Alaska

EPA Regulatory Approvals

On July 20, EPA proposed to approve components of Alaska’s May 12, 2015, SIP submission responding to the NO2 and SO2 NAAQS published separately in 2010. 81 Fed. Reg. 47,103 (July 20, 2016). When EPA promulgates a new NAAQS, states must submit and obtain EPA approval of plans providing for the “implementation, maintenance, and enforcement” of the new NAAQS. 42 U.S.C. § 7410(a)(1); see also id. at 47,104. The components of these plans are known as “infrastructure elements.” 81 Fed. Reg. at 47,104. EPA accepted comments on Alaska’s proposed NO2 and SO2 infrastructure elements until August 19.

On November 25, EPA issued a direct final rule approving minor modifications to Alaska’s SIP concerning air permit administration and emissions fees. 81 Fed. Reg. 85,160 (Nov. 25, 2016). The rule will take effect as part of Alaska’s SIP on January 24, 2017, unless EPA receives adverse comments from the public by December 27, 2016. Id.

Fairbanks North Star Borough—Fine Particulate Pollution

On November 3, EPA announced a proposed consent decree with two environmental groups to resolve a citizen suit concerning fine particulate matter pollution in Alaska’s Fairbanks North Star Borough (FNSB). The June 2016 lawsuit, covered previously here, sought to force EPA to take action on a proposed state implementation plan for achieving compliance with the 2006 24-hour NAAQS for PM2.5 in the FNSB, which suffers from some of the worst fine particulate pollution in the country. The proposed consent decree, if approved, would require EPA to take final action on Alaska’s implementation plan by August 28, 2017.

In a related action, the same environmental groups filed a separate citizen suit against EPA on October 11 (No. 2:16-cv-01594 (W.D. Wash. Oct. 11, 2016)). The more recent suit seeks to force EPA to issue a determination that the FNSB has not achieved compliance with the 24-hour NAAQS for PM2.5, and that the borough is a “serious” nonattainment area for fine particulate matter. The October 11 lawsuit is the third action in three years by environmental groups to force EPA to take action on particulate pollution in the FNSB.

Meanwhile, Alaska regulators have adopted several recent changes to the state’s air quality regulations that are intended to address ongoing air quality issues in the borough. As explained here previously, the rules create three separate “air quality control zones” within the FNSB nonattainment area and create a number of new restrictions on the installation, use, and emissions of solid fuel-fired home heating devices. On November 22, Alaska’s Department of Environmental Conservation submitted these rule changes for EPA approval as part of the state’s SIP.

Enforcement: $425 Million Refinery Settlement

On July 18, EPA and the U.S. Department of Justice announced a $425 million settlement agreement to resolve Clean Air Act violations at six petroleum refineries in Alaska, Washington, Hawaii, California, North Dakota, and Utah. Five of the refineries are operated by subsidiaries of Texas-based Tesoro Corporation, including one in Alaska’s Kenai Peninsula Borough and one in Anacortes, Washington. The sixth refinery, now operated by Par Hawaii Refining in Kapolei, Hawaii, was owned and operated by a Tesoro subsidiary until 2013.

The state of Alaska and Washington’s Northwest Clean Air Agency joined the federal government as parties to a consent decree approved on September 28 by Judge Orlando Garcia of the U.S. District Court for the Western District of Texas. Under the consent decree, Tesoro agreed to pay a $1.3 million civil penalty to the state of Alaska for violations at the Kenai refinery. Tesoro must also reimburse the state of Alaska for administrative fees, legal fees, costs, and expenses.

Additionally, the consent decree:

1. Requires installation and operation of pollution control equipment at the covered refineries.
2. Establishes stipulated damages for violations of consent decree terms.
3. And mandates three environmental mitigation projects. All told, EPA estimates that Tesoro and Par Hawaii will spend $425 million to comply with the consent decree.

Idaho

EPA Regulatory Approvals

On September 12, EPA finalized its approval of various provisions included in Idaho’s May 21, 2015, SIP submission. 81 Fed. Reg. 53,290 (Sept. 12, 2016). As discussed in a previous report here, these newly approved Idaho SIP revisions establish annual facility-wide emissions caps for minor sources. They also include modifications to the permitting requirements for nonmetallic mineral process plants such as rock crushers and asphalt plants, and they establish new flexibility for stationary sources that combust sulfur-containing fuels. EPA received no comments on its earlier proposal to approve the revisions.

On October 27, EPA issued a proposed rule partially approving and partially disapproving Idaho’s attainment plan for the Cache Valley PM2.5 nonattainment area. 81 Fed. Reg. 74,741 (Oct. 27, 2016). The Cache Valley nonattainment area spans portions of southeast Idaho and northern Utah. The Idaho portion consists of rural, sparsely populated Franklin County, where fine particulate pollution is caused principally by woodstove emissions and road sanding. Idaho submitted its attainment plan for the Cache Valley PM2.5 nonattainment area in 2012.

EPA previously approved, in 2014, certain Idaho SIP elements designed to reduce particulate emissions from woodstoves and road sanding in the Cache Valley. Id. at 74,743–44. EPA’s latest rulemaking now proposes to find that Idaho’s attainment plan satisfies the CAA’s requirements regarding reasonably available control measures for nonattainment areas. Id. at 74,747. However, EPA also proposes to disapprove certain elements of Idaho’s attainment plan, including the state’s identification of contingency measures to satisfy section 172(c)(9) of the CAA. Id. at 74,747–48.

EPA’s proposed determinations regarding Idaho’s nonattainment plan for the Cache Valley PM2.5 nonattainment area appear to be consistent with the agency’s obligations under a June 2 consent decree approved by a federal judge in California. As reported here before, the June 2 consent decree resolved a lawsuit brought by environmental organizations alleging EPA’s failure to comply with a non-discretionary duty under the CAA to approve or disapprove 2012 and 2013 SIP submissions for nonattainment areas under the 2006 PM2.5 NAAQS.

Oregon

Climate Change Litigation—Public Trust

On August 12, 2015, a group of plaintiffs filed a civil rights lawsuit in the U.S. District Court for the District of Oregon seeking an order that requires the government to create a plan to dramatically reduce greenhouse gas emissions released by the burning of fossil fuels. The plaintiffs include a group of 21 young citizens, Earth Guardians (an association of young environmental activists), and James Hansen, acting as guardian for “future generations.” See Juliana et al. v. United States et al., No. 15-cv-1517, 2016 WL 6661146 (D. Or. Nov. 10, 2016).

Case Background

Plaintiffs’ complaint includes causes of action against the United States and various government officials and agencies on the basis that the government has known for decades that carbon dioxide (CO2 ) pollution has been causing climate change and has failed to take necessary action to curtail fossil fuel emissions. Plaintiffs allege that the government and its agencies have taken action or failed to take action that has resulted in increased carbon pollution through fossil fuel extraction, production, consumption, transportation, and exportation, causing greenhouse gas emissions to increase to dangerous levels. Plaintiffs assert that a reduction of global CO2 concentrations to less than 350 parts per million is possible, but action must be taken immediately to prevent further ocean acidification and ocean warming.

Plaintiffs allege that the government has failed to implement plans for climate stabilization, thereby endangering plaintiffs’ lives, liberties, and property. According to the complaint, these risks infringe upon the plaintiffs’ constitutional rights under the Due Process Clause, Equal Protection Clause, and Ninth Amendment, and also violate the federal government’s responsibilities under the public trust doctrine.

Denial of Motions to Dismiss

The defendants filed motions seeking dismissal on multiple grounds, including that the plaintiffs lack standing, have not stated cognizable constitutional claims, and have not asserted a cognizable claim under the public trust doctrine. Intervenors National Association of Manufacturers, American Fuel & Petrochemical Manufacturers, and American Petroleum Institute moved to dismiss on the same grounds.

On April 8, 2016, Magistrate Judge Thomas M. Coffin issued findings and a recommendation that the court allow plaintiffs to proceed with their lawsuit. Juliana, 2016 WL 6661146 at *27. In denying the motions, the magistrate judge assumed that the defendants had a duty to limit greenhouse gas emissions. Turning to the public trust doctrine, the magistrate judge found that a federal version of that doctrine exists, that it applies to the territorial ocean waters and atmosphere of the nation, and that it provides substantive due process protections for some plaintiffs within the navigable waters of Oregon. 

On November 10, 2016, U.S. District Judge Ann L. Aiken adopted Magistrate Judge Coffin’s findings and recommendation to deny the motions to dismiss. Id. at *26. The court’s decision framed the case as follows:

This is no ordinary lawsuit. . . . This lawsuit is not about proving that climate change is happening or that human activity is driving it. For the purposes of this motion, those facts are undisputed. The questions before the Court are whether defendants are responsible for some of the harm caused by climate change, whether plaintiffs may challenge defendants’ climate change policy in court, and whether this Court can direct defendants to change their policy without running afoul of the separation of powers doctrine.

Id. at *2 (footnote omitted) (emphasis added). In denying the motions to dismiss, the court made three key rulings.

First, the court rejected defendants’ arguments that the case should be dismissed because the lawsuit raises a nonjusticiable political question. Judge Aiken ruled that the lawsuit simply asks the court to determine whether defendants have violated plaintiffs’ constitutional rights, and that “question is squarely within the purview of the judiciary.” Id. at *8 (citing INS v. Chadha, 462 U.S. 919, 941 (1983)). Judge Aiken cautioned: “Should plaintiffs prevail on the merits, this Court would no doubt be compelled to exercise great care to avoid separation-of-powers problems in crafting a remedy.” Id. at *9.

Second, the court held that plaintiffs had adequately alleged they have the standing to sue. In their motions to dismiss, the defendants and intervenors asserted that the plaintiffs lacked Article III standing because their claims are generalized grievances better resolved by the executive and legislative branches of the government rather than by the judiciary. The court found that the relief sought by plaintiffs would at least partially redress their asserted injuries, and therefore that the plaintiffs had sufficient standing. Id. at *14.

Third, the court ruled that the “federal government, like the states, holds public assets—at a minimum, the territorial seas—in trust for the people. Plaintiffs’ federal public trust claims are cognizable in federal court.” Id. at *23–24.

In upholding plaintiffs’ public trust claims, the court evaluated whether such claims had been displaced by acts of Congress. The court held that the plaintiffs’ claims were not displaced by federal statutes, including the Clean Air Act (CAA). Judge Aiken wrote that public trust claims are unique: “The public trust imposes on the government an obligation to protect the res of the trust. A defining feature of that obligation is that it cannot be legislated away. Because of the nature of public trust claims, a displacement analysis simply does not apply.” Id. at *24 (emphasis added).

Judge Aiken’s ruling and displacement analysis stand in apparent contrast to two notable decisions. In American Electric Power Co., Inc. v. Connecticut, 564 U.S. 410 (2011) (AEP), the Supreme Court addressed whether a federal common law public nuisance claim against greenhouse gas emitters could be maintained after the passage of the CAA. The Supreme Court held unambiguously “that the Clean Air Act and the EPA actions it authorizes” displace any such claims. Id. at 424.

A year later, in Native Village of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012), the Ninth Circuit affirmed a district court’s dismissal of an Alaska Native village’s claim for damages against major emitters of greenhouse gas emissions who had allegedly contributed to global warming that was destroying sea ice that protected the village from erosion. In that case, the district court had dismissed the complaint on several grounds, including the plaintiff’s failure to state a claim, its lack of standing, and the fact that it sought resolution of a political question. The Ninth Circuit addressed only the failure to state a claim, affirming on the ground that “[t]he Supreme Court has already determined that Congress has directly addressed the issue of domestic greenhouse gas emissions from stationary sources and has therefore displaced federal common law.” Id. at 856 (citing AEP, 410 U.S. at 424).

In this context, it is important to note that unlike the claims in AEP and Kivalina, the Oregon plaintiffs are suing the government, not private companies. In addition, the plaintiffs are asking the court to impose equitable remedies as opposed to money damages.

Notable Decision—Citizen Suit over Land Use Violations

On September 30, 2015, plaintiff Rogue Advocates filed a citizen suit in the U.S. District Court for the District of Oregon against defendant Mountain View Paving, Inc., under section 304 of the CAA, 42 U.S.C. § 7604. The plaintiff alleged that the defendant’s operation of an asphalt plant, as well as associated activities on its property, violated its federally enforceable air quality permit and thereby resulted in violations of the CAA from 2010 to the present. Rogue Advocates v. Mountain View Paving, Inc., No. 1:15-cv-01854, 2016 WL 6775636, at *1 (D. Or. Nov. 15, 2016).

The Defendant owned and operated an asphalt plant and conducted associated activities on a property zoned for residential use within the floodplain of Bear Creek—a tributary of the Rogue River—in Talent, Oregon. The Defendant possessed an air contaminant discharge permit (ACD permit), issued by the Oregon Department of Environmental Quality (DEQ), to operate the asphalt plant. The ACD permit is federally enforceable under the CAA and was issued pursuant to Oregon’s SIP. OAR § 340-216-0020.

A unique aspect of this case centers around this language of the ACD permit:

This permit is not valid * * * at any location where the operation of the permittee’s processes, activities, and insignificant activities would be in violation of any local land use or zoning laws. * * * It is the permittee’s sole responsibility to obtain local land use approvals, as, or where, applicable before operating this facility at any location.

Rogue, 2016 WL 6775636, at *14 (emphasis added). In its complaint, the plaintiff did not specifically allege that the defendant had violated any emissions standards. Instead, the plaintiff alleged that the defendant was in violation of the CAA because it did not have proper county-zoning approvals.

The defendant moved for summary judgment, arguing, among other things, that whether the plant had obtained necessary land use approvals was a matter committed to the exclusive jurisdiction of the county and the Oregon Land Use Board of Appeals. The defendant also sought dismissal on the grounds that on January 11, 2016, it had shut down and relocated its asphalt plant, thereby mooting the plaintiff ’s citizen suit. The plaintiff, in turn, filed a cross-motion for partial summary judgment seeking to establish the defendant’s liability under the CAA.

The court granted in part the defendant’s motion for summary judgment and held that the plaintiff’s claim for declaratory relief, injunctive relief, and civil penalties relating to the defendant’s allegedly unlawful operation was moot. Id. at *13 (“While the entire facility has not been dismantled, the issue here is whether there is a likelihood the defendant will resume its batching operation on the property. Because the batch plant has been removed, the Court believes the need for the deterrent effect of civil penalties has been eliminated.”).

However, the court denied the defendant’s motion for summary judgment as to whether its zoning violations violated the terms of its ACD permit and therefore violated the CAA. Here, the court reasoned that neither party disputed that the defendant continued to engage in associated activities on the property at issue and the court observed that some of the defendant’s associated activities appeared to be in violation of local land use laws. According to the court, “if these activities do fall under the ACD permit, the defendant would be in violation of its permit for operating in violation of local land use laws. Based on the plain language of the ACD permit, the Court finds that a dispute exists as to whether or not defendant’s associated activities violate its permit.” Id. at *13–14.

Key Takeaway

One key reminder from this decision is that under the CAA, an operator’s violation of a state or local permit’s terms or conditions issued pursuant to a SIP may also constitute a violation of an emission standard or limitation. Such a violation is the hook allowing private citizens to initiate judicial proceedings against an operator “who is alleged to have violated . . . or to be in violation of . . . [the] emission standard or limitation.” 42 U.S.C. §§ 7604(a)(1), (f)(4); see also Rogue, 2016 WL 6775636, at *14.

Washington

Greenhouse Gas Regulation

In September, the Department of Ecology finalized the Clean Air Rule, which regulates greenhouse gas (GHG) emissions in Washington State. As expected, the rule was quickly challenged by businesses and industry organizations. Youth plaintiffs also returned to state court to argue that the rule was not stringent enough.

Clean Air Rule Mechanics

In general, entities with annual baseline or projected GHG emissions of at least 70,000 metric tons of carbon dioxide equivalent (CO2e) must reduce emissions by 1.7 percent of baseline emissions each year. Sources with at least 100,000 metric tons CO2e per year must comply starting in 2017. Sources with lower emissions have later compliance dates.

Parties in energy-intensive, trade-exposed (EITE) industries are presented with a choice for their emission reduction requirements. Depending on an EITE party’s efficiency relative to industry norms, it may be entitled to less stringent requirements. This system rewards efficient operations. An EITE party can also opt to be treated like a non-EITE party, though, once made, this decision is permanent.

In addition to the entities that must reduce GHG emissions, the Clean Air Rule also allows voluntary participation by parties otherwise not covered by the rule.

Participating entities can reduce emissions at their sources or obtain and retire emission reduction units (ERUs). ERUs may be generated by emission reductions beyond required levels, emission reductions achieved by qualifying projects in the state, and, in decreasing amounts, emission allowances from approved regulatory programs in other jurisdictions. ERUs can be banked for later use and exchanged.

The rule also establishes an ERU reserve that will serve several purposes, including, for example, accommodating modest economic growth, encouraging renewable energy development, and promoting emission reduction projects that meet certain environmental justice criteria.

Ecology also amended chapter 173-441 WAC, the state greenhouse gas emissions reporting requirements, to align with the Clean Air Rule.

Clean Air Rule Lawsuits

The Clean Air Rule is facing three challenges from businesses and industry organizations. A fourth salvo is being led by youth plaintiffs, as part of continuing litigation to secure protective greenhouse gas regulations.

Avista Corp. v. Department of Ecology was filed in federal court by utilities. No. 2:16-cv-00335 (E.D. Wash. Sept. 27, 2016). The utilities also filed a state court action with the same name. No. 16-2-03966-34 (Thurston Cty. Super. Ct. Sept. 30, 2016). It has been consolidated with another state court challenge filed by industry associations. Ass’n of Wash. Bus. v. Dep’t of Ecology, No. 16- 2-03923-34 (Thurston Cty. Super. Ct. Sept. 27, 2016). The federal case has been stayed pending resolution of the state law claims.

The state law claims involve allegations, in part:

1. That Ecology lacks the authority to issue the rule under the Washington Clean Air Act.
2. That Ecology should have issued an environmental impact statement under the state Environmental Policy Act (SEPA).
3. That the rule violates the Washington Administrative Procedure Act because it is arbitrary and capricious and the agency failed to follow proper rulemaking procedures.
4. That the rule constitutes, in part, an unlawful tax under the Washington Constitution.

On November 10, Ecology filed a motion to dismiss the challengers’ SEPA claims. This motion was scheduled for hearing in December. On December 5, the challengers asked the court for leave to file amended petitions for judicial review that would include new factual allegations intended to thwart standing arguments raised by Ecology’s motion to dismiss.

Briefing on other claims is scheduled to take place in the first quarter of 2017 with oral arguments at the end of March.

In Foster v. Department of Ecology, youth plaintiffs won a legal victory in May when they persuaded a state court that Ecology, as obligated by the state CAA, the state constitution, and the public trust doctrine, was required to adopt greenhouse gas regulations by the close of 2016. No.14-2-25295-1 (King Cty. Super. Ct. Orders filed May 16, 2016, and Nov. 19, 2015). However, on October 16, the plaintiffs, in a motion for an order to show cause, asked the court to determine that the Clean Air Rule violated the court’s previous orders regarding Ecology’s duty to address climate change. The plaintiffs maintain that the motion is not a direct challenge to the rule. Rather, in a subtle distinction, they seek to confirm that the rule in its current form does not meet the obligations identified by the court and to “require sciencebased, numeric emission reductions be achieved with all deliberate speed.” No. 14-2-25295-1 (Mot. to Show Cause filed Oct. 18, 2016). 

Clean Power Plan

The state has revealed little information about how it intends to comply with the federal Clean Power Plan (CPP). But, in comments submitted in January 2016 on EPA’s proposed federal plan, model trading rules, and the Clean Energy Incentive Program, the state recognized “several benefits in pursuing a massbased plan.” Even if the Trump administration rolls back the CPP, emissions from power plants in Washington will still be regulated by the Clean Air Rule, assuming the rule survives legal challenges.

Carbon Tax

A carbon tax initiative, I-732, was roundly defeated at the ballot box in November. The initiative would have imposed a tax on greenhouse gas emissions while providing reductions and subsidies in other areas. The Alliance for Jobs and Clean Energy plans to advocate for an alternative carbon tax proposal in the 2017 state legislative session.

Start-up, Shutdown, and Malfunction Regulation

Ecology has initiated a rulemaking to update to regulations regarding excess emissions during start-up, shutdown, and malfunction (SSM) events in response to a May 2015 state implementation plan (SIP) call by EPA. 80 Fed. Reg. 33,839 (June 12, 2015). In November, Ecology began seeking feedback on proposed changes from stakeholders. Ecology is aiming to propose a rule addressing SSM events in March 2017 and to adopt a final rule during the summer. Ecology did not submit a corrective plan by EPA’s November 22 deadline.

In draft-proposed rule changes shared with stakeholders in December, Ecology set out a process for developing an “alternative emission limitation” for start-up and shutdown periods to be applied by the permitting authority for federally enforceable requirements, i.e., SIP standards. Alternative emissions limits may not result in an exceedance of the NAAQS. Ecology has also floated a malfunction abatement plan requirement. For state-only requirements, Ecology would retain an affirmative defense for unavoidable excess emissions. 

The outcome of a federal lawsuit, Walter Coke Inc. v. EPA, D.C. Cir., No. 15-1166 (D.C. Cir. filed June 12, 2015), challenging EPA’s SSM SIP call will likely affect any regulatory changes ultimately adopted by states.

EPA Regulatory Approvals

On October 6, EPA approved SIP revisions in chapters 173-400 and 173-476 of the Washington Administrative Code (WAC), General Regulations for Air Pollution Control Sources and Ambient Air Quality Standards, reflecting the adoption of federal law by reference, including certain prevention of significant deterioration (PSD) regulations, clarifications that the Benton County Clean Air Agency does not implement WAC PSD regulations, and changes to the ozone NAAQS. 81 Fed. Reg. 69,385 (Oct. 6, 2016); 81 Fed. Reg. 53,362 (Aug. 12, 2016).

On September 29, EPA took direct final action to approve corrections to “minor typographical errors” discovered in prior SIP submittals concerning chapter 173-400 WAC, General Regulations for Air Pollution Sources. 81 Fed. Reg. 66,823 (Sept. 29, 2016).

On July 14, EPA approved a limited maintenance plan for the Spokane carbon monoxide limited maintenance area, thereby incorporating it into the Washington SIP. 81 Fed. Reg. 45,417 (July 14, 2016).

Enforcement Actions

In August, Ecology entered into agreed orders with Intalco Aluminum LLC and Alcoa Wenatchee LLC to install and operate ambient sulfur dioxide and meteorological monitoring equipment to evaluate whether either of the aluminum smelters complies with the one-hour sulfur oxides NAAQS. Ecology Docket Nos. 13551 and 13552.

Indian Tribes and Reservations

EPA Region 10 has authority over 271 federally recognized Indian Tribes. On 39 reservations in Idaho, Oregon, and Washington, air quality is governed by EPA’s 2005 Federal Air Rules for Indian Reservations (FARR).s On June 16, EPA entered into a consent agreement with CHS Inc. to resolve an alleged violation of the FARR. CHS, which operates a grain facility on the Yakama Indian Reservation in Toppenish, Washington, agreed to pay a $3,052 civil penalty for failing to timely register its facility as an emissions source with EPA as required by the FARR.

On July 21, EPA announced a settlement with PNW Wind Down LLC related to alleged Clean Air Act violations at an on-reservation plywood veneer manufacturing facility owned by the Confederated Tribes of the Colville Reservation. The facility is leased by the tribe to PNW Wind Down, a successor to Omak Wood Products. Under the settlement, PNW Wind Down agreed to pay a civil penalty of $89,000 for alleged exceedances of opacity limits during an emissions source test, noncompliance with an administrative compliance order, and failure to submit a complete response to an EPA information request made under section 114 of the CAA. The settlement is the culmination of multiple EPA enforcement actions and extensive technical assistance since 2013, when operations at the facility resumed after a several-year shutdown.

On October 6, EPA announced a settlement with Pace International LLC related to alleged Clean Air Act violations at a facility located on the Yakama Indian Reservation in Washington. Pace, which manufactures post-harvest fruit coatings, agreed to pay a civil penalty of $77,134 and to spend $78,427 on facility improvements designed to reduce emissions of volatile organic compounds (VOCs). The Clean Air Act violations at issue were discovered during an unannounced inspection of the Pace facility; a second, follow-up inspection employed forward-looking infrared camera technology to identify VOC emissions.

©2017. Published in Air Quality Committee Newsletter, Vol. 20, No. 2, February 2017, by the American Bar Association Section of Environment, Energy, and Resources. Reproduced with permission. All rights reserved.