News + Events
Deseret Permit Remanded for Further Consideration of Limits on CO2
Washington Energy Report
November 14, 2008
The U.S. Environmental Protection Agency’s (“EPA”) Environmental Appeals Board (“EAB”) declined yesterday to resolve the question of whether Clean Air Act air quality permits for new coal-fired electric generating facilities and potentially many other types of facilities must contain limits on carbon dioxide (CO2) emissions. The decision found that none of the arguments made by industry, environmental parties and EPA were persuasive and sent the matter back to EPA for further consideration.
The case involves a Prevention of Significant Deterioration (“PSD”) air quality permit for a new waste-coal-fired unit at Deseret Power Electric Cooperative’s Bonanza Power Plant in Utah. Although PSD permits are typically issued by state permitting agencies subject to EPA supervision, EPA Region 8 has responsibility for the Deseret permit because the Bonanza Power Plant is located on Indian land. The Sierra Club argued to Region 8 that the permit could not be issued without a condition requiring Deseret to install Best Available Control Technology (“BACT”) to control CO2 emissions. Region 8, however, rejected that argument, stating that CO2 emissions are not at present regulated under the Clean Air Act.
On appeal, the EAB declined to say whether or not the Clean Air Act requires PSD permits to contain CO2 BACT limits. Rejecting arguments made by Region 8 and industry, the Board found that the Clean Air Act does not unambiguously bar inclusion of CO2 BACT limits in PSD permits. On the other hand, the EAB also rejected the arguments of the Sierra Club and other environmental parties that the Clean Air Act unambiguously requires that CO2 BACT limits be included in PSD permits. The Board said that the matter was uncertain, that EPA has discretion to decide the matter either way, and that the agency must reconsider its decision in light of the Board’s finding.
The Board’s decision also expressed a clear preference that the issue of possible CO2 regulation under the Clean Air Act should be addressed in “an action of nationwide scope,” instead of in the context of the permit proceedings for an individual facility. As reported previously here, an action of nationwide scope is presently underway at EPA in the form of an advanced notice of proposed rulemaking (“ANPR”) to decide whether CO2 should be regulated under the Clean Air Act. Many believe that the Obama Administration will ultimately make an “endangerment finding” – a determination that CO2 endangers the public health and welfare – in order to trigger CO2 regulation under the Clean Air Act. An endangerment finding will essentially render the Deseret decision moot because it will resolve the key question left unanswered by the EAB, namely, whether CO2 is regulated under the Clean Air Act and whether PSD permits must therefore include CO2 BACT limits.