This post is the first part of a two part series analyzing challenges to coal-fired power plant permits under federal statutes.

Lawsuits challenging coal-fired power plant permits from Oregon to Georgia have the potential to shape the regulatory future of industries that emit large quantities of greenhouse gases. These lawsuits are taking aim at power plants under two statutes: the Clean Air Act (CAA) and the National Environmental Policy Act (NEPA). Although these cases are in the early stages, the issues raised offer insight into what regulatory requirements will look like in a carbon-constrained world.

This post reviews the two CAA petitions filed before the Environmental Protection Agency’s appeals board challenging permitting of coal-fired power plants in Utah and Illinois, with plaintiffs’ groups vowing to challenge on CAA grounds permitting decisions by state boards in Georgia, Arkansas, Montana, and Oregon.

The greatest number of challenges to permitting of coal-fired power plants are being brought under provisions of the Clean Air Act that require new facilities, or facilities that are undertaking major modifications, to install the “Best Available Control Technology” (BACT) for pollutants that are “subject to regulation” under the Clean Air Act.

In the aftermath of the Massachusetts v. EPA case, public interest groups are challenging power plant permit approvals that do not require BACT limits for carbon dioxide on grounds the Supreme Court’s decision, and the EPA’s monitoring and reporting requirements for CO2 emissions from power plants under the acid rain program, establish that CO2 is “subject to regulation.” EPA, however, has argued before the Environmental Appeals Board (EAB) in cases challenging coal-fired power plants in Utah and in Illinois that a pollutant is “subject to regulation” only if EPA has issued regulations that require actual controls on emissions of the pollutant. EPA argued that the mere fact that the Supreme Court concluded that carbon dioxide in an “air pollutant” does not translate into a requirement that every permit contain BACT provisions for CO2.

The EPA’s interpretation of the CAA is afforded substantial deference, and the agency — and the EAB — have consistently applied BACT only to pollutants for which the agency has established specific emission limitations. The petitioners challenging these permit approvals may face an uphill battle in court, but the lawsuits do succeed in driving up costs and delaying projects.

The lawsuits also raise important issues that will be relevant if EPA moves forward with regulation of CO2 from industry. Under the CAA, a “major” source is defined to include those facilities within certain high-emitting source categories that emit 100 tons or more annually of any “air pollutant,” or facilities that do not fall within the defined source categories that emit at least 250 tons annually. These limits would sweep vast numbers of facilities into the CAA’s permitting programs — large power plants can emit between 16 million and 25 million tons of CO2 annually — which pose complicated questions, including the appropriate limitations on carbon dioxide and other greenhouse gases for various industry sectors; how these limitations will incorporated into individual facility’s permits and monitored and enforced; and what technologies will be considered acceptable controls on GHG emissions.

For further information about this topic, please contact Akin Gump.