United States: Year In Preview: 2015 Heralds Big Changes Under The Clean Air Act

Last Updated: February 16 2015
Article by Bernadette M. Rappold, John M. Lain and Heather Nixon Stevenson

The Environmental Protection Agency (EPA) has a robust Clean Air Act agenda for 2015.

Not only has a new interstate pollution and allowance trading regime kicked in (effective Jan. 1), but the agency has announced that it will publish final carbon standards this summer for new and existing power plants and embark on an aggressive strategy to reduce methane emissions. Meanwhile, the agency continues to face a number of key challenges to its Clean Air Act regulations, including a case headed for the U.S. Supreme Court challenging the Mercury and Air Toxics Standard (MATS). States and facilities will be gearing up to meet the newly proposed National Ambient Air Quality Standards (NAAQS) for ozone while also trying to anticipate the mix of voluntary and regulatory programs the EPA will pursue under its recently announced methane reduction initiative.

The agency's Clean Air Act efforts are not confined to stationary sources only. Indeed, after failing to finalize the 2014 renewable volume obligation (RVO) under the Renewable Fuels Standards (RFS) program, the agency has pledged to finalize this year the RVOs for 2014, 2015 and 2016. This is a tall order, particularly at a time when falling crude oil prices have stolen some of the energy security urgency underlying the RFS program.

Here we preview some of the EPA's Clean Air Act efforts in 2015.

Cross State Air Pollution

There is a new air program in town. Effective Jan. 1, 2015, the Clean Air Interstate Rule (CAIR) no longer applies and the Cross State Air Pollution Rule (CSAPR) is the law of the land.

Over the years, the EPA has established a number of federal air emissions trading programs for SO2 and NOx under the Clean Air Act. These programs are based on pollutant allowances that authorize a source to emit a specific amount of a particular pollutant during a given year. With some exceptions, at the end of each year, the source must hold an amount of allowances at least equal to the source's actual, annual emissions of the specified pollutant. Allowances are marketable and can be bought and traded, and excess allowances (over those equal to the source's emissions) are traditionally sold (traded) or banked for future use by the source.

CSAPR was adopted in 2011 but underwent protracted legal challenges, culminating last year when the U.S. Supreme Court upheld the rule and the District Court lifted the stay on CSAPR's implementation. As a result of these rulings, the EPA issued a ministerial rule in November 2014 resetting CSAPR's implementation dates, with Phase 1 effective Jan. 1, 2015, and Phase 2 effective Jan. 1, 2017. While CSAPR will replace CAIR, it will not replace the Title IV Acid Rain Program.

Now that CSAPR is implemented, only allowances created or banked under CSAPR may be used to meet the requirements of that rule. Allowances created or banked under CAIR or the Acid Rain program will not be permitted to be applied or traded under CSAPR.

The EPA is conducting state outreach to address the practicalities of CSAPR implementation. Additional federal and state rulemakings and guidance are expected in the coming weeks and months. States will need to incorporate the new CSAPR requirements into their permitting programs and any applicable trading programs.

EPA Proposed Ozone Standard Rule

The EPA published a proposed rule on Dec. 17, 2014, by which the agency intends to modify the national ambient air quality standards (NAAQS) for ground-level ozone. The Clean Air Act requires NAAQS to be updated every five years and the ozone standard was last updated in 2008. As a result, the EPA is now under a court order to complete the revision by October 2015.

In its proposal, the EPA has said it is considering lowering the standard from the current 75 ppb to somewhere between 65 and 70 ppb. It has also invited the public to comment on a standard as low as 60 ppb; however, the expectation is that it will finalize the rule using the 70 ppb standard.

While the EPA is prohibited from using costs as a factor in setting NAAQS, the agency estimates the cost of compliance with a 70 ppb standard would be $3.9 billion annually using 2025 as the future baseline year in which all states other than California would be in compliance with the standard. The agency's estimate of public health benefits at the 70 ppb standard are from $6.4 to $13 billion annually.

Not surprisingly, public interest groups say the health benefit calculations are too low and industry groups claim that the cost estimates are too high, with the former pushing for a 60 ppb standard and the latter group pushing for the standard to remain at the current 75 ppb.

The industry groups have the support of the Republican-controlled Congress, where Republicans have pledged to reintroduce and advance legislation in the next session to block EPA from moving forward with the revised standard. The Clean Air, Strong Economies Act (S. 2833, H.R. 5505) would block revisions to the current 75 ppb standard until 85 percent of current nonattainment counties comply with the existing standard.

States bear the burden of implementing any new standard and would need to revise their state implementation plans accordingly. However, because of other EPA initiatives, such as CSAPR and the Clean Power Plan, many states will be revising implementation plans anyway, so the incremental burden may not be too great. Two things can be predicted with a fair degree of certainty: first, that the EPA is likely to miss the Oct. 1 deadline based on its past regulatory deadline performance; and second, that when it does issue a rule, litigation is sure to follow.

Clean Power Plan

In an ordinary year, EPA's changes to pollution allowance trading and the ozone NAAQS would be news enough. But this year, those changes take a back seat to EPA's planned summer 2015 release of final carbon standards for new and existing power plants under Clean Air Act sections 111(b) and 111(d).

EPA issued its new plant proposal in September 2013 and its existing plant proposal in June 2014. The proposed rules received some 2 million comments each, causing pundits to react with skepticism to the agency's January 2015 announcement that it intends to finalize both this summer and to issue a proposed federal implementation plan as a guide for states.

The new power plant proposal is straightforward, if controversial. It creates essentially two standards: one for natural gas and one for coal plants. While the two standards, expressed as pounds of CO2/MWh (around 1,000 – 1,100 pounds/MWh), are nearly identical, it is widely expected that the rule will virtually preclude construction of new coal power plants in this country, given the expense of the control technology, carbon capture and sequestration (CCS), which are required to meet the standard for coal plants.

The 111(d) proposal for existing plants, however, is more complicated – and more controversial. It would, in essence, target carbon emissions rates for each state, and allow states to meet those rates through a combination of tools: (1) requiring fossil fuel power plants to be more efficient, (2) using more low-emitting natural gas combined cycle plants where excess capacity is available, (3) increasing use of renewables and nuclear power, and (4) reducing electricity demand.

EPA has assessed the cost of complying with the existing source rule at $7.3 billion to $8.8 billion by 2030, resulting in an estimated 3 percent increase in electricity rates. The agency also projects that the rule will deliver $55 billion to $93 billion in public health benefits.

Litigation on the proposed rule is already underway, with more suits likely to be filed once the final rule is issued this summer. Ironically, the very flexibility that the proposed rule affords states to meet emissions targets may be its Achilles' heel; industry pundits have already cast doubt on the agency's ability under the Clean Air Act to require beyond-the-fenceline adjustments in states that fail to adopt conforming implementation plans.

Meanwhile, certain members of the Republican-controlled Congress are threatening to pass legislation that would limit EPA's ability to implement any new rulemaking.

Mercury and Air Toxics Standards

Last November, the Supreme Court granted certiorari on an industry challenge to EPA's 2012 Mercury and Air Toxics Standards (MATS), which set limits on residual emissions of mercury, other toxic metals and acid gases from coal- and oil-fired electric utilities.

EPA issued MATS under Clean Air Act section 112, which requires the agency to determine whether the imposition of new standards is "appropriate and reasonable," but does not specifically require a cost-benefit analysis before deciding to regulate.

Industry has challenged the standards which, at an annual compliance cost of $9.6 billion, are among the most expensive environmental rules ever promulgated. Industry claims that EPA erred by failing to consider costs when determining that the standards are "appropriate and reasonable."

In agreeing to hear the challenge, the Supreme Court has limited its review to a single question: "Whether EPA's interpretation of "appropriate" in 42 U.S.C. § 7412(n)(1)(A) is unreasonable because it refused to consider a key factor (costs) when determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities."

Pundits agree that if the high court determines that EPA erred in not considering costs, the future of MATS – and other potential rulemakings – is in doubt. EPA's own estimates of the value of MATS' health benefits do not exceed the projected annual costs.

Reducing Methane from the Oil and Gas Industry

In January 2015, the EPA announced it would be taking a series of actions designed to reduce methane emissions from oil and gas extraction, processing and transmission by 40 to 45 percent, from a 2012 baseline, by 2025.

To achieve this ambitious goal, EPA plans to utilize a multifaceted approach, with regulatory and voluntary programs, coupled with advances in emissions monitoring and modeling.

The agency does not specify which sources it intends to tackle first. It seems likely, however, that the focus will shift from well sites to processing and transmission facilities, given the recent promulgation of new source performance standards for well sites. These standards require producers to utilize green completions and low-bleed pneumatics to achieve significant VOC – and, hence, methane reductions at well sites.

To complement the EPA's efforts, the Bureau of Land Management (BLM) has agreed to issue concomitant regulations governing flares and leaks at well sites located on federal lands.

Again, given increasing resource constraints at the EPA, it is unclear how quickly the agency will act on this strategy.

Renewable Fuel Standard Program

Congress established the Renewable Fuel Standard (RFS) program in 2007 to promote energy security by increasing the percentage of renewable fuels used in transportation. The RFS program works by imposing an annual obligation on refiners and importers of fossil transportation fuels to include an increasing percentage of renewable fuel in the overall production.

This obligation, known as the Renewable Volume Obligation (RVO), is the cornerstone of RFS. Refiners and importers must annually certify that they met their RVOs by either physically blending the required amount of renewable fuel or by purchasing and retiring "renewable information numbers" (RINs), which are renewable fuel credits that are bundled with renewable fuels meeting certain requirements.

In November 2014, the EPA announced it was withdrawing the proposed 2014 RVO, which would have resulted in a reduction in the total RVO. In announcing the pullback, the EPA indicated it intended this year to reset the RVO process and issue final RVOs for 2014, 2015 and 2016.

While the renewable fuel industry is hopeful that the withdrawal will ultimately result in the 2014 RVO being set at the actual level of production, RFS opponents see the agency's failure as another reason to push for the program's demise. The EPA's failure has already prompted at least one lawsuit seeking prompt action by the agency to establish the 2014 RVO.

With increasing constraints on its resources and a bold Clean Air Act agenda generally, no one is certain how quickly the agency can or will act. It is clear, however, that the failure to set an RVO has left refiners, importers and renewable fuel producers in a muddle and has introduced additional uncertainty into the renewable fuels market.

Clean Air Act Enforcement

The EPA's Office of Enforcement and Compliance Assurance (OECA) will continue to pursue several national enforcement initiatives under the Clean Air Act:

  • Reducing emissions at "under-controlled coal-fired electric generating units, cement, acid, or glass plants" under the Clean Air Act's New Source Review/Prevention of Significant Deterioration (NSR/PSD) program
  • Reducing leaks and flares of hazardous air pollutants under the NESHAPs, Title V, NSR/PSD and other programs, particularly at sites likely to have a public health impact, and as part of a multi-statute enforcement effort
  • Addressing noncompliance at onshore natural gas extraction and processing sites

The agency has had varying results under these initiatives, with the agency's natural gas initiative receiving perhaps the least consistent enforcement efforts. The agency's resource constraints have had a disparate impact on OECA, which has had to cut lean muscle, not fat, to achieve reduced funding levels. Thus, it seems likely that the agency will see a reduced level of Clean Air Act enforcement in 2015, compared with years past.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.