On Thursday, December 18, 2008, out-going EPA Administrator Stephen Johnson issued a memorandum setting an agency-wide policy prohibiting controls on carbon dioxide emissions from being included in air permits coal-fired power plants and other facilities. In essence, this memorandum overturns the Environmental Appeals Board finding in In re Deseret Power Electric Cooperative. In that matter the EAB remanded an appeal of a permitting decision back to the Region, because the permitting record failed to set forth “sufficiently clear and consistent articulations of an Agency interpretation to constrain the authority.” In laymen’s terms, what this meant was that Region 8 could include limits on greenhouse gases, particularly carbon dioxide, in a Clean Air Act permit.
Administrator Johnson stated that air permits issued under the Clean Air Act cannot require limits on greenhouse gases, such as carbon dioxide, since there are currently no regulations on greenhouse gases. Although ultimately the matter is one of statutory interpretation, legally speaking, the EPA probably got it right.The EAB based its decision on the fact that there was not a clear EPA interpretation of the scope of the phrase “subject to regulation” used in the regulatory definition of the term “regulated NSR pollutant,” 40 C.F.R. 52.21(b)(50), and §§ 165 and 169 of the Clean Air Act. The Sierra Club had argued in Deseret that the scope of “subject to regulation” encompassed pollutants which are monitored and reported, but for which there are no EPA limits. The EAB concluded that the phrase was ambiguous and, in light of the lack of EPA interpretation, the Region could issue a Clean Air Act permit that contained limits on carbon dioxide.
The Administrator found that the principle of ejusdem generis applied in interpreting the statute and regulation leading him to conclude:
that the definition of “regulated NSR pollutant” in 40 C.F.R. § 52.21(b)(50) to exclude pollutants for which EPA regulations only require monitoring or reporting but to include each pollutant subject to either a provision in the Clean Air Act or regulation promulgated by EPA under the Clean Air Act that requires actual control of emissions of that pollutant. . . This interpretation is supported by the language and structure of the regulation and sound policy considerations.
What the Administrator can be faulted for is not the content and reasoning of the memorandum, but the timing. The EPA has, for over a year now, been required to act on climate change pursuant to the U.S. Supreme Court’s ruling in Massachusetts v. EPA. The Administrator, however, after issuing an Advanced Notice of Proposed Rulemaking in May, 2008, punted, leaving the actual setting of greenhouse gases to the next administration.
In the meantime, several power plants have lined up seeking Clean Air Act permits – and they would prefer not to have carbon dioxide limits in them. With the memorandum in place, those permits could be issued without greenhouse gas limits, putting the plants’ permits beyond the reach of the incoming Obama Administration. Unlike with respect to climate regulations, the Administrator was not under any court order or other time limit to issue the memorandum. Issuing the memorandum now, one month before a new administration takes office, was the Administrator’s choosing, making at the very least seem like he meant to ensure that power plants receive Clean Air Act permits without carbon dioxide limits until the Obama Administration can pass climate change regulations as the Supreme Court requires in Masschusetts v. EPA.