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22 ELR 10235 | Environmental Law Reporter | copyright © 1992 | All rights reserved Chapter 5. Prevention of Significant DeteriorationTheodore L. Garrett and Sonya D. WinnerEditors' Summary: In this second of a three-part series on the Clean Air Act and the 1990 amendments, the authors analyze the background of several key Clean Air Act sections, including the prevention of significant deterioration (PSD) program, new and modified source review, the national emission standard for hazardous air pollutants (NESHAP) program, acid deposition control provisions, and mobile source controls. The authors explore the evolution of the PSD program from its origins in Sierra Club v. Ruckelshaus, 2 ELR 20656, to its current focus on requiring preconstruction review of major sources and modifications to ensure that deterioration is prevented and appropriate control technology is used. The authors next analyze how the Clean Air Act utilizes the review and permitting of new and modified sources as basic planning and control features for regulating such sources and their impact on attainment and maintenance of the national air quality standards. The authors next explore the regulation of hazardous emissions, from the pre-1990 NESHAP program to the ramifications of the 1990 amendments. Finally, the authors analyze the new acid deposition control provisions added by the 1990 amendments, including the new allowance program, and how the amendments impact Title II of the Clean Air Act, which governs emissions from mobile sources. Theodore L. Garrett is a partner in the law firm of Covington and Burling in Washington, D.C. Mr. Garrett has coordinated the firm's environmental practice and has been extensively involved in litigation and administrative proceedings. A former U.S. Supreme Court law clerk to Chief Justice Burger, Mr. Garrett has served as a featured speaker at numerous environmental law and litigation programs, and has written widely in the environmental area. He is a coauthor of the ALI-ABA book A Practical Guide to Environmental Law and the ABA book Environmental Litigation. Mr. Garrett is vice-chairman of the Solid and Hazardous Waste Committee of the ABA Section of Natural Resources, Energy, and Environmental Law; a member of the Steering Committee of the Environment, Energy, and Natural Resources Section of the District of Columbia Bar; a member of the Editorial Board of the Environmental Law Reporter, and a member of the Advisory Committee on Hazardous Waste of the Center for Public Resources. Sonya D. Winner is a partner in the law firm of Covington and Burling, where she practices in the areas of environmental law, international trade, and antitrust. She is a graduate of Michigan State University (B.A. 1979) and Harvard Law School (J.D., magna cum laude, 1982). After graduation, she served as a law clerk to Judge Louis F. Oberdorfer of the U.S. District Court for the District of Columbia. She is a member of the adjunct faculty at the American University Washington College of Law, where she has taught courses in international commercial arbitration and legal ethics. The Clean Air Act contains a separate program to prevent degradation of air that meets the national ambient standards. The nondegradation program, entitled "Prevention of Significant Deterioration of Air Quality," is in Part C of Title I.1 The program had its origins in Sierra Club v. Ruckelshaus,2 a suit by the Sierra Club under the 1970 Act, and was subsequently codified as one of the major features of the 1977 Act. The prevention of significant deterioration (PSD) program requires preconstruction review of major sources and modifications to ensure that deterioration has been prevented and that appropriate control technology is used. I. Background of the PSD Program The 1970 Clean Air Act contained no specific provisions dealing with nondegradation. The 1971 regulations governing state implementation plans (SIPs) in effect said that the plans were acceptable as long as air quality met the national ambient air quality standards (NAAQS).3 The Sierra Club brought suit challenging these rules on the ground that clean air should not be allowed to worsen. In the absence of regulatory provisions in the statute, the Sierra Club relied on one of the "purposes" of the statute: "to protect and enhance the quality of the Nation's air resources."4 A federal district court ruled in favor of the Sierra Club and enjoined the U.S. Environmental Protection Agency (EPA) from approving state plans that allow air quality in clean areas to deteriorate to NAAQS levels.5 After the Sierra Club decision, EPA deliberated various regulatory approaches at some length and promulgated its first PSD regulations in 1974.6 The regulations required preconstruction review of new sources of particulates and sulfur dioxide, allowed certain increments of pollution, and required new sources to meet a general best available control technology (BACT) requirement. Only small increases of pollutants were to be allowed in Class I areas, primarily national parks and wilderness areas. Moderate increases were allowed in Class II areas. In Class III areas, increases up to the NAAQS would be allowed to permit industrial growth. These regulations were upheld by the court of appeals, although the judgment was later vacated and remanded to EPA for consideration in light of the 1977 amendments to the Act.7 In 1977, Congress added a new Part C to Title I providing a detailed statutory basis for the PSD program. Under § 110 (a)(2)(j), state plans must contain provisions to prevent deterioration.8 Section 163 contains allowable increments for increases of sulfur dioxide and particulates.9 Section 165 contains preconstruction requirements for major emitting facilities, including permits containing emission limits, analysis of air quality impacts, and the imposition of BACT.10 In 1978, EPA issued another set of PSD regulations to implement the 1977 amendments.11 These regulations were closely examined in the D.C. Circuit in a lengthy opinion in Alabama Power Co. v. Costle.12 After this decision, EPA revised its PSD regulations in light of the court's ruling.13 II. Classification and Increments The PSD program applies to areas of the country that meet the NAAQS or that are unclassifiable. The statute further divides these areas into three classes, each with a separate "increment" of allowable pollutant increases. Section 162 initially classifies all wilderness areas and national parks exceeding 5,000 acres as Class I areas, and classifies all other areas as Class II unless they are redesignated under § 164.14 Section 164 allows redesignation under limited circumstances.15 National parks, monuments, or wilderness areas larger than 10,000 acres may be designated only as Class I or Class II. Other areas may be designated as Class III only after elaborate procedural requirements are followed, including specific approval by the governor of the state as well as general purpose units of local government.16 The allowable increments of sulfur dioxide and particulates are set forth in § 163(b) of the statute,17 in micrograms per cubic meter (mug/m3), as follows:
These increments were based on percentages of the NAAQS, amounting to 2 percent, 25 percent, and 50 percent for Class I, II, and III areas, respectively.18 Although § 163 of the Act prescribes increments for only two pollutants, § 166(a) directs EPA to study the other four criteria pollutants and to promulgate regulations to prevent significant deterioration.19 These "other pollutants" are hydrocarbons (HC), carbon monoxide (CO), ozone, and nitrogen oxides (NOx). The regulations are required to contain measures "at least as effective as the increments," including increments, emission density requirements, or other measures.20 After years of delay by EPA, a district court ordered the Agency to take action under this provision,21 and EPA developed increments for nitrogen in 1988 in response to this decision.22 The increments for nitrogen dioxide are 2.5 mug/m3, 25 mug/m3, and 50 mug/m3 annual arithmetic mean in Class I, Class II, and Class III areas, respectively.23 The above increments represent an allowable increase over the baseline concentration. Section 169(4) defines the baseline as the ambient concentration level that exists at the time of the first application for a PSD permit, taking into account projected emissions from major emitting facilities that commenced construction before January 6, 1975, the effective date of EPA's earlier PSD regulations.24 With respect to major sources, the increment is consumed or allocated as sources are permitted.25 The governor of a state may exclude certain categories of emissions from increment consumption after notice and public hearing and approval by EPA. The categories are sources that have converted under energy legislation; increases due to natural gas curtailments, construction, or other temporary emissions; and new sources outside the United States.26 These exclusions may remain in effect for five years.27 Although permits are required only for major sources, the increment is consumed by both major and minor sources affecting air quality after the baseline date.28 Permit applicants in PSD areas thus have no assurance that the increments will be protected by the permit process alone. States concerned about the consumption of the increment and growth allowances in PSD areas should review minor as well as major sources. In addition to the above increments, sources in PSD areas are subject to the NAAQS as a ceiling under § 163(b)(4).29 Thus, even if a hypothetical source could emit a certain number of tons per year without exceeding the increment, those emissions would be barred if the resulting ambient levels would exceed the NAAQS. III. Preconstruction Review and Permitting Section 165(a) provides that no major emitting facility on which construction began after 1977 may be constructed in a PSD area unless a permit is issued pursuant to the preconstruction review provisions of the statute.30 These provisions also apply to major modifications of such a source. EPA's regulations contain detailed and complex review requirements, which are summarized below. A "major emitting facility" is defined as one of 28 stationary sources listed in the statute that emit, or have the potential to emit, 100 tons per year of any pollutant regulated under the Act, or any other stationary source with the potential to emit 250 tons per year of any pollutant subject to regulation under the Act.31 The listed major sources include iron and steel mills, municipal incinerators discharging more than 250 tons of refuse per day, petroleum refineries, chemical plants, primary lead and zinc smelters, and fossil-fuel boilers and steam electric plants with more than 250 million BTU per hour heat input. Fugitive emissions and state-exempted nonprofit health or education institutions are excluded from the definition.32 A "major modification" is defined as any physical change or change in the method of operation of a major stationary source that would result in a significant net emissions increase of any pollutant subject to regulation under the Act.33 A "significant" increase is defined in EPA's regulations as a net emissions increase or the potential to emit 40 tons per year (TPY) of sulfur dioxide, 25 TPY of particulate matter (15 TPY of small particulate matter or PM-10), 40 TPY of volatile organic compounds (VOCs), and specified quantities of other pollutants.34 The phrase "net emissions increase" refers to the relevant emissions for a major modification.As defined by EPA, it means the sum of the increase in actual emissions from a particular change together with any other increases and decreases at a source that are "contemporaneous" and are "creditable."35 The increases or decreases must (1) occur within a [22 ELR 10239] reasonable period before the modification, (2) not have been relied on previously, (3) be enforceable, (4) have approximately the same air quality significance, and (5) meet certain other requirements. The entire plant may be considered for purposes of netting the increases and decreases, an approach known as the "bubble concept."36 This concept allows flexibility in modifying a plant's process equipment without enduring permit delays and uncertainties. Under the 1990 amendments to the Act, § 112 hazardous air pollutants are exempt from the PSD permit and other requirements of Part C.37 The following pollutants that had been regulated under the PSD program are no longer regulated under Part C because they are on the § 112 hazardous pollutant list: * benzene (including benzene from gasoline) * radionuclides (including radion and polonium) It should be noted that states with approved PSD programs may continue to regulate the § 112 hazardous air pollutants if the state PSD regulations provide an independent basis for doing so. The pollutants currently subject to federal PSD review and permit requirements are as follows: * particulate matter and PM-10 * total reduced sulfur compounds (including H[2]S) * chlorofluorocarbons (CFCs) 11, 12, 112, 114, 115 A preconstruction permit application must be accompanied by air quality monitoring data and an impact analysis. The application must contain an analysis of ambient air quality in the affected area to assess whether emissions from the source would exceed the NAAQS or the increment.38 EPA's regulations require the applicant to gather continuous air monitoring data for one year before submitting the application, unless the reviewing authority concludes that a sound evaluation can be made with data for a shorter period. The impact analysis and estimates of ambient concentrations must be made using certain air quality models and other requirements specified in EPA's regulations.39 A modification or substitution of the models may be made if approved by EPA, after notice and opportunity for public comment.40 A PSD permit must require the applicant to meet emission limits based upon BACT for each pollutant subject to regulation under the Act.41 A new major stationary source must meet BACT for pollutants that it would have the potential to emit in significant amounts. A major modification must meet BACT for polluants that constitute a significant net increase as a result of a physical change or change in operations.42 What constitutes BACT is determined by the permit authority on a case-by-case basis. The Act defines BACT as an emission limit based on the "maximum degree of reduction" of each regulated pollutant "taking into account energy, environmental, and economic impacts and other costs" that are determined "to be achievable for the facility.43 At minimum, BACT must be no less stringent than the new source performance standards or hazardous emissions standards established by EPA under §§ 111 and 112 of the Act.44 If an emissions limitation is infeasible, the permit authority may prescribe a design, equipment, work practice or operational standard, or some combination of them.45 The preconstruction requirements are enforceable by EPA and the states. Under § 167, the Administrator or a state may take such measures as necessary to prevent the construction of a major emitting facility that does not conform to the preconstruction and permitting requirements of the Act, including the issuance of an order or seeking injunctive relief.46 One court has held that § 167 imposes a nondiscretionary duty on EPA to enforce the requirements.47 IV. Class I Areas, Visibility Protection The federal land manager must be notified of each PSD permit application that may impact Class I areas. The land manager is responsible for protecting air quality and may object to the issuance of a permit if the proposed emissions "would have an adverse impact on the air quality-related values (including visibility)" of Class I lands.48 Conversely, a permit that exceeds the Class I increment may be issued with the concurrence of the federal land manager if EPA determines that the emissions would not have an adverse impact on the air quality-related values of such lands, including visibility.49 In addition, there are procedures for variances by the governor with the concurrence of the federal land manager or the President.50 The 1977 amendments added a separate program to address visibility protection on Class I lands.51 The program [22 ELR 10240] includes (1) the identification of Class I federal areas where visibility is determined to be important, (2) a study by EPA of means to prevent future visibility impairment and to remedy existing visibility impairment in mandatory Class I federal areas, and (3) regulations to assure reasonable progress to attain these goals.52 EPA's visibility regulations were promulgated on December 2, 1980.53 The regulations include procedures for review of new major stationary sources or major modifications in a PSD area.54 The regulations include requirements for the installation of the best available retrofit technology (BART) on major stationary sources that may reasonably be anticipated to cause or contribute to impairment of visibility in a mandatory Class I area.55 BART is determined on a case-by-case basis, taking into account the technology available, costs, energy and non-air-quality environmental impacts of compliance, the remaining useful life of the source, and the improvement of visibility likely to result.56 EPA may grant exemptions from this technology requirement, with the concurrence of the federal land manager.57 States were slow to adopt SIP provisions to implement EPA's visibility regulations. As a result, in 1985 EPA published federal regulations requiring monitoring and review of new sources in states that do not have approved visibility plans.58 Amendments to these rules and new provisions for long-term strategies were promulgated in 1987.59 1. Clean Air Act (CAA) §§ 160-167, 42 U.S.C. §§ 7470-7479, ELR STAT. CAA 66-70. 2. 344 F. Supp. 253, 2 ELR 20262 (D.D.C. 1972), aff'd per curiam, 2 ELR 20656 (D.C. Cir. 1972), aff'd by equally divided Court without opinion sub nom. Fri v. Sierra Club, 412 U.S. 541, 3 ELR 20684 (1973). 3. 36 Fed. Reg. 22398 (1971). 4. CAA § 101(b)(1), 42 U.S.C. § 7401(b)(1), ELR STAT. CAA 6. 5. Sierra Club v. Ruckelshaus, 344 F. Supp. at 253, 2 ELR at 20263 (D.D.C. 1972). 6. 39 Fed. Reg. 42510 (1974). 7. See Sierra Club v. EPA, 540 F.2d 1114, 6 ELR 20669 (D.C. Cir. 1976). 8. 42 U.S.C. § 7410(a)(2)(j), ELR STAT CAA 20. 9. 42 U.S.C. § 7473, ELR STAT. CAA 66. 10. 42 U.S.C. § 7475, ELR STAT. CAA 68. 11. 43 Fed. Reg. 26380 (1978). 12. 606 F.2d 1068, 9 ELR 20400 (D.C. Cir.), modified, 636 F.2d 323, 10 ELR 20001 (D.C. Cir. 1979). 13. 45 Fed. Reg. 52676 (1980). 14. 42 U.S.C. § 7472, ELR STAT. CAA 66. 15. 42 U.S.C. § 7474, ELR STAT. CAA 67. 16. Id.; see 40 C.F.R. § 51.166(g) (1991). For a decision discussing the redesignation process, see Kerr-McGee Chem. Corp. v. Department of the Interior, 709 F.2d 597, 13 ELR 20770 (9th Cir. 1983). 17. 42 U.S.C. § 7473(b), ELR STAT. CAA 66. 18. See H.R. REP. NO. 294, 95th Cong., 1st Sess. 7-9 (1977). 19. 42 U.S.C. § 7476(a), ELR STAT. CAA 69. 20. Id., CAA § 166(d), 42 U.S.C. § 7476(d), ELR STAT. CAA 70. 21. Sierra Club v. Thomas, 658 F. Supp. 165, 17 ELR 20875 (N.D. Cal. 1987). 22. 53 Fed. Reg. 40656 (1988). 23. 40 C.F.R. § 51.166(c) (1991). 24. 42 U.S.C. § 7479(4), ELR STAT. CAA 70-71. 25. For an interesting case in which permits were submitted on the same day, see Citizens Against the Refinery's Effects, Inc. v. EPA, 643 F.2d 178, 11 ELR 20174 (4th Cir. 1981) (upholding EPA's discretion in breaking the tie, thus requiring the other applicant to include the winner's emissions in its analysis). 26. CAA § 163(c), 42 U.S.C. § 7473(c), ELR STAT. CAA 67. 27. See 40 C.F.R. § 51.166(f) (1991). 28. See Alabama Power Co. v. Costle, 636 F.2d 323, 361-64, 10 ELR 20001, 20012-13 (D.C. Cir. 1979). 29. 42 U.S.C. § 7473(b)(4), ELR STAT. CAA 66-67. 30. 42 U.S.C. § 7475(a)(1), ELR STAT. CAA 68. 31. CAA § 169(1), 42 U.S.C. § 7479(1), ELR STAT. CAA 70. 32. See Alabama Power Co., 636 F.2d at 368-70, 10 ELR at 20016-17. 33. 40 C.F.R. § 51.166(b)(2)(i) (1991). 34. 40 C.F.R. § 51.166(b)(23)(i) (1991). 35. 40 C.F.R. § 51.166(b)(3)(i) (1991). 36. See Alabama Power Co., 636 F.2d at 399-403, 10 ELR at 20035-37. 37. CAA § 112(b)(6), 42 U.S.C. § 7412(b)(6), ELR STAT. CAA 31. 38. 40 C.F.R. § 51.166(m) (1991). 39. 40 C.F.R. § 51.166(l) (1991). 40. For a discussion of EPA's discretion to require or waive monitoring, see Alabama Power Co., 636 F.2d at 372-73, 10 ELR at 20018-19. 41. CAA § 165(a)(4), 42 U.S.C. § 7475(a)(4), ELR STAT. CAA 68. 42. 40 C.F.R. § 51.166(j)(2), (3) (1991). 43. CAA § 169(3), 42 U.S.C. § 7479(3), ELR STAT. CAA 70. 44. 42 U.S.C. §§ 7411, 7412, ELR STAT. CAA 25-45. 45. 40 C.F.R. § 51.166(b)(12) (1991). 46. 42 U.S.C. § 7477, ELR STAT. CAA 70. 47. Save the Valley, Inc. v. Ruckelshaus, 565 F. Supp. 709, 13 ELR 20881 (D.D.C. 1983). 48. 40 C.F.R. § 51.166(p)(3) (1991); CAA § 165(d)(2)(C)(ii), 42 U.S.C. § 7475(d)(2)(C)(ii), ELR STAT. CAA 68. 49. 40 C.F.R. § 51.166(p)(4). 50. Id., § 51.166(p)(5)-(7). 51. CAA § 169A, 42 U.S.C. § 7491, ELR STAT. CAA 71. 52. Id., CAA § 169A(a), 42 U.S.C. § 7491(a), ELR STAT. CAA 71. 53. 45 Fed. Reg. 80084 (1980) (codified at 40 C.F.R. § 51.300 et seq.) 54. 40 C.F.R. § 51.307. 55. Id., § 51.302(c). 56. Id., § 51.301(c). 57. Id., § 51.303. 58. 50 Fed. Reg. 28544 (1985). 59. See 40 C.F.R. §§ 52.26-29 (1991). 22 ELR 10235 | Environmental Law Reporter | copyright © 1992 | All rights reserved |