The NAAQS as A Metric for The Veil of Cooperative Federalism

Published in ABA Section of Environment, Energy and Resources; Air Quality Committee Newsletter; Vol. 20, No. 2 February 2017

Introduction

From 1970, modern environmental law has been a joint venture between the federal government and the states. When Congress enacted the Clean Air Act (CAA) of 1970 it crafted the model for most of the pollution control legislation enacted in the ensuing decades. Referred to as cooperative federalism the concept was to delegate authority to a federal agency, such as the Environmental Protection Agency (EPA), to enact standards to achieve clean air goals. The EPA then invites the states to participate in implementation and enforcement. As it relates to the environment, cooperative federalism involves inducement of state participation in a coordinated EPA program. Many states have lately become concerned about the EPA failure to adhere to the CAA cooperative federalism schematic.

Cooperative federalism has a pragmatic basis. States and local governments are best positioned to develop compliance strategies to protect the environment in a way that is relevant to local needs and conditions. (Jonathan H. Adler, Jurisdictional Mismatch in Environmental Federalism, N.Y.U. ENVTL. L.J. 130, 134-39 (2005-06)).  

CAA History and Cooperative Federalism

The 1970 Act established a strong role for the states because it was desired to ‘to preserve the federal system’ and ‘recognized that the task of implementing …the clean air program was so enormous that it would be helpful to have effective agencies at the state and local level to get the job done more quickly and thoroughly.’ (Muskie, Edmund S., ‘Role of the Federal Government in Air Pollution Control’ (1968–1969) 10 Ariz L Rev 17).  In addition, the states and local governments were thought to be best situated to implement some control policies (such as, land use) thought to be critical to effective pollution control.  (S. Rep. No. 1196, p. 2 (1970)).

The 1977 law moved the balance of federal-state authority toward more EPA control. The states’ autonomy mostly was maintained by reiterating the states’ freedom to adopt controls more stringent than EPA.

The 1990 law digressed another step from an “equal” partnership between the two government levels. The 1990 amendments were driven by the consistent inability of many states to comply with the NAAQS. The revised law set new timelines for NAAQS compliance in NAAs and defined “Reasonable Further Progress” (RFP) steps necessary to move NAAs toward compliance. Sanctions were available to EPA if states did not make said progress (42 USC § 7410(m)).

Air Quality and Cooperative Federalism

Although air quality has improved in the United States over the past 46 years, there is a mounting concern that EPA, instead of cooperating with the states as equal partners, is coopting the states by treating them as mere regional offices of a huge federal bureaucracy. (Att’ys Gen. Jon Bruning et al., White Paper, Perspective of 18 States on Greenhouse Gas Emission Performance Standards for Existing Sources under § 111(d) of the Clean Air Act, at 2 (2013)). This could undermine a strategy that has helped to garner for the CAA broad public support.

Issues in Implementation

The principle that states are EPA’s partners under the CAA is not always reflected in how EPA conducts rulemaking proceedings that impact the states. The EPA often seeks to undermine the cooperative process with the states by providing little advance consultation with the states before publication of a proposed rule, then EPA allows a very short timeframe for states to comment on the rule proposal, and often gives little attention to state concerns.

For example, EPA’s disregard for the role of the states arose in the context of EPA’s premature reconsideration of the ozone NAAQS in 2010. Many states objected to the adverse impacts of this unscheduled reconsideration. (States’ Comments re: 2010 Ozone NAAQS Reconsideration. National Ambient Air Quality Standards for Ozone, 75 Fed. Reg. 2,938.

Members of Congress spoke out against the proposed action as well. In July 2011, Senator Jeff Sessions (R-AL), wrote a bipartisan letter joined by 33 other U.S. Senators, which implored EPA not to revise the ozone NAAQS. Upon receipt of the letter, EPA delayed the issuance of the ozone rule and reconsidered the proposal. The President agreed with the request and directed EPA to halt to the ozone standard revision. (Letter from Cass Sustein, Off. of Info. and Reg. Affairs, to Lisa Jackson, Admin. EPA (Sept. 2, 2011)). However, the President’s decision came 18 months after EPA commenced the ozone reconsideration process. By that time states had spent significant resources preparing for the revision.

“Uncooperative” Federalism; Recent Examples

EPA’s failure to adequately involve the states is in CAA rulemaking reflected in the following two recent rulemakings.  In both cases, the Agency’s failures impose significant burdens on the states.

On September 27, 2016, the EPA published in the Federal Register a proposed determination that the Houston-Galveston­ Brazoria (HGB) area failed to attain the 2008 eight-hour ozone NAAQS by the applicable deadline of July 20, 2016. Upon finalization and publication, this resulted in a reclassification by operation of law to the designation of "Moderate” on December 14, 2016. The EPA action proposed to require that Texas must submit state implementation plan (SIP) revisions to the EPA by January 1, 2017. These SIP revisions would be required to meet the CAA statutory and regulatory requirements that apply to 2008 ozone NAAQS nonattainment areas.

The Texas Commission on Environmental Quality (TCEQ) commented that the proposed SIP submittal deadline of January 1, 2017 for the HGB area was unreasonable, not consistent with previous practice, and the EPA's lack of timely notification of the abbreviated schedule would place an undue burden on the state. TCEQ noted that EPA had told the State and local stakeholders on several occasions that these SIP revisions would be due one year from final reclassification by the EPA. TCEQ also requested a clarification on how the EPA is working with them to support submittal of the required moderate nonattainment SIP by the proposed January 1, 2017. EPA responded that they assist during the monthly calls regarding the HGB 2008 ozone nonattainment areas. A regular topic on the meetings' agenda is to discuss any issues with TCEQ then aid on any issues requested by TCEQ.

EPA responded that they believed that TCEQ was aware of the likelihood of a January 1, 2017 submission deadline, which lines up with the deadlines of the Marginal areas reclassified as Moderate in the 81 FR 26697 (May 4, 2016) action. In that action, EPA stated that it recognized the value of providing states as much time as possible to develop an attainment demonstration, however, it also recognized the value in establishing a single due date for Moderate area SIP submissions including Reasonably Available Control Technology (RACT). EPA believed the area was provided adequate notice to develop and submit a moderate area attainment plan by January 2017.

The TCEQ also disagreed with the proposed January 1, 2017 RACT compliance deadline for the reclassified HGB area and recommended adjusting this deadline to July 20, 2018, the Moderate attainment deadline. The EPA responded that they believed the time frame is reasonable and consistent with prior actions included in the May 2016 final action. They responded that the state committed to have their state requirements in place by the deadline proposed by EPA and the state has not been prohibited from beginning development of Moderate area SIP revisions prior to finalization of this reclassification. Per EPA, Texas' SIP revision proposal of September 21, 2016 indicated no new RACT requirements in the 2018 attainment demonstration; the TCEQ only proposed expanded coverage of a list of existing sources. (Apparently, there is some disconnect between EPA and TCEQ, because Texas’ RACT rule “require[s] new control requirements in the HGB area to be achieved by July 20, 2018”.)

As a final action on December 14, 2016, EPA determined that the HGB area failed to attain the 2008 ozone NAAQS by the attainment deadline date of July 20, 2016, and that area was reclassified as Moderate. Texas should submit the SIP revisions to address the Moderate ozone nonattainment area requirements, including a January 1, 2017 RACT compliance deadline, by January 1, 2017.Barring Texas’ compliance, EPA could impose a Federal Implementation Plan or other CAA sanctions.

EPA’s proposed rule regarding Source Determination for Certain Emission Units in the Oil and Natural Gas Sector. (Federal Register, September 18, 2015. (EPA-HQ-OAR-2013-0685)) also illustrates EPA’s failure to work with the states to develop air pollution controls. EPA stated that the goal of this proposal was to provide certainty to the oil and gas industry regarding the definition of a source and would aggregate many oilfield sources into major NSR or PSD sources, thereby subjecting them to a more comprehensive permit review. EPA proposed two options for determining whether two or more properties in the oil and natural gas sector are “adjacent.” EPA’s preferred option (Option 1) relied solely on proximity as the determinative factor for “adjacent” requiring aggregation of oil and gas sources that are within ¼ mile of each other. EPA’s Option 2 would have regulated facilities beyond ¼ mile that are functionally interrelated as a basis for adjacency. Option 2 could be defined as a ‘hub and spoke’ model, where “oil and gas produced from one or more wells has a dedicated flow to only one possible downstream point for further compression, processing or storage.”

Texas indicated that both options raised significant implementation issues that would create an overly broad aggregation policy and overburden the permit program. Presently, the vast majority of the 300,000 regularly producing oil and gas sources in Texas are authorized under permits by rule or standard permits (PBR/SP). Many sources previously permitted under PBR/SP would be aggregated into major NSR or PSD sources, which would increase permit review time.  Texas contended that under the proposed rule, there would be numerous sources very few areas that would not be affected by either of EPA’s proposed adjacency definitions.

TCEQ objected to Option 1 because the adoption in rule any fixed distance between sources, without consideration of how those sources function together, is arbitrary and furthermore does not “approximate a common-sense notion of ‘plant’” nor “fit within the ordinary meaning of ‘building,’ ‘structure,’ ‘facility,’ or ‘installation’.” TCEQ also did not support Option 2, because this configuration could lead to potentially absurd results where several oil and gas wells located over an area of many square miles could be aggregated merely because the product is transported by pipeline, rail or truck, to one central point.

In 2016, EPA finalized the definition that equipment on separate surface sites located more than 1/4 mile apart is not “adjacent” and, therefore, is not part of the same stationary source. In the final rule, EPA modified Option 1 to require that emitting equipment located on separate surface sites within 1/4 mile of each other be aggregated as a single stationary source only if the emitting equipment also have a relationship that meets the “common sense notion of a plant.” (Federal Register, June 3, 2016, 35623)

In response to TCEQ and other’s comments relating to burdening the permit programs, EPA’s argued that (1) EPA is not requiring states with approved programs to apply its meaning of the term ‘‘adjacent,’’ as many these approved programs already comply with EPA’s PSD, NNSR and Title V rules, without these changes; (2) states remain free to adopt more stringent requirements in order to address local air quality concerns; and (3) states that administer PSD permitting programs under a delegation of federal authority by the EPA will have to follow the approach that EPA is finalizing, or develop their own permitting programs.

EPAs decisions as they relate to cooperative federalism in the case of the ozone redesignation example is a case of minimizing the impacted state’s involvement in the rulemaking and increasing the burden of compliance. With the aggregation rule, EPA adopted a more synergistic approach, which combined the two proposed definitional options. Nonetheless, in oil producing states such as Texas and Oklahoma, the new definition will create additional permitting burdens on the impacted states, because of the sheer land coverage in those states by oil and gas production activities.