EPA’s New “Public Participation” Threshold for an “Applicable Requirement” Would Create New Complexities for Clean Air Act Title V Operating Permits

Summary

EPA’s proposal rests on two longstanding constructs, among others: (1) that the term “applicable requirement” is a unique feature of CAA Title V and confined to the Title V program; and (2) Title V permits are designed “to consolidate and assure compliance with the substantive requirements of other CAA programs, but not to create or modify such requirements.” In its preamble, EPA clarifies that the following types of standards are either not “applicable requirements” or are “applicable requirements” that cannot be substantively challenged within the Title V public petition process:⁴

• Requirements derived from environmental laws other than the CAA (e.g., Clean Water Act, Endangered Species Act, etc.);
• Laws that govern the actions of permitting authorities and not the permit holders (such as the Civil Rights Act of 1964)
• Procedural and programmatic requirements of the Title V program applicable to state or federal agencies;
• Terms of presidential executive orders that do not apply to state permitting authorities;
• State air quality standards (i.e., state-only requirements) not included in a State Implementation Plan (SIP) or derived from the CAA;
• CAA standards that are inapplicable to Title V stationary sources, such as mobile source requirements;
• The CAA Section 112(r)(1) “General Duty Clause” on prevention of hazardous substance releases (although CAA Section 112(r)(7) risk management plans remain applicable requirements); and
• Self-implementing CAA applicable requirements separately established by rule (e.g., MACT standards).

EPA’s proposal also identifies when the Title V process can be used to challenge the sufficiency of an applicable requirement:

• Lack of Public Participation. EPA’s proposed rule will allow objections to a Title V applicable requirement that was not previously afforded formal public notice or opportunity for comment and judicial review.⁵ EPA provides scant legal authority to support its position that it has jurisdiction to review any applicable requirement that has not been subject to formal public participation. As proposed, the new definition of “applicable requirement” would allow “substantive review” for numerous minor source authorizations that are incorporated by reference into a Title V permit at renewal, for example, permits by rule (PBRs) in Texas.⁶ It also may create an avenue for EPA or the public to object to NSR emission limits developed based on Confidential Business Information (CBI) under the rationale that there was no public opportunity to review those permit terms.⁷
• Overlap with NSR Permits. Per the proposal, EPA can also object to a Title V applicable requirement where there is so-called “overlap” between an NSR permit requirement and a Title V permit, namely the sufficiency of monitoring and related compliance assurance requirements or where the “details” were left to the Title V process. Although EPA claims that a Title V permit cannot create or modify” substantive requirements, some monitoring requirements can be tantamount to a change in the regulatory requirement. For example, the use of AP-42 flare factors to determine flare compliance (a longstanding engineering determination) relative to complex instrumentation and monitoring is a substantive change to facility operations, requires significant engineering, and can cost millions of dollars to implement.⁸

EPA’s rulemaking will likely shift certain types of objections to Title V permits to other public participation avenues, such as an NSR public hearing contested case process that EPA explicitly recognizes. As we have reported in other articles, navigating the air permitting landscape is tricky for industry, and must be proactively addressed prior to preparing and submitting a permit application.

Beveridge & Diamond's Air and Climate Change practice groups guide clients through the rapidly-changing landscape of climate-related law and regulation. We represent clients engaged in all aspects of the carbon and carbon offset markets, including entities acquiring carbon offsets for compliance or voluntary purposes, carbon offset project developers, and secondary market participants. For more information, please contact the authors.