Clean Air Interstate Rule Reinstated

12/29/2008

In an unusual action, the U.S. Court of Appeals for the District of Columbia reversed its earlier ruling that would have vacated the entirety of the Clean Air Interstate Rule (“CAIR”). EPA promulgated CAIR, requiring fossil fuel-fired power plants in 28 states to use a cap and trade system to reduce emissions of nitrogen oxides and/or sulfur dioxide, to lower concentrations of ozone or particulate matter in areas downwind of the plants. Texas was one of the 28 states subject to CAIR because of its contribution to downwind concentrations of particulate matter.

Multiple entities had filed petitions for review of EPA’s CAIR rules and the Court of Appeals, in its July 11, 2008 original decision, determined that multiple deficiencies in those rules warranted that they be vacated in their entirety. The decision to vacate the rules troubled numerous entities, including many of the persons who had filed for review of the rules. States had relied upon the anticipated CAIR reductions to demonstrate future attainment of the national ambient air quality standards for ozone and particulate matter. Many utilities had ordered control equipment to achieve compliance with CAIR. Environmental groups were upset that vacating CAIR might result in no emission reductions for an extended amount of time until either EPA or Congress could determine how to fix the problems identified by the court.

In its reversal, the Court of Appeals took note of the concerns raised in response to its original opinion and determined that CAIR may continue in effect for an indefinite period of time while the parties either appeal the decision or EPA works to address the deficiencies identified by the court. CAIR was adopted following the inability of Congress to enact a multi-pollutant bill. It remains possible that either Congress will act to address the deficiencies noted by the court or the new Obama administration will rework the CAIR rules addressing not only the deficiencies, but perhaps imposing additional requirements.

If you have any questions, please contact:

James D. Braddock
512.867.8462
james.braddock@haynesboone.com    

Jeff Civins
512.867.8477
jeff.civins@haynesboone.com    

Mary Mendoza
512.867.8418
mary.mendoza@haynesboone.com

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