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CRS - 2008 the D.C. Circuit Rejects EPA's Mercury Rules New Jersey v. EPA

CRS - 2008 the D.C. Circuit Rejects EPA's Mercury Rules New Jersey v. EPA

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WikiLeaks Document Release
February 2, 2009
Congressional Research ServiceReport RS22817
The D.C. Circuit Rejects EPA’s Mercury Rules: New Jersev. EPA
Robert Meltz, American Law Division; James E. McCarthy, Resources, Science, and Industry DivisionApril 9, 2008
Abstract.
On February 8, 2008, the D.C. Circuit decided New Jersey v. EPA, unanimously vacating two EPArules under the Clean Air Act (CAA) regarding emissions of mercury from electric utility steam generatingunits (EGUs). The two rules had the effect of shifting EPA regulation of power-plant emissions of mercury fromthe more stringent and less flexible regime under CAA section 112, governing hazardous air pollutants (HAPs),to the less stringent and more flexible one under CAA section 111, authorizing national emission standardsfor new stationary sources. The court decision, unless reversed or circumvented by EPA’s properly removingEGUs from section 112, will mean that each individual EGU will have to meet strict Maximum AchievableControl Technology standards, and that no cap-and-trade program will be authorized. Setting such standardsmight take time, however, as EPA gathers information on current emission levels and the effectiveness of controltechnologies, delaying the effective date of national mercury emission standards for EGUs to as late as 2014,according to knowledgeable observers. Legislation has been introduced in both the House and Senate to speedthis process (S. 2643 and H.R. 1087).
 
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2008 Westlaw 341338.
Order Code RS22817Updated April 9, 2008
The D.C. Circuit Rejects EPA’s Mercury Rules:
New Jersey v. EPA
Robert MeltzLegislative AttorneyAmerican Law DivisionJames E. McCarthySpecialist in Environmental PolicyResources, Sciences, and Industry Division
Summary
On February 8, 2008, the D.C. Circuit decided
 New Jersey v. EPA
, unanimouslyvacating two EPA rules under the Clean Air Act (CAA) regarding emissions of mercuryfrom electric utility steam generating units (EGUs). The two rules had the effect of shifting EPA regulation of power-plant emissions of mercury from the more stringentand less flexible regime under CAA section 112, governing hazardous air pollutants(HAPs), to the less stringent and more flexible one under CAA section 111, authorizingnational emission standards for new stationary sources. The court decision, unlessreversed or circumvented by EPA’s properly removing EGUs from section 112, willmean that each individual EGU will have to meet strict Maximum Achievable ControlTechnology standards, and that no cap-and-trade program will be authorized. Settingsuch standards might take time, however, as EPA gathers information on currentemission levels and the effectiveness of control technologies, delaying the effective dateof national mercury emission standards for EGUs to as late as 2014, according toknowledgeable observers. Legislation has been introduced in both the House and Senateto speed this process (S. 2643 and H.R. 1087).On February 8, 2008, the U.S. Court of Appeals for the D.C. Circuit rendered itsdecision in
 New Jersey v. EPA
,
1
unanimously vacating two EPA rules under the Clean AirAct (CAA) regarding emissions of mercury from electric utility steam generating units(EGUs). The case attracted widespread participation — it was actually 29 consolidatedpetitions for review filed by, among others, 17 states. Seven other states joined EPA indefending the rules. The decision is a setback for the Bush Administration’s longstanding
 
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CRS-2
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Environmental Defense v. Duke Energy Co., 127 S. Ct. 1423 (2007) (holding that EPA’s 1980Prevention of Significant Deterioration regulations must be read as imposing an annual, ratherthan hourly, emissions standard for determining when CAA new source review is triggered; EPAin 2005 had proposed regulations changing to the easier-to-meet hourly emissions standard); NewYork v. EPA, 443 F.3d 880 (D.C. Cir. 2006),
cert. denied 
, 127 S. Ct. 2127 (2007) (invalidatingEPA’s “equipment replacement rule,” under which a utility’s replacement of components withfunctionally equivalent components not exceeding 20% of the replacement value of the processunit does not trigger new source review; the rule would have exempted the large majority of repairs and replacements that power plants perform).The D.C. Circuit selected the same three-judge panel in
 New Jersey v. EPA
as had decided
 New York v. EPA
: Judges Rogers and Tatel, appointed by President Clinton, and Judge Brown,appointed by President George W. Bush.
3
42 U.S.C. § 7412.
4
42 U.S.C. § 7411.
5
70 Fed. Reg. 15,994 (March 29, 2005).
6
70 Fed. Reg. 28,606 (May 18, 2005).
7
A third exception, the acid precipitation program under Title IV of the Clean Air Act, is not atissue in the mercury emissions regulations.
efforts to ease or make more flexible emission restrictions for coal-fired power plants, joining two other recent court decisions to similar effect.
2
 The two EPA rules struck down in
 New Jersey v. EPA
would have had the effect of shifting the regulation of power-plant emissions of mercury from the more stringent andless flexible regime under CAA section 112,
3
governing hazardous air pollutants (HAPs),to the less stringent and more flexible one under CAA section 111,
4
authorizing emissionlimits for new stationary sources. The first rule removed coal- and oil-fired EGUs fromthe agency’s list of stationary sources whose HAP emissions are regulated under section112.
5
The second rule set performance standards for new coal-fired EGUs under section111 and established total mercury emission limits for states and certain tribal areas, alongwith a voluntary cap-and-trade program for new and existing coal-fired EGUs.
6
Thissecond rule was called the Clean Air Mercury Rule.Some familiarity with the roles of sections 112 and 111 in the CAA regulatoryscheme is useful. For the most part, the CAA allows emission limitations for individualstationary sources (power plants, factories, etc.) to be set by the states, rather than EPA.A state has considerable flexibility in this task, as long as the cumulative effect of theemissions within its borders does not cause exceedance of national ambient air qualitystandards, set by EPA, or other CAA requirements. The act has two major exceptions thatare relevant here, however — situations where stationary-source emission limitations areset by EPA rather than the states. For particularly harmful pollutants (the aforementionedHAPs), section 112 requires EPA to set uniform national standards for each category of stationary sources listed by EPA. Similarly, under section 111, newly constructed andnewly modified stationary sources are subject to EPA-prescribed “new sourceperformance standards” (NSPSs). (States may prescribe standards of performance for anyexisting source for any air pollutant to which an NSPS would apply if the existing sourcewere a new source.)
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