remanded most of an EPA permitting rule regarding de minimis exemptions from certain analysis and monitoring requirements for projected emissions of PM 2.5.  The Court held that EPA exceeded its authority to set such de minimis levels where the Act did not provide it such discretion.  The significance of this ruling is that it potentially widens the set of sources to whom PM 2.5 requirements apply and will make permitting of sources of such pollutants more challenging.

Under EPA’s PSD permitting program (applicable to new source and modification permits for attainment areas), sources seeking such permits must perform one year of pre-permit monitoring to set the baseline for the pollutants at issue and must make a demonstration that the source’s projected emissions of such pollutants will not exceed the national ambient air quality standard for each such pollutant.  The Rule at issue set de minimis screening values (i.e. thresholds) for PM 2.5 (so-called small particulate matter) that would have allowed the EPA or state agencies to exempt PSD permittees from the NAAQS analysis and/or one year monitoring requirement for PM 2.5.  Sierra Club challenged the EPA Rule as unauthorized under the Clean Air Act and the intervenor, UARG, argued that EPA did not go far enough in providing a blanket exemption for such de minimis levels.

The Court, in a brief opinion, held that a) based on EPA’s concession and request for remand, that it would remand to EPA a portion of the Rule dealing with significant impact levels (“SILs”) to reconsider the cumulative impact of more than one de minimis source of PM2.5 on the required analysis of potential violations of the National Air Quality Standard for PM2.5 and b) that with respect to the requirement of significant monitoring concentrations (“SMCs”) and the provision that a projection of de minimis SMCs could exempt a source from the one year pre-construction monitoring, that it would remand to EPA for further consideration in light of the same cumulative impact issue.

The significance of this decision is that it potentially places a hold on PSD permitting with respect to PM2.5, primarily for coal-fired utilities and other industrial sources using fossil fuels, since these fuels, unlike natural gas and renewables, are the main stationary sources of particulate emissions, including PM2.5. Without certainty on whether there is a de minimis or other threshold for PM 2.5 pre-construction monitoring, sources do not know how to plan for and price the controls for PM2.5 (such controls are emerging technology). This uncertainty builds on the existing uncertainty about PM 2.5 controls in light of EPA’s  recent reversal of its longstanding guidance that for purposes of measurement and control of PM 2.5 emissions, sources can use as a surrogate for PM 2.5 emissions, PM 10 emissions.  See Implementation of the New Source Review Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5) (Final Rule), 73 FR 28321 (May 16, 2008); 74 FR 48153-01 (9/22/09) (9 month stay of implementation of the revocation of the EPA’s surrogate method); Memo from Stephen D. Page, “Implementation of New Source Review Requirements in PM-2.5 Non-Attainment Areas” (explanation of rationale for long-standing surrogate policy).

Until EPA rewrites this PM 2.5 de minimis rule, the states and permittees will remain in a fog of uncertainty regarding monitoring and control of PM 2.5.

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Kenneth Reich is an experienced environmental and energy lawyer, including significant experience under the Clean Air Act.  He represents and counsels clients with respect to the requirements of the Clean Air Act and other federal and state laws and regulations and manages both litigation and transactional matters for his clients.  See his website for further information: www.kennethreichlaw.com.

Note:  This memo is not intended as nor should it be regarded as legal advice. Please consult an attorney for the specifics of any of the matters discussed above. Further, this memo may be regarded as lawyer advertising in some jurisdictions.

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About Kenneth Reich

Experienced Environmental and Energy Attorney, Adjunct at Boston University Law School and legal mentor.

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