Biden EPA Decides to Keep a Trump EPA NSR Rule … For Now

Troutman Pepper

Troutman Pepper

The Biden EPA just did something unexpected — it decided to keep a Trump EPA rule, at least for the time being. The rule, known as “project emissions accounting” under the “New Source Review” (NSR) air permitting program, allows sources of air emissions to avoid permitting by using emission decreases to offset an increase that would otherwise need a permit. While largely procedural in nature, EPA’s decision to keep the rule is notable for a few reasons.

The decision comes in response to a petition filed by Sierra Club and several other environmental groups, asking EPA to “reconsider” the “project emissions accounting” rule. The Clean Air Act requires EPA to reconsider a rule if someone raises an objection that (1) could not have been raised in comments on the rule (or arose after the end of the comment period), and (2) is of central relevance to the rule. Petitions meeting these criteria force EPA to initiate reconsideration. However, EPA also has the authority to voluntarily reconsider a rule anytime it chooses.

In the past, new administrations often willingly granted reconsideration of rules adopted by a prior administration rules, where the new administration saw a need for a policy change. Granting a petition for reconsideration was a typical and expedient way of pausing litigation to allow time for developing a new policy. EPA has also willingly granted requests for a stay of such rules to avoid wasting resources on implementing a rule that was about to change anyway.

The denial of Sierra Club’s petition for reconsideration of the “project emissions accounting” rule suggests this administration will not follow that pattern, and that it will only grant a petition if it clearly meets the requirements for a mandatory reconsideration. This break from past practice may have been prompted by D.C. Circuit precedent, rejecting attempts by the Trump EPA to initiate a reversal of several Obama EPA rules via reconsideration. In rejecting Sierra Club’s plea for a second look at the “project emissions accounting” rule, EPA noted that the issues raised by Sierra Club and others could have been, and often were, raised during the comment period, and therefore reconsideration was not mandatory.

Despite EPA’s denial of the petition, EPA expressed some sympathy for the key objections raised by Sierra Club, suggesting that EPA may still decide to review the rule voluntarily. Specifically, EPA indicated further review may be needed on whether sources must prove that emissions decreases used to offset an increase were part of the same project that caused the increase, not merely an unrelated change. EPA also expressed interest in reevaluating whether additional recordkeeping and reporting provisions are necessary to ensure the decreases will actually occur.

Accordingly, a relook at “project emissions accounting” may still be coming. However, EPA’s denial of Sierra Club’s petition confirms it will not be a high priority. Also notable in the exchange is that neither Sierra Club nor EPA expressed concern over the basic concept of allowing decreases to offset increases in determining whether permitting is needed. That idea may still be tested in court, however, since EPA’s refusal to reconsider means the litigation challenging the rule, filed earlier this year, may now proceed.

For more information on “project emissions accounting” click here and check out our article in the Summer 2020 edition of ABA Natural Resources and Environment, Reforming New Source Review: What Project Emissions Accounting Really Means, and Why It Should Survive. Please contact Mack McGuffey and Melissa Horne with any questions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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