EAB’s Decision Leaves Permitting Up in the Air


In its recent decision in In re: Deseret Power Electric Cooperative, the Environmental Appeals Board (“EAB”) of the U.S. Environmental Protection Agency (“EPA”) addressed whether and to what extent CO2 emissions needed to be considered in air quality permitting. The Sierra Club challenged the Regional Office’s decision to issue a prevention of significant deterioration (“PSD”) permit in part because the permit did not include a best available control technology (“BACT”)-based limitation on CO2 emissions. In its ruling, the EAB reversed and remanded the Regional Office’s decision to approve a permit and because of its failure to adequately consider how CO2 emissions should be addressed.

Although the EAB agreed with the Region that the applicable statutory provisions did not mandate that EPA establish BACT-based CO2 limitations in PSD permits, it held that the Region did not have adequate support in the record for its decision to not require BACT for CO2. In its remand, the EAB urged the Region to reconsider whether to impose a CO2 BACT-based limit and to develop an adequate record for its decision, making the puzzling – and somewhat inconsistent – comment that the issue of regulating CO2 is “an issue of national scope” and that “all parties would be better served by addressing it in the context of an action of nationwide scope rather than in the context of a specific permit proceeding.”

The scrutiny of government decisions related to CO2 emissions is a direct result of the U.S. Supreme Court’s April 2007 decision of Massachusetts v. EPA, in which the U.S. Supreme Court held that CO2 is an “air pollutant” under the Clean Air Act, and EPA had to either regulate emissions of CO2 as a pollutant that endangers human health and the environment, determine that the emission of CO2 does not endanger human health and the environment, or explain why it could not make an endangerment finding. With its decision concluding that CO2 must be addressed, but acknowledging that the issue is better addressed nationally, the EAB has left both the agency and the permit applicant in a state of uncertainty as to how to proceed.

Given the uncertainty that this decision leaves in the permitting process, companies need to give careful consideration to how they handle the issue of CO2 emissions. New developments in this area likely will emerge in the coming year, changing the way that companies deal with CO2 emissions in the permitting process.

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