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The Insider

Industry Push-Back On Key EPA Rules Creates Balancing Act For Agency

Various industry groups are pushing back on a handful of EPA regulatory plans, creating a difficult balancing act for the agency on key air, water, energy and other issues as it already battles opposition from environmentalists threatening lawsuits over the proposals.

Some industry groups say the agency's latest efforts at Clean Air Act permitting reform do not go far enough, while the agency's work on the renewable fuel standard (RFS) is heightening tensions between oil and ethanol interests.

EPA is also balancing competing pressures on its Clean Water Act (CWA) policies, as congressional Republicans are at odds with states -- including those led by the GOP -- over whether reforms to the water law's “certification” process are needed to prevent Democratic states from using it to block fossil-fuel projects.

Those policy clashes put the Trump EPA in the rare position of dealing with pressure to either go farther than its current agenda or outright reverse a policy proposal in order to satisfy concerns from its allies in industry or Congress -- making it difficult to predict how officials will ultimately choose to proceed.

The latest installment in the long-running conflict between oil and ethanol groups over the RFS comes in response to President Donald Trump's new order that requires EPA to authorize year-round sales of fuel mixed with 15 percent ethanol (E15). The fuel is currently prohibited from sale from June 1 until Sept. 15 due to air quality concerns, and whether the agency has authority to waive that restriction without an act of Congress is still an open question:

Trump Order Approving Year-Round E15 Sales Divides Critics, Supporters
President Donald Trump's issuance of a directive Oct. 9 for EPA to authorize year-round sales of 15 percent ethanol fuel (E15) is drawing contrasting reaction from biofuels advocates, their oil industry opponents, environmentalists and others, with supporters saying it will boost E15 while critics warn it risks harming vehicle engines and air quality.

Ethanol proponents are welcoming the Trump order, but the American Petroleum Institute is vowing to sue if it goes into effect next year. “EPA has previously stated that it does not have the legal authority to grant the E15 waiver, and we agree with that assessment. The industry plans to aggressively pursue all available legal remedies against this waiver,” the group said.

In Congress, GOP senators led by Senate Environment and Public Works Committee Chairman John Barrasso (R-WY) are making their latest push for reforms to how the agency administers CWA section 401's water quality certification process, despite broad state opposition to any such changes.

Section 401 allows states to set new conditions on federally-approved projects when necessary to ensure compliance with their own water policies, but Barrasso and other supporters of his bill to reform the process are urging EPA to enact some of their preferred changes voluntarily. They say Democratic states are abusing that authority to block fossil-fuel infrastructure for political reasons:

GOP Senators Urge EPA CWA Section 401 Policy Revisions, Tout Pending Bill
Republican senators who are seeking legislative changes to the Clean Water Act section 401 water quality certification process are urging EPA to revise its policy on the issue and saying current agency guidance incorrectly characterizes some aspects of the law, while still touting their bill to implement some of the revisions.

But any effort to rework the section 401 program faces strong opposition from several state organizations, including the Western Governors Association, the Association of Clean Water Administrators and the Association of State Wetlands Managers.

Meanwhile, the latest step in EPA's ongoing effort to reform the new source review (NSR) permit program is drawing calls from industry groups seeking more aggressive changes:

Industries Urge EPA To Narrow NSR 'Adjacency' Test Beyond Draft Guide
Major industry groups are praising EPA's draft guidance narrowing when the agency will “aggregate” pollution sources as one source for new source review (NSR) permitting purposes, but are urging EPA to further reduce the scope of aggregation by creating a more-limited definition of when sources are deemed “adjacent” for NSR.

A coalition of 10 industry groups says they support the agency's draft guide to narrow the test for when multiple pollution sources are “aggregated” under a single NSR permit -- and thus become more likely to reach the more stringent “major source” threshold. But while the coalition welcomes those changes compared to the current metric, it says the new test is still too broad, and should include a “bright line” distance-based limit beyond which sources will never be aggregated.