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The Week Ahead

Congress Touts Competing Efforts On EPA's GHG Rule; Court Eyes EPA Aggregation Policy

Posted: January 13, 2014

Lawmakers on both sides of the climate debate are stepping up their advocacy, with a particular focus on EPA's greenhouse gas rules for power plants. A key federal appellate court is slated to hold oral argument in a case challenging agency efforts to preserve its policy for when permit writers can subject natural gas and other operations to strict “major” source air permits.

In Congress

Lawmakers only have a few days in Washington before the Martin Luther King Day break but they are likely to be busy ones for those interested in EPA policy matters, especially the agency's pending greenhouse gas (GHG) rules for power plants.

In the House, Rep. Ed Whitfield (R-KY), chairman of the House Energy & Commerce Committee's energy and power subcommittee, is planning a Jan. 13-14 subcommittee markup for H.R. 3826, his just-introduced bill that would significantly raise the bar before EPA could issue its planned rules for power plants.

Among other things, the bill requires EPA to subcategorize plants by the type of fuel they use, only allows EPA to issue rules once the standard “has been achieved on average for at least one continuous 12-month period . . . by each of at least 6 units within such category,” and requires Congress to approve any regulation.

Sen. Joe Manchin (D-WV), who has sponsored a Senate companion, is expected to discuss the issue at a Jan. 15 event hosted by RealClearPolitics Washington Bureau Chief Carl Cannon. The conversation will focus on the energy priorities for Congress this year, as well as the government’s role in helping facilitate Americans’ demand for power while creating new jobs and protecting the environment.

While Manchin is leading the effort in the Senate, the bill is not likely to advance in the upper chamber, at least not through the environment committee, where Sen. Barbara Boxer (D-CA), the panel's chair, is strongly pushing to advance legislation to regulate GHGs. Together with Sen. Sheldon Whitehouse (D-RI), Boxer is planning this week to announce the details of a new climate action task force designed to "wake up Congress" to global warming, an effort the senators say is designed to build support for eventual passage of carbon control legislation.

Boxer is also slated to hold a Jan. 16 hearing on President Obama's Climate Action Plan, a hearing that Boxer and Republicans have long sought to hold. Among those slated to testify are EPA Administrator Gina McCarthy and White House environment chief Nancy Sutley.

Another venue where lawmakers are likely to seek to address EPA's upcoming rule is the omnibus appropriations bill that Congress must approve before the current Jan. 15 continuing resolution expires. Some Republicans have been looking to attach a legislative rider to the omnibus spending bill that would block EPA from finalizing its power plant rules but prospects for such a deal appear unlikely.

House lawmakers signaled last week that they would extend the deadline by a few days if appropriators need more time to complete the deal but currently the deadline remains Jan. 15.

In Court

A host of major industry groups will have an opportunity to convince a key federal appellate court to throw out a controversial EPA decision adopting different tests for determining whether oil and gas operations and other sites are subject to strict “major” source air permits.

The U.S. Court of Appeals for the District of Columbia Circuit is slated to hear oral arguments Jan. 17 in National Environmental Development Association's Clean Air Project (NEDA/CAP) v. EPA. The pending suit challenges an EPA memo -- issued in December 2012 -- in response to a ruling from the 6th Circuit that scrapped a key part of the agency's test for aggregating, or combining, dispersed emissions sources for the purposes of determining whether sources are subject to “major” source requirements.

Until the 6th Circuit's ruling, EPA had nationwide been using a "functional interrelatedness" test established in a 2009 policy, which says permit writers should assess whether facilities are "contiguous or adjacent," whether they are in common control and whether they are part of the same industrial grouping -- the same three factors listed in a Bush-era policy -- when determining to aggregate sources' emissions for permitting purposes.

The Bush administration said physical proximity was the most important factor in determining adjacency, but the 2009 policy added "functional interrelatedness" as a significant consideration, increasing the likelihood that dispersed facilities, such as those at natural gas operations, exceed the emissions threshold for strict "major" source permitting mandates under the air act and would face more stringent pollution controls.

The 6th Circuit in an August 2012 ruling in Summit Petroleum Corp. v. EPA found the "functional interrelatedness" test unlawful, making it difficult for permit writers to aggregate sources' emissions.

In response, EPA issued the memo that said while it would not use the test in the 6th Circuit states of Michigan, Ohio, Tennessee and Kentucky, it will continue to use the test elsewhere.

That prompted the lawsuit in the D.C. Circuit by NEDA/CAP. The group, whose members include Alcoa, BP America, Koch Industries, Procter & Gamble Boeing, ExxonMobil and others, challenged the memo, arguing that the agency's decision to limit the reach of the Summit ruling violates the air law by creating a policy split among agency regions. The group also challenges the constitutionality of the functional interrelatedness test that remains in other states.

In its final briefs before arguments, EPA reiterated its call for the court to dismiss the suit, saying the agency's approach adheres to a decades-old permitting policy and that EPA has taken no action that groups could challenge in court.

NEDA/CAP argues that EPA's memo must be set aside under the Administrative Procedure Act "because it flouts the statutory and regulatory 'uniformity mandate'" under the Clean Air Act section 301(a)(2) that requires the agency to apply a uniform set of criteria when implementing air law programs.

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