New Source Review Court Decision

I enter the field of air pollution control carefully: not only is it controversial, but it's outside my immediate range of experience (dispersion modeling). It looks like the recent Appeals Court decision regarding EPA’s December 2002 New Source Review (NSR) reforms doesn't lean THAT heavily in industry's direction. Still, everyone is waiting to see what happens with the NEXT court decision:

The Bush administration's plan to let aging industrial plants modernize without buying expensive new pollution controls was upheld Friday by a federal appeals court.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia sided with the Environmental Protection Agency, saying New York and 13 other states failed to show how key areas of the administration's new regulations violate the 1970 Clean Air Act. But the unanimous decision also came down against the EPA on two parts of the rule changes, and told the agency to review a third, giving environmentalists some reason for optimism within the 73-page decision.

...The Bush administration argued that its decision to let older power and other industrial plants modernize without making them install expensive new pollution controls will remove barriers to innovation and increase productivity -- and will not worsen air quality. But environmental critics say the changes also will increase sulfur dioxide and nitrogen oxides that contribute to acid rain and public health woes....

...The judges' ruling said it is not clear if the administration's changes in "new source review" regulations -- rules governing industrial sources of pollution -- will lead to greater pollution, or if leaving the old rules in place would deter companies from modernizing. The new source review rules apply to some 17,000 facilities around the country, including power plants, refineries, steel mills and pharmaceutical factories.

...Another lawsuit, focusing on plant maintenance and upgrades, will be of greater importance to power plants. That case is pending.

Among its decisions, the Appeals Court rejected an exemption for pollution control projects. For example, if you install a scrubber on a coal-fired boiler, you will generate a large reduction in SO2 emissions and a small increase in particulate emissions. Under the old rules, the increase in particulate emissions could trigger NSR and Best Available Control Technology requirements, thus creating a disincentive to install the scrubber. The December 2002 rule changes would have exempted these collateral emission increases from review under certain circumstances, but the Court held that there is no basis in law for this exemption. Some California District rules include similar exemptions.

Most significantly, this Court decision has nothing to do with the Routine Repair, Maintenance and Replacement provisions of the NSR Reform package. These provisions are the most controversial provisions that lead to the claim that power plant operators might be able to modernize their facilities without undergoing NSR. The Court decision didn’t address those provisions because the States’ lawsuits didn’t challenge those provisions, because they were adopted by EPA less than two weeks ago. So that battle is yet to come.