UPDATE: The Resurrection of CAIR

On December 23, 2008, the U.S. Court of Appeals for the District of Columbia Circuit (Court) reversed its earlier (July 11, 2008) decision to vacate the Federal Clean Air Interstate Rule (CAIR).  The Federal court decided, after considering comments from the appellants to the rule, to allow CAIR to remain in effect while U.S. EPA “fixes” the rule. In the July 11, 2008 decision, the Court had identified where the rule was not consistent with the Clean Air Act (CAA). In its order for a rehearing the Court stated: “Here, we are convinced that, notwithstanding the relative flaws of CAIR, allowing CAIR to remain in effect until it is replaced by a rule consistent with our opinion would at least temporarily preserve the environmental values covered by CAIR.” 

On July 11, 2008, the Court had decided to vacate CAIR in its entirety and remand it to U.S. EPA declaring that the 2005 rule “had more than several fatal flaws.” In September 2008, U.S. EPA petitioned the Court for a rehearing or as an alternative, a remand of CAIR without the Court’s order vacating the rule.  The Court, in its December order, stated that it had considered the appellant parties’ positions in making its determination to remand CAIR to U.S. EPA without vacating it.  The Court did not give U.S. EPA a specific deadline for revising CAIR as some petitioners had requested, but the court warned the Federal agency that it did “not intend to grant an indefinite stay of the effectiveness of this court’s decision.”

Most CAIR-affected sources and state air quality regulatory agencies believe that the recent Court decision is a good move that will benefit the environment and is in the best interest of industry.  However, this action may have caught both regulators and CAIR-affected sources off guard because of the January 1, 2009 effective date of CAIR.  U.S. EPA has indicated that it will issue guidance to address problems that may result from such a quick re-start of the program.  Regardless, CAIR-affected sources now need to review their implementation plans to assure that they are doing everything in accordance with the rules.

The immediate future of CAIR has regained certainty, but now the owners and operators of CAIR-affected sources are left with making long-term decisions about the use of their allowances and construction of additional CAIR controls without the benefit of knowing what the revised final CAIR rule will ultimately look like.  We suggest that CAIR-affected sources track the development of the Court-mandated CAIR revisions very closely.  Considering its past history and the fact that we will now have a new U.S. EPA Administrator, the surprises may not be over.