A recent opinion by the United States Court of Appeals for the Third Circuit has breathed new life into Clean Air Act Section 126(b), which allows downwind state and local governments to petition the Environmental Protection Agency (“EPA”) for immediate relief from interstate pollution caused by a major source (or a group of sources) in an upwind state. In the recent ruling, the Third Circuit held that it was reasonable for EPA to interpret Section 126(b) to be an “independent mechanism for enforcing interstate pollution control,” thereby giving EPA authority to directly regulate a specific source in an upwind state. See GenOn REMA, LLC v. EPA, No. 12-1022, slip op. at 29 (3d Cir. July 12, 2013) (pdf).
Specifically, Section 126(b) provides that:
Any State or political subdivision may petition the Administrator for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of [the “good neighbor” provision] or this section. Within 60 days after receipt of any petition under this subsection and after public hearing, the Administrator shall make such a finding or deny the petition.
42 U.S.C. § 7426(b). The “good neighbor” provision, in turn, prohibits sources within one state from emitting air pollutants in amounts that significantly contribute to the nonattainment of the national ambient air quality standards (“NAAQS”) in another state. Id. § 7410(a)(2)(D)(i). If EPA finds, pursuant to a Section 126(b) petition, that the upwind source is violating the “good neighbor” provision, the polluting source must cease operations within three months of EPA’s finding. Id. § 7426(c). EPA may, however, allow the source to continue operations beyond three months if the source “complies with such emissions limitations and compliance schedules … as may be provided by the Administrator” to bring about compliance “as expeditiously as possible, but in no case later than three years after the date of such finding.” Id.
In the recent Third Circuit case, the New Jersey Department of Environmental Protection filed a petition under Section 126(b), requesting that EPA issue an order restricting sulfur dioxide emissions from Portland Generating Station (“Portland”), a coal-fired, electricity generating plant in Pennsylvania that is within 500 feet of Knowlton Township in Warren County, New Jersey. Following notice and comment, EPA granted the petition, concluding that Portland’s sulfur dioxide emissions significantly contribute to nonattainment and interfere with maintenance of the 1-hour sulfur dioxide NAAQS in New Jersey. EPA authorized the continued operation of Portland but imposed emissions limits and compliance schedules to bring Portland into compliance.
GenOn REMA, LLC (“GenOn”), the owner and operator of Portland, petitioned for review of EPA’s action, challenging the agency’s authority to impose direct regulations on Portland before the time that Pennsylvania is required to complete its Section 110 State Implementation Plan (“SIP”) for the 1-hour sulfur dioxide NAAQS. According to GenOn, EPA’s action offended the cooperative federalism structure of the Clean Air Act by undermining a state’s power to determine how to achieve air control standards.
The Third Circuit rejected this argument, concluding that the Clean Air Act is unambiguous that EPA can make a finding on a Section 126(b) petition without regard to the Section 110 SIP process. The court stated that “[t]he plain language of the relevant portions of the statute and the context in which such language is used convey that Congress intended Section 126(b) as a means for the EPA to take immediate action when downwind states are affected by air pollution from upwind sources.” GenOn REMA, No. 12-1022, slip op. at 18. Even if the statute were deemed ambiguous, however, the court found that EPA’s construction of the statute was reasonable. Based on the legislative history, the court concluded that “Section 126(b) was intended to allow the EPA, as a federal regulator, to intervene when states fail to adhere to the air pollution control process.” Id. at 22.
Finally, the court rejected GenOn’s argument that EPA’s action was arbitrary and capricious because it requires a reduction in sulfur dioxide emissions at Portland before requiring similar reductions from sources in New Jersey and prior to the time that SIPs addressing the new NAAQS are required. According to the court, once EPA independently determined that Portland was contributing to nonattainment and interfering with New Jersey’s air quality, “it reasonably abided by the Clean Air Act” in requiring Portland to undertake emissions reductions “as expeditiously as practicable, but in no case later than three years after the date of such finding.” Id. at 27 (quoting 42 U.S.C. § 7426(c)). Further, the court noted that it was satisfied that EPA had thoroughly examined the relevant scientific data.
In the wake of the Third Circuit’s ruling, it is possible that more states and local governments will file Section 126(b) petitions, and that EPA may be more receptive to such petitions.