Ohio Senators Oppose Closing Midwest Regional Office of U.S. EPA

In the past several months, the Trump Administration has targeted U.S. EPA for major regulatory reform, massive budget cuts and a roll-back of Obama era regulations.  No Administration since the enactment of the landmark environmental statutes has gone as as far as the Trump Administration in attempting to change the landscape of environmental regulation.

After signing multiple executive orders and proposing a huge EPA budget cut, rumors are swirling as to what may be next. This creates a massive amount of regulatory uncertainty which is something businesses always say they hate.  This uncertainty extends to what the size and structure of what U.S. EPA will look like under the Trump Administration, including which Regional Offices will remain if the budget cuts and staff layoffs are implemented.  

Recently, one rumor causing significant uncertainty is whether EPA's Region V Office, located in Chicago, will be eliminated.  Region V covers Ohio, Illinois, Michigan, Wisconsin, Indiana and Minnesota.   

Both Ohio Senators along with ten others in the Great Lakes congressional delegation wrote to EPA Administrator Pruitt strongly opposing closing of the Region V Office.  This from the Plain Dealer Article discussing the letter:

Recent reports that the U.S. EPA's Region 5 office, which is based in Chicago and includes Ohio among other Great Lake states, will be shut down has alarmed members of Ohio's Congressional delegation and other representatives of the five states of the Great Lakes region.

On Tuesday, Senator Rob Portman, R-Ohio, joined Senator Sherrod Brown, D-Ohio, and a coalition of Democratic senators and house members in delivering a letter to EPA Director Scott Pruitt expressing their concern over the proposal, and demanding he not relocate Region 5's 1,500 employees to the Region 7 office in Lenexa, Kansas.

"Closing EPA's Region 5 office would have a devastating effect on those who call Illinois, Michigan, Wisconsin, Indiana, Minnesota and Ohio home," the letter reads. "Therefore, we urge you to protect the environmental health and well-being of our states by keeping Region 5 intact and fully supporting its critical mission."

The focus of the letter is largely on consequences to public health and the environment, including the Great Lakes.  However, it is also worth noting the negative economic impacts elimination of the Regional Office would have on a region President Trump has stated he wants to help.

While delegated State EPAs handle most of the permitting for new factories or plant expansions, EPA plays a critical role in reviewing draft permits.  Until such permits are issued construction is limited and the new operations cannot commence.  Region V staff also address a myriad of issues that directly impact economic growth.  Without adequate staff permitting and decision making will slow.

The Midwest still has significant manufacturing.  President Trumps says he wants to keep or bring back U.S. manufacturing jobs.  Having adequate personnel to process permits and address other regulatory issues that impact economic development are critical to that effort.   

Let's hope this is just another rumor.  However, these types of rumors are not helpful due to the uncertainty they create.  For example, if a business is currently thinking of expanding or locating in the Midwest, the inability to secure timely permits or address other regulatory decisions that impact economic growth could cause businesses to rethink locating in the region.

Ohio EPA Wants to Take Over Wetland and Stream Permitting from the Army Corps of Engineers

Another aspect of Governor Kasich's controversial proposed legislation- Senate Bill 315- is to provide the legislative authority for Ohio EPA to take over Section 404 Clean Water Act permitting from the Army Corps of Engineers.  Section 404 permits are needed prior to impacts to streams or wetlands within federal jurisdiction. 

The bill itself doesn't really do that much.  It simply provides the authority to the Director of Ohio EPA to seek approval from U.S. EPA to assume responsibility for administering the Section 404 permitting program.  The real important issues will be covered in the approval request itself. 

As discussed below, the biggest issue Ohio EPA faces is to convince U.S. EPA in its request that it has sufficient resources to take over all the Section 404 permitting functions from the Army Corps.

What's good about the proposal

Right now any developer that needs to impact wetlands or streams as part of their development will typically need to obtain two permit approvals.  First, they must obtain a Section 401 Water Quality Certification from Ohio EPA.  Second, if the wetland or stream is considered within federal jurisdiction, the developer must obtain a Section 404 permit from the Army Corps of Engineers. 

The fact two permits will be needed won't change if Ohio takes over the Section 404 program.  However, developers will have the opportunity to go to one regulator to obtain both certifications.  This will hopefully streamline the process. 

Another major complication under the current structure is that Ohio is divided among four different Army Corp Districts- Pittsburgh, Buffalo, Louisville and Huntington.  Each of the Districts has very different ways they process Section 404 permits.  Therefore, another benefit of Ohio taking over the program would be greater consistency. 

Approval Process Will Be Lengthy and Difficult

While there are good reasons for Ohio to take over Section 404 permitting, it will be a very lengthy and difficult process.  First, Ohio EPA will have to show that it has sufficient resources to handle all the duties performed by the Army Corps.  I have heard projections that this could take up to forty (40) additional staff in Ohio EPA wetland section. 

This would be a very substantial increase in staff and the resources will be very difficult to come by.  Unless, Ohio EPA is going to direct fees that are currently being used to support other programs, the Agency would need to seek a fee increase or new fee.  While applicants may like the streamlined process, its unlikely they will want to pay substantially more for it. 

If the Director was going to tap into current fees, such as the solid waste disposal fee, he will have to likely cut other programs.  Also, the solid waste industry may object to use of the disposal fees to pay for significant new staff in program that doesn't directly deal with management of solid waste.

Even if Ohio EPA clears the hurdle of demonstrating sufficient resources, it will still need to prove to U.S. EPA its has the legal authority to carry out the same functions as the Army Corps.  The last time the State of Ohio tried to convince U.S. EPA of something similar it was transfer of the water permitting program (NDPES) for large farms to the Department of Agriculture.  This process has taken years and involves only a transfer between two state agencies. 

While the idea may sound good in theory, Ohio faces a significant uphill climb to make this proposal a reality.

 

Economic Impact of Permitting Energy Projects

The U.S. Chamber commissioned a study of the economic impact of project that have been delayed or canceled as a result of federal and state permitting processes. As described by the U.S. Chamber on its website:

This study estimates the potential loss in economic value of 351 proposed solar, wind, wave, bio-fuel, coal, gas, nuclear and energy transmission projects that have been delayed or canceled due to significant impediments, such as regulatory barriers, including inefficient review processes and the attendant lawsuits and threats of legal action.

The Chamber does acknowledge you can't blame the fact these project did not move forward exclusively on permitting:

As noted above, we do not believe that all of the subject projects will be approved or constructed even in the absence of any legal and regulatory barriers. Also, as with all economic forecasts, we recognize that there is an element of uncertainty. This could be true here because, to our knowledge, this is the first empirical study to quantify the macroeconomic and employment impact of the regulatory barriers imposed on the development and operation of so many energy projects.

The Study is a first real attempt to aggregate data on the impacts regulations on development. Below is a snaptshot of projects at issue in Ohio.

 

Key Lessons for Businesses from a Rare State Court Air Regulatory Decision

You don't often get State court decisions on environmental law, especially on air permitting issues.  Recently, the 10th Appellate Court in Columbus issued a decision that has at least a few major implications for businesses in Ohio.  State of Ohio ex rel Ohio Atty. Gen. v. The Shelly Holding Co, et. al.,

There is a good summary of the facts behind the case and a discussion of the legal conclusions the Court reached on the blog American College of Environmental Lawyers by longtime environmental attorney Mike Hardy.  I won't repeat the history of the case here.  Rather, let me highlight the major implications from the ruling for businesses that operate air sources within Ohio.

Ohio EPA's Permit Backlog

Up until 2008, air sources were first issued a permit to install (PTI) to construct and start-up.  Then the source had to obtain a permit to operate (PTO) for continued operation.  With nearly 70,000 regulated air sources Ohio EPA had thousands of backlogged PTO applications.

To address the issue going forward, the law was changed in June 2008 and new sources could obtain a combined PTIO permit.  This reduced the need for two permits from 2 to 1 and extended the effectiveness from five years (PTO) to ten years (PTIO). (Click here for Ohio EPA chart on difference between the programs).

This was a good fix going forward, but what about businesses who were stuck with the system that existed prior to 2008?  The Court's ruling on potential to emit (see below) shows the danger of the Agency's failure to act on a timely basis.  Shelly submitted timely applications, but was placed at a major disadvantage because the Agency failed to act on those applications on a timely basis.

Key Lesson #1:  Even if a business fulfills its obligations on a timely basis it still can be placed at a regulatory disadvantage based on the Agency's failure to act.

What is a Source's Potential to Emit

A source of air pollution (boiler, paint line, etc.) must obtain a federal permit if it exceeds certain thresholds (100/250 tons per year).  There is a huge incentive for businesses to avoid obtaining a federal permit because they impose more onerous requirements. 

In determining whether a sources exceeds federal permitting thresholds, EPA looks at its design capacity, not its actual day-to-day emissions.  Design capcity is referred to as "potential-to-emit." (PTE).

Unless enforceable restrictions exist on design capacity, PTE is calculated using worst case assumptions- source operation 7 days a week, 365 days per year and 8,760 hours per year.  Enforceable restrictions include:

  1. air pollution control equipment;
  2. restrictions on hours of operation; and/or
  3. restrictions on the type or amount of material combusted, stored or processed.

The 10th Appellate Court rejected Ohio EPA's claim that the restrictions must be federally enforceable (federal rule or permit).  The Court held state permits were deemed sufficient for purposes of enforceability.

However, it rejected Shelly's claim that voluntary restrictions were sufficient, even if those restrictions are in permit applications pending Ohio EPA review.  Until the permit is actually issued, the Court held they don't have sufficient legal effectiveness to avoid the worst case PTE calculation of 365 days a year.

Key Lesson  #2:  You can't rely on permit applications as enforceable restrictions to avoid federal permits. 

Ohio EPA's Failure to Follow the Law

Shelly was hurt by the failure of Ohio EPA act on its PTO applications.  Ohio law imposes an obligation on the Agency to issue permits within 180 days. 

The Court noted Ohio EPA failure to act on a timely basis and held that in considering penalties Ohio EPA failure to act "should not be held against the owner or operator."    An interesting sentence in the ruling-  "After the 180-day deadline passed, the burden falls on Ohio EPA to meet its obligation under law; and owner cannot be penalized for the Ohio EPA's failure."

I can envision that sentence being quoted in future briefs by lawyers whose clients may face penalties partially as a result of Ohio EPA failure to perform its mandated functions on time.

Key Lesson #3:  Don't forget Ohio EPA has legal obligations.  Their failure to meet those obligations could be a basis for a legal defense.

Stack Testing to Determine Compliance

Stack tests are samples of air emissions what a source is operating.  The accuracy of stack tests to determine whether a source is in compliance with its emission standards in a permit has been long debated. 

Businesses have argued that stack tests don't represent normal conditions and are only "a snap shot in time."  Regulators argue that stack tests are a valid way of determining compliance.  Until a source passes a stack test (emissions are within limits), the assumption is the source is operating out of compliance with permit standards and subject to penalties.  Any associated penalties should be based on the time from the failed stack test until the source passes a subsequent stack test.

Key Lesson #4:  To avoid large civil penalties, business should act very quickly to make adjustments following a failed stack test.

 

Ruling Highlights Benefits of Recent Legislative Changes to Permit Status During Appeal

Recently, the Toledo Blade had a story on the recent court ruling regarding the FDS Coke permit.  The FDS permit has been the subject of numerous appeals which have dragged on years.  The 10th Appellate Court recently issued a ruling sending the FDS  permit back to the Environmental Review Appeals Commission for determination of whether construction had begun in order to maintain the validity of the permit.

The FDS permit had a condition that a continuing program of construction must be commenced to maintain the validity of the permit.  The Court said more information was need to determine whether the permit was still valid.

The ruling is largely irrelevant for future air permits due to a legislative change that allows permits to be valid so long as an appeal is pending. R.C. 3704.03(F)(2)(b)(iv) was revised to expressly suspend the expiration clock for air permits during a third party appeal.  It states: 

(iv) The installation permit is the subject of an appeal by a party other than the owner or operator of the air contaminant source that is the subject of the installation permit, in which case the date of termination of the permit is not later than eighteen months after the effective date of the permit plus the number of days between the date in which the permit was appealed and the date on which all appeals concerning the permit have been resolved.

However, its another legislative change to the appeal process that I want to comment on.  The Blade included the following in the story regarding the FDS Coke decision:

In 2005, former Ohio EPA Director Joe Koncelik took the unprecedented action of modifying the permit while it was still under appeal, softening it for FDS. That action was ruled invalid, prompting Gov. Ted Strickland to seek a permanent change in state law that would allow such modifications to occur. The Ohio General Assembly approved it, giving greater power to state EPA directors.

The permanent change referenced was Am. Sub. H.B. 119 (September 2007) which modified the language in Revised Code 3745.04 to state:

The environmental review appeals commission has exclusive
original jurisdiction over any matter that may, under this
section, be brought before it. However, the director has and
retains jurisdiction to modify, amend, revise, renew, or revoke
any permit, rule, order, or other action that has been appealed
to the commission.

The story implies that the bill was some sort of power grab for Director's of Ohio EPA.  In fact, it is necessary authority given the reality of our permit appeal process. 

It is not unusual for permits to be under appeal for years.  During that time period circumstances can change that warrant modifications, revisions or revocation of a previously issued permit.  It could be changing regulations or environmental conditions that push the need for the change. 

If the law was left as it stood after the ruling saying Director's could not modify permits under appeal, it would effectively freeze these action in time while ever changing environmental conditions and regulations march forward.  The legislative change was a logical reaction to this reality.

 

 

EPA Releases Interim Guidance on Environmental Justice

In my tenure at Ohio EPA, no issue was as vexing as Environmental Justice (EJ).  In a nutshell, there is a legitimate issue behind the concept of EJ- low income and minorities are exposed to more pollution.  Here is how EPA presents the EJ issues:

Fair Treatment means that no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.

The root causes of disproportionate impacts can be traced to the history of how our country developed and expanded. Lower income housing can typically be found near areas zoned industrial.  In our past, this occurred for easy access to plant and factories.  However, this history has carried forward and people living in these communities are disproportionately impacted by pollution. 

However, the difficulty was trying to address this social problem through EPA rulemaking or decision making on permits for new industrial facilities.  EJ issues come into conflict with concepts of urban redevelopment, brownfield redevelopment and creating jobs in low income communities. 

Are we really prepared to declare an industrial area off limits to new factories or manufacturing because the pollution burden is too great?  How would someone establish a standard for what is deemed too great an exposure?

How does EPA "regulate away" this social issue?  EPA struggled with answer to these questions for so long that is has released and than retracted EJ policies over time.  For long stretches the Agency simply put EJ issues on the back burner. 

Now, EPA has released its first new Environmental Justice guidance document in a long time.

EPA is required to develop procedures to evaluate EJ issues in its decision making process as a result of Executive Order 12898 which directs agencies such as EPA to do the following:

 “[t]o the greatest extent practicable and permitted by law,” to “identify[…] and address[…], as appropriate, disproportionately high and adverse human health or environmental effects” of agency programs, policies, and actions on minority populations and low-income populations.

EPA's new fifty page guidance document walks through a complex process for evaluating EJ issues in EPA decision making.  I think the chart below says it all.   Is this really helpful in addressing a complex social issue?

Reading the document, the EJ document is strinkingly similar to past efforts by EPA.  It really seems to boil down to two requirements that fall onto EPA staff.

1.  Ensure participation by low income and minority groups in the EPA decision making process-  the guidance offers suggestions for how to reach out to communities and make sure they are informed regarding EPA actions.

2.  Document that EJ issues were considered in the decision making process-  When EPA issues is response to public comments, it must include a description of the EJ issues that were identified and how those impacted the decision making process.

What the guidance document doesn't address- When EPA is required to take alternative action as a direct result of EJ considerations?  The reason EPA avoids setting such standards is that a uniform "regulation" would be nearly impossible to develop.  Therefore, the new guidance appears to be very similar to past EPA approaches to incorporate EJ considerations in its decision making-

  1. Inform;
  2. Consider the alternatives; and
  3. Document how EJ issues were considered in the decision making process 

Three Years After Major Reforms- Ohio's Air Permitting Process is Anything But Certain

Major uncertainty surrounds Ohio's air permtting program.   I use the term "certainty" because that was the buzz word utilized when business groups fought hard for major reforms that eventually were passed in Senate Bill 265 in 2006. 

Back in 2006, business groups were concerned that  Ohio's system for issuing air permits was far more onerous and unpredictable than other states.  The focus of attention was the requirement to install Best Available Technology (BAT) on smaller sources of air pollution.  

Business groups complained BAT was imposed on an "ad-hoc" case-by-case basis.  Individual permit reviewers could develop inconsistent determinations as what constituted BAT on same or similar sources.  The goal was to get away from this uncertain application of BAT.

The two major reforms secured in Senate Bill 265:

  1. All sources less than 10 tons per year (tpy) were no longer required to install BAT
  2. For all sources larger than 10 tpy, Ohio EPA could only require BAT through rulemaking that defined BAT consistent with elements set forth in S.B. 265.  It was contemplated the rules would spell out the requirements for various source categories.  Thus, providing certainty by avoiding case-by-case determinations of BAT.

What is the status of air permitting in Ohio three years after passage of these reforms? 

  • Business have far less certainty regarding Ohio's permitting process than they did three years ago (prior to S.B. 265)
  • Businesses are caught in a stalemate between U.S. EPA and Ohio EPA that could subject them to federal enforcement and make their permits invalid
  • Ohio businesses are no closer to avoiding case-by-case BAT decisions as they were three years ago
  • In some cases, businesses will take longer to get their permits and still have the same level of required controls
  • The two major reforms (the less than 10 tpy exemption and BAT through rulemaking for larger sources) will never be implemented unless hard choices are made.

To preserve the two major reforms, means facing the reality that federal law requires Ohio demonstrate the changes are valid. How does Ohio demonstrate validity?

  1. Ohio EPA would have to quantify the lost reductions from "weakening" the BAT requirement (something Ohio EPA hasn't done in three years).
  2. The business community will have to help direct the Agency in identifying new air pollution control programs that can be used to offset the lost reductions attributable to BAT.

Less Than 10 TPY Exemption

My last post discussed the recent federal court ruling which determined the exemption from installing BAT for sources smaller than 10 tpy was inconsistent with federal law.  The Court found Ohio EPA failed to properly revise its State Implementation Plan (SIP- the State plan for how it will meet federal air quality standards).

At issue, was a prohibition contained in the Clean Air Act called "anti-backsliding."  In essence, if a state is going to reduce air pollution requirements on one set of sources it must make up for lost reductions by imposing more stringent controls someplace else.

The response to the Court decision by some business groups is to urge Ohio EPA to appeal the Magistrate's decision.  This from the Ohio Manufacturer Association (OMA) Web page regarding the decision:

The OMA is urging the Ohio EPA to mount a vigorous defense of this common sense regulatory reform through all available legal channels.

However, even if the Agency successfully challenged the Magistrate's decision on appeal, I don't see how this fixes things for the business community. At issue in the Magistrate's decision was a Citizen Group's rights to challenge a State's implementation of its SIP- Ohio's air pollution control plan.  

Regardless of the Citizen's suit, U.S. EPA has already put Ohio EPA on notice that it believes the less than 10 tpy BAT exemption is inconsistent with federal law.  U.S. EPA sent a letter back on June 5, 2008 that it could not approve Ohio's attempt to provide the 10 TPY exemption

Without U.S. EPA approval, all permits issued without BAT due to the state exemption could be deemed to violate federal law.  All those businesses holding those permits could be subject to federal enforcement action or their permits determined invalid. 

A win on appeal barring the Citizen Group from challenging Ohio EPA isn't truly a fix.  The harsh reality is the only way to fix things for the business community is for Ohio to make an approvable submittal to U.S. EPA.  To be approvable, Ohio will have to demonstrate their reforms don't violate "anti-backsliding."

To make such a demonstration, Ohio EPA must quantify the lost reductions attributable to the 10 TPY exemption- something I don't believe Ohio EPA has done in the three years since passage of S.B. 265.  After Ohio EPA quantifies the difference, it will have to work with the business community to come up with replacement controls to make up for the lost reductions. 

Anything short of developing a "true" fix, leaves the business community with greater uncertainty than it had prior to S.B. 265.

BAT Through Rule Making On Sources Greater Than 10 TPY

Things may even be more complicated for sources that emit more than 10 tpy.  S.B. 265 mandates that Ohio EPA specify BAT on these larger sources through rulemaking.  S.B. 265 provided a three year window to give Ohio EPA time to develop rules specifying BAT for different air pollution source categories. 

In the three years since, Ohio EPA has yet to finalize a single rule defining BAT.  Since the three year deadline has passed, State law now prohibits Ohio EPA from requiring BAT on sources larger than 10 tpy because it has not adopted rules consistent with S.B. 265.  This State law requirement is in conflict with the federal law which requires approval from U.S. EPA before it can be deemed effective. 

On December 10, 2009, Ohio EPA proposed a policy titled "BAT requirement for Permit Applications Filed on or After August 3, 2009."  [August 3rd was the deadline imposed by S.B. 265 after which Ohio EPA could only require BAT through rulemaking].  The Policy was put out for public comment which closed January 31, 2010.  The policy describes the current status as follows:

Ohio is currently working to develop short-term and long-term set of rules that would implement S.B. 265.  A short-term rule would define BAT on a case-by-case basis consistent with the S.B. 265 provisions.  Long-term rules would attempt to define BAT by category when possible.  However, neither short-term nor long-term rules have been developed. 

U.S. EPA has told Ohio EPA that issuing permits on or after August 3, 2009 without BAT would be considered by U.S. EPA as "backsliding" under the statutory provisions of the Clean Air Act and would not be acceptable. 

The policy goes on to say, because Ohio EPA has not adopted any BAT rules it will require BAT on a case-by-case basis to avoid "backsliding" claims. 

First of all...It's been three years since passage of S.B. 265 and the business community is no closer to its goal of avoiding case-by-case BAT decisions.  Even what Ohio EPA describes as its "short-term rule" would require case-by-case BAT. 

Worse yet, the policy makes clear that businesses may even be worse off then prior to S.B. 265.  In the "Common Questions and Answers" Section of the Policy, at least two critical Ohio EPA comments appear:

Question 1:  If a company indicates they do not want Ohio EPA to establish a BAT limit because a BAT rule has not been developed, what should the permit writers do?

The Policy goes on to answer- try and get the company to voluntarily accept a BAT limit or Ohio EPA will have to process the permit without a BAT limit.  However, if there is no BAT limit in the permit, Ohio EPA states:

We will inform them [the business] that U.S. EPA would likely not approve the permit and that U.S. EPA may take some sort of action against either the company or the Ohio EPA because they don't approve the approach.  We will also inform them that we are obligated to provide U.S. EPA with a copy of any issued permit that does not contain BAT.

In essence, unless a business voluntarily accepts a case-by-case BAT limit, they will be subject to enforcement by U.S. EPA. 

The Second major issue appears in Question 5 of the Ohio EPA policy.  It relates to when sources can avoid New Source Review (NSR) which is the complex federal air permitting program.  Due to the complexities of the program there are strong incentives for businesses to avoid NSR.

Prior to August 3, 2009, Ohio EPA used BAT limits to avoid triggering NSR.  However, the policy makes clear they can no longer utilize BAT to avoid NSR because of the stalemate with U.S. EPA. 

The implication is more sources will have to go through a longer permitting process in order to avoid NSR.  Therefore, no only will sources end up with the same controls as prior to S.B. 265, it will take longer to get their permit.

Conclusion

The status quo should be unacceptable to the business community.  It must decide:

  1. Whether the reforms in S.B. 265 are worth holding onto. If not, new state legislation is needed to undo the mess.  
  2. If the reforms are still critical, then the business community must engage Ohio EPA to fix its issues with U.S. EPA.  It is very important that the business community involve itself in the details of developing a fix.  Otherwise, it risks Ohio EPA spending valuable time developing proposals businesses believe are unworkable.

U.S. EPA to Impose Numeric Discharge Limits at Construction Sites

On November 23, 2009, the U.S. Environmental Protection Agency (EPA) finalized new rules intended to control stormwater pollution from construction sites.  The rule takes effect on February 2010 and will be phased in over four years. 

The most significant new requirement is the imposition of numeric discharge limits from larger construction sites.  In the past, U.S. EPA required construction site owners/operators to implement best management practices (BMPs) to control stormwater runoff without monitoring or discharge limits.  Once the new standards are phased in, owners/operators will be required to sample stormwater discharges and comply with a numeric standard for the pollutant turbidity in discharges according to the following schedule:

  • In 18 months (August 2011), construction sites 20 acres or larger will be required to monitor and meet numeric discharge limits
  • In four years, construction sites 10 acres or larger will be required to monitor and meet numeric discharge limits

From the EPA press release:

Owners and operators of sites that impact 10 or more acres of land at one time will be required to monitor discharges and ensure they comply with specific limits on discharges to minimize the impact on nearby water bodies. This is the first time that EPA has imposed national monitoring requirements and enforceable numeric limitations on construction site stormwater discharges.

There are also impacts to smaller construction sites ranging from 1 acre to 10 acres in size.  The rule will impose a series of mandatory Best Management Practices (BMPs) relating to: Erosion and Sediment Controls; Soil Stabilization BMPs; Dewatering BMPs; Pollution Prevention Measures; and Prohibited Discharges.  Previously, owners/operators were allowed to pick and choose their BMPs as long as they met specified engineering requirements.

Stringency of the Numeric Limits

Dirt particles in storm water discharges typically cannot be effectively removed by conventional BMPs (such as sediment basins). In November 2008, U.S. EPA had proposed a numeric limit of 13 nephelometric turbidity units (NTU). To meet the proposed numeric turbidity limit, sites may have been forced to actively treat stormwater.  Active treatment could have included use of chemical treatment and filtration of their storm water discharges.

However, U.S. EPA backed off the stringent 13 NTU proposed limit.  The final rule has a far more relaxed standard of 280 NTU.  EPA decided to increase the limits based upon a flood of comments suggesting the 13 NTU limit would represent less than background levels at some sites and would be nearly impossible to meet.

Even with the high numeric standard, Industry is concerned with the implications of the new rules.  The construction industry is simply not accustomed to being required to take samples and meet specific permit limits.  As detailed on the Associated General Contractors of America, the following could be implications for contractors at larger construction sites:

On all jobsites where the numeric limit applies, the rule requires contractors to collect numerous stormwater runoff samples from all discharge points during every rain event and calculate the NTU level(s). (This may entail taking "grab" samples by hand and performing measurements with a field turbidimeter; however the rule doesn't specify any sort of monitoring protocol or methods - instead EPA is leaving it up to that states to spell that out in their permits.) If the average NTU level of the samples taken over the course of a day exceeds the "daily maximum limit" of 280 NTU on any given calendar day, then the site is in violation of the federal limitation requirement. EPA is also leaving it up to the states to specify applicable requirements for contractors to report on the samples they take of their construction site discharges...

AGC is deeply concerned about the potential impact this rule will have on the construction industry and will provide more information in the near term as we continue to analyze EPA's C&D ELG rulemaking

No doubt the final rule represents a significant increase in the stringency of regulations applicable to the construction industry. 

Ohio BAT- Changes to State Air Pollution Control Strategy Prove Daunting

Back in 2006, while I was still at Ohio EPA, a major piece of state legislation worked its way through the General Assembly.  Senate Bill 265 was developed by business groups in Ohio to address concerns with the structure and implementation of Ohio air pollution permitting programs.  The main target to be fixed was the requirement for all non-federally regulated air sources to install Best Available technology (BAT).

Business groups believed that the BAT requirement put Ohio at a disadvantage to neighboring states by requiring a higher (and more costly) level of controls.  Even more importantly, Ohio businesses felt that implementation of BAT at Ohio EPA lacked the certainty that businesses look for in regulatory programs.

Issues with BAT

The lack of certainty stemmed from the fact that BAT was determined on a case-by-case basis with each individual permit that was submitted to the Agency.  Concerns were expressed that permit reviewers reached different conclusions as to what constituted BAT, sometimes for similar sources. 

During the debate over BAT I was at the center of the storm working as Director of Ohio EPA.  I had to testify numerous times before the Legislature.  While I did not agree with every argument against BAT, I did agree that Ohio EPA was placing too much time and energy into regulating small sources of air pollution.

  • FACT:  Ohio has some 70,000 regulated air sources in the State whereas Michigan has less than 10,000

The huge difference in regulated sources is not attributable to there being less industry in Michigan, rather it was because Ohio regulated much smaller sources.  For these reasons, Ohio EPA took a neutral position on the legislation.

Senate Bill 265 passed the Legislature and included two major components as an overhaul of the BAT requirement:

  1. It exempted all sources less than 10 tons per year from having to install BAT. 
  2. For sources larger than 10 tpy, Ohio EPA could only require BAT by adopting rules specifying what exactly BAT would be for particular sources.  The legislation gave Ohio EPA a three year window to adopt rules.  The window is up this month (August 3, 2009)

Region 5 U.S. EPA Questions Ohio's Ability to Modify BAT

In the ensuing three years since passage of S.B. 265 the course of change has been anything but certain.  U.S. EPA has issued two letters to Ohio EPA.  A June 2008 letter rejected Ohio EPA's rule which would exempt sources smaller than 10 TPY because U.S. EPA said Ohio EPA failed to prove Ohio's air pollution control strategy would not be weakened.  On May 22, 2009, U.S. EPA sent a second letter expressing concern over the impending deadline of August 3, 2009 when Ohio would no longer be able to require BAT without source specific rules.

In discussing the letters with staff, Ohio EPA is confident it can work out with U.S. EPA the exemption of sources smaller than 10 TPY.  However, it is much more difficult to envision a resolution of the issue pertaining to sources larger than 10 TPY. 

As an indication of the messy situation that may emerge, U.S. EPA Region 5 could start issuing notices of violation (NOVs) to all sources that receive an air permit without BAT after August 3, 2009.  In an attempt to avoid such a situation, Ohio EPA has discussed passing a rule that would require BAT on all sources larger than 10 tpy.  The rule would specify BAT are those general characteristics set forth in S.B. 265. 

  1. Work practices;
  2. Source design characteristics or design efficiency of applicable air contaminant control devices;
  3. Raw material specifications or throughput limitations averaged over a twelve-month rolling period;
  4. Monthly allowable emissions averaged over a twelve-month rolling period.

 

 

Sierra Club Sues Ohio for Failing to Enforce the Clean Air Act

It was not just Region 5 of U.S. EPA that was attacking changes to BAT. The Sierra Club filed suit against Ohio EPA over its rule exempting sources smaller than 10 tpy.  The Sierra Club challenged Ohio EPA under the Clean Air Act''s citizen suit provisions. 

In a very surprising decision, Magistrate Judge Abel found the citizen's suit provisions of the Clean Air Act did not allow suits against a State for failing to to enforce the Clean Air Act.  This decision will be appealed given its broader implications on the scope of the citizen suit provisions.  Given the prior precedents it is unclear whether Judge Abel's decision will be upheld.

Lessons Learned

We will have to wait and see how these major issues unfold over the next few months.  However, there is no doubt that the situation that has emerged after three years is not at all what was envisions during passage of S.B. 265.

The complexities involved in trying to change a State's air pollution control strategy on any significant scale are immense.  Ohio's BAT experience is a prime example.  With 70,000 regulated sources the ability to determine the impact of the BAT changes is almost impossible.  Making such a demonstration is the first step toward gaining U.S. EPA's approval.

Unfortunately, after three years businesses may be left with less certainty than they had before the overhaul was attempted. 

  • Back to case-by-case BAT
  • Region 5 scrutiny of Ohio EPA air permits
  • Continuing litigation of changes to Ohio's State Implementation Plan (SIP)

 

This is hardly the specificity that the business community envisioned during passage of S.B. 265.  Business groups envisions rules that would specifically state that type of controls or work practices that must be utilized for different types of sources.  The stop gap rule proposed by Ohio EPA looks more like case specific BAT.

Ohio Budget Includes Directive to Speed Up Decisions on Environmental Appeals

Buried in the thousand pages of the Ohio Budget Bill (H.B. 1) is an amendment that could have a major impact on hundreds of pending and future appeals of environmental decisions.  The budget bill amendment includes language placing strict deadlines for issuing decisions on environmental appeals. The deadlines could impact some very controversial permit appeals, including the Natural Resource Defense Council (NRDC) appeal of AMP Ohio's air permit for its new baseload coal-fired power plant.

By law the Environmental Review Appeals Commission (ERAC) hears and issues decisions on a multitude of actions by Ohio EPA as well as a limited number of actions by other state agencies.  The appeals heard by ERAC include:

  • Ohio EPA rules
  • Ohio EPA enforcement orders
  • Ohio EPA permitting decisions in air, water, solid waste, hazardous waste, etc.
  • Actions by the Boards of Health related to solid waste facilities
  • Ohio EPA decision related to the Voluntary Action Program (brownfields)
  • Orders of the State Fire Marshall relative to underground storage tanks (BUSTR)
  • Water permits and orders issued by Ohio Department of Agriculture for large factory farms

At any given time ERAC will typically have hundreds of appeals pending.  Some appeals can sit before ERAC for years, but this is typically by mutual consent of the parties in the appeal.   However, its not uncommon  in complex cases for hearings to be scheduled 18 to 24 months after appeal has been filed. 

Obviously someone felt concerned that ERAC was taking too long in issuing the majority of its decisions because the Ohio Budget Bill included strict deadlines for making determinations.  Here is the language (click here for the actual H.B. 1 Budget amendment):

The commission (ERAC) shall issue a written order affirming, vacating, or modifying an action pursuant to the following schedule:

(1) For an appeal that was filed with the commission before April 15, 2008, the commission shall issue a written order not later than December 15, 2009.

(2) For all other appeals that have been filed with the commission as of October 15, 2009, the commission shall issue a written order not later than July 15, 2010.

(3) For an appeal that is filed with the commission after October 15, 2009, the commission shall issue a written order not later than twelve months after the filing of the appeal with the commission. 

The language is silent on what happens if ERAC fails to adhere to the deadlines.  If left as is the language could create a right to file an action against ERAC to compel it to issue a decision (called a mandamus action). 

I am told that the legislative intent of the language was to remove the appeal from ERAC's jurisdiction and allow the Court of Appeals to hear the appeal.  If that was indeed the intent it would appear to be unworkable given the Court of Appeals doesn't accept testimony of witnesses.   In addition, there would be no assurance a Court, with its very busy docket, would make a determination any quicker.

Regardless, the new deadlines could have a significant impact.  With so many appeals pending before ERAC, the Commission may be forced to shorten hearings, reduce discovery or take other steps to speed up the decision making process.  It is also possible the deadlines could influence ERAC's level of scrutiny of Agency actions.

Indeed, the language could impact some very controversial actions currently under appeal, including the NRDC appeal of the AMP Ohio air permit on multiple grounds including regulation of greenhouse gases. According to ERAC's docket, a hearing is scheduled to begin March 8, 2010. The original appeal was filed in early spring of 2008. Under the imposed deadlines a decision would have to be issued no later than December 15, 2009.

It is possible that the Legislature will used the Budget Correction Bill to amend the language. Given the fact that the public hasn't had an opportunity to see it or provide input we may yet see substantial revisions. 

(Photo: wallyg/everystockphoto.com)

Pitfalls and Considerations When Deploying Cleantech or Renewable Energy Projects

So you are about to deploy the first commercial version of your new technology.  Or you are about to select your site for a new renewable or advanced energy project. In ramping up your cleantech project, everything has looked great in small scale trial tests.  You have had great result and are excited to bring this to market as the "next big thing." 

Deployment of new technologies and choosing sites for your renewable energy project can always present major challenges.  What looks good during small scale tests or on paper may prove to be unworkable or too costly in the field. 

How can you better assess your situation and proceed to a smooth launch of your technology or successfully deploy your project?  Here are some suggestions I have developed either from my years as a regulator or in working with clients.  Hopefully, taking careful consideration of some these issues can better position your company and avoid some "unseen enemies." 

1.  Site Selection-  Study closely the practical aspects of various proposed locations for your new facility.  Often company's select a site based upon expected customer demands or other business considerations.  However, prior to moving forward with the significant investment in terms of lease or purchase agreements, permitting, and zoning/building approvals significant investigation should be performed to evaluate the viability of the proposed site.

  • What the local zoning and building requirements?
  • Transportation routes should be evaluated
  • Any significant history with regards to citizen or environmental groups in the area?- Cleantech companies can naively think they are immune to NIMBY concerns only to find themselves immersed in costly and protracted litigation
  • Will your project require significant amounts of water?  If so, is there a readily available source or any issues with tapping into that source?

2.  Environmental Permitting and Regulatory Requirements-  Will your source have air or water emissions?  Will you generate significant solid waste or hazardous waste?  You should have an assessment of how environmental permitting and regulatory requirements could impact either the location or configuration of the facility at the site.  You should also know whether environmental requirements are going to impact the ultimate engineering design of your facility.  I have seen companies forced to completely redesign their process because they did not fully incorporate environmental permitting issues into their designs.

  • Will you have air emissions at levels that will require pollution controls?
  • Are you co-located at a location with an existing air source where EPA requirements may force you to aggregate emissions with that existing source?
  • Will you have a wastewater discharge? If so, can you hook into the wastewater treatment system or need a direct discharge.  If hooking into a pre-existing wastewater treatment system what are the pre-treatment requirements. 
    • What if the local wastewater treatment plant is under investigation or a federal consent decree?  Will that result in stricter standards that could drive up your pre-treatment requirements on-site?

3.  Lease Agreement and Construction Documents-  While you may believe you are headed to a wildly successful deployment or expansion, if anything has been shown in the last six months its that the market place is unpredictable.  You should make sure you understand and negotiate termination provisions in your lease agreements, construction documents or other legal documents governing your relationships with customers or business partners.  While you may be very disappointed you have to cancel the project, you may really be frustrated if you find yourself in a costly legal battle with potential customers, contractors and/or property owners.

4. Feasibility Studies-  Make sure when hiring a consultant to perform a feasibility study that  they have the expertise and knowledge regarding the state and local requirements associated with the project.  Many may be familiar with federal requirements, but you need to take into account local site selection issues as well.

  • Local ordinances- many renewable energy projects will be highly impacted by local ordinances that contain siting requirements.  Make sure your consultant takes into account the hurdles involved in deploying your project.
  • Include assessment of possible environmental market trading mechanisms-  Will you generate CO2 offsets?  Are you deploying renewable energy that could qualify for renewable energy credits?  Is your consultant or project team considering the current market fluctuations in these markets when evaluating whether carbon credits or RECs add to the viability of your project?

5.  Incentives-  It seems every lawyer and consultant is promoting their knowledge regarding availability of federal stimulus funding.  However, don't forget there are many state and even local programs that can provide grants and tax incentives for green businesses and energy.  Make sure you have someone on your project team that has knowledge of these incentives and understands the process for obtaining funds. 

(Photo:jurvetson/everystockphoto.com)

Controversial Ohio EPA Rule Proposes New Permit For Impacts To All Streams

On September 12, 2008, Ohio EPA issued proposed rules that would require a new permit, called a "state water quality permit", for all dredge or fill impacts to non-federally regulated streams.  Ohio may be the first state in the country to try and expand state stream permit requirements in reaction to recent U.S. Supreme Court decisions limiting the coverage of the Clean Water Act.  As discussed below, Ohio's effort will be controversial.

 The Supreme Court in Rapanos and SWANCC limited federal jurisdiction of the nation's waterways based upon its interpretation of the Clean Water Act's trigger for jurisdiction- "Navigable Waters".  In a prior post (Narrowing Federal Jurisdiction Over Waterways), I discussed the pressure mounting on States to react to federal court decisions which leave many waterways unprotected.  

Currently, Ohio EPA only requires a permit (401 permit) to fill or dredge a stream if the stream is under federal jurisdiction.   No permit is required if a stream is considered a state waterway but not a federal waterway.

In the past this approach didn't matter much because the Army Corps had a very expansive interpretation of federal waterways.  However, with the federal authority shrinking based upon a flurry of recent federal court decisions, the State felt it could no longer allow more and more streams to go unprotected.  In reaction, they have proposed a new rule that would require a permit for dredge or fill activity on any Ohio waterway, defined as "waters of the state" under Ohio Revised Code 6111.01(H). 

While Ohio EPA's action is understandable, after reviewing the rule, the Agency may be overcompensating.  The definition of a "water of state" is quite expansive under O.R.C. 6111.01(H), it includes:

 "...all streams, lakes, ponds, marshes, watercourses, waterways, wells, springs, irrigation systems, drainage systems, and other bodies or accumulations of water, surface and underground, natural or artificial, regardless of depth of the strata in which underground water is located, that are situated wholly or partly within, or border upon, this state, or are within its jurisdiction, except those private waters that do not combine or effect a junction with natural surface or underground waters."

I can see the lobbyists now, holding up pictures of a small puddle and arguing that Ohio EPA would require a permit for putting a few shovels of dirt in the hole.  Only problem is there is not much in the rule to refute this claim from a purely legal perspective.  The rule does not contain an exemption from permit requirements for small water bodies or deminimis impacts. 

In my experience the Agency is typically not persuasive when it argue "just trust us" to apply the regulation fairly.  As a result, there is no doubt this rule package will be very controversial. 

Other issues with the package include the following:

  1. Same Level Review for All Impacts-  While flawed, Ohio's isolated wetland permit requirements appropriately tries to match the level of review required with the amount/severity of impact.  The proposed rule makes no such effort.  All impacts are required to submit the same amount of technical information as part of their application. Also, all projects will be reviewed within 180 days, expedited review requirements for smaller projects is not included in the rule.
  2. Drainage Ditches- Who can clean out a ditch and when has been a controversial issue in Ohio for some time.  The proposed rule would put significant limitations on when ditches can be cleaned out for purposes of flood control or drainage.
  3. Clean Fill Materials- The rule limits fill to material "free from toxic contaminants in other than trace quantities."  While this limitation often appears in 401 permits, it has always been vague.  The rule adds no clarity to what is considered "trace quantities."  For instance, arsenic is naturally occurring in most Ohio soils.  Couldn't this limit be viewed to prohibit use of even typical Ohio farm soil as fill?
  4. All Permit Applicants Will Have to Wait-  The rule requires every applicant provide a copy of a determination letter from the Army Corps of Engineers as to whether the waters to be impacted are within federal jurisdiction.  Shouldn't some waters be just obviously not within federal jurisdiction?  This requirement is problematic because the Army Corps has been very slow to issue jurisdictional determinations. 
  5. Ohio EPA Guidance Elevated to Legal Requirements-  The rule requires all applicants evaluate the quality of streams in accordance with a series of technical guidance developed by Ohio EPA.  While these guidance documents have been used for years in permit reviews, it certainly will be controversial to make them mandatory. 

Comments on the rule package are currently due October 27, 2008.  However, business associations  are already requesting Ohio EPA allow for more extensive public involvement in the development of the rules.

 (Photo: flickr, heather0174)

(August 08) Ohio Environmental Regulatory and Incentive Update

PTIO Program is Launched-  Effective June 30, 2008 Ohio EPA finalized this new permit program which combines the Permit to Install (PTI) and Permit to Operate (PTO) into a single permit for non-Title V facilities.  Facilities will no longer have to apply for a separate PTO.  This program is intended to deal with Ohio EPA's backlog of PTOs which is in the thousands.  Ohio EPA's new PTIO application is up and must be used for new permits.

Electronic Reporting through Air Services- Effective June 30, 2008 Ohio EPA transitioned from its STARship electronic air reporting software to Air Services.  Air Services is part of Ohio EPA's larger effort to transition to more web based business interaction with the regulated community.  Following the release of the Air Services software, both Title V and Synthetic Minor Title V facilities will be required to use the eBusiness Center: Air Services for all emissions reporting, Title V Annual Compliance Certifications, Title V and other permitting applications.

Electronic Reporting of Surface Water Reports-  If you are using paper reporting or SWIMware to submit monthly-operating-reports (MORs) for NPDES permit compliance you need to quickly transition to Ohio EPA's new electronic reporting system.  Ohio EPA indicates it expects to cease accepting MORs by "end of the  summer". SWIMware has been replaced by the new online system called e-DMR, Electronic Discharge Monitoring Reporting System. The term, MORs (Monthly Operating Reports) is now being referred as DMRs (Discharge Monitoring Reports). The new reporting system is entirely web-based and accessible via any internet connection.

Ohio Diesel Grant Awards Announced-  On July 29th the Ohio Department of Development announced the recipients of the grants for diesel retrofit and repower projects for vehicles and fleets.  The award recipients originally submitted applications back in February.  The implementation of the Diesel Emission Reduction Grant (DERG) program was plagued with a number of issues that resulted in the rejection of a large number of applications and delay in announcing awards.  The Ohio Diesel Coalition is working in conjunction with the various State agencies to improve the grant process in the second round.  The Department of Development is expected to release the second request for proposals (RFP) in August. 

Brownfield Redevelopment- Clean Ohio Assistance Fund (COAF)-  As of July 1, 2008 the Ohio Department of Development has begun accepting applications for COAF grants to pay for Phase II site assessments (up to $300,000) and clean ups (up to $750,000) of brownfield properties.  ODOD has approximately $11.4 million to award.  To qualify the property must be in a designated priority investment area (see map).

Important Issues Unaddressed After Passage of Great Lakes Compact

With Michigan and Pennsylvania's passage of the Compact, all of the Great Lake States have now endorsed it.  The next step is to go to Congress for ratification.   While the press has almost exclusively concentrated on the diversion aspects of the Great Lakes Compact, there are other provisions that could have important ramifications for businesses.  Ohio has yet to pass enabling legislation that will grant authority to the Ohio Department of Natural Resource to implement other important aspects of the Compact, most notably regulation of water withdraws. 

The driving force behind the Compact was to ban diversions to other States and Countries.  But the Compact also requires each of the eight states to establish a regulatory program for new or increased withdraws from the Great Lakes basin. Ohio's enabling legislation will decide critical issues such as- how much water must be withdrawn before a permit will be required?  The Compact sets a default number of 100,000 gallons per day (gpd).  Other states have established higher thresholds, such as 1,000,000 gpd.

Another critical question - what type of review is required if a business triggers the need for a withdraw permit?  The Compact contains very broad language that requires a review of impacts to the Great Lake basin from which the withdraw takes place.  However, the Compact grants the states a tremendous amount of discretion to establish the level of review associated with new withdraws.  For example, Ohio could prohibit issuance of a withdraw permit if the proposed project would result in decreased flow in a tributary of Lake Erie.  Ohio could also require a detailed review of the impacts to the ecosystem if a withdraw is allowed.

While focus has rightfully been on protecting this tremendous freshwater resource from being diverted elsewhere, there are important policy questions that still remain unanswered.  How Ohio and the other Great Lake States regulate withdraws within their states will arguably have a more direct and immediate impact on its constituents. 

 

Ohio already requires all individuals and business to register with the Ohio Department of Natural Resources a withdraw of 100,000 gpd taken anywhere in the State of Ohio. (See, Ohio Revised Code Section1521.16)   The requirement has been in place since 1988 and is retroactive.  Therefore, it covers all facilities who currently withdraw more than 100,000 gpd. 

ODNR has compiled the data it has assembled through these registrations.  The withdraw information provides some insight into which sectors of the economy are the largest users of water in the State of Ohio. 

It is important to note that withdraw is not equivalent to consumption.  For example, the power sector is responsible for the largest amount of water withdraw in the state.  The vast majority of these withdraws are for cooling water which gets returned to the receiving stream from which it withdrawn. 

National data appears to be pretty consistent with Ohio.  Below is a chart from the USGS that shows an assessment of water use from 1950-2000.  The most notable differences between the charts is how much water is used for irrigation purposes nationally versus what is used in Ohio.

 

Note:  the ODNR chart has errors.  The total number of facilities with withdraws over 100,000 gpd is 1,970 not 1,685 as indicated on the chart.

First Court Revokes Air Permit Over CO2 and Clean Air Act

For the first time a court has revoked a permit due to concerns over C02 emissions and climate change.  While there have been previous instances where states have denied permits due to concerns with C02 emissions, this is the first time a court has revoked a previously issued permit.  Notably, the Court did not base its decision on state law, rather it ruled the Clean Air Act (CAA) requires analysis and control of C02 emissions. 

Other courts are currently hearing similar challenges.  If this decision is a trend it will have major implications for any new facilities seeking an air permit.  In a future blog post I will discuss the implications of using the Clean Air Act, specifically the New Source Review provisions, to regulate CO2.  Much speculation has been made as to whether CO2 will be regulated even without action by Congress on comprehensive climate change legislation.

The CO2 decision was issued on June 20, 2008 in Georgia's Fulton County Superior Court.  The Georgia Environmental Protection Division had approved a permit for the construction of a proposed 1200-megawatt coal-fired power plant.   Environmental groups, including the Sierra Club, challenged the permit saying the plant's emission of 8-9 million tons of CO2 had to be considered. Siding with the Sierra Club, the Court overturned the State's issuance and sent the permit back to perform the analysis it said was required under the CAA. 

Note: According to Sourcewatch, between 2007 and 2008, plans for 69 coal plants have been canceled.

The Clean Air Act requires major new sources of air pollution to install the best available pollution control technology (BACT) to reduce pollutants regulated by the Act.  The parties agreed that CO2 was not evaluated as a pollutant under the BACT analysis performed by the Georgia Environmental Protection Division.  Longleaf Energy defended its permit by arguing that CO2 was not a pollutant "controlled or limited" by the Clean Air Act.  The Company also argued the U.S. Supreme Court's decision in Massachusetts v. EPA was not controlling because the Court only found CO2 to be a pollutant, it did not determine it was a "regulated pollutant" under the Act.

The Court rejected the arguments raised by Longleaf stating the BACT provisions of the Clean Air Act were broader "encompassing all pollutants that are subject to regulation under the Act, whether or not they are independently subject to NAAQS [federal air quality standards] or other general limits."  The Court found that the Supreme Court in Massachusetts v EPA did determine CO2 was a "pollutant subject to regulation."