Home New mexico united EPA seeks to extend ozone transport rule west and to new sources | Brownstein Hyatt Farber Schreck

EPA seeks to extend ozone transport rule west and to new sources | Brownstein Hyatt Farber Schreck

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The Environmental Protection Agency (EPA) recently proposed a Federal Implementation Plan (FIP) this has important implications for power plants and other industrial sources of nitrogen oxide (NOx) in the western United States, including Utah, Wyoming and Colorado, as these states continue to struggle to reach ozone. The agency proposed the plan under its “good neighbour” Clean Air Act to establish NOx reductions from power plants and certain other industrial sources, including large stationary engines (>1000 hp) in the gas pipeline and natural gas transportation sector. For the first time, the EPA has identified the western states of Nevada, Utah and Wyoming as downwind states subject to plan reductions.

EPA’s proposal is intended to meet downwind states’ obligations under Section 110 of the Clean Air Act not to interfere with downwind states’ ability to meet the National Air Quality Standard. Ambient Air (NAAQS) 2015 Ozone Report. This rule provides the following:

  • Beginning with the 2023 ozone season, 25 states are expected to meet ozone season emissions budgets for power plants by participating in a revised version of the Cross Country’s Ozone Season Group 3 NOx trading program. -State Air Pollution Rule. However, if a state submits, and the EPA approves, a State Implementation Plan (SIP) that achieves emission reductions sufficient to comply with good neighbor obligations, it would not be required to participate in the PIF.
  • Beginning in 2024 for certain power plants in covered states, the EPA is proposing to establish an emergency daily emissions rate of 0.14 lb/mmBtu for coal-fired steam plants greater than or equal to 100 megawatts. Excess emissions would result in a 3:1 buy-back ratio under the trading program.
  • Beginning in 2026, the rule proposes new NOx limits in 23 states from certain industrial stationary sources other than power plants, including alternative internal combustion in pipeline transportation of natural gas sources, furnaces in sources in the manufacture of cement and cement products, and high-emitting equipment and large boilers in the manufacture of basic chemicals and the manufacture of petroleum and coal products. The EPA is also exploring control strategies for other sources.

With this proposal, the EPA seeks to impose federal requirements over a greater geographic area and over more sources of NOx emissions, including the gathering, boosting, and transmission segments of the oil and gas sector. For the first time, the western states of Nevada, Utah and Wyoming would be required to submit SIPs that address impacts on neighboring states or be subject to FIP. Air quality modeling and EPA contribution analysis for 2023 show that these states are above the 1% NAAQS contribution threshold established by the EPA. It’s unclear whether those states will challenge the EPA’s findings or attempt to evade good neighbor requirements during the rulemaking process. The proposed rule also indicates that the EPA is also seeking to regulate a wider range of NOx emission sources under this Clean Air Act program than in the past. In addition to including new NOx limits for some industrial sources, the proposed rule requests comments on potential control strategies for other sources, such as municipal waste incinerators.

The EPA isn’t the only organization looking west. An environmental group recently filed a lawsuit against the EPA to compel the agency to include New Mexico in an FIP for its ozone contributions in Colorado and Texas, alleging that New Mexico has not submitted any SIP dealing with these contributions. Wildearth Guardians vs. EPA, case no. 22-cv-174 (DNM filed on March 8, 2022). Notably, the EPA proposal does not include New Mexico.

Comments may be submitted on the proposed rule once it is published in the Federal Register. (The proposal published on February 28, 2022 by the EPA was the prepublication version.) Our lawyers and policy advisors are familiar with the evolving requirements under the Clean Air Act and the federal regulatory process. We would be happy to answer any questions your business may have about how these proposed rules might impact your business or industry.