EPA Issues "Amendment" to Definition of Condensable Particulate Matter as Regulated New Source Review Pollutant

On Thursday, March 16, 2012, the Environmental Protection Agency (“EPA”) took the almost unprecedented step of publishing in the Federal Register a correction to its prior definition of “regulated new source review pollutant” (“Rule”) contained in two sets of Prevention of Significant Deterioration (“PSD”) regulations, 40 C.F.R. §§ 51.166 and 52.21, and in EPA’s Emissions Offset Interpretative Ruling, 40 C.F.R. Part 51, Appendix S, 77 Fed.Reg. 15,656. The purpose of the revision is to correct an “inadvertent error” dating back to the Rule’s promulgation in 2008 when the then-existing definition was changed to require that particulate matter emissions, both PM10 and PM2.5, representing three separate size ranges of particulates, must include “gaseous emissions, source or activity which condense to form particulate matter at ambient temperatures,” i.e., condensable particulate matter.  See, e.g., 40 C.F.R. § 51.166(b)(49)(vi).  Previously, EPA’s regulations only required the filterable fraction, not the condensable particulate matter, to be considered for new source review purposes.  The 2008 change therefore imposed an unintended new requirement on State and local agencies and the regulated community.

The now apparent rationale for the revision (besides political pressure from governmental agencies and the emitting community), is that EPA no longer regulates the ambient indicator, total suspended particulates, with which the indicator “particular matter emissions” is associated.  Therefore, there is no “compelling” reason for requiring the condensable PM portion to be counted toward the measure of particulate matter emissions from stationary sources for PSD applicability determinations and establishing emissions limitations. 

Finally, the revision will restore consistency in the regulation of these indictors for particulate matter under the PSD program with EPA’s original intent.  Specifically, this would mean PM10 and PM2.5 pollutants will be regulated as criteria pollutants, i.e, under the definition covering “any pollutant for which a National Ambient Air Quality Standard has been promulgated,” and would be required to include the condensable PM fraction emitted by the source.  In addition, “particulate matter emissions” would be regulated as a non-criteria pollutant (that is under the portion of the definition that refers to “any pollutant that is subject to any standard promulgated under § 111 of the Act”) without a general requirement to include the condensable PM fraction emitted by a source. 

While this change may seem insignificant to the general public, the regulated community that will be affected by it is not small, and includes, but is not limited to, miscellaneous chemical products, natural gas liquids, natural gas transportation, pulp and paper mills and automobile manufacturing.  These industry segments will be relieved of expensive and time consuming burdens caused by EPA’s “inadvertent error,” and, thus, will not be required to pass these costs on to the consumer.
 

Preemption Rears its Head Again in Federal Common Law and Nuisance Climate Change Challenge

A Federal Court has recently thrown open the door to potential civil challenges to both private and governmental sources of greenhouse gas emissions, based on the Federal common law of nuisance. For those who believe the Environmental Protection Agency (EPA) has acted too slowly in promulgating greenhouse gas regulation, civil actions are now possible at least in the Second Circuit. However, the Supreme Court may now scrutinize the Second Circuit’s decision. Based on a recent Fourth Circuit decision on a similar issue, the “Nine” may be tempted to follow in Moses’ footsteps and pare down the Second Circuit decision to apply only to greenhouse gas emissions from Federal projects.

 

To the surprise of all parties, and, no doubt, the glee of defendants, one of which is the Tennessee Valley Authority (TVA) (both a government agency and a private corporation), the United States Solicitor General joined with defendants in petitioning the United States Supreme Court for review of the Second Circuit’s decision in AEP v. Connecticut, et al., 582 F.3d 309 (2nd Cir. 2009). In that case, the governmental and environmental plaintiffs (plaintiffs include the States of Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin, the City of New York, The Open Space Institute, The Open Space Conservancy, and the Audubon Society of New Hampshire) had claimed, in two consolidated actions brought originally in the Southern District of New York that defendants’ (American Electric Power Company, American Electric Power Service Company, The Southern Company, XCel Energy, Inc., Synergy Corp. and TVA) combined annual emissions of 650 million tons per year of carbon dioxide contribute to global warming, and, thus, constitute a public nuisance. The District Court dismissed both lawsuits on the principal ground that the case presents a non-justiciable question of governmental policy.

The Second Circuit, however, overturned the District Court’s decision on, among other grounds: (1) plaintiffs’ claims were not preempted by statute or regulation; (2) in the absence of a statute and/or regulation completely occupying the field of climate change, the Federal common law of nuisance governs and plaintiffs had adequately stated a claim under it; and (3) the case did not present a non-justiciable Federal question.

One of the threshold questions for the Supreme Court must be whether the Congress or the Environmental Protection Agency (EPA) has, in fact, so completely occupied the field of climate change that there is no room left for the common law. Preemption exists where Congress has expressed its intent to occupy the entire field through specific statutes and/or regulations, or, over time, Congress or the agency granted authority to regulate in a specific area have so completely legislated and regulated the field that there is no room for state or local regulation. City of Burbank v. Lockheed Air Terminal, 411 U.S. 624, 638-639 (1973).

The Solicitor General argued in his brief that just such an occupation of the field had taken place since the District Court’s decision, where EPA has: (1) found that greenhouse gas emissions for motor vehicles “endanger the public health and welfare” and should be regulated under the Clean Air Act [endangerment finding], endangerment and cause or contribute findings for greenhouse gases under section 202(a) of the Clean Air Act, 74 Fed.Reg. 66,496 (December 15, 2009); (2) issued a final rule establishing CO2 emissions standards for automobiles, Light Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards, 75 Fed.Reg. 25,324 (May 7, 2010); and (3) promulgated rules establishing emissions standards for stationary sources which have not yet been finalized, prevention of significant deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed.Reg. 31,514 (June 3, 2010).

If it accepts certiorari, the Supreme Court will most likely be looking at the somewhat inconsistent decisions of the Second and Fourth Circuits in this area. In a ruling in August, 2010, the Fourth Circuit in North Carolina v. Tennessee Valley Authority, ____ F.3d ___, 2010 W.L. 2891572 (4th Cir. July 26, 2010), considered the argument of plaintiffs in that case that emissions of the seven criteria pollutants (including VOC or NOx, Ozone, Sulfur Dioxide, Nitrogen Dioxide, Carbon Monoxide, PM10, PM2.5 ) from TVA installations, currently regulated by the EPA under the conformity provision of the Clean Air Act, 42 U.S.C. section 7506, and 40 C.F.R. section 93.150, et seq., constitutes a public nuisance. Predictably, the Fourth Circuit found, among other things, that substantial regulation had already been promulgated at the Federal level for the control of criteria pollutants from Federal projects, and that to allow public nuisance doctrine to supercede the comprehensive regulatory regimen would lead to a “Balkanization of clean air regulations and a confused patchwork of standards.” North Carolina, supra, 2010 W.L. 2891572 at 1. The Fourth Circuit case did not implicate greenhouse gas emissions, either from Federal or private sources.

If the defendants/petitioners in AEP are looking to the Fourth Circuit decision for the “conflict among Circuits” threshold to Supreme Court review, their reliance may be misplaced, because a gap in Federal regulations, and thus preemption, persists with respect to the regulation of greenhouse gases emitted by Federal projects such as TVA. As greenhouse gases are defined to include pollutants other than the seven criteria pollutants, greenhouse gas regulation may not be fully preempted by the conformity provision. Therefore, the decisions of the Second Circuit in AEP and of the Fourth Circuit in North Carolina may, in fact, be consistent, because while EPA has fully regulated criteria pollutants, it has not yet regulated greenhouse gases in the context of conformity.

In short, a window appears to remain open to bring challenges to greenhouse gas impacts from Federal projects under the Federal common law of nuisance. The window will remain open until EPA supplements its conformity regulation, 40 C.F.R. section 93.150, et seq., for greenhouse gases. This opportunity is, of course, cold comfort to the State of Connecticut and its co-petitioners who are hoping to obtain an avenue of relief from private as well as public emissions sources.