The U.S. Environmental Protection Agency (EPA) is requesting comment by March 31, 2016, on its intention to designate previously uncharacterized areas of the country with particularly large sources of sulfur dioxide (SO2) emissions. The areas will be designated as either in attainment, nonattainment, or unclassifiable with respect to the most recently established thresholds for unhealthful concentrations of atmospheric SO2. A nonattainment designation can be expected to lead to significantly tightened SO2 emission limitations for those large sources.
Background
Pursuant to the federal Clean Air Act, in 2010 EPA promulgated a lower National Ambient Air Quality Standard for SO2 (the 2010 SO2 NAAQS) deemed necessary to protect public health of 0.075 parts per million. As required under the Act, over the next few years EPA evaluated available ambient air quality monitoring information to designate a number of areas in the United States as either in nonattainment, in attainment, or unclassifiable with respect to the 2010 SO2 NAAQS. For areas designated as non-attainment, state regulators most likely must adopt significantly tighter emission control requirements for large local sources of SO2 emissions (typically, power plants or industrial operations dependent on burning coal or other sulfur-bearing fuels) than are necessary for areas designated as attainment. Areas designated as "unclassifiable" because available information is not fully conclusive are treated the same as attainment areas for these purposes.
EPA decided it was unable to make these "Round 1" designations for a great many other areas around the country because monitors that could measure SO2 ambient air concentrations were not located in those areas. EPA missed the deadline prescribed in the Act for making these designations, and environmental groups brought suit against EPA to compel the Agency to act. In a court-approved consent decree, EPA settled this case by agreeing to promulgate within 16 months so-called "Round 2" designations for any undesignated areas containing an active SO2 source either emitting more than 16,000 tons of SO2 in 2012, or emitting more than 2,600 tons of SO2 and exceeding a specified average emission rate. See Sierra Club v. McCarthy, Case No. 13-cv-03953-SI (N.D. Cal., March 2, 2015).
EPA also agreed to issue designations by the end of 2017 (basically through the use of computer model projections) for those remaining undesignated areas that do not have the requisite SO2 monitors installed and operational. EPA further agreed to issue designations by the end of 2020 for those remaining undesignated areas which would have installed new SO2 monitors by January 2017 and collected three years of data. (Our January 21, 2016, client alert provides information about how the designation process is proceeding in a prioritized manner for those additional undesignated areas.)
Pursuant to steps prescribed by the Act, EPA has received and evaluated recommendations on Round 2 designations from the states on areas in which these largest sources are located. EPA's solicitation of public comment pertains to the notices it has sent back to the states involved of how it presently intends to promulgate designations for these areas by July 2, 2016, after considering the recommendations which the states have presented.
Actions Going Forward
EPA has tabulated 66 areas in 24 states that are implicated in this Round 2 of designations associated with the 2010 SO2 NAAQS in connection with the high-emitting sources meeting the criteria established in the Sierra Club consent decree. Of those 66 areas, EPA has reported that states recommended that 55 be designated as the equivalent of attainment, three be designated as nonattainment, and eight be designated as unclassifiable. In the notices EPA returned to these states, EPA indicated that it did not intend to accept all these recommendations. Instead, EPA reported its intent to designate 31 areas as the equivalent of attainment, 12 as nonattainment, and 23 as unclassifiable.
In those instances in which EPA did not agree with the state's recommendations, it typically adopted a more stringent approach to the intended designation. In 10 such instances, EPA notified Illinois, Indiana, Louisiana, Maryland, Missouri, Oklahoma and Texas of its intent to designate certain areas in those states as nonattainment (in addition to the recommended nonattainment designations for three areas in Illinois and Michigan). Reasons that EPA provided for their different tentative conclusions included:
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Projected future reductions in annual or hourly SO2 emissions from key contributing facilities involved uncertainty regarding the extent or timing of those reductions, and in any event were not established in a manner that EPA could enforce
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Monitored or computer-modeled impacts of source emissions on ambient SO2 concentrations either were not provided by the state, were based on inadequate information, or produced inconclusive results
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Modeling information submitted by the Sierra Club which projected impacts exceeding the 2010 SO2 NAAQS were based on credible information and performed reasonably in conformance with established EPA guidelines.
According to its Federal Register notice, EPA will accept and evaluate comments from the public on its intended Round 2 designations which it receives by March 31. At the same time, EPA will continue discussions with the 24 states which are home to the targeted large SO2 emission sources and affected by the Round 2 designations, and particularly with the eight states in which EPA has announced its intent to designate nonattainment areas, to work through issues presented by EPA's notifications. To comply with the Round 2 time frame specified in the Sierra Club consent decree, EPA will issue its final, updated designations for the Round 2 areas in the 24 states by July 2, 2016.
States with areas designated as nonattainment are required under the Act to submit plans to EPA for approval that identify steps for reducing ambient SO2 to levels below the 2010 SO2 NAAQS. Those plans can reasonably be expected to include impositions of more stringent SO2 emissions limitations on these largest sources of SO2 in their respective areas. Given these implications, it is quite possible that litigation will ensue over EPA's final Round 2 designations, even as work to specify these tighter emission limitations gets underway.
