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The Week Ahead

EPA Faces Looming FY14 Budget Shutdown; Supreme Court Weighs Environmental Cases

Posted: September 30, 2013

EPA faces an Oct. 1 shutdown -- which would significantly pare back the agency's operational staffing levels and reduce its activities to only “essential” work -- if lawmakers fail to agree on a way to continue to fund the government when fiscal year 2014 begins at midnight Sept. 30. Meanwhile, the Supreme Court is readying its 2013 term and cases over major EPA and climate regulations are seen as the justices' key environmental suits.

EPA Shutdown

Unless House and Senate lawmakers can resolve an ongoing fight over the FY14 budget, EPA will essentially be shuttered effective Oct. 1 when a continuing resolution (CR) funding government agencies expires. The House GOP is trying to use a CR as a vehicle to block President Obama's health care law, but Senate Democrats are refusing to agree to the plan and are insisting on a clean bill to give time to craft appropriations bills.

The Senate is expected Sept. 30 to table a House measure that seeks to delay the health care law for one year, leaving lawmakers with only hours to avoid a government shutdown, which would pose major adverse impacts on EPA. According to the agency's shutdown plan -- recently obtained by Inside EPA -- the agency will be operating at just 6.5 percent of its 16,205 total employees during any shutdown. EPA Administrator Gina McCarthy has said the agency will essentially be closed throughout the shutdown.

Some EPA operations will continue, however, including law enforcement, “essential” Superfund cleanups deemed vital to protect against imminent threats to public health.

In Court

The Supreme Court, which will continue to operate until Oct. 4, is slated at its Sept. 30 conference to consider nine separate petitions seeking review of the D.C. Circuit's ruling in Coalition For Responsible Regulation v. EPA, which upheld the agency's initial greenhouse gas (GHG) regulatory program.

If the justices agree to hear the case in their new term, which is slated to begin Oct. 7, it would give the high court a fresh chance to debate the merits of EPA's GHG regulatory regime. The court in its landmark 2007 ruling in Massachusetts v. EPA said the agency has power under the Clean Air Act to regulate GHGs, and the rules at issue in Coalition for Responsible Regulation are the first issued under that power.

The GHG suit -- should the Supreme Court agree to hear it -- is seen as one of the most significant environmental cases facing the justices in their 2013 term, along with an appeal of a ruling scrapping EPA's Cross-State Air Pollution Rule emissions trading program they have already agreed to hear.

The National Chamber Litigation Center is holding a Supreme Court preview Oct. 3 in Washington, D.C. where the group, which is one of the parties petitioning the justices to review the GHG case, is likely to discuss the pending environmental suits.

EPA is expected Oct. 4 to ask the U.S. Court of Appeals for the District of Columbia Circuit to dismiss an industry challenge to an agency memo that aims to narrowly apply an appellate ruling that scrapped a key part of its policy for determining when dispersed operations are “aggregated” and subject to strict major source permit requirements.

The 6th Circuit in Summit Petroleum Corp. v. EPA scrapped the agency's "functional interrelationship" test used in determining whether to aggregate sources. In response EPA issued a memo saying that test should now no longer be used in the 6th Circuit states of Michigan, Ohio, Tennessee and Kentucky -- but could be used elsewhere.

The National Environmental Development Association's Clean Air Project, which represents energy producers and manufactures, then filed suit in the D.C. Circuit saying the memo violates the air law by creating a policy split among agency regions. The group also challenges the constitutionality of the functional interrelationship test that remains in other states.

The policy is a key issue for energy developers because aggregating, or combining emissions from dispersed sources, such as natural gas operations, and counting them as one unit can push their overall emissions over Clean Air Act thresholds for “major” sources that are subject to more stringent pollution controls than if they were regulated separately.

As Inside EPA has previously reported, EPA is expected to argue that the court should dismiss the suit because the memo is not "final agency action" subject to judicial review.

Air Office Fraud

Lawmakers will hold two meetings this week on the case of John Beale, a former senior EPA air office employee who defrauded the agency out of almost $900,000.

Beale pleaded guilty to the fraud and theft at a Sept. 27 court hearing, and members of both the House and Senate will discuss the fallout from the case and the EPA Inspector General's (IG) investigation into the theft.

First up is the Senate Environment & Public Works Committee, which will hold a Sept. 30 briefing on the investigation, with IG Arthur Elkins.

The House Oversight & Government Reform Committee will then hold an Oct. 1 hearing titled "Secret Agent Man? Oversight of EPA's IG Investigation of John Beale" on the IG's investigation. Elkins, EPA Deputy Administrator Bob Perciasepe and former air office official Rob Brenner are slated to testify.

Water Infrastructure

A coalition of water industry and nonprofit groups known as the Value of Water Coalition will hold an Oct. 1 teleconference to launch a new “public education” campaign that aims to help Americans understand the challenges ahead for water infrastructure.

“This effort marks the first time a broad coalition of water businesses and nonprofit associations have come together as a single voice,” says an announcement for the call by the coalition, which includes the American Water Works Association (AWWA), the National Association of Clean Water Agencies and the National Association of Water Companies.

AWWA's California-Nevada Section could bring up the value of water debate when they discuss a host of water quality issues at their Sept. 30-Oct. 1 fall conference taking place in Sacramento, CA.

Among the topics on the meeting's agenda are water infrastructure issues; water quality problems; an update on California's drinking water regulations, and more.

NOx-SOx NAAQS

EPA will hold an Oct. 1-3 workshop in Research Triangle Park, NC, to discuss an integrated science assessment (ISA) that could inform a potential future first-time combined nitrogen oxides (NOx) and sulfur oxides (SOx) national ambient air quality standard.

According to a Federal Register notice announcing the workshop, the goal is to update the most recent version of the ISA for NOx and SOx that EPA issued in December 2008. The ISA is an early part in the NAAQS review process, and is a comprehensive review of the most policy-relevant science on the pollutants.

The workshop comes days ahead of Oct. 10 oral arguments in a federal appeals court case in which environmentalists are challenging EPA's April 3, 2012, final rule in which it dropped an earlier proposal to develop the novel joint NOx-SOx standard.

EPA in its final rule left open the option to pursue the combined NAAQS at a later date, once the uncertainty had been sufficiently addressed through further research. EPA has said it will pursue efforts to collect research on the issue, and the workshop could assist that effort.

Ozone Transport Commission

Comments are due Oct. 3 on EPA's proposed approval of Maine's plan for a partial exemption of its emission reduction mandates as part of the Ozone Transport Commission (OTC), a group of 12 Northeastern and Mid-Atlantic states seeking to cut ozone-forming emissions.

Under the Clean Air Act, being a member of the OTC requires states to meet additional emissions limits that do not apply outside of the region. But Maine is trying to secure a partial exemption from those requirements by arguing that emissions from within its borders are not hindering other states' ability to attain EPA's air standards, and the agency recently proposed to approve the exemption.

But the OTC states of Delaware and New York raised concerns over the proposal, saying they need more time to review whether the plan is legal under the Clean Air Act. As a result of the state's concerns, EPA extended a previous Sept. 4 comment deadline on the proposal until Oct. 3.

Climate & Energy

The Environmental Law Institute will hold a briefing Sept. 30 on “expectations, concerns and opportunities” for President Obama's second term Climate Action plan, of which EPA's recently proposed carbon dioxide emission rule for newly constructed power plants -- and a similar pending rule for existing utilities -- are key parts.

Representatives from the Center for Climate and Energy Solutions, law firm Reed Smith, and the White House Domestic Policy Council will be taking part.

Energy efficiency is also part of the president's climate agenda, and the Alliance to Save Energy will be holding a “Great Energy Efficiency Day” Oct. 2 to tout state and other efforts to boost efficiency. Department of Energy officials, representatives from power firms, and regulators from New York, Los Angeles and other cities are among those slated to attend.

Congress also turns its attention to energy Oct. 2 when the House Energy & Commerce Committee's power panel holds a hearing on a bipartisan bill, the North American Energy Infrastructure Act. According to energy panel Democrats' website, the legislation “will require approval for the construction and operation of oil or gas pipelines and electric transmission facilities within U.S. boundaries for the import or export of oil, gas, or electricity to or from the U.S., Canada, or Mexico.”

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