Comments of Marlo Lewis on a Potential Clean Power Plan Replacement Rule

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Thank you for the opportunity to submit comments on the Environmental Protection Agency’s (EPA) advance notice of proposed rulemaking (ANPRM) [1] to solicit information on how (or whether) to replace certain aspects of the so-called Clean Power Plan (CPP),[2] which EPA proposes to repeal.[3]

The comment letter is organized as follows. Part I summarizes the letter’s main points. Part II briefly discusses the CPP, EPA’s statutory reasons for repeal, and the associated limitations the statute places on any possible replacement rule. Part III makes the case for simply repealing the CPP and not replacing it with new carbon dioxide (CO₂) emission performance guidelines for existing electric generating units (EGUs). Part IV argues that improving power plant thermal efficiency via equipment upgrades and good practices is inconsistent with the understanding of “best system of emission reduction” (BSER) reflected in all previous CAA section 111 standards, which always based BSER on a specific emission-reduction technology. Part V recaps the key points and concludes the comment letter.

Part I: Overview of Key Points

1. The ANPRM is correct that the CPP is unlawful.

• CAA section 111(d) standards are to reflect the “best system of emission reduction” (BSER) that has been “adequately demonstrated.”
• BSER measures “must be based on a physical or operational change to a building, structure, facility, or installation at that source.”
• Defying that textual, contextual, and traditional understanding, the CPP chiefly based BSER on “measures that the source’s owner or operator can implement on behalf of the source” through economic decisions anywhere in the national electricity marketplace.

2. Even if BSER is confined to measures applicable to and at the source, EPA may not lawfully regulate existing EGUs under CAA section 111(d).

• CAA section 111(d) excludes its application to “any air pollutant” regulated under the national ambient air quality standards program—the so-called NAAQS exclusion—or from a “source category regulated under CAA section 112”—the so-called Section 112 Exclusion.
• Coal- and oil-fueled power plants have been regulated under section 112 since 2012, and natural gas combustion turbines since 2004.
• Hence, the CPP, which regulates CO₂ emissions from existing power plants, is unlawful under the very provision that purportedly authorizes it.

3. Contrary to the proposed CPP and its accompanying legal memorandum, the two versions of the Section 112 Exclusion in the Statutes at Large do not create “ambiguity” allowing EPA to reconcile the texts.

• The version in the U.S Code was passed by the House. As noted, it prohibits CAA section 111(d) regulation of any source category regulated under CAA section 112. The Senate version prohibits CAA section 111(d) regulation of any air pollutant “listed [as a hazardous air pollutant (HAP)] under CAA section 112(b).”
• Claiming the two versions make the statute “ambiguous,” the Obama EPA proposed to interpret the statute to mean that CAA section 111(d) may not regulate HAPs that are actually regulated (not merely listed) under CAA section 112. Since CO₂ is not regulated as a HAP, the CPP concluded, CAA section 111(d) may regulate CO₂ emissions from existing EGUs.
• However, the Senate-passed version is invalid. It would bar EPA from using CAA section 111(d) to regulate any HAP listed under CAA section 112(b). However, CAA section 112(n)(1)(A) gives EPA the option to regulate power plant HAP emissions under other statutory authorities, such as CAA section 111(d).
• Thus, as the Bush EPA observed in the Clean Air Mercury Rule, “It is hard to conceive that Congress would have adopted section 112(n)(1)(A), yet retained the Senate amendment to section 111(d).”
• In addition, the House Law Revision Counsel correctly decided that the Senate version, a mere conforming amendment (clerical revision), “could not be executed,” because it updated a cross reference already deleted by the prior House amendment.
• According to the Senate Managers’ memorandum on the 1990 CAA House-Senate conference committee, the Senate “recedes to” (accepts) the House bill’s provisions “amending section 111 of the Clean Air Act relating to new and existing sources.”

4. Contrary to the final CPP, the House-passed version of CAA section 111(d)—the statute as it appears in the U.S. Code—is not itself ambiguous.

• In effect, the CPP argues that because we can imagine alternative meanings that are plainly “unreasonable” and have never been suggested during the previous 40 years, we are now free to pretend the obvious meaning relied on by the Clinton EPA, the Bush EPA, and even the Obama EPA until promulgation of the final CPP is just one of many equally valid possibilities.
• That is a non-sequitur and does not pass the laugh test.

5. Contrary to the final CPP, the Senate-passed version is not “unambiguous.”

• As the Supreme Court has held, “Ambiguity is not a creature of definitional possibilities but of statutory context.” As explained above, the Senate version of the Section 112 Exclusion is inconsistent with its statutory context—CAA section 112(n)(1)(A), the provision in CAA section 112 dealing with EGUs.
• Read as an isolated phrase, “listed under CAA section 112(b)” is not ambiguous. But a phrase need not be ambiguous to be a drafting error. The CPP tacitly admits the Senate version is in error, because its preferred reading of the text substitutes “regulated under CAA section 112” for “listed under CAA section 112(b).”

6. Even if the House and Senate versions are both valid, EPA would still have no authority to regulate existing power plants under CAA section 111(d).

• If, as the CPP assumes, both versions of the Section 112 Exclusion must be “given effect,” then EPA should simply combine them, not mix and match their elements to suit a political agenda. After all, EPA is an administrative agency, not a conference committee.
• Combining the two prohibitions is simple because they are complementary rather than conflicting.
• To wit: EPA may apply CAA section 111(d) neither to source categories regulated under CAA section 112 nor to air pollutants listed under CAA section 112(b).

7. Contrary to the Obama EPA and environmental petitioners, the U.S. Code version of the Section 112 Exclusion does not punch a “gaping hole” in the “structure” of the CAA, nor does it endanger public health.  

• There was never a big demand for CAA section 111(d) regulation—EPA has used CAA section 111(d) to regulate a total of four pollutants from five sources, and none more recently than 1996 (until the CPP).
• The post-1990 proliferation of “maximum achievable control technology” (MACT) standards for virtually all industrial sources of 189 air pollutants leaves very little room for additional regulation via less stringent CAA section 111(d) performance standards.
• In addition, most non-HAP sources operating today were built after the start of the CAA section 111(d) program in 1975. As such, those sources are subject to CAA section 111(b) new source performance standards, which typically are more stringent than CAA section 111(d) standards.
• After decades of industrial stock turnover and the expansion of both CAA section 111(b) and CAA section 112 pollution controls, CAA section 111(d) has become an anachronism of a bygone era when many industrial source categories were still uncontrolled.
• If by some improbable chance, scientists find that aging facilities emit some previously unknown form of dangerous air pollution, EPA could classify and regulate it as a HAP.

8. Contrary to the final CPP, the U.S. Code version of the Section 112 Exclusion does not conflict with CAA section 112(d)(7), which prohibits EPA from interpreting MACT standards to “diminish or replace the requirements” of CAA section 111(d) regulations.

• One can only “diminish or replace” requirements that have already been adopted.
• The Section 112 Exclusion applies prospectively to new CAA section 111(d) regulation of CAA section 112 sources, not retroactively to “previously established” CAA section 111(d) rules.
• Excluding new and additional CAA section 111(d) regulation of CAA section 112 sources does not diminish or replace anything.

9. It is not the Section 112 Exclusion but CAA section 111(d) regulation of CO₂ that conflicts with the tripartite structure of the CAA.

• As EPA’s 1975 implementing regulation observes, one reason Congress enacted CAA section 111(d) is that some pollutants are “not emitted by ‘numerous or diverse’ sources as required by section 108.”  Carbon dioxide is emitted by both numerous and diverse mobile and stationary sources. It is exactly the type of ubiquitous “air pollutant” Congress did not intend to be addressed by CAA section 111(d).
• Putting the same point somewhat differently, CAA section 111(d) was designed to address air pollutants with “highly localized” effects.  For such pollutants, proximity to the source chiefly determines the associated health risks. Whatever the impacts of CO₂ emissions on global climate, or of climate change on particular communities, the potential health and welfare risks are not affected by proximity to the source.
• Carbon dioxide and CAA section 111(d) are a total mismatch.

10. Defining “best system of emission reduction” in terms of operating efficiency is not consistent with the understanding of CAA section 111 reflected in EPA’s historic practice.

• In all previous CAA section 111 rules, BSER is based on a specific emission-reduction technology. It would be ridiculous, for example, to define BSER for primary aluminum plants in terms of incremental efficiency gains rather than in terms of technologies that can actually control fluoride emissions.
• The Obama EPA acknowledged that retrofitting fossil-fuel power plants with carbon capture and storage (CCS) technology is too costly to pass muster as BSER. However, it refused to face the obvious implication of that assessment: There is no “adequately demonstrated” BSER for CO₂ emissions from existing EGUs.
• The absence of a bona fide BSER is another reason CAA section 111(d) may not be used to control CO₂ emissions from existing fossil fuel power plants, and why the agency should simply repeal rather than replace the CPP.

Read the full comments here.