CLIMATE CHANGE AND THE PSD PROGRAM: USING BACT TO COMBAT THE INCUMBENCY OF FOSSIL FUELS.

• Author: Ertman, Sage
• Position: Prevention of Significant Deterioration, Best Available Control Technology

1. INTRODUCTION 996 II. PRESSING CLIMATE CONCERNS AND THE FOSSIL FUEL INCUMBENCY 1001 A. Climate Change and Its Impacts 1002 B. A Fossil Fuel Dynasty 1004 III. PSD, BACT, AND THE TEST FOR "REDEFINING THE SOURCE" 1006 A. Prevention of Significant Deterioration 1006 B. Best Available Control Technology 1009 C. "Redefining the Source " Doctrine 1012 1. The Test for "Redefining" 1012 2. Discretionary Power Under the Clean Air Act 1013 IV. APPLICATION OF THE "REDEFINING THE SOURCE" DOCTRINE 1015 A. Sierra Club v. U.S. Environmental Protection Agency 1015 B. Desert Rock Energy Co 1016 C. Cash Creek Generation, LLC 1017 D. Helping Hand Tools v. U.S. Environmental Protection Agency 1017 E. An Overview: How "Redefining" Undermines PSD 1019 V. REMEDIES 1020 A. Clarifying Doctrinal Principles 1021 B. Curbing the Test for "Redefining the Source" 1022 C. Abolishing the Test 1023 D. Remedies: Why They're Important 1024 VI. CONCLUSION 1025 I. INTRODUCTION

   As a result of anthropogenic climate change, negative environmental impacts are a growing threat to the health and welfare of the global population. (1) In the last century, average global temperatures have risen to dangerous heights, and this pattern is only predicted to continue. (2) Glaciers are melting, sea level is rising, the ocean is acidifying, and natural disasters are intensifying. (3)

   Since the Industrial Revolution, as more and more nations have implemented energy-intensive technology, humans have been generating pollution faster than the Earth's natural processes can absorb it, thus increasing atmospheric concentrations of greenhouse gases (GHGs). (4) Unfortunately, when generating the electricity necessary to support a developing industry and society, the most popular, potent, and reliable methods of energy production also produce the most pollution. (5) Rising atmospheric concentrations of GHGs are primarily responsible for the observed surges in global temperatures (6) Although there are countless sources of GHG emissions, this Chapter will focus primarily on the U.S. electricity sector.

   According to the United States Environmental Protection Agency (EPA), the electricity sector was the leading source of GHG emissions in 2014, totaling 30% of U.S. GHG emissions. (7) Emissions from the electricity sector are predominantly comprised of carbon dioxide (C[O.sub.2]). (8) In turn, fossil fuel combustion is "[t]he predominant source of anthropogenic C[O.sub.2] emissions." (9) The electricity sector largely depends on the burning of fossil fuels to quickly and reliably produce power to meet energy demand. (10) Due in part to generous government subsidies, this fossil fuel incumbency has dominated U.S. energy markets for over a century. (11) Unfortunately, despite the reduced external costs to society, (12) renewable energy has seen only a fraction of the subsidies provided to the fossil fuel industry. (13)

   In the United States, the primary legislative tool used by EPA to regulate emissions of air pollutants, like GHGs, is the Clean Air Act (14) (CAA). (15) In 1990, sensitive to the substantial need for better air pollution protections, Congress amended the CAA, (16) creating several programs designed to further the goals of achieving "the prevention and control of air pollution," and protecting "public health and welfare." (17) Although the CAA is not explicitly designed to prevent climate change, it serves to prevent its biggest causes by establishing air quality standards and imposing technology-based controls that apply to certain stationary sources of air pollution. (18) One of the programs established by the 1990 amendments, called Prevention of Significant Deterioration (PSD), imposes a preconstruction permit requirement on new or modified "major" stationary sources of air pollution. (19) The permit assures a facility's compliance with PSD's technology-based pollution control requirements. (20) For each major facility--i.e., those emitting regulated pollutants in "major" quantities--PSD requires that the facility satisfy the "best available control technology" (BACT) standard. (21)

   To implement the BACT standard, EPA uses a five-step, top-down approach to determine what pollution control technologies must be installed by a particular major facility. (22) At step one, the list of pollution controls from which BACT is selected is meant to be expansive and comprehensive in order to ensure that all viable pollution control options are adequately considered. (23) However, to some degree, EPA and states have discretion to exclude from step-one BACT consideration pollution controls that would effectively "redefine the source" by disrupting the facility's basic project purpose. (24) Unfortunately, polluters reap the benefit of this EPA-created loophole by narrowly defining their facilities' stated purposes and specific design configurations. (25) The result is that power-generating facilities, when bringing new facilities online or making major modifications to an existing facility, typically never have to consider using alternative--e.g., cleaner or zero-emission--fuels, as opposed to fossil fuels. (26)

   The general test to determine whether a potential pollution control might "redefine the source" begins with an initial attempt by the PSD applicant to define the basic purpose and design of its proposed facility. (27) The permitting authority is then tasked with deciding which design elements are inherent and which elements may be changed to achieve desired emissions reductions without disrupting that inherent design. (28) According to EPA guidance, however, the CAA does not actually prohibit BACT consideration of pollution controls that "redefine the source." (29) Thus, permitting authorities ultimately have the discretion to require PSD applicants to consider a redesign, such as changes to the facility's primary fuel type. (30) Exempting cleaner fuel technology from BACT consideration means that the emissions standards imposed will be less stringent than they could or should be, arguably undermining the goals of the CAA and PSD program. (31) This Chapter argues that in order to best serve the purpose of preserving air quality and protecting public health and welfare, fossil fuel reliance should be curtailed by imposing stricter regulations on the worst GHG emitters: fossil fuel facilities.

   Several cases illustrate courts' general tendency to defer to EPA when assessing how the "redefining the source" test is used to permit a PSD applicant and limit its pool of potential pollution controls under BACT step one. For example, in Sierra Club v. U.S. Environmental Protection Agency (32) and Helping Hand Tools v. U.S. Environmental Protection Agency, (33) the United States Court of Appeals for the Seventh and Ninth Circuits, respectively, attempted to address the "redefining the source" issue. (34) Both courts ultimately agreed that it was not clear where to "draw the line" with respect to when a pollution control constitutes a redefinition of the source, and each court deferred that determination to the discretion of EPA. (35)

   In Sierra Club, the Seventh Circuit held that the permitting authority did not err in finding that the use of a more efficient fuel alternative--low-sulfur coal as opposed to high-sulfur coal--would constitute a redefinition of the source. (36) The court found that decision reasonable in light of the applicant's basic project purpose, which was to use a high-sulfur coal mine as a fuel source to operate a "mine-mouth" plant--a plant that mines for its fuel on-site as opposed to having its fuel shipped from a distance. (37) In Helping Hand Tools, the Ninth Circuit used similar reasoning in holding that EPA did not err when it found that the use of solar energy, as opposed to wood-waste biomass accumulated on site, would redefine the source. (38) The court further sided with EPA in finding that, despite the facility's planned fuel usage of natural gas for limited purposes, requiring consideration of a higher natural gas mix as its primary fuel nevertheless constituted redefining the source. (39) In both cases, the "redefining the source" justification precluded inherently lower-emitting pollution controls--i.e., cleaner fuel alternatives--from BACT consideration. (40)

   However, even in cases where courts rejected the redefining the source argument, the lower-polluting controls of which the court required consideration under BACT consisted only of other fossil fuel options. (41) There does not appear to be a single instance of any court requiring BACT consideration of a renewable fuel source, despite express EPA authorization to do so. (42) The court in Helping Hand Tools even specifically rejected the plaintiffs' argument that EPA's BACT assessment should have considered the use of solar energy as a fuel source. (43)

   This Chapter argues that courts and agencies have demonstrated a pattern of relying on the overly subjective nature of the "redefining the source" doctrine to read out of the CAA the "clean fuels" requirement. (44) This treatment allows new GHG-emitting sources to come online when potentially viable carbon-free renewable energy sources could be constructed in their stead, thereby perpetuating the overcapitalization of fossil fuel resources. (45) In desperate need of solutions to mitigate the worst effects of climate change, agencies, legislators, and courts should operate to ensure that the goals of the CAA are not dwarfed by fossil fuel interests heavily resistant to policy reform.

   Part II of this Chapter addresses the global impacts of climate change and explains the relation between climate change and GHG emissions as a product of the incumbency of the fossil fuel industry in the United States. Part III outlines the statutory and regulatory framework of the PSD program and the application of BACT under the CAA. It also discusses the "redefining the source" doctrine and outlines the test relied on by courts when examining...