Pruitt Eyes Changes to Air Pollution Permitting Regime

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By Jennifer Lu

EPA Administrator Scott Pruitt signaled a renewed effort to challenge an air pollution permitting program, known as New Source Review, through a task force that is looking to provide “certainty” to industry.

New Source Review requires industrial facilities, including coal-fired power plants and refineries, to install modern pollution controls when renovating or building new facilities that significantly increase air emissions. The EPA under President George W. Bush tried to overhaul the permitting requirements, but those efforts were stopped by the courts.Pruitt, during a Sept. 19 interview with Dana Perino of Fox News at the Concordia Annual Summit in New York, described the permitting requirements as a disincentive for industry to invest “hundreds of millions of dollars in some instances to achieve good environmental outcomes.”

Pruitt added that the EPA was “engaged in an NSR kind of task force” to explore ways to encourage companies to make investments without concern that they would lose their Clean Air Act operating permit. The EPA did not respond to requests for more information about the task force.

Pruitt’s source of contention with New Source Review echoes a long-standing industry complaint about how the agency interprets what constitutes a “major modification” that triggers new permitting requirements. Pruitt’s comments aren’t the first time the Trump administration highlighted New Source Review permitting as a barrier for industry: a recent Energy Department study on the nation’s electric grid said that uncertainty over the program’s requirements discourage utilities from making efficiency improvements or retrofitting power plants with carbon capture technology.

Past Overhaul Unsuccessful

In 2003, the EPA sought to expand the kinds of routine maintenance on emitting facilities that are exempt from the permitting requirements. That action was successfully challenged by state and environmental groups in the U.S. Court of Appeals for the District of Columbia Circuit, which blocked implementation of the EPA’s efforts.

What counts as a major modification remains a common complaint, said Eric Hiser, an attorney with Jorden Hiser & Joy PLC in Phoenix who represents manufacturers, mining companies, and other industrial sectors.

“I think we spend a lot of time and energy and resources on what is a major modification,” he said.

As a result of the costs involved with obtaining a permit, industries have less motivation to improve efficiency and reduce air emissions, because “when you do, you trigger New Source Review,” said Jeff Holmstead, a partner at Bracewell LLP who was assistant EPA administrator for air and radiation from 2001 to 2005.

However, New Source Review only applies when modifications result in a signification increase in air emissions, said John Walke, clean air director at the Natural Resources Defense Council.

Pruitt’s comments at the summit indicate “that industries and Republican politicians are serious about targeting this program for weakening changes,” Walke said.

The timing of that push coincides with the pending EPA nomination of William Wehrum, an attorney at Hunton & Williams LLP in Washington, D.C., to lead the EPA’s air office. Wehrum served in several roles within the Office of Air and Radiation during the George W. Bush administration, including two years as acting assistant administrator after Holmstead’s departure.

“It’s fascinating Mr. Wehrum has been in the thick of this for 20 years,” Walke said.

However, Walke said he didn’t think that the EPA had the authority to weaken New Source Review requirements unless the Congress amended the Clean Air Act.

“They keep running into the plain language of the statue,” Walke said. “And there’s not a lot of rollbacks to be wrung from the law as it is written.”

To contact the reporter on this story: Jennifer Lu at jlu1@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

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