Public and Industry Comment on Regulatory Reform

This article is available as a podcast episode on ALL4’s Air Quality Insider

This past April, Lindsey wrote about U.S. EPA’s Regulatory Reform Task Force seeking public input for potential repeals, replacements, or modifications of existing regulations as directed by President Trump’s Executive Order (EO) 13777.  Written comments were due by May 15, 2017 and various public meetings were also held prior to the deadline.

ALL4 participated in the April 24 Office of Air and Radiation (OAR) public meeting and we have also been examining comments submitted to U.S. EPA.  The majority of the comments pertaining to air quality regulations focus on a subset of regulations and programs that industry groups and companies feel are overly burdensome and complex, which include:

• National Ambient Air Quality Standards (NAAQS) – Several industry groups and individual companies indicated that the stringency of the NAAQS and the short frequency at which these are reviewed and updated are impacting companies’ ability to obtain the permits needed to make  facility changes required to react to market conditions and remain competitive.
• New Source Review (NSR) – The stringency and complexity of current NSR regulations were raised as obstacles to companies’ ability to expand and make modifications to their facilities.  Several entities requested that U.S. EPA streamline the NSR regulations and re-write these regulations in a way that provides more certainty for companies considering modifying or expanding their production capabilities.
• Clean Power Plan (CPP) – Opposition to the CPP was also recently voiced by industry groups.  The CPP regulation has been opposed since its inception with companies and some states arguing that it is overly burdensome and that U.S. EPA overstepped its legal authority to regulate greenhouse gas (GHG) emissions from power plants in issuing the rule.
• GHG Reporting Rule – The GHG Reporting Rule was also brought up in industry comments as another regulation that is overly complex and costly, in addition to being duplicative of other Federal and state programs that already require reporting of GHG emissions.
• 40 CFR Part 60 Subpart OOOOa Standards of Performance for Crude Oil and Natural Gas Facilities (Subpart OOOOa) – This rule has been opposed by the oil and gas industry since it was originally proposed, in part due to the fact that it added GHG (i.e., methane) as a regulated pollutant in addition to criteria pollutants already regulated under earlier regulations.  Opposition to this regulation remained strong in recent comments provided by industry.  This regulation is also currently being reviewed under President Trump’s March 28, 2017 Executive Order Promoting Energy Independence and Economic Growth discussed in our March 31 blog post.  Certain aspects of the rule have recently been stayed by U.S. EPA (see our April 27 blog post).

It should be noted that for every comment in support of repealing or streamlining regulations, U.S. EPA received a number of comments from private individuals and environmental groups opposing any weakening of regulations.  This opposition from the public and environmental organizations signals the challenges ahead for any attempts by U.S. EPA to roll back existing regulations.

NSR Déjà vu?

If the current discussion regarding regulatory reform sounds familiar, you probably recall the discussion regarding NSR reform which began during the first term of the Clinton Administration.  Many of the same concerns that are being expressed by the regulated community today mirror the same or very similar concerns that were identified in the years preceding the NSR reforms of 2002.   The U.S. EPA initially published three “White Papers” in the mid-1990s, two of which addressed implementation issues associated with the Part 70 permit program and one which addressed flexible permitting, including plantwide applicability limitations (PAL).  During this period the U.S. EPA also embarked on several flexible permitting initiatives including the Project XL and P4 programs and published a report titled “Evaluation of Implementation Experiences with Innovative Air Permits” which chronicled associated flexible permit successes.

Several of the flexibility concepts were reflected in the NSR reform rule of 2002.  The NSR reforms of 2002 included a number of beneficial changes to the regulations including a revised definition of baseline actual emissions (BAE), the “actual-to-projected-actual” NSR applicability test, a definition of projected actual emissions (PAE), the use of “excludable” emissions in an NSR applicability analysis, clean unit (CU) provisions, pollution control project (PCP) provisions, and PALs.  The reforms although successful, have been watered down by court and agency policy decisions since 2002.  The CU and PCP provisions were vacated and removed from the NSR rules in June of 2007.  Regulatory agencies have effectively narrowed the scope of several effective reform provisions through policy.  Several additional reforms intended to address chronic NSR uncertainties (e.g., routine maintenance, repair and replacement, and project netting) were proposed as rule revisions subsequent to the 2002 NSR reforms but were never promulgated.  The vacated portions of the rule and the proposals that were never promulgated would have gone a long way towards addressing industry concerns associated with NSR.

We expect that regulatory uncertainty will be a recurring theme in the foreseeable future.  ALL4 will continue to track this ever-changing regulatory environment and to share what we find with our clients and the community at large.  If you would like to have a conversation about how your current operations or future plans could potentially be impacted by regulatory reform or the lack thereof, contact Roy Rakiewicz at 610.933.5246 x127, rrakiewicz@all4inc.com.