A Petition to U.S. EPA for a Rulemaking and Interpretive Guidance Coverage Pertaining to Methane Sources

On March 19, 2013, Clean Air Task Force (CATF), Environmental Defense Fund (EDF), Natural Resources Defense Council (NRDC), and Sierra Club (hereto, collectively referred to as the “Petitioners”) submitted a petition to U.S. EPA for a rulemaking and interpretive guidance coverage pertaining to methane sources under 40 CFR Part 98 Mandatory Greenhouse Gas Reporting Rule (MRR), Subpart W (Petroleum and Natural Gas Systems).  The Petitioners allege that U.S. EPA has not fulfilled its obligations under the Clean Air Act (CAA) to collect GHG emissions data from several large sources of methane in the petroleum and natural gas sector that are currently not listed in Subpart W or other Subparts of the MRR.  In particular, the Petitioners are requesting that U.S. EPA:

1. Clarify that oil wells that co-produce natural gas and are located in tight-oil formations are required to report emissions from venting and flaring associated with well completions;
2. Require reporting of well-completion emissions from any co-producing well currently excluded by the MRR focus on “gas wells;”
3. Require reporting from facilities and pipelines in the gathering and boosting segment of the natural gas industry, and from transmission pipeline blowdown events;
4. Require reporters to include API well identification numbers along with submissions.

The Petitioners believe that, currently, the MRR omits several potentially significant sources of methane in the oil and gas sector, which has caused an incomplete picture of emissions from petroleum and natural gas operations.  The Petitioners cite recent reports from the oil and gas industry that purport 2011 methane emissions from Subpart W sources are approximately 51% lower than national estimates from U.S. EPA.  According to the Petitioners, the lower reported emissions are not representative because they do not include missing source categories from Subpart W, other Subparts of the MRR, and excluded emissions from smaller facilities that are not required to report under the MRR because of the 25,000 ton carbon dioxide equivalent (CO₂e) Part 98 reporting threshold. 

The Petitioners claim that the inclusion of missing sources (sources which are not included under Subpart W, certain co-producing wells, boosting/transmission facilities, etc.) will result in more representative data which will provide U.S. EPA with several benefits.  Foremost, the Petitioners see the additional data aiding policy makers in understanding top-down emissions inventory analyses and helping them to understand the discrepancies between the actual and estimated annual emissions of methane.  In turn, the Petitioners hope that additional Subpart W data will allow states to calibrate additional policy priorities that may optimize methane reductions.  Likewise, the Petitioners claim that the additional data will allow the U.S. EPA to fulfill their obligations under Section 111 of the CAA to review and, if appropriate, revise standards of performance for certain source categories, including the oil and natural gas sector.   

In addition to the reporting of missing Subpart W data, the Petitioners request that U.S. EPA remove the best available monitoring methods (BAMM) provision that currently exist in the MRR and add opportunities for real-time continuous emissions monitoring technologies in Subpart W.  The Petitioners assert that the facilities that initially qualified for alternative reporting under the BAMM provision of Subpart W have had ample time to transition to other methods required under Subpart W.  Indeed, the Petitioners find that the BAMM provisions are no longer being used as a limited, transitional bridge to bring Subpart W facilities into compliance but rather are being used as a permanent fixture of the MRR.  The Petitioners feel that because facilities have had at least two (2) years of reporting to take advantage of BAMM they have had ample time to transition to the methods required under Subpart W.  In addition, the Petitioners request that U.S. EPA provide a mechanism under which requests for real-time continuous monitoring techniques that the U.S. EPA determines are more accurate than those ordinarily required by U.S. EPA procedure be deployed by facilities.

At this time we have no indication as to U.S. EPA’s timing for considering and making a decision on this petition. 

7th Circuit Court of Appeals Upholds Statute of Limitation in NSR Enforcement Case

In a very interesting ruling that, at first glance, would appear to have major ramifications to how U.S. EPA pursues New Source Review (NSR) enforcement cases, the United States Court of Appeals for the Seventh Circuit (Court) ruled on July 8, 2013 that a five (5) year statute of limitation applies in NSR enforcement cases involving preconstruction permits and that the requirements of 42 USC § 7475 (CAA §165) relate only to construction or modification of a source.  The decision can be viewed here. The case involved the modification of five of the defendant’s (Commonwealth Edison) “grandfathered” coal-fired power plants between 1994 and 1999.  The defendant took the position that a preconstruction permit was not required. Based on that position, they did not obtain a permit and did not install best available control technology (BACT) in accordance with §165.  The plaintiffs sued the defendant in district court after 10 and 15 years had passed since the modifications were finished, and the district court dismissed the suit as untimely.  The district court decision was appealed by the plaintiffs.

The Court, citing Gabelli v. SEC, 133 S. Ct. 1216 (2013), indicated that “a claim accrues when the plaintiff has a complete and present cause of action” and that the statute of limitations begins to run when the claim accrues.  In this case, the Court determined that the claim accrued at the time of the violation (e.g., between 1994 and 1999).  The plaintiffs argued that the lack of a construction permit was a “continuing violation” (e.g., every day a plant operates without a §165 permit is a fresh violation of the Clean Air Act).   The Court disagreed indicating that the §165 text specifies a step the operator must take before constructing or modifying a “major emitting facility” and stated that “the violation is complete when construction commences without a permit in hand”.  The Court added that there is nothing in the text of §165 indicating that a fresh violation occurs every day that a plant operates without a construction permit.  The statute specifies what must be built, not how the source operates after construction.  The Court cited two other court of appeals decisions[1] in support of their decision regarding operation of a new or modified plant without obtaining a construction permit.

The plaintiffs also contended that newly built or modified sources are subject to BACT (i.e., the operational component of a construction permit) which is a continuing obligation.  The plaintiffs cited a decision[2] contrary to the 8^th and 11^th circuit court decisions cited by the Court.  The Court clarified that the decision[3] cited by the plaintiffs was based on Tennessee statutes and implementation plans that require certain sources to use the best available control technology whereas §165 relates only with conditions associated with construction or modification.  The Court indicated the possibility that an Illinois statute, regulation, or implementation plan may require that a plant “subject to” BACT use it in operation, but deferred any such consideration to district court for resolution.  The plaintiff cited an Illinois statute[4] (§5/9.1(d)(2)) that they contend was analogous to the Tennessee requirement considered by the 6^th circuit, which the Court deferred to district court.  Within the context of the appeal, the Court disagreed that the defendant violated the Illinois statute[5] because of the earlier violation of §165.  The Court surmised that “Commonwealth Edison’s violations of §7475 during the 1990s do not make its current operations a violation of federal law, so they do not derivatively violate §5/9.1(d)(2)”.  Finally, the Court stated that “Today’s emissions cannot be called unlawful just because of acts that occurred more than five years before the suit began. Once the statute of limitations expired, Commonwealth Edison was entitled to proceed as if it possessed all required construction permits”.

While some parties may well be applauding this court decision that limits the time of permitting liability, every significant court decision like this has potential consequences as to how the U.S. EPA will act in the future.  This reminds us of the landmarked air quality court decision in the late 1980s known as “United States v. Solar Turbines, Inc.”  In that decision the court basically found that U.S. EPA could not overturn a prevention of significant deterioration (PSD) permitting decision on Best Available Control Technology that had been made by a state agency that had been delegated authority to implement PSD permitting.  That decision led to significant provisions in the 1990 Clean Air Act that strengthened the U.S. EPA’s authority for oversight in major source permitting.  It has also lead to significantly more review of preconstruction permits by the U.S. EPA prior to a state/local agency (“Agency”) issuing any permit to revise a major source permit even for instances of a minor permit action at a major source facility.  It now takes significantly longer to obtain a preconstruction permit at a major facility than it did in the 1980s as a direct consequence of this additional permitting oversight.  Therefore, this court decision could similarly result in additional U.S. EPA rules or permitting requirements to mitigate their shortened window for taking legal action.

You are NOT Subject to a NESHAP Standard…Now What?

With all of the activity surrounding National Emission Standards for Hazardous Air Pollutants (NESHAPs) lately (boilers, internal combustion engines, and a slew of new and sometimes obscure area source standards), many environmental professionals have been able to secure a moral victory by determining that a given NESHAP does not apply to a unit or units at their facility. 40 CFR Part 63 does not require the submittal of a notification of “negative applicability” to a state agency or U.S. Environmental Protection Agency (U.S. EPA) regional office. However, when an auditor or an agency representative comes to your facility and questions about the applicability of a given NESHAP, what will your response be? Sure, your verbal explanation of your determination will likely be thorough and technically complete. However, what do you have in your facility’s files to substantiate your verbal position? Remember the old expression – if it’s not documented, it didn’t happen? When you get a break during your busy day, take a look at 40 CFR §63.10(b)(3) and you might be surprised at what you read.  In that paragraph, you will read about the recordkeeping requirements related to your “negative applicability” determination for a NESHAP. Specifically, the following elements are required when an owner or operator determines that a source is not subject to a relevant standard because of limitations on the source’s potential to emit or an exclusion:

• The owner or operator must keep a record of the applicability determination on site at the source for a period of five (5) years after the determination, or until the source changes its operations to become an affected source, whichever comes first.
• The record of the applicability determination must be signed by the person making the determination and include an analysis (or other information) that demonstrates why the owner or operator believes the source is unaffected (e.g., because the source is an area source for a standard that applies only to major sources). The analysis (or other information) must be sufficiently detailed to allow the Administrator to make a finding about the source’s applicability status with regard to the relevant standard or other requirement.

So go ahead and celebrate that you are not subject to a certain NESHAP. Just please remember to document your determination in your files so you can share the good news with those who may ask!

Nice While It Lasted: Biogenic CO2 Exemption From Tailoring Rule Struck Down

“Don’t it always seem to go, that you don’t know what you got ‘till it’s gone?” Joni Mitchell knew what she was talking about in “Big Yellow Taxi” (one of my favorite songs), and any facilities combusting biomass were likely singing it last Friday, July 12, 2013, after the D.C. Circuit Court threw out the biogenic CO₂ exemption from air permitting activities under the Federal Greenhouse Gas (GHG) Tailoring Rule.

The Tailoring Rule, finalized on June 3, 2010 (75 FR 31514), “tailored” emission threshold levels for GHG in order for them to be regulated under the Title V and Prevention of Significant Deterioration (PSD) permitting programs. As of July 1, 2011, any facility with the potential to emit (PTE) over 100,000 tons per year (TPY) of carbon dioxide equivalent (CO₂e) became subject to the Title V program, if they were not already. Additionally, sources with PTE greater than 100,000 TPY CO₂e began to be considered major sources for PSD permitting, and projects resulting in a more than 75,000 TPY increase were subject to PSD review.

On July 20, 2011 (76 FR 139), U.S. EPA declared that biogenic emissions were not required to be included in emissions totals for purposes of determining Title V and PSD applicability, for at least three (3) years from the publication date. Biogenic emissions include but are not limited to: CO₂ from combusting biomass materials, black liquor solids, and portions of tire derived fuel (TDF); CO₂ generated from the biological decomposition of waste in landfills, and CO₂ from fermentation during ethanol production. In its reasoning, U.S. EPA recognized that using certain biological materials may be helpful towards reducing both overall use of fossil fuels and the concentration of atmospheric GHGs, and that careful study would be needed during the deferral period to determine the best way to regulate the resulting GHG emissions. This exemption was effective immediately at the Federal level, but optional for state and local permitting authorities. Any authority choosing to adopt this exemption created an incentive to use more bio-based materials to avoid being pulled in to either the Title V or PSD programs.

The D.C. Circuit Court’s majority decision in Center for Biological Diversity, et al. v. EPA, et al stated that U.S. EPA’s original reasoning was invalid, and that it has no authority to differentiate CO₂ based on its origin, given the wording of the Tailoring Rule and original “endangerment finding” justifying regulation of GHGs under the Clean Air Act. A coalition of environmental groups brought the suit, maintaining that biogenic CO₂ emissions may have as strong a climate impact as those from fossil fuels. The exemption will remain in place for 52 days from the decision date.

This decision does not affect the Federal GHG Reporting Rule. Biogenic CO₂ still must be reported under 40 CFR Part 98.

Stay tuned to ALL4’s Blog for further updates from the brave new world of GHG regulations.

Policy On Public Participation

The Pennsylvania Department of Environmental Protection (PADEP) has issued a draft revised guideline for public participation in the permit review process for permits or other applicable authorization application submitted for Department review.  The draft document establishes guidelines, which are considered the minimum to ensure adequate public review, for how PADEP requests public comments and how it will review and respond to comments received during the public participation process in the review of a permit application.  The draft policy discusses how and under what circumstances the Department will make use of written/electronic comments, public hearings, public information meetings, and informal conferences.  Included in the draft is an example of the format that is to be used by the Department when it prepares a formal Comment and Response Document as part of its decision on whether to grant the permit or other type of authorization.  The submitted will be made available to the public when PADEP renders a decision on the permit application.  Additional information about public participation in connection with the permitting process, Department staff, applicants, and the public may consult the Department’s website at http://www.dep.state.pa.us.  The draft guideline as well as the sample Comment and Response Document can be found here.  Interested persons may submit written comments on this draft technical guidance document to PADEP by July 22, 2013.  Feel free to also comment below on PADEP’s request to comment on their public participation processes.

The President’s “Climate Action Plan”

On June 25, 2013 President Obama released his much anticipated Climate Action Plan (Plan).  Driving home the point that changes to cut our carbon pollution should be done to forge a better tomorrow for our future generations, the Plan highlights three (3) specific areas in which the President hopes that the United States, as a whole, can improve on, as follows:

(1)    Cut Carbon Pollution in America

Although our country emitted less carbon emissions in 2012 than during any given year within the past two (2) decades, the President recognizes that there is still a lot of work to be done.  The centerpiece of the President’s Plan is a commitment to continue to cut carbon pollution from both new and existing power plants through the promulgation of GHG emission standards. 

As described in Megan Uhler’s historic blog, U.S. EPA first proposed New Source Performance Standards (NSPS) for emissions of carbon dioxide (CO₂) on April 13, 2012.  However, since U.S. EPA failed to issue the final rule within one (1) year of the original April 13, 2012 proposed version, the rule must be “terminated” and U.S. EPA must propose, accept comments on, and finalize a new version of the rule.  U.S. EPA recently announced its intent to re-propose the rule during September 2013, and all affected parties are curious as to whether the re-proposal will this time include unique standards for coal- vs. gas-fired plants.  The President has also directed U.S. EPA to propose a rule that will apply to existing power plant in June 2014 and to finalize those rules within a year later, with the understanding that the NSPS for new plants must be finalized prior to finalization of the NSPS for existing plants.

In addition to implementing new standards on the power industry, the President has set new goals for the use of renewable energy within America.  The President has specified that 10 additional gigowatts of renewables on public lands shall be permitted by 2020 and has also specified goals for both the Department of Defense (the largest consumer of energy in the U.S.) and for federally subsidized housing.  To help support these goals and other clean energy innovation, the President has increased funding for clean energy technology by 30 percent in the Fiscal Year 2014 budget. 

The President has addressed both the transportation sector and the energy usage of American families and businesses.  The Plan states that work to find alternative fuel options for transportation will continue to be invested in and fuel economy standards will continue to be increased.  For American families and businesses, the Plan promises that (1) the Department of Energy will establish new energy efficiency standards, (2) various government agencies will invest in energy efficiency technology so that it may become a more affordable investment, and (3) the Better Buildings Challenge will continue to help American commercial and industrial buildings become at least 20 percent more energy efficient by 2020.

The Plan addresses the reduction of other GHG emissions, specifically hydrofluorocarbons and methane emissions.  To reduce the emission of hydroflurocarbons, the Plan places responsibility in U.S. EPA’s hands, stating that when possible, the use of harmful chemical alternatives shall be prohibited and low-emission technology should be identified and invested in.  The Plan suggests two (2) approaches for reducing methane emissions: (1) through the development of an interagency (U.S. EPA and the Departments of Agriculture, Energy, Interior, Labor and Transportation) comprehensive methane strategy. The strategy will address emissions data, data caps, new technologies and best practices for reducing methane emissions; (2) through a collaborative approach across the entire economy, which will include additional loans and investments in new technology.

Finally, the Plan states that in order to continue to reduce carbon pollution, America must continue to build, preserve, and maintain the country’s forests.  The Administration suggests that the improvement of soil and water quality, the reduction of wildfire risk, and the identification of new approaches will further protect and restore America’s forests.

Overall, the Plan believes that the Administration needs to be the leader and driver for cutting carbon pollution. Government agencies need to continue to lead the way by cutting their own carbon emissions, thereby providing an example for the rest of the country to follow.

 (2)   Prepare the U.S. for the Impacts of Climate Change

Despite the fact that work has been done to combat future climate change due to GHG pollution, there will be impacts from past pollution which will inevitably be felt.  First, the Plan outlines ways in which to build stronger and safer communities and infrastructure.  The Plan suggests establishing state, local, and tribal task forces to tackle the key actions needed for communities to become prepared for climate changes.  The Plan suggests that the Federal government will continue to be involved via support and assistance, when needed, to help communities prepare for future climate changes.  This will include the communication of how to boost the resilience of buildings and infrastructure.  The Plan also includes tackling rebuilding and learning from the devastation of Hurricane Sandy.

Additionally, the Plan addresses how the U.S. can protect both our economy and our natural resources from future climate changes.  The most important aspect is to identify which key sectors have vulnerabilities and what can be done to protect these areas. Overall, the country needs to begin to better prepare for future droughts, floods, and forest fires all by maintaining and conserving land, water, and agricultural resources.

Finally, to prepare the U.S. for future climate changes the Plan suggests turning to science.  The Plan suggests the use of the $2.7 billion in the Presidents Fiscal Year 2014 Budget, to increase the understanding of climate-change impacts to develop models and tools to respond to both the long-term and short-term effects of climate changes.  The Plan describes the creation of a Climate Data Initiative which will help to organize the development a climate resilience toolkit.  This toolkit will be available to the public and will help not only with the rebuilding of post Hurricane Sandy communities, but with the assessment of environmental security of current and future communities.  

(3)    Lead International Efforts to Address Global Climate Change

The final area which the Plan addresses is the need for the U.S.’s leadership not only in domestic climate change affairs, but in international climate change affairs as well.  The Plan states that continued effort of multilateral engagement with major international economies will be enhanced through efficiency gains in the building sector.  Bilateral cooperation with major emerging economies will also be enhanced to further decrease GHG emissions.  The U.S. will continue to combat short-lived climate pollutants by leading both the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollution (Coalition) and the Global Methane Initiative (Initiative).  The efforts of the Coalition and Initiative will continue to reduce black carbon and methane emissions from all over the world. Just as is the case on the domestic front, the Administration will continue to address the need to improve the conservation world’s forests in order to further combat GHG emission.

The Plan largely focuses on how the Administration can lead the world in the use of renewable, clean, and efficient energy sources.  The Administration hopes to be a global leader and provide financial and regulatory support for renewable and clean energy projects, promote the use of clean fuels (natural gas or renewables), support safe and secure nuclear power, help to develop clean coal technologies, and lead the way in developing programs to improve energy efficiency worldwide.  The Administrator hopes to continue to be a leader in discouraging wasteful consumption of fossil fuels, to promote public financing towards cleaner energy, and to help strength the global resilience to future climate changes.

Overall, the Plan calls to attention the need to continue to take action to combat future climate changes due to the emission of GHGs.  The President’s full “Climate Action Plan” can be found here, and a quick fact sheet on the plan can also be found here.