Deseret Power: Environmental Appeals Board Decision Opens the Door for Future CO₂ Best Available Control Technology

The proposed Deseret Power Plant, to be located on Native American land near Bonanza, Utah, is the focal point of the legal battle over CO₂ regulation under the Clean Air Act (CAA). In issuing the air permit, U.S. Environmental Protection Agency Region 8 (EPA) rejected the Sierra Club’s position that CO₂ is a “regulated pollutant” under the CAA’s Prevention of Significant Deterioration (PSD) program and stated no best available control technology (BACT) analysis or limit for CO₂ was required. As with almost all coal-related air permits, the permit was appealed to the federal Environmental Appeals Board (EAB), which addresses EPA-issued permits. After significant briefing by numerous trade and environmental groups, the EAB remanded the permit back to EPA to review and reconsider the CO₂ issue on the basis that the permitting record did not support the agency’s reason for rejecting a CO₂ BACT limit.

In particular, the EAB found the phrase “subject to regulation” (as applied to CO₂) is open to interpretation and EPA is not bound by any past precedent or rulemaking to reject regulating CO₂. Recognizing the importance of the issue, the EAB suggested EPA would be best served to decide the issue of regulating CO₂ under the CAA as part of a national CO₂ control plan and not as part of an individual permit proceeding.

Implication
The EAB’s specific holding remanding the case back to EPA does not require EPA to develop a CO₂ BACT. However, the implications of the remand are significant. In particular, the new administration will now have a “vehicle” for regulating CO₂ under the PSD provisions of the CAA should it elect to do so. Also, the decision may embolden other regulatory review boards or courts to look more closely at the issue, which may result in state court decisions like the ruling in Longleaf, where the Georgia trial court held CO₂ is a regulated pollutant subject to BACT.

In any case, Sierra Club and other environmental non-governmental organizations are likely to continue to pursue the issue in individual air permitting challenges across the country. As such, it would be advisable to consider developing a CO₂ contingency plan in any boiler or other coal-related permitting activities that might go forward in the near term.

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If you have any questions about this alert or would like to discuss these topics further, please contact your Foley attorney or the following individuals:

Mark A. Thimke
Milwaukee, Wisconsin
414.297.5832
[email protected]

Richard G. Stoll
Washington, D.C.
202.295.4021
[email protected]