Posted on January 9, 2012 by Kelly Becker

Update to the December 20, 2011 Liskow & Lewis E-Newsletter

By Megan Spencer

In our December 20, 2011 E-Newsletter, we reported on the status of: (1) EPA’s Cross-State Air Pollution Rule; and (2) the EPA Inspector General’s report, “EPA Must Improve Oversight of State Enforcement.” Some recent developments in those areas merit an update: 

(1) On December 30, 2011, the United States Court of Appeals for the D.C. Circuit stayed EPA’s Cross-State Air Pollution Rule (CSAPR). The Court stayed CSAPR until it could resolve the petitions for review. In the meantime, EPA will continue to administer the Clean Air Interstate Rule. Click here for the complete ruling (PDF).

(2) Peggy Hatch, Secretary of the Louisiana Department of Environmental Quality (LDEQ), sent a response letter to the Inspector General of the EPA responding to the publication of EPA’s report, entitled “EPA Must Improve Oversight of State Enforcement.” The purpose of the response letter was to highlight some of the errors and omissions in the report criticizing Louisiana’s enforcement record. In her response, Secretary Hatch identified 14,454 enforcement actions that EPA did not take into account in evaluating the LDEQ’s enforcement record, and stated that Louisiana has seen tremendous improvement in ambient air and water quality in the recent past. Click here for the complete ruling (PDF).

 

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Posted on October 3, 2011 by Robert Theriot

EPA Proposes Modifications to Oil & Gas Air Pollution Standards

By Carlos J. Moreno:

On August 23, 2011, the Environmental Protection Agency (EPA) published in the Federal Register a proposed rule that significantly expands the applicable air emissions standards for the Oil and Natural Gas Sector. See 76 Fed. Reg. 52738 (Aug. 23, 2011), available at http://epa.gov/airquality/oilandgas/actions.html. Specifically, EPA is proposing changes to the New Source Performance Standards (NSPS) in 40 CFR part 60 and technology-based National Emissions Standards for Hazardous Air Pollutants (NESHAP) in 40 CFR part 63 that apply to oil and gas production, processing, transmission and storage facilities.  According to EPA, the rules would result in a net savings for industry of $29 million because of the increased natural gas and condensate available for sale. The public comments period for the proposal ends on October 24, 2011.

New Source Performance Standards

Currently, two New Source Performance Standards apply to the oil and gas industrial category. Subpart KKK covers Volatile Organic Compound (VOC) emissions from leaking components in onshore natural gas processing plants, while Subpart LLL covers SO2 emissions from onshore natural gas processing plants. EPA conducted reviews of both standards as required by the Clean Air Act, and is now proposing changes to each. Specifically, EPA is proposing to update the Leak Detection and Repair (LDAR) requirements in Subpart KKK, and modify Subpart LLL to require greater SO2 control in facilities that process natural gas with high sulfur content.  

In addition, the proposal would create a new NSPS Subpart OOOO to regulate VOC emissions from all oil and gas operations not already covered under Subpart KKK that commence construction, reconstruction, or modification after August 23, 2011.  The new Subpart OOOO would include operational standards for completions of hydraulically-fractured gas wells. Non-exploratory and non-delineation wells would need to use reduced emission completion, commonly referred to as “green completion,” while exploratory and delineation wells would be allowed to use pit flaring. For purposes of the rule, a completion associated with refracturing performed at a well existing prior to August 23, 2011 is considered a modification, subjecting the well to the new standards. The rule also requires a 30-day advance notification for each completion or recompletion of a hydraulically fractured gas well. EPA is also proposing VOC emissions limits for gas-driven pneumatic devices, equipment standards for centrifugal compressors, operational standards for reciprocating compressors, and a 95% VOC emission reduction requirement for some condensate and crude oil storage tanks. Finally, the proposal exempts some “non-major” sources that would be subject to Subpart OOOO from having to obtain Title V permits.

NESHAP Technology-Based Standards

Under 40 CFR part 63, there are two technology-based NESHAP standards that apply to sources in the Oil and Gas sector.  Subpart HH covers oil and natural gas production facilities that are major or area sources of Hazardous Air Pollutants (HAP). The rule includes standards for the following emission points: glycol dehydrator vents, storage vessels, and natural gas processing plant equipment leaks. On the other hand, Subpart HHH covers natural gas transmission and storage facilities that are major sources of HAP, and only includes standards for emissions from glycol dehydrator process vents. These NESHAP standards require major sources to use Maximum Achievable Control Technology (MACT). As required by the Clean Air Act, EPA conducted technology reviews and residual risk assessment reviews for both standards. Based on the findings from the reviews, EPA is proposing changes to both MACT standards for major sources. 

The proposal establishes new emissions limits for small glycol dehydrators at major sources, which were previously exempted under Subpart HH and HHH. EPA is also proposing to eliminate the alternative compliance option under Subpart HH and HHH, which allows sources to reduce benzene emissions from large glycol dehydrators to less than 0.9 Mg/yr in lieu of achieving 95% emissions control. In addition, the rule proposes to eliminate the existing Startup, Shutdown and Malfunction (SSM) exemption that made emission standards inapplicable during periods of SSM.  However, EPA proposes to add an affirmative defense to civil penalties and exceedances of emission limits caused by malfunctions.  Finally, the proposal would modify Subpart HH to require all crude oil and condensate tanks at major sources to control their HAP emissions by at least 95%, and requires inclusion of all tank emissions when performing major source determinations.

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Posted on September 15, 2011 by Kelly Becker

EPA's Cross-State Air Pollution Rule Will Have A Dramatic Impact on Texas and Louisiana

By: Lesley Foxhall Pietras

On August 8, 2011, the Environmental Protection Agency (EPA) published a far-reaching Clean Air Act rule intended to address the interstate transport of sulfur dioxide (SO2) and nitrogen oxides (NOx) from upwind to downwind states. See 76 Fed. Reg. 48208 (Aug. 8, 2011). Specifically, the Cross-State Air Pollution Rule (CSAPR) requires 27 states, including Louisiana and Texas, to make dramatic cuts in power plant emissions. Emissions reductions will take effect quickly, starting January 1, 2012 for SO2 and annual NOx reductions, and May 1, 2012 for ozone season (May-September) NOx reductions. Texas power plants must meet the January 1, 2012 deadline for SO2 and annual NOx emissions, and the May 1 deadline for ozone season NOx emissions. Louisiana power plants must meet the May 1 deadline to reduce ozone season NOx emissions.

As promulgated, CSAPR will have dramatic impacts on Texas and Louisiana. According to the Texas Commission on Environmental Quality, CSAPR requires Texas power plants to lower SO2 emissions by 46 percent and NOx emissions by 7 percent compared with 2009 levels. See Kate Galbraith and Ari Auber, Controversial Pollution Rule Still on Track for Texas, The Tex. Tribune, Sept. 5, 2011. As for Louisiana, the Louisiana Public Service Commission’s consultant notes that CSAPR requires Louisiana power plants to reduce NOx emissions by 42 percent compared to 2010 levels. See David E. Dismukes, Acadian Consulting Group, Commissioner Briefing & Proposed Staff Recommendation: EPA’s Recently-Proposed Cross State Air Pollution Rule, Louisiana Public Service Commission Business & Executive Meeting (Sept. 7, 2011). Making these cuts by the highly compressed deadline could jeopardize the ability of the Texas and Louisiana electric grids to supply sufficient power to businesses and consumers. The reductions could even lead to rolling blackouts. For example, the Electric Reliability Council of Texas (ERCOT), the independent power system operator for the state, estimates that implementing CSAPR could result in a power generation capacity reduction of as much as 1,400 MW during the summer peak months. A reduction of that magnitude would have resulted in rotating outages during some days in August 2011. See ERCOT, Impacts of the Cross-State Air Pollution Rule on the ERCOT System at 5 (Sept. 1, 2011). Additionally, Luminant, the largest power generator in Texas, recently announced that it will need to close certain facilities to comply with CSAPR, which will cause the loss of approximately 500 jobs. See Luminant News Release, Luminant Announces Facility Closures, Job Reductions in Response to EPA Rule (Sept. 12, 2011). Moreover, in light of the substantial capital that power plants will need to spend on pollution control technology to comply with CSAPR, the rule will significantly increase the cost of electricity for all consumers, including businesses and individuals.

Numerous parties are considering challenges to CSAPR. Under the Clean Air Act, the deadline to file petitions for review of the rule is October 7, 2011. Petitions for reconsideration also must be filed by that same date.

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Posted on August 3, 2011 by Andrew Wooley

Texas employers will welcome the decision in Marsh USA Inc. v. Cook

 By Andrew Wooley

          The Supreme Court of Texas’ recent decision in Marsh USA Inc. v. Cook, 54 Tex. Sup. Ct. J. 1234, 2011 WL 2517019, 2011 Tex. LEXIS 465 (Tex. June 24, 2011), will make it easier for employers to enforce a Texas employee’s post-termination covenant not to compete. The decision was not unanimous, however, and it leaves some questions still to be answered.

          One of the requirements for an enforceable covenant not to compete in Texas has long been that it be “ancillary to or part of an otherwise enforceable agreement at the time the agreement is made….” Justin Belt Co. v. Yost, 502 S.W.2d 681, 685 (Tex. 1973); Tex. Bus. & Com. Code Ann. § 15.50 (Vernon 2011) (“Covenants Not to Compete Act”). Commercial real estate leases and agreements to employ someone, to settle a dispute, and to sell a business have been recognized as “otherwise enforceable agreements” to which a covenant not to compete can be ancillary. In a decision 17 years ago though, the state supreme court added two requirements for enforcement of an employee’s non-compete that are not found in the Covenants Not to Compete Act itself:

(1) the consideration given by the employer in the otherwise enforceable agreement must give rise to the employer’s interest in restraining the employee from competing; and (2) the covenant [not to compete] must be designed to enforce the employee’s consideration or return promise in the otherwise enforceable agreement.

Light v. Centel Cellular Co. of Texas, 883 S.W.2d 643, 647 (Tex. 1994). Since Light was decided in 1994, the only combination of employer consideration and employee return promise that has been generally recognized to satisfy Light’s additional requirements for enforcement of an employee’s post-termination noncompete is an employer’s fulfilled promise to disclose confidential information to the employee and the employee’s return promise not to disclose or use such information other than for the employer’s benefit.

          In Marsh, the court of appeals had affirmed the trial court’s summary judgment that an employee’s agreement not to compete in consideration of a grant of stock options was unenforceable as a matter of law for failure to satisfy the first part of the Light two-prong test. The supreme court reversed, holding that (i) a grant of stock options in consideration of the recipient’s covenant not to compete after termination of employment was reasonably related to the employer’s interest in protecting its goodwill, and (ii) the employee’s covenant not to compete was therefore not per se unenforceable for failure to satisfy the first part of the Light test. As is discussed below, Marsh did not undo entirely Light’s additional requirements for an enforceable employee non-compete. The court only held that the restrictive covenant in Marshwas not per se unenforceable (not that it was enforceable) and remanded the case to the trial court for further proceedings. Nevertheless, the holding in Marsh is favorable to employers, because it increases the likelihood that a Texas employee’s post-termination covenant not to compete will be enforced and sharply reduces the probability of a summary disposition in favor of the employee based on the nature of the consideration for the noncompete. 

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Posted on May 27, 2011 by Andrew Wooley

Parties May Agree to Expanded Judicial Review Under Texas Arbitration Act -- Nafta Traders, Inc. v. Quinn

One of the prominent features of arbitration under the Federal Arbitration Act (“FAA”)[1] and the arbitration statutes of most states is a stringently limited right of appeal, which is integral to the goal of expeditious and economical dispute resolution. Some parties choose to arbitrate for reasons other than cost and efficiency, however, such as a desire for privacy, to avoid a forum perceived to be hostile, or to present their case to a tribunal with special expertise, and those parties often would also like to reserve the right to appeal the arbitrators’ award under a traditional judicial standard of review for errors of law and the sufficiency of the evidence to support the findings underpinning the award.

The United States Supreme Court foreclosed the possibility of traditional judicial review under the FAA in 2008, when it held that the limited grounds for vacatur or modification of an arbitration award specified in the FAA are exclusive and may not be supplemented or expanded by agreement. Hall Street Assocs., L.L.C. v. Mattel, Inc.[2] The Court made clear though that it was simply construing the text of the FAA and not ruling out other avenues of expanded review of arbitration awards.[3] “The FAA is not the only way into court for parties wanting review of arbitration awards: they may contemplate enforcement under state statutory or common law, for example, where judicial review of different scope is arguable.”[4] 

The Supreme Court of Texas recently confirmed that review of arbitration awards under the Texas General Arbitration Act (“TAA”)[5] is indeed different from review under the FAA, notwithstanding the substantial similarities between the FAA and the TAA.[6]  It held in Nafta Traders, Inc. v. Quinn that the TAA does not limit judicial review of an arbitration award to the grounds specifically stated in the TAA and that the FAA does not preempt expanded judicial review of an arbitration award under the TAA.[7]  Consequently, parties whose agreement to arbitrate is within the scope of the TAA may preserve the right to traditional judicial review of the arbitration award by restricting their arbitrators’ powers to those typically possessed by a judge or by expressly agreeing that the arbitration award will be subject to a traditional judicial standard of review.[8]  Of course, they will also need to make a verbatim record of the arbitration proceeding and should consider specifying in their arbitration provision that the TAA governs any proceeding thereunder and that any suit to confirm, modify, or vacate an award must be brought in a Texas state court. 

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  1. 9 U.S.C. §§ 1-16.
  2. 552 U.S. 576, 578 & 584 (2008).
  3. Id. at 586-88.
  4. Id. at 590.
  5. Tex. Civ. Prac. & Rem. Code Ann. §§ 171.001-098.
  6. The statutory grounds for vacating an arbitration award are substantially the same under both the FAA and the TAA: (1) it was procured by corruption, fraud, or undue means, (2) there was evident partiality or corruption in the arbitrators, (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or any other misbehavior by which the rights of any party have been prejudiced; or (4) the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. 9 U.S.C. § 10, Tex. Civ. Prac. & Rem. Code Ann. § 171.088.
    The statutory grounds for modifying an arbitration award are likewise similar under the FAA and the TAA: that the arbitrators made an award on a matter not submitted to them or there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award. 9 U.S.C. § 11, Tex. Civ. Prac. & Rem. Code Ann. § 171.091.
  7. Nafta Traders, Inc. v. Quinn, No. 08-0613, 2011 WL 1820875, at *7 & *10, 2011 Tex. LEXIS 361, at *33 & *45-46 (Tex. May 13, 2011).
  8. The issue presented for decision in Nafta Traders was the availability of judicial review concerning whether an arbitrator had exceeded his powers, but the supreme court characterized its holding more broadly: “The TAA, as we have construed it, permits parties to agree to expanded review, or to a corresponding limit on the arbitrator’s authority, as in this case . . . .” Nafta Traders, 2011 WL 1820875, at *10, 2011 Tex. LEXIS 361, at *45.
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Posted on May 17, 2011 by Kelly Becker

EPA and Army Corps of Engineers Issue Draft Guidance on Waters Protected by Clean Water Act

By Lesley Foxhall Pietras

On April 27, 2011, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (the Corps) released new proposed guidance on how the agencies will identify waters protected by the Clean Water Act (CWA) in light of Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC) and Rapanos v. United States, 547 U.S. 715 (2006). Although EPA and the Corps have previously issued guidance interpreting SWANCC and Rapanos (EPA’s earlier guidance on Rapanos is discussed at www.theenergylawblog.com/2007/07/articles/environmental/epa-and-army-corps-of-engineers-publish-joint-guidance/ ), the agencies believe “previous guidance did not make full use of the authority provided by the CWA to include waters within the scope of the Act, as interpreted by the Court.” Guidance at 2. The agencies therefore expect that, under the new proposed guidance, “the number of waters identified by the [CWA] will increase compared to current practice.” 76 Fed. Reg. 24479, 24479 (May 2, 2011). Accordingly, the proposed guidance appears to substantially expand the agencies’ jurisdiction when compared to the prior guidance. Public comment on the proposed guidance must be received on or before July 1, 2011. Id.

In SWANCC, the Supreme Court addressed the question of CWA jurisdiction over isolated, non-navigable, intrastate ponds, and concluded that CWA jurisdiction could not be based solely on the presence of migratory birds. In Rapanos, the Court addressed CWA protections for wetlands adjacent to non-navigable tributaries, but issued five opinions with no single opinion commanding a majority. The proposed guidance emphasizes that the plurality opinion concluded that “waters of the United States” extends beyond traditional navigable waters to include “relatively permanent, standing or flowing bodies of water.” Rapanos, 547 U.S. at 731-32; see also id. at 739. The proposed guidance also highlights the plurality opinion’s conclusion that only wetlands with a “continuous surface connection” to other jurisdictional waters are considered “adjacent” and protected by the CWA. Id. at 742. In contrast, Justice Kennedy’s concurring opinion, the proposed guidance notes, concluded that “waters of the United States” includes wetlands with a “significant nexus” to traditional navigable waters. Rapanos, 547 U.S. at 780. The agencies continue to believe that they can assert jurisdiction over waters that satisfy either the plurality standard or Justice Kennedy’s standard, because a majority of justices would support jurisdiction under either standard. Guidance at 2.

Under the proposed guidance, the following waters are protected by the CWA: traditional navigable waters (including water bodies that have been found to be navigable-in-fact by a federal court, and waters which are currently used, historically have been used, or are susceptible to being used for commercial navigation); interstate waters (even if such waters are not traditional navigable waters); and wetlands adjacent to either traditional navigable waters or non-wetland interstate waters.

Moreover, the proposed guidance determines which waters are covered by the CWA pursuant to the standard set out in the Rapanos plurality opinion. In this vein, non-navigable tributaries are subject to CWA jurisdiction, if the tributary is connected to a downstream traditional navigable water, and flow in the tributary is at least seasonal. Guidance at 13. Wetlands that directly abut relatively permanent waters are also covered by the CWA. Id. at 15.

Additionally, the following types of waters are covered by the CWA if a fact-specific analysis determines they have a “significant nexus” to traditional navigable waters or interstate waters:
• tributaries to traditional navigable waters or to interstate waters;
• wetlands adjacent to jurisdictional tributaries to traditional navigable waters or interstate waters; and
• waters that fall under the “other waters” category of the regulations, including intrastate lakes, rivers, and mudflats. The proposed guidance divides these waters into two categories (those that are physically proximate to other jurisdictional waters and those that are not) and discusses how each category should be evaluated.
According to the proposed guidance, waters have the requisite “significant nexus” “if they, either alone or in combination with similarly situated waters in the region, significantly affect the chemical, physical, or biological integrity of traditional navigable waters or interstate waters.” Guidance at 7.

Under the proposed guidance, waters that are not covered by the CWA include artificially irrigated areas which would revert to upland if the irrigation ceased; artificial lakes or ponds which are used for stock watering, irrigation, settling basins, or rice growing; artificial reflecting pools or swimming pools excavated in uplands; water-filled depressions created in dry land incidental to construction activity and pits excavated in dry land for the purpose of obtaining fill; groundwater drained through subsurface drainage systems; and erosional features, swales and ditches that are not tributaries or wetlands. Guidance at 21.

The proposed guidance will apply to all CWA programs, including section 303 water quality standards, section 311 oil spill prevention and response, section 401 water quality certification, section 402 National Pollutant Discharge Elimination System permits, and section 404 permits for discharges of dredged or fill material.

After the agencies receive comment on the proposed guidance, they plan to finalize the guidance and then propose revisions to the existing regulations to further clarify which waters are covered by the CWA.

For more information on the proposed guidance, see water.epa.gov/lawsregs/guidance/wetlands/CWAwaters.cfm

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Posted on May 5, 2011 by Kelly Becker

Latest Chapter in the "EPA v. Texas" GHG Permitting Saga: EPA Publishes Final Rule Partially Disapproving Texas SIP and Promulgates FIP for GHG Emissions

by: Carlos J. Moreno

On May 3, 2011, the U.S. Environmental Protection Agency (EPA) promulgated a final rule partially disapproving the Texas State Implementation Plan (SIP) and issuing a Federal Implementation Plan (FIP) for Texas. The action prolongs EPA's authority to issue Prevention of Significant Deterioration (PSD) permits for Greenhouse Gas Emissions (GHG) emissions in Texas. Under the Clean Air Act (CAA), states have authority to implement the federal National Ambient Air Quality Standards (NAAQS) if the state submits, and EPA approves, a State Implementation plan (SIP). The SIP must include implementation of preconstruction PSD permitting requirements for NAAQS pollutants and, according to EPA, non-NAAQS pollutants. The CAA authorizes EPA to call for revisions to a SIP ("SIP Call") if the agency later finds that a SIP is inadequate. Following a series of EPA regulatory actions, GHG emissions became subject to PSD requirements as a non-NAAQS pollutant beginning on January 2, 2011. Since then, the EPA Tailoring Rule has required sources that trigger PSD for pollutants other than GHGs to also permit GHG emissions if they are 75,000 tpy or more.

On December 1, 2010, EPA issued a SIP Call for 13 states, including Texas, whose SIPs needed revisions in order to regulate GHG emissions under their PSD permitting program. Contrary to the other states, Texas refused to set a timeline for a SIP revision, effectively telling EPA that it would not revise its SIP to cover GHG emissions. To ensure that sources could obtain GHG permits, EPA issued an interim final rule and a "mirror" rule proposal in December 2010 that partially disapproved the Texas SIP and promulgated a FIP authorizing EPA to issue GHG permits under PSD. EPA stated that it erred in approving the Texas SIP 18 years earlier because the SIP does not contain assurances of adequate legal authority for the application of PSD to newly regulated non-NAAQS pollutants. The interim final rule was set to expire on April 30, 2011. Texas has filed several judicial challenges to EPA's GHG regulations in the DC Circuit, as well as a challenge in the 5th Circuit to EPA's SIP Call finding the Texas SIP inadequate. After issuance of the final interim rule, Texas requested a stay of the rule in the DC Circuit. The DC circuit granted a 30-day stay that was subsequently lifted on January 12, 2011. Since then, EPA has effectively been the permitting authority for GHG emissions in Texas. On May 3, 2011, EPA finalized the December 2010 rule proposal partially disapproving the Texas State Implementation Plan (SIP) and issuing a Federal Implementation Plan (FIP) for Texas. The action was made effective on May 1st to ensure no gap in permitting coverage.

One of the arguments that Texas has pursued is that EPA issued the December 2010 error correction FIP without proper notice and comment. By essentially reissuing the FIP under this final rule after notice and comment, EPA has addressed this argument. Under the FIP, EPA continues to be the PSD permitting authority for GHG emissions in Texas, while Texas continues to be the permitting authority for non-GHG emissions. Therefore, a project that is currently subject to PSD may require two PSD permits: a Texas Commission on Environmental Quality (TCEQ) PSD permit for pollutants other than GHG, and a EPA PSD permit for GHG emissions if the project has 75,000 tpy or more of GHG emissions. Currently, GHG PSD permits are only required if New Source Review is triggered by a non-GHG pollutant. But, starting on July 1, 2011, EPA's GHG Tailoring Rule will also require PSD permits for sources that trigger PSD solely because of their GHG emissions (100,000 tpy or more of GHG's for new projects; 75,000 tpy or more of GHG's for modifications). For these projects, EPA will be the PSD permitting authority for all pollutants. The final error correction FIP will remain in place until Texas submits, and EPA approves, a SIP revision including GHG permitting. Under EPA's standing SIP Call, Texas still has until December 1, 2011 to submit a SIP revision that includes application of PSD program requirements to GHG emissions. EPA has already stated that if Texas does not submit a revision by this date, EPA is prepared to promulgate a new FIP associated with the SIP Call, which would replace the May 3rd FIP, but be "fully consistent" with it. In the meantime, litigation regarding EPA's authority to regulate GHGs, error correction FIP for Texas, and the GHG SIP Call is continuing in the DC Circuit and 5th Circuit.

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Posted on April 27, 2011 by Robert Theriot

Supreme Court of Texas Reverses Appeals Court in Oil and Gas Waste Injection Well Permitting Case

By: Carlos J. Moreno

In Railroad Commission of Texas v. Texas Citizens for a Safe Future and Clean Water, No. 08-0497, 2011 WL 836827 (Tex. Mar. 11, 2011), the Supreme Court of Texas reversed the Austin Court of Appeal’s finding that the Railroad Commission (the “Commission”) has to consider broad public safety concerns in the permitting of proposed oil and gas waste injection wells.

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Posted on February 3, 2011 by Amy Harang

Extra! Extra! Read All About It!

Thanks to you, our readership, Liskow’s Energy Law Blog has been nominated for the LexisNexis Top 50 Environmental Law & Climate Change Blogs!  If you like what you see on our blog, please let the ELCCC (LexisNexis Environmental Law & Climate Change Community) know by commenting “here” (go ahead and do it now, nomination support ends February 14).  We appreciate your online interest in our industry blog and hope that you continue to follow it and invite a few colleagues to do the same!

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Posted on February 3, 2011 by Kelly Becker

EPA Denied Extension to Promulgate Boiler MACT Rule

By: Megan J. Spencer

EPA first issued its Boiler MACT Rule on September 13, 2004. However, these standards were vacated by the United States Court of Appeals for the District of Columbia Circuit after the Court found EPA’s definition of “commercial or industrial waste” conflicted with the language of the Clean Air Act in NRDC v. EPA, 489 F. 3d 1250 (D.C. Cir. 2007). The deadline for EPA to issue its Boiler MACT Rule was judicially imposed on EPA in Sierra Club v. Johnson, 444 F. Supp. 2d 46 (D.D.C. 2006), requiring EPA to fulfill its statutory duties of promulgating emissions standards by June 15, 2009. However, the United States District Court for the District of Columbia granted several unopposed motions to extend this deadline for the Boiler MACT Rule, resulting in an eventual deadline of January 21, 2011. EPA requested another extension of this deadline through April 13, 2012, but this request was opposed by the plaintiff, the Sierra Club.

EPA argued that it needed a fifteen-month, or alternatively a five-month, further extension of the January 21, 2011, deadline because: (1) in light of the comments received after the proposed rules, EPA must re-propose the rules to ensure that the final rules are a logical outgrowth of the proposed rules; and (2) in the alternative, EPA needs a five-month extension to fulfill its statutory duty of responding to all significant comments. However, the court agreed with the plaintiff that EPA had failed to satisfy the impossibility standard for the setting of emissions standards within the previous deadline set by the court. Thus, the court denied EPA’s request for an extension until April 13, 2012 so that EPA could re-propose the rules before issuing the final rules. The Court also denied the five-month extension requested by EPA to respond to all comments and instead gave EPA one-month to promulgate its Boiler MACT Rule finding that EPA had not provided sufficient evidence on why it needed five months to respond to comments it had already began reviewing.   

Although EPA argued to the District Court that it wanted an extension to re-propose the rules including another round of public comment, EPA submitted the final rules to the White House Office of Management and Budget for review on January 21, 2011, the same day the court denied the request for an extension. www.nytimes.com/gwire/2011/01/21/21greenwire-with-extension-denied-epa-sends-boiler-rules-t-75622.html 

It is likely that EPA will use section 307(d)(7)(B) of the CAA for administrative reconsideration of the rules without postponing the effectiveness of the rules. 42 U.S.C. § 7607(d)(7)(B). Additionally, because of the far reaching nature of the Boiler MACT Rule, it is also possible that the rules could face judicial challenges. 

                                                                                                                                  

Congress has also indicated that it may get involved in EPA’s deadline to promulgate its Boiler MACT Rule. At a January 26 hearing of the House Energy & Commerce Committee, Rep. Fred Upton (R-MI) offered to advance legislation that would provide EPA with more time to issue its final Boiler MACT Rule. 

See full opinion at: Sierra Club v. Jackson, No. 01-1537, 2011 U.S. Dist. LEXIS 5316 (D.D.C. Jan. 20, 2011). 

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