The incoming Biden Administration intends to take many major environmental policy actions aimed at climate change, enforcement, environmental justice, and several other issues, many of which entail reversing actions taken by the Trump Administration. Companies and their environmental managers should monitor and consider participating in this contentious process. GT will be tracking these changes in key areas on our E2 Law Blog in the coming months, with this first topic featuring “What Clean Air Act Permittees Should Track in the Biden Administration.”

Several Clean Air Act rules and policies were adopted by the U.S. Environmental Protection Agency (“EPA”) during the Trump Administration that directly affect operations with air permits. Some of these regulatory changes were accomplished by issuing guidance memos while others by made by conducting rulemakings that only recently have been completed and may be more vulnerable to being reversed.

Regulatory changes made via guidance memos are particularly vulnerable to revision because guidance documents might not be considered final agency action, which makes them tougher to challenge in court and more easily changed. Also, states can enact more stringent rules in their Clean Air Act State Implementation Plans (“SIPs”) (that EPA can also approve and enforce) that go beyond federal requirements.

In addition, when a presidential transition occurs, even recently adopted rules can be vacated by an incoming Congress using its Congressional Review Act (“CRA”) authority. The CRA allows Congress to pass, on simple majority votes of each house, joint resolutions that vacate regulations published within the past 60 legislative days. Thus, depending on which party gains majority control of the Senate through the upcoming Georgia runoff elections, the CRA might come into play. During the first year of the Trump Administration, when Republicans controlled both houses of Congress, the CRA was used to roll back Obama-era regulatory actions.

In addition to possibly rescinding, revising, or replacing the Trump-era rules, the Biden Administration may have to deal with a large volume of litigation over the Trump-era rules. As a result, we might see the Biden Administration declining to defend challenges to the prior rules, seeking to stay litigation while rescission or replacement rules are developed, or selectively defending portions of the rules.

Therefore, in the next several months, as business and operational plans are being made, companies should carefully consider how changes in Clean Air Act rules and policies might apply to their planned activities and objectives. Here are just a few samples of changes that were implemented that permittees should consider tracking.

EPA’s New Source Review Preconstruction Permitting Requirements: Enforceability and Use of Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability. On Dec. 7, 2017, EPA issued an NSR guidance memorandum on how to project future air emissions after an existing facility is modified. Interpreting a 2002 rule, EPA said that, so long as a company complies with the procedural requirements used to forecast projected emissions, the EPA would not second-guess the permittee’s emission projections. If a company mistakenly projects an insignificant increase, EPA said it would not pursue enforcement unless the post-project actual emissions indicate a significant net increase did occur.

EPA’s “Project Emissions Accounting Under the New Source Review Preconstruction Permitting Program.” Traditionally, in NSR applicability reviews, only project increases were considered in “Step 1” of the review used to determine if significant emission increases were expected to occur as a result of the project. Only after that Step 1 would other decreases and increases be considered. This memo stated that emissions decreases as well as increases can be considered in Step 1 and that decreases in Step 1 need not be creditable or enforceable. This approach allows for some projects to “net-out” of NSR at Step 1 and never reach Step 2. Environmental groups challenged the memo as final agency action, but the case was stayed because EPA began a rulemaking to codify the memo’s approach. On Nov. 24, 2020, EPA published a final rule, at 85 Fed. Reg. 74890, that incorporates this approach, which may also be challenged in court.

EPA’s “Reclassification of Major Sources as Area Sources Under Section 112 of the Clean Air Act.” Changes in EPA’s so-called “Once in, Always in” policy were made, first by memo and then in a final rule issued on Nov. 19, 2020. This rule reverses prior agency policy that once sources were deemed to be subject to MACT standards, they remained subject to them even when they no longer exceeded the HAP program’s major source emission thresholds. This final rule might trigger requests for reconsideration, might be challenged in court, and might be vulnerable to CRA review in the next Congress. In addition, depending on each state’s rules, this interpretation might not be observed in a particular state.

In 2018, EPA also issued a final interpretive rule, “Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR): Aggregation; Reconsideration,” that addressed aggregation of projects to determine if they are part of one modification at the facility for purposes of NSR permitting. EPA concluded that the timing of the projects is not the only factor in determining whether projects should be aggregated and established a rebuttable presumption that projects more than three years apart should not be aggregated. There is some debate on how binding an interpretive rule is on the agency that issues it, and states with SIPs may have latitude to interpret their own programs. Therefore, companies must continue to look carefully at which modification projects must be aggregated for purposes of NSR review.

Some other policy changes or reinterpretations that the EPA made during the last four years by issuing guidance memos include: EPA’s Dec. 2, 2019, “Revised Policy on Exclusions from ‘Ambient Air’ which revises the Agency’s 1980 policy on the exclusion of certain areas from the scope of “ambient air” under the Clean Air Act and EPA’s regulations; EPA’s April 30, 2018, letter to Pennsylvania’s Department of Environmental Protection and its Oct. 16, 2018, letter to the Wisconsin Department of Environmental Management re: the interpretation of “common control” for purposes of determining whether two or more entities at a single location constitute a single source making for air permitting decisions; and EPA’s Nov. 26, 2019, guidance document, “Interpreting ‘Adjacent’ for New Source Review and Title V Source Determinations in All Industries Other Than Oil and Gas.

As noted above, future changes of environmental policies under the Biden Administration and other important environmental developments will be discussed in this blog.

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Photo of Michael Cooke Michael Cooke

Board Certified in State & Federal Government and Administrative Practice, Michael G. Cooke concentrates his practice in administrative law, including environmental, utility, and land use law. He represents industrial, agricultural, banking, government, and developer clients on matters involving clean air, climate change, electric…

Board Certified in State & Federal Government and Administrative Practice, Michael G. Cooke concentrates his practice in administrative law, including environmental, utility, and land use law. He represents industrial, agricultural, banking, government, and developer clients on matters involving clean air, climate change, electric generating facilities, renewable energy, telecommunications, utility plant and transmission line siting, water, and wastewater issues and permitting and zoning matters.

From 2003 to 2006, Michael was the Director of the Division of Air Resource Management for the Florida Department of Environmental Protection. In this position, he managed the air quality program for the State of Florida, interacting with federal and local agencies and over-seeing permitting and enforcement matters and the development of state air regulations. Michael also served as General Counsel for the Florida Public Service Commission in Tallahassee from 2006 through 2008. His responsibilities at the Public Service Commission included conduct of rate cases, rulemaking, enforcement proceedings, and decision-making involved with policy issues regarding nuclear facility site cost recovery and renewable energy.

Michael has represented clients in connection with numerous environmental regulatory matters, particularly in air permitting and compliance issues. He has represented electric utilities, manufacturing, and agricultural entities in connection with various Title V and New Source Review matters. He is well versed in CERCLA, RCRA, TSCA, water, and solid waste matters.

Photo of Christopher Bell Christopher Bell

Chris Bell represents clients in civil and criminal enforcement and investigations, litigation, compliance counseling, emergency incident response, and legislative and regulatory advocacy (including appellate challenges to rulemakings) under all of the major environmental, health, safety and natural resource laws. His enforcement experience includes…

Chris Bell represents clients in civil and criminal enforcement and investigations, litigation, compliance counseling, emergency incident response, and legislative and regulatory advocacy (including appellate challenges to rulemakings) under all of the major environmental, health, safety and natural resource laws. His enforcement experience includes internal investigations, responding to grand jury investigations and agency information requests, and negotiating consent, probation, and debarment agreements. He is currently the EPA Independent Monitor overseeing the nation’s largest investor-owned energy company’s compliance with complex debarment and probation agreements arising from the resolution of a criminal enforcement case brought under the Clean Water Act.

Chris assists buyers, sellers, investors and financial institutions on the environmental aspects of transactions, including conducting due diligence, negotiating the environmental provisions of transactional documents, and identifying and executing insurance-based risk management opportunities. His transactional experience has included upstream, midstream and downstream energy projects, alternative energy projects, and transactions in the manufacturing, logistics, consumer products and chemicals sectors.

He helps clients evaluate and implement compliance and ethics programs (e.g., under the Sentencing Guidelines), and environmental, health and safety management systems (including based on ISO 14001). Chris advises clients on sustainable development, climate change, product and chemical stewardship and regulation, and value chain management. He recently served on an independent committee advising the senior management of a Fortune 50 company on its global sustainability strategy and reporting.