As previously reported in the Summer 2014 issue of The Climate Report, on June 23, 2014, the United States Supreme Court held that (i) the Clean Air Act ("CAA") does not compel the EPA to regulate greenhouse gas ("GHG") emissions under either the Prevention of Significant Deterioration ("PSD") or Title V programs and that the EPA's current interpretation was impermissible and beyond the statutory purpose of the PSD and Title V programs; and (ii) the EPA's decision to require Best Available Control Technology ("BACT") for GHGs emitted by sources otherwise subject to PSD requirements is permissible under the CAA, though the Court did not rule on the EPA's current approach to requiring BACT for such sources. See Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014) ("UARG").
In the aftermath of the Supreme Court's decision, the United States Court of Appeals for the District of Columbia Circuit must now decide how to proceed with underlying consolidated cases that were the subject of or otherwise directly implicated by the UARG decision. See, e.g., Coalition for Responsible Regulation, Inc. v. EPA, 09-1322 (D.C. Cir.). To that end, the D.C. Circuit directed the parties in Coalition for Responsible Regulation to file motions to govern future proceedings. The motions were filed in October 2014, and responses were filed in November 2014.
In their motions and responses, the EPA, certain states, and certain environmental groups acknowledge that EPA regulations requiring stationary sources to obtain PSD or Title V permits, if GHGs are the only pollutant that the source emits above applicable major source thresholds, should be vacated under UARG. However, they argue that UARG permits the EPA to continue requiring BACT for GHG emissions from sources that are already subject to PSD permit requirements based on emissions of other pollutants (referred to as "anyway sources") without the need for new rulemaking. They contend that the BACT requirement is set forth in § 165(a) of the CAA itself, and that requiring new rulemaking would create confusion because it would upend PSD permitting processes already effectively administered.
In contrast, certain other states and industry groups argue in their motions and responses that UARG does not support continued application of BACT for GHG emissions to "anyway sources." These states and industry groups assert that UARG requires vacation of the Tailoring Rule and any portion of the Timing Rule or other challenged rules that the EPA relied upon to support PSD and Title V regulation of GHG emissions. They contend that no PSD regulation of GHGs survives the UARG decision, such that the EPA would have to enact new rules that properly define and justify application of BACT to GHG emissions of "anyway sources." They argue that allowing the EPA to enforce a BACT program on "anyway sources" without new rulemaking would result in an interim program administered on a permit-by-permit basis that would cause disruption and uncertainty for regulated sources.
The D.C. Circuit must now determine the extent to which UARG compels EPA regulations of GHG emissions to be vacated based on these competing arguments.
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