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Regulatory: Down the rabbit hole to EPA wonderland

Circuit court ruling vacates EPA’s Transport Rules

On August 21, in in EME Homer City Generation, L.P. v. Environmental Protection Agency, the D.C. Circuit vacated the Environmental Protection Agency’s (EPA) Transport Rules governing air pollution emissions, which travel across state boundaries. The rules defined emission reduction responsibilities of 28 upwind states. The rules governed SO2 and NOx emissions, primarily from coal and natural gas fired power plants.

Under the Clean Air Act regulatory scheme, Congress set up a “federalism” approach to the regulation of air pollution. Under this regulatory scheme, the EPA sets standards for the states. EPA locates areas with air pollution problems, which are designated “nonattainment areas.” Then, the lead role shifts to the states, which are required to develop state-specific “State Implementation Plans” (SIPs). SIPs represent a state’s uniquely designed approach to improving air quality in nonattainment areas within that state. In essence, the EPA identifies problem areas, but the states are charged with finding a solution.

As pointed out by the court, EPA did not stop there. Instead of allowing states to implement SIP’s to achieve EPA objectives, the EPA simultaneously promulgated a Federal Implemental Plan (FIP), essentially usurping state authority.

The court found that EPA had exceeded its statutory authority. The court pointed out that the EPA rules required states to cut all emissions they could eliminate at a specific cost per ton, regardless of that state’s contribution to downwind nonattainment. This result was found to be legally flawed. The court stated that “States are obligated to prohibit only those ‘amounts’ of pollution ‘which will . . . contribute significantly’ to downwind attainment problems – and no more.”

Contributing Author

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Craig Metcalf

Craig Metcalf is a Shareholder with Kirton McConkie. His practice emphasizes intellectual property and appeals as well as mediation and arbitration. He can be reached...

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