The Chicago-Naperville, IL-IN-WI ozone nonattainment area failed to attain the 2008 ozone NAAQS by the attainment date of July 20, 2018.   The area, which is currently classified as “Moderate” for the 2008 ozone NAAQS, will automatically be bumped-up to a “Serious” classification upon the effective date of the final reclassification notice.  The Chicago area joins six (6) other Moderate areas that likewise failed to attain the standard, including Dallas-Fort Worth, TX; Greater Connecticut, CT; Houston-Galveston-Brazoria, TX; Nevada County (Western part), CA; New York-North New Jersey-Long Island, CT-NY-NJ; and San Diego County, CA.

The U.S. Environmental Protection Agency (USEPA) published a proposed rule of the reclassification on November 14, 2018.  The reclassification is based on ozone monitoring data for the years 2015-2017.  The bump-up to a Serious classification will give Illinois, Wisconsin and Indiana until July 20, 2021 to attain the standard.  These states will be required to submit to USEPA the SIP revisions for these areas that meet the requirements applicable to “Serious” areas under Section 182(c) of the Clean Air Act.  USEPA is proposing in the rule to allow the states up to 12 months after the effective date of the final reclassification notice to submit SIP revisions for non-RACT requirements and until August 3, 2020 to submit RACT SIP revisions.

The effect of failing to attain the standard is significant for owners or operators of sources in the area that emit volatile organic compounds (VOCs) or nitrogen oxides (NOx).  The main impacts of the reclassification include:  (a) the Title V major source threshold will be going from 100 tpy to 50 tpy; (b) the new source review major modification threshold will be going from 40 tpy to 25 tpy aggregated over 5 years; (c) the emissions offset requirements will be going from 1.15 to 1, to 1.2 to 1; and (d) new RACT requirements may be implemented to control sources emitting between 50 to 100 tpy.

With the lowering of the Title V major source threshold, sources should begin to seek emission reductions and permit revisions to stay below the new 50 tpy threshold.  Sources that cannot stay below the major source threshold will need to apply for and obtain a Title V permit.  Sources should also be considering the new source review and major source threshold changes when planning upcoming projects at your facility.

USEPA is accepting comments on the proposed rule by December 14, 2018.  Assuming no public hearing is held, the automatic bump-up could happen as early as February 2019.  We will continue to keep you apprised of developments as they occur.

Several environmental organizations have petitioned the D.C. Circuit Court of Appeals and moved to block EPA from implementing a 90-day administrative stay of the New Source Performance Standards covering methane emissions from oil and gas infrastructure.  A group of states, plus the District of Columbia and the City of Chicago, have since moved to intervene in favor of petitioners.  Industry groups and conservative leaning states have lined up to support the agency’s action.  The rule, which focuses on detecting and repairing methane leaks, would have required oil and gas well owners and operators to complete initial monitoring by June 3, 2017.

Petitioners ague that EPA lacks the authority to issue a stay of finalized regulations under the Clean Air Act other than pursuant to 42 U.S.C. § 7607(d)(7)(B), which requires identification of an objection of central relevance to the rule that could not have been raised during the initial public comment period.  The groups claim that these conditions are not satisfied, as all the issues relied on by EPA were extensively deliberated during the public comment period, or at least could have been, and in any event are not centrally relevant.  For example, petitioners attack EPA’s claim that its rationale for including low producing well sites in the leak detection and repair program was not presented to the public, noting that EPA explicitly sought comment on this issue in its 2015 proposal.

Petitioners also contend that the stay is overboard and that the EPA’s failure to narrowly tailor it to the specific issues under reconsideration, or balance the equities involved, is arbitrary and capricious.

In response, EPA submits that 42 U.S.C. § 7607(d)(7)(B) establishes only when the agency must reconsider a rule, but that it has inherent authority to reconsider its decisions.  Its argument runs into a bit of trouble because the authority for the three month stay EPA initiated appears to be tied to a reconsideration pursuant to 42 U.S.C. § 7607(d)(7)(B).  Only secondarily does it defend its decision on the grounds that the conditions required by that section are satisfied.

This legal fight is part of a larger battle between the EPA and the environmental community over the rule.  On June 13, 2017, the EPA proposed an additional 2-year stay of portions of the regulations.  In particular, the agency has proposed to stay the fugitive emissions requirements, the well site pneumatic pump standards, and the requirements for certification of closed vent system by professional engineers.  Even if petitioners are successful before the D.C. Circuit, they will still have an uphill battle to maintain the rules indefinitely.  They do not dispute that the agency can initiate a separate rulemaking and likely permanently eliminate as much of the rule as it would like.

A group of waste industry trade associations and waste management and recycling companies is challenging the EPA’s recently finalized Clean Air Act rule that revises Emission Guidelines for existing municipal solid waste (MSW) landfills. The National Waste & Recycling Association is among those that petitioned the United States Court of Appeals for the District of Columbia to review the agency’s action, which would set a lower emission threshold at which owners and operations of MSW landfills must install a landfill gas collection and control system (GCCS).  The petition does not cover the separate, contemporaneously published rule that revised the New Source Performance Standards (NSPS) for new and modified MSW landfills, which became effective on October 28, 2016.

The substantive basis for the challenge to the rule is not laid out in the initial petition.  Some of the arguments petitioners are likely to make, however, can be anticipated from comments submitted to EPA during the rulemaking process.   The National Waste & Recycling Association and Solid Waste Management of North America, another petitioner, criticized a draft of the rule for proposing a GCCS installation trigger of emissions of 34 Megagrams per year (Mg/yr) of non-methane organic compounds (NMOC), rather than the previously contemplated 40 Mg/yr.  They claimed that EPA’s own calculations show that it will achieve no overall reduction in emissions of NMOC and only a marginal drop for methane.  Petitioners are also likely to take issue with EPA’s decision to maintain an operational standard for wellhead temperature, which it had considered removing in a prior proposed rule (80 FR 52100).

We will be tracking this litigation as it develops and providing updates on this blog.

Beginning on October 28, 2016, new and modified municipal solid waste (MSW) landfills are now subject to updated New Source Performance Standards under the Clean Air Act 81 FR 59331. The U.S. EPA has also issued new rules for existing MSW landfills, but they must be implemented through state or federal implementation plans before they become operative.

The rules are in part a reaction to President Obama’s Climate Action Plan, which instructed the U.S. EPA and other federal agencies to assess ways of reducing methane emissions. The most significant new element of both sets of regulations is a reduction in the threshold at which the requirement to install a regulatory landfill gas collection and control system (GCCS) is triggered. U.S. EPA is, however, also providing owners and operators with additional flexibility in this area. Under the new Tier 4 option they can put off installing a regulatory GCCS by demonstrating through surface emission monitoring methane emissions below 500 ppm.

There is a lot more in the new rules that the industry must be aware of, including mandatory electronic reporting requirements. For more details, see our Client Alert on the topic.