CHAPTER 9 PREPARING FOR REGIONAL HAZE PHASE II: NUTS AND BOLTS FOR MINING, OIL AND GAS, AND OTHER NON-EGU EMISSION SOURCES
| Jurisdiction | United States |
PREPARING FOR REGIONAL HAZE PHASE II: NUTS AND BOLTS FOR MINING, OIL AND GAS, AND OTHER NON-EGU EMISSION SOURCES
Of Counsel
Ray Quinney & Nebeker
Salt Lake City, UT
E. Blaine Rawson
Shareholder
Ray Quinney & Nebeker
Salt Lake City, UT
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MARIE BRADSHAW DURRANT is Of Counsel, with the law firm of Ray Quinney & Nebeker, in Salt Lake City, UT. She assists clients with environmental compliance and litigation involving the Clean Air Act and other environmental statutes, including issues involving Indian tribes and tribal lands. She has represented energy and natural resource clients in legal challenges to rulemakings, permitting, and enforcement actions at the local, regional and national levels. She also has extensive experience helping clients respond to information requests and investigations by the EPA and other administrative agencies, negotiating settlements for potential violations, and developing administrative and legislative strategies to address broad legal environmental concerns. Ms. Durrant worked as a Legal Fellow at the Institute for Clean and Secure Energy, where she conducted policy research for the Department of Energy on the Clean Air Act, climate change legislation, unconventional fossil fuels, and carbon capture and sequestration. During law school she worked with a large energy law firm in Kazakhstan, and before becoming an attorney she served as a research fellow at Brigham Young University in the Women's Research Institute and the Kennedy Center for International Studies. She was also adjunct faculty in the departments of Geography, Anthropology, and Social Work. Years ago, she served in the U.S. Peace Corps in Chad, Africa, and she maintains her African and university connections through an annual student study abroad trip to climb Mount Kilimanjaro in Tanzania.
E. BLAINE RAWSON, a shareholder at Ray Quinney & Nebeker in Salt Lake City, Utah, is a member of the Firm's Litigation Section and the Chair of the Environmental and Natural Resources Section. Mr. Rawson has practiced environmental law, natural resources law, and commercial litigation since graduating from the University of Utah in 1995. His expertise covers Clean Air Act, CERCLA, RCRA, and Clean Water Act litigation and counseling, as well as related state issues such as groundwater, underground storage tanks, and state air quality law. Mr. Rawson has represented energy and natural resource companies in matters related to the federal and state permitting of, and litigation and enforcement actions related to, crude oil and natural gas pipelines, coal-fired power plants, syn-fuel facilities, hard-rock mines, and natural gas processing facilities. He also has practiced in many areas of commercial litigation in federal and state courts related to electrical generation, regulated utilities, oil and gas production, transportation, and refining. He has written articles regarding underground storage tank regulation, water rights, injunctive relief in environmental cases and the "overfilling" authority of the EPA. Mr. Rawson has also spoken at several seminars regarding power plant permitting, supplemental environmental projects, Clean Air Act permitting and other environmental topics.
I. Introduction
Many natural resources companies may have heard about the "regional haze" program under the Clean Air Act ("CAA") but may not have yet had any practical experience with this program or understand its potential impact on future operations. However, in the near future, natural resource companies in the western United States with significant air emissions are likely to become better acquainted with the regional haze program. Western states are in the early stages of planning for the second round of regional haze state implementation plans (RH SIPs). While round one RH SIPs mostly focused on larger and older emission sources such as coal-fired power plants, round two will cast a broader net to find the required emission reductions to improve visibility in national parks and wilderness areas ("Class I areas"). Because many natural resource companies operate relatively near Class I areas, states are likely to consider whether their emissions can be reduced to help meet state and national goals for visibility improvement. Now is a pivotal time for natural resource companies to become involved in the planning processes if they want to influence the RH SIPs for round two. This paper is meant to provide relevant background on the regional haze program as well as lessons learned from round one that can help natural resources companies make more informed decisions to best address their interests.
States must submit the second round of regional haze state implementation plans ("RH SIPs") to EPA by July 31, 2021. 82 Fed. Reg. 3078, 3116 (Jan. 10, 2017). While that may seem far away, the planning, modeling, cross-state consultations, and coordination with EPA for RH SIPs are intense and time consuming (taking years), and most states have already begun, or soon will begin, the planning process. For round two, the main focus of the RH SIPs will shift away from older coal-fired power plants and other large industrial sources requiring the Best Available Retrofit Technology ("BART"), as required by round one, to achieving "reasonable progress" from a much broader range of sources such as oil and gas production, mining, general industry and maybe even agriculture to achieve the required emission reductions.
During round one, EPA rejected, in whole or in part, the RH SIPs for several western states, including Wyoming, New Mexico, Utah, North Dakota, Arizona, Nevada, Oklahoma, Texas, and Colorado. EPA also issued a FIP for Montana, since Montana did not submit a RH SIP of its own. Many of these same RH SIPs or FIPs were challenged in court by states, regulated industry, and environmental groups, leaving a complicated legal trail with plant closures, fuel switching, pollution trading, and several unresolved or conflicting legal and policy issues in their wake. Round Two has the potential to be equally controversial and litigious.
Also during round one, large coal-fired power plants learned the importance of close involvement with state and federal regulators, the nuances of modeling versus actual monitoring data, and the need to document and exhaustively support any departures from standard methods. In addition, many facilities realized that fuel switching and closures are not off the table, that EPA versus state discretion can play a determining role in pollution control requirements and the
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costs of controls, and the difficulties of accounting for multiple discretionary considerations to achieve realistic and workable control requirements. These lessons can also be applied to round two.
II. New Industry Targets for Regional Haze Round Two
The regional haze program grants states and EPA considerable authority to require specific and costly emission reductions, and round one demonstrated that several states and EPA did not shy away from wielding this authority. At times EPA used its authority to disapprove state preferences, even in the face of substantial impacts on the affected sources. For round two, significant sources of NOx and SO2 in the western states likely will be particular targets.
a. Analysis of the oil and gas industry under "Reasonable Progress Goals"
The oil and gas industry is likely to be a key target in the western U.S. for round two of the RH SIPs. The oil and gas sector represents one of the larger sources of NOx and VOCs in many of western states. See, e.g., EPA, Air Pollutant Emissions Trends Data, available at https://www.epa.gov/air-emissions-inventories/air-pollutant-emissions-trends-data. Further, the oil and gas sector was specifically targeted by some states and environmental groups during round one as a focus for further reasonable progress analysis. See, e.g., 78 Fed. Reg. at 34763 (discussing Wyoming's reasonable progress analysis for oil and gas sources); EPA Response to Comments on Texas and Oklahoma Regional Haze SIP, at 646, 659 (Dec. 9, 2015), EPA-R06-OAR-2014-0754. It is likely the focus on the oil and gas sector will increase for round two, since many power plants were required to install the most stringent NOx controls during the first round or made other accommodations by fuel switching or adopting trading programs. These NOx reductions were often complex and expensive.
The lawsuit over Wyoming's RH SIP gives a preview of how environmental groups may present the case that the oil and gas industry should be further regulated to make the necessary reasonable progress for round two. As part of round one, environmental groups claimed EPA violated the RH Rules for reasonable progress by failing to require emission reductions from a sector that was a significant source of regional emissions:
[H]ighly cost-effective NO x controls for the oil and gas sector . . . are necessary for the State to make reasonable progress toward eliminating haze. As Wyoming recognized, oil and gas production is the second largest stationary-source category of haze pollution in the West, right behind coal-fired power plants.
Opening Brief of Respondent Powder River Basin Resource Council, et al., Wyoming v. EPA, 2014 WL 4257489, at 49 (10th Cir. Aug. 18, 2014). As discussed further in Section III.f, as part of their legal claims involving round one RH SIPs, the environmental advocacy groups essentially used the standards adopted by EPA in the most recent update to the regional haze rules: "The state may reject necessary controls only if it affirmatively demonstrates that specific controls are unreasonable based on 'the costs of compliance, the time necessary for compliance, the energy and non-air quality environmental impacts of compliance, and the remaining useful life of...
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