TCEQ-EPA LEGAL CHALLENGES. Derek Seal Betsy Peticolas February 6, 2014 Air & Waste Management Association HOT AIR TOPICS CONFERENCE

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1 TCEQ-EPA LEGAL CHALLENGES Derek Seal Betsy Peticolas February 6, 2014 Air & Waste Management Association HOT AIR TOPICS CONFERENCE

2 "I go into the office, I sue the federal government and I go home." Texas Attorney General Greg Abbott - April 27, 2013 Texas has filed suit against or been involved in at least 18 lawsuits against EPA since 2002 Greenhouse Gas Cross State Air Pollution Rule (CSAPR) Mercury and Air Toxics Standards (MATS) TCEQ's Flexible Permitting Program February 5, 2014 Congressional Committee Hearing Charge Examining the Science of EPA Overreach: A Case Study in Texas

3 Greenhouse Gas (GHG)

4 Texas' Legal Challenges Greenhouse Gas (GHG) Rick Perry, et al. v. EPA petition for review of EPA's FIP Rules in December 2010 and May 2011, filed and consolidated in the U.S. Court of Appeals for the D.C. Circuit Petition for review of EPA's GHG SIP Call filed in the 5 th Circuit on December 15, 2010 and in the D.C. Circuit on February 14, 2011 The 5 th Circuit case was dismissed The D.C. Circuit case was consolidated Certain Texas GHG challenges were consolidated by the U.S. Supreme Court with 5 other cases in Utility Air Regulatory Group v. EPA Oral argument is scheduled for February 24, 2014

5 Texas' Legal Challenges Greenhouse Gas (GHG) Texas' challenges in Utility Air Regulatory Group v. EPA to GHG permitting authority date back to 2010 February 16, 2010 Texas challenge of Endangerment Finding Denied by the D.C. Circuit U.S. Supreme Court declined review June 1, Texas challenge of the Timing Rule Dismissed by the D.C. Circuit U.S. Supreme Court granted certiorari June 11, 2010 Texas challenge of the Tailpipe Rule Denied by the D.C. Circuit Supreme Court declined review August 2, 2010 Texas challenge the Tailoring Rule Dismissed by the D.C. Circuit

6 Issues Before the U.S. Supreme Court Greenhouse Gas Whether EPA permissibly determined that its regulation of GHGs from new motor vehicles triggered permitting requirements under the FCAA for stationary sources that emit greenhouse gases

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9 Cross-State Air Pollution Rule (CSAPR)

10 Background Cross-State Air Pollution Rule (CSAPR) EPA v. Homer City Generation L.P. Consolidation of matters in the U.S. Court of Appeals for the D.C. Circuit Based on the "good neighbor" provision of the FCAA, 110(a)(d)(D) which requires states to reduce emissions that "contribute significantly" to nonattainment in downwind states

11 Timeline Cross-State Air Pollution Rule (CSAPR) September 20, Texas files petition for review and request for stay December 30, stay granted August 21, 2012 CSAPR vacated/remanded to EPA March 29, 2013 EPA and environmental groups file petition for certiorari with the U.S. Supreme Court December 10, arguments heard by the U.S. Supreme Court June decision expected

12 Nature of EPA Action Cross-State Air Pollution Rule (CSAPR) Replaced EPA's 2005 CAIR Rule CSAPR would require power plants in 28 upwind states in the East, Midwest, and South to reduce nitrogen oxides and sulfur dioxide, in order to help downwind states meet NAAQS for ozone and PM2.5 In a 2-1 decision the D.C. Circuit vacated/remanded CSAPR for two reasons the rule may require upwind states to reduce emissions more by more than a "significant contribution" to a downwind state's nonattainment, i.e., more than their "fair share" EPA erroneously issued a FIP when it should have allowed states the opportunity to issue SIPs

13 Issues Cross-State Air Pollution Rule (CSAPR) Whether states are excused from adopting SIPs prohibiting emissions that "contribute significantly" to air pollution in other states until after EPA has adopted a rule quantifying each state's inter-state pollution obligations Whether the EPA permissibly interpreted the statutory term "contribute significantly" so as to define each upwind state's "significant" interstate air pollution contributions in light of the cost-effective emission reductions it can make to improve air quality in polluted downwind areas Whether the Clean Air Act instead unambiguously requires the EPA to consider only each upwind state's physically proportionate responsibility for each downwind air quality problem

14 Mercury Air Toxics Standards (MATS)

15 Background of Case Mercury Air Toxics Standards (MATS) MATS litigation has been consolidated in the U.S. Court of Appeals for the D.C. Circuit Utility Air Regulatory Group v. EPA White Stallion Energy Center LLC, et al v. EPA Timeline September 20, Texas files petition for review December 10, arguments heard by the D.C. Circuit

16 Nature of EPA Action Mercury Air Toxics Standards (MATS) NESHAPs for HAPs from Coal and Oil-Fired Electric Utility Steam Generating Units NSPS for Fossil-Fuel-Fired Electric Utility, Industrial- Commercial-Institutional, and Small Industrial- Commercial-Institutional Steam Generating Units

17 Issues Mercury Air Toxics Standards (MATS) The industry groups and states argued that EPA impermissibly promulgated the MATS based on their conclusion in 2000 that mercury from power plants was detrimental to public health without first considering if the regulation was appropriate and necessary, which is in violation of 112(n)(1)(A) of the FCAA EPA failed to conduct an analysis to see if technologies were available to implement MATS and EPA failed to consider costs EPA's 2000 finding only applied to mercury and cannot be extended to toxic metals and acid gases The D.C. Circuit Court judges expressed skepticism EPA's approach was impermissible expressed concern about the underlying data upon which EPA relied

18 TCEQ Flexible Permit Litigation

19 Flex Permits State of Texas, et al v. EPA July 26, 2010 petition for review in the 5 th Circuit challenging EPA disapproval of the Flex Permit Program August 13, 2012 petition for review granted, EPA disapproval was vacated, and remanded to EPA January 29, 2014 TCEQ and EPA announce agreement for EPA approval of TCEQ Flex Permit Program, and TCEQ proposed modifications on February 12, 2014 Of the 120 flex permit holders, most "de-flexed"

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21 Derek Seal Betsy Peticolas February 6, 2014