To no one’s surprise, the New Year has brought a continuation of the Bonanza Wars that began in 2007.

Last Tuesday, the Sierra Club, joined by a number of other environmental organizations, filed a petition asking EPA Administrator Stephen P. Johnson to reconsider a memo he issued last month to regional administrators purporting to “interpret” relevant statutory language in a manner that does not require the imposition of limits on CO₂ emissions in a Prevention of Significant Deterioration (PSD) permit for “major emitting facilities,” including coal-fired power plants. Among other things, the petition claims the memo violates the “Bonanza” ruling issued in November by the EPA’s Environmental Appeals Board.

To quickly recap, in August 2007, EPA Region 8 awarded Deseret Electric Power Cooperative a PSD permit to build a new coal-fired electric generating unit at its existing Bonanza Power Plant in southern Utah, without requiring the company to limit CO₂ emissions from the plant. In Bonanza Wars Episode I (“The CO₂ Menace”), the Sierra Club filed a petition with the Environmental Appeals Board (EAB), arguing that the PSD permit should have required the application of Best Available Control Technology (BACT) to limit CO₂ emissions. The Clean Air Act (CAA) requires that PSD permits impose emissions limits on each pollutant “subject to regulation” under the Act, and the Sierra Club argued that CO₂ is a pollutant “subject to regulation” because it is subject to “monitoring and reporting” requirements under the CAA. The EPA disagreed, claiming that it had always interpreted the phrase “subject to regulation” as meaning subject to regulations that require actual control of emissions.

In a headline-making ruling and a significant victory for the Sierra Club, the EAB on Nov. 13 rejected the EPA’s assertion that it had historically interpreted “subject to regulation” in the manner it claimed and sent the Bonanza permit back to Region 8 with instructions to “reconsider whether or not to impose a CO₂ BACT limit in light of the [EPA’s] discretion to interpret, consistent with the CAA, what constitutes a ‘pollutant subject to regulation under [the CAA].’” Significantly, the Board invited the Agency to refrain from making this decision in the context of a single PSD permitting proceeding; according to the EAB:

The Board recognizes that this is an issue of national scope that has implications far beyond this individual permitting proceeding. The Board suggests that the Region consider whether interested persons, as well as the Agency, would be better served by the Agency addressing the interpretation of the phrase “subject to regulation under this Act” in the context of an action of nationwide scope, rather than through this specific permitting proceeding….

On remand, the Region shall reconsider whether or not to impose a CO₂ BACT limit in the Permit. In doing so, the Region shall develop an adequate record for its decision, including reopening the record for public comment

(Emphasis added.)

In Episode II of the Bonanza Wars (“The Administrator Strikes Back”), Johnson responded to the EAB’s ruling with a memo “interpreting” the phrase “pollutant subject to regulation” for purposes of the PSD permitting process as excluding pollutants “for which EPA regulations only require monitoring or reporting” and only including a pollutant “subject to either a provision in the Clean Air Act or regulation adopted by EPA under the Clean Air Act that requires actual control of emissions of that pollutant.” The memo was sent to regional administrators on Dec. 18, and a “Notice of Issuance” of Johnson’s interpretation was published in the Federal Register on Dec. 31, prompting the Sierra Club to immediately file the petition for reconsideration (Bonanza Wars Episode III, “A New Hope”).

In its petition, the Sierra Club argues, among other things, that Johnson’s memo blatantly violated the EAB’s instructions that the EPA reopen the record for public comment in reconsidering its position on imposing CO₂ BACT limits in PSD permits. According to the petition:

The EAB – the final agency decision-maker as to PSD permits – has already addressed whether a notice and comment process is required for EPA to change its position regarding the appropriate scope of analysis in PSD permits, and concluded that it is…. EPA simply cannot excuse itself from its legal obligation to pursue additional notice and comment before finalizing a change to its PSD regulations merely by seeking to adopt its new interpretation of the Act through an “interpretive rule”.

The petition also argues that Johnson’s memo is “impermissible as a matter of law, because it was issued in violation of the procedural requirements of the Administrative Procedures Act…and the Clean Air Act…, it directly conflicts with prior agency actions and interpretations, and it purports to establish an interpretation of the Act that conflicts with the plain language of the statute.”

The EPA has not yet responded to the petition. As always, stay tuned to Warming Law for an update on the next episode of The Bonanza Wars.