2017 Federation of Environmental Technologists Conference in Pewaukee, WI

1. Clean Air Act Enforcement and
Other Legal Issues
Cynthia Faur
Quarles & Brady LLP
(312) 715-5228
Cynthia.Faur@quarles.com
October 26, 2017
Sessions 10A

2. Overview
•Trump EPA – Back to Basics
• Regulatory Streamlining
• Cooperative Federalism
•Future of Clean Air Act Enforcement
•Future of Clean Air Act regulation
• IB MACT Rule
• 2015 Ozone NAAQS
• Climate Regulation
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3. EPA's "Back to Basics" Agenda
•EPA Administrator – Scott Pruitt's Goals
• Return the Agency to its intended mission, return power to
the states and create an environment where jobs can grow
• Focus on the three E’s:
• Environment: Protecting the environment
• Focus on Clean Air, Clean Water, Cleanup of Waste Sites
• Economy: Sensible regulations that allow economic growth
• Strict interpretation of statutory authority
• Engagement: Engaging with state and local partners
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4. Regulatory Streamlining
•Reducing Regulation and Controlling Regulatory Costs---
Executive Order 13771
• Unless prohibited by law, two regulations must be repealed for every
rule issued
• Statutorily required rules for which costs cannot be considered still
need to be offset through deregulatory actions
• Requires incremental costs for new rules in FY 2017 to be zero. For
future years, the OMB Director will identify the total amount of
incremental costs allowed for rule issued by each Agency
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5. Executive Order 13771 (cont.)
•OMB Guidance on Implementation – April 5, 2017
• Covers "significant" regulatory actions or guidance documents
• "Significant" actions are likely to result, among other things, in rules
that adversely affect, in a material way, the economy or a particular
economic sector, the environment, public health or that raise novel
legal or policy issues
•Executive Order challenged - Public Citizen Inc. v. Trump,
D.D.C., No. 1:17-cv-00253
• Oral argument held on August 10, 2017
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6. Executive Order 13771 (cont.)
•Implementation in the environmental area unclear
• Clean Air Act regulations likely statutorily required and in
some cases cost is not a consideration.
• Only rule identified as subject to the order to date:
• EPA rule to reduce discharges of mercury from dental offices into
municipal sewage treatment plants
• Offsetting rules not yet identified
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7. Executive Order 13777
• February 24, 2017 – Enforcing the Regulatory Agenda
• Directs Agencies to set up task forces to identify regulations that:
• Eliminate or inhibit job creation
• Are outdated
• Impose greater costs than benefits
• Are inconsistent with regulatory reforms and policies
• EPA established a task force in March 2017 and solicited public comments on
regulations appropriate for repeal, replacement or modification
• Comment period ended May 15, 2017
• Over 63,000 comments received
• May 25, 2017 - Initial progress report was to be sent to EPA Administrator
• Progress report has not been made public
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8. Regulatory Streamlining
• January 26, 2017 -- Presidential Memorandum on Streamlining
Permitting and Reducing Regulatory Burdens for Domestic
Manufacturing
• Required the Secretary of Commerce to:
• Conduct outreach concerning the impact of Federal regulations on domestic
manufacturing and solicit comments from the public on Federal actions to
streamline permitting and reduce regulatory burdens for domestic
manufacturers
• Prepare a report setting forth a plan to streamline Federal permitting processes
and reduce regulatory burdens affecting domestic manufacturers
• Report issued on October 6, 2017
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9. Regulatory Streamlining
• Report includes the following potential air related reforms:
• New Source Review permitting
• One-year turnaround of applications
• One year statute of limitations on challenges
• Revise RMRR definition to allow more flexibility
• Streamline permitting by providing guidance on debottlenecking, aggregation,
netting and emission projections
• Title V Permit – Extend term to 10 years
• NESHAPs/NSPS – Reduce duplicative requirements
• NAAQS – Use real world measurements rather than probabilistic
models
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10. "Sue and Settle"
• EPA directive issued October 16, 2017 ending the "sue and
settle" practice
• Under "Sue and Settle," EPA would agree to take certain actions by a
specified date through a federal consent decree
• Directive to provide greater transparency
• EPA to publish NOIs and settlement documents on-line and notify affected
states and sources
• No settlements that make discretionary decisions mandatory
• Stricter requirements for attorneys fees
• If enter a settlement, must provide sufficient time for the regulatory
process
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11. Cooperative Federalism
•Give states a larger role in collaborating with EPA on
environmental matters
•States as the primary regulatory and enforcement
agencies
• Deference in enforcement matters?
• Funding and staffing of state environmental programs an issue
• Role of the Regional Offices
• Possible consolidation of Region 5 and Region 7?
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12. EPA Region 5 Air Quality Priorities
• NAAQS Updates
• Finalize pending SO2 Designations
• Permitting and SIPS
• Streamline the process and provide consistency
• Industrial Partnerships
• Limited details available – would likely be a voluntary program to
expand environmental performance in certain sectors
• Sectors not yet selected
• Region 5 only program undertaken in cooperation with the states
• Importance of Health
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13. Clean Air Act Enforcement Priorities
• EPA issues enforcement priorities every three years
• Updated in FY 2016, before the Trump administration
• PSD/NSR Enforcement
• Coal-fired Power Plants
• Cement Manufacturing
• Sulfuric Acid/Nitric Acid Manufacturing
• Glass Manufacturing
• Reducing Air Toxics
• Leak Detection and Repair
• Improper Operation of Flares
• Emissions during Startup, Shutdown and Malfunction
• Trump administration has not issued its priorities
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14. EPA Strategic Plan for 2018-2019
• Refocus efforts toward areas with significant noncompliance
issues and where enforcement can address the most substantial
impacts to human health and the environment
• Focus on “direct implementation” responsibilities and most
significant violations
• Clean Air Act mobile source program
• Enforcement in Indian country,
• Enforcement of non-delegated portions of various other laws, including
the stratospheric ozone under the CAA
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15. Clean Air Act Enforcement
•Environmental Integrity Project Report on enforcement
(all media) during the first 6 month of the Trump
administration
• $12 million in penalties in 26 civil lawsuits – less than half the
amount of penalties collected under the Clinton, Bush and
Obama administrations
• $197 million in injunctive relief in 10 cases – compared to
$710 million in 16 cases under Bush and $1.2 billion in 22
cases under Obama
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16. Clean Air Act Enforcement
•Reduced EPA enforcement will likely lead to increased
citizen suits
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• Sierra Club donations reportedly up
700% from the election through January
compared to the previous year
• Near record number of Freedom of
Information Requests
• More than 60 requests per day
• 10,970 FOIA requests filed as of mid-
September (850 off the record set in FY
2007)

17. DOJ Policy Impact on Environmental Projects
•Prohibition of Settlement
Payments to Third Parties
• June 15, 2017 Memorandum
• Prohibited projects that direct or
provide for a payment or loan to
non-parties to the dispute.
• Does not apply payments or loans
that directly remedy
environmental harm caused by a
corporation's action
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18. DOJ Policy on Environmental Projects
•July 28, 2017 - DOJ issued a directive to review
settlements going back 10 years
• Review could result in reopening of cases
•Resulted in a revised settlement with Harley Davidson
• DOJ removed a $3 million wood stove replacement project
from a negotiated and lodged consent decree
• The $3 million was not added to the penalty
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19. Industrial Boiler MACT
• July 29, 2016 Decision in United States Sugar Corp. v. EPA, et al.
(Consolidated Cases No. 11-1108) (“U.S. Sugar”)
• Court of Appeals largely upheld the rule BUT
• Remanded several MACT standards because EPA failed to consider
emissions from some of the best performing sources in the
subcategories created by the Agency
• EPA set MACT Floor based on emissions from units that co-fired at least 90% of
the fuel covered by each subcategory but regulated sources in a particular
subcategory if it co-fires more than 10% of the fuel covered by that
subcategory.
• Remand affects 11 of 33 existing source categories and 9 of 33 new source
categories
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20. Preliminary Affected Categories
Existing Sources Pollutant New Sources Pollutant
Existing Solid Fuel HCL New Solid Fuel Hg
Existing Solid Fuel Hg New Pulverized Coal Boilers CO
Existing Coal Stoker CO New Coal Stokers CO
Existing Wet Biomass Stokers CO New Biomass Fluidized Bed CO
Existing West Biomass Stokers PM New Biomass Fluidized Bed PM
Existing Biomass Fluidized Bed CO New Biomass Suspension Burners PM
Existing Biomass Fluidized Bed PM New Biomass Hybrid Suspension Grate CO
Existing Biomass Suspension Burners PM New Liquid Fuel HCL
Existing Liquid Fuel HCL New Heavy Fuel PM
Existing Liquid Fuel Hg
Existing Heavy Fuel PM
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21. IB MACT – Sierra Club v. EPA Litigation
•CO Emission Limitation
• In U.S. Sugar, court upheld EPA’s use of CO as a surrogate for organic
HAPS
• In Sierra Club v. EPA, environmental groups challenged the level at
which the 130 ppm CO emission limitation was set
•Work Practice Standards for Startup and Shutdown
• Issues include:
• Lack of numerical standards
• Lack of clean fuel requirements
• Length of startups
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22. 2015 Ozone Standard
• Under Section 107 of the CAA, EPA must established ambient air quality
standards for "criteria" (i.e. ubiquitous) pollutants that are "protective of
human health with an adequate margin of safety"
• In 2015, EPA lowered the standard for ozone to 70 ppb averaged over 8
hours
• Because most large emission sources are already controlled (but mobile
sources and international emissions are hard to address), rule was
expected to create significant and costly implementation requirements,
potentially shut down manufacturing
• Industry and several states challenged the rule in court
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23. 2015 Ozone Standard
• In April 2017, U.S. DOJ asked the Court to suspend the litigation so that
EPA can reconsider the rule and the ozone limit.
• No public notice of reconsideration in Federal Register--yet.
• On June 6, 2017, EPA announced that it was delaying ozone designations
until October 1, 2018. (Published June 28, 2017)
• On August 2, 2017, EPA withdrew its notice of the delay. (Published
August 10, 2017).
• Ozone designations were due on October 1, 2017; have not yet been
promulgated.
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24. 2015 Ozone Standards – What's Next
•On September 21, EPA sent an proposed implementation
rule, including designations, to OMB.
• Review pending
•Several states and environmental groups submitted
notices of intent to sue EPA for failure to timely
promulgate ozone designations
•Reconsideration of the 2015 ozone standard?
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25. Future of Climate Regulation
• Decision to leave the Paris Climate Accord
• Reconsideration of the 2016 NSPS for the Oil and Gas Sector
• 2016 NSPS updated the 2102 NSPS to include methane emission
reduction requirements
• EPA announced a 90-day stay of the rule, which was set to apply on
June 30, 2017, and stated that it intended to promulgate a longer stay
• July 31, 2017: Full DC Circuit Court of Appeal vacated EPA’s 90 day stay
• Court decision did not impact EPA’s proposed 2-year stay, but NSPS
currently applicable
• EPA withdrew the ICR seeking information from existing oil and gas
operations
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26. Future of GHG Regulation
•Mobile Source Standards
• January 12, 2017, EPA signed determination to maintain the
current GHG standard for MY 2022-2025
• March 22, 2017: EPA, DOT and the NHTSA published notice of
reconsideration of the mid-term evaluation of GHG standards
for MY 2022-2025 automobiles
• Public comment ended on October 5, 2017
• California can set state mobile source standards under the
Clean Air Act; stated it will not loosen its standards
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27. Clean Power Plan
•Proposed Repeal of the Clean Power Plan (CPP)
• Executive Order 13783 required review of the CPP
• October 10, 2017 – EPA proposed to repeal the CPP
• EPA revising its legal interpretation of “Best system of emission
reduction” (BSER) limited to "technological or operational measures
that can be applied to or at a single source"
• Advance Notice of Proposed Rulemaking (ANPR) to evaluate
whether the CPP should be replaced
• Draft of the ANPR sent to OMB on October 10, 2017
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28. Future of Climate Regulation
• Endangerment Finding: Review does not appear imminent
• Massachusetts v. EPA: Supreme Court required EPA to make a finding
on whether GHGs endangered public health and welfare
• EPA specifically did not seek comment on the endangerment finding in
the CPP repeal
• Implications of Deregulation:
• Legal challenges to deregulatory efforts
• Increased potential for common law suits related to damage from
climate change
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29. © 2017 Quarles & Brady LLP - This document provides information of a general nature. None of the information contained
herein is intended as legal advice or opinion relative to specific matters, facts, situations or issues. Additional facts and
information or future developments may affect the subjects addressed in this document. You should consult with a lawyer about
your particular circumstances before acting on any of this information because it may not be applicable to you or your situation.
Thank You!
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Cynthia A. Faur
Quarles & Brady LLP
300 N. LaSalle Street,
Suite 4000
Chicago, Illinois 60654-3422
(312) 715-5228
Cynthia.Faur@quarles.com