Judicial Review of Mercury and Air Toxics Regulations

August 17, 2020

Judicial Review of Mercury and Air Toxics Regulations

Since 1990, the U.S. Environmental Protection Agency’s

(EPA’s) efforts to regulate mercury and other hazardous air

pollutants (HAPs or air toxics) emitted by power plants

have faced numerous legal challenges. The Clean Air Act

(CAA) Amendments of 1990, Pub. L. 101-549, established

a multistep process for EPA to regulate HAP emissions

from fossil fuel-fired electric utility steam generating units

(i.e., power plants). One of those steps requires EPA to

regulate HAP emissions from power plants if the agency

determines that it is “appropriate and necessary” to do so.

Stakeholders have challenged each of EPA’s “appropriate

and necessary” findings and other actions to regulate HAP

emissions from power plants. Most recently, litigants are

challenging EPA’s May 2020 rule that concluded that HAP

emission limits for coal- and oil-fired power plants are not

“appropriate and necessary” under the CAA (2020

Appropriate and Necessary (A&N) Rule, 85 Fed. Reg.

31,286, May 22, 2020). This rulemaking reversed a prior

EPA-issued rule that such limits were appropriate and

necessary, though EPA declined to rescind the emissions

limits that were associated with the prior finding. This In

Focus reviews the history of litigation challenging EPA’s

treatment of HAP emissions from power plants under CAA

Section 112 and identifies legal issues that will likely arise

in the current litigation.

CAA Section 112 Framework

CAA Section 112(c) requires EPA to identify and list

categories of HAP pollution sources prior to regulating their

HAP emissions. Under Section 112(c)(9), EPA may delist a

source category only if the EPA Administrator makes

specific findings that the health and environmental effects

of the sources’ emissions in that category do not exceed

certain thresholds.

Congress explicitly required EPA to assess power plant

HAP emissions and consider their regulation. Specifically,

CAA Section 112(n) required EPA to study the “hazards to

public health reasonably anticipated to occur” from HAPs

emitted by power plants once the agency had imposed other

CAA requirements, and to regulate those emissions if the

agency “finds such regulation is appropriate and necessary

after considering the results of the study.”

The 2000 A&N Finding and Listing

EPA completed the Section 112(n)(1) study in 1998. In

2000, EPA determined that it was “appropriate and

necessary” to regulate HAPs from coal- and oil-fired power

plants and listed them as a source of hazardous pollution

(2000 A&N Finding, 65 Fed. Reg. 79,825, Dec. 20, 2000).

EPA did not issue emission standards as part of the A&N

Finding. In 2001, the U.S. Court of Appeals for the District

of Columbia Circuit (D.C. Circuit) dismissed challenges to

the 2000 A&N Finding, holding that the matter was

nonjusticiable until EPA issued emission standards (UARG

v. EPA, No. 01-1074 (D.C. Cir., Jul. 26, 2001)).

The 2005 Delisting and the

Clean Air Mercury Rule

In 2005, EPA reversed the 2000 A&N Finding (70 Fed.

Reg. 15,994, Mar. 29, 2005). EPA concluded that it had

erred in the 2000 rule by relying solely on environmental

factors without considering the potential mercury emissions

reductions achievable under other CAA requirements. EPA

determined that in light of these potential reductions,

regulating power plant emissions under Section 112 was

neither appropriate nor necessary, and it delisted power

plants as a source of HAP emissions.

In place of regulating power plant emissions under Section

112, EPA issued the Clean Air Mercury Rule (CAMR)

pursuant to CAA Sections 111(b) for new power plants and

111(d) for existing power plants (70 Fed. Reg. 28,606, May

18, 2005). CAMR set mercury performance standards for

new power plants and created a voluntary mercury cap-andtrade program for new and existing power plants.

In 2008, the D.C. Circuit vacated the 2005 delisting of

power plants as a HAP source because EPA failed to make

the health and environmental findings set forth in CAA

Section 112(c)(9) prior to delisting (New Jersey v. EPA,

517 F.3d 574 (D.C. Cir. 2008)). Further, the court vacated

CAMR as applied to existing power plants because, as EPA

conceded, if power plants are listed under Section 112(c),

EPA lacked authority to regulate them under Section

111(d). The court also vacated and remanded CAMR as

applied to new power plants in part because EPA issued the

Section 111(b) new source performance standards based on

the erroneous “vital assumption[]” that EPA would not

regulate new power plants under Section 112.

The 2012 Mercury and Air Toxics Rule

and the 2016 Supplemental Finding

After settling a suit seeking enforceable deadlines for EPA

to regulate HAP emissions from power plants, EPA

promulgated the Mercury and Air Toxics (MATS) Rule in

2012 (77 Fed. Reg. 9304, Feb. 16, 2012). The MATS Rule

reaffirmed the 2000 A&N Finding and, based on additional

analysis and information, determined that setting HAP

emissions standards for most existing coal- and oil-fired

power plants under Section 112 was “appropriate and

necessary.” As part of the rule, EPA concluded that it was

not “appropriate to consider costs” when making an A&N

finding.

The D.C. Circuit upheld the MATS Rule in 2014 (White

Stallion Energy Ctr. v. EPA, 748 F.3d 1222 (D.C. Cir.

https://crsreports.congress.gov

Judicial Review of Mercury and Air Toxics Regulations

2014)), but the Supreme Court reversed the decision

(Michigan v. EPA, 576 U.S. 743 (2015)), ruling that EPA

must consider cost in Section 112 A&N findings. The Court

declined to vacate the MATS Rule, however, as did the

D.C. Circuit on remand, leaving the MATS Rule in effect.

The public health and environmental organizations, a subset

of the state and local governments challenging the 2020

A&N Rule, the emissions control technology companies,

and the three utility companies have moved to intervene in

Westmoreland’s suit to defend these agency actions.

In response to the Supreme Court’s ruling, EPA finalized a

supplemental A&N finding in 2016, which concluded that

the 2000 A&N finding that regulating power plant

emissions is “appropriate and necessary” was still valid

after taking into account the MATS Rule’s estimated costs

(2016 Supplemental Finding, 81 Fed. Reg. 24,420, Apr. 25,

2016). Industry groups challenged the 2016 Supplemental

Finding, but in 2017, the D.C. Circuit paused the litigation

while EPA reconsidered it (Murray Energy Corp. v. EPA,

No. 16-1127 (D.C. Cir.)).

The court has not set a briefing schedule, and the full set of

issues the petitioners will raise is not yet known. Based on

the comments submitted on the proposed 2020 A&N Rule,

as well as the relevant litigation history, several key issues

will likely arise in the case or its aftermath:

Current Status and Next Steps

The 2020 A&N Rule reversed the 2016 Supplemental

Finding. EPA found that its prior analysis was flawed

because it gave “equal weight” to direct benefits (HAP

emission reductions) and co-benefits (non-HAP emission

reductions) of the regulation. Excluding co-benefits from

the cost-benefit comparison led EPA to conclude that

regulating HAP emissions from power plants is not

“appropriate and necessary” because monetized costs

exceed by a factor of 1,000 the monetized benefits of HAPspecific emissions reduction.

The 2020 A&N Rule does not, however, remove coal- and

oil-fired power plants from the Section 112 list. Consistent

with New Jersey v. EPA, EPA recognized that it could not

remove power plants from the Section 112 list by reversing

an A&N finding without satisfying the health risk criteria

set forth in CAA Section 112(c)(9). Finding that the

estimated cancer risk from exposure to power plant HAPs

would fail to meet the health risk criteria, EPA noted that it

is “extremely unlikely that any EPA Administrator could

(much less would) lawfully exercise his or her discretion

[under CAA Section 112(c)(9)] to ‘de-list’ the coal- and oilfired power plant source category.” As long as power plants

remain listed as a source category, EPA concluded that the

MATS Rule emissions limits must remain in effect.

Six groups have filed challenges to the 2020 A&N Rule: (1)

Westmoreland Mining Holdings, a coal producer; (2) a

coalition of public health and environmental organizations;

(3) a coalition of 20 states and five local governments; (4) a

group of emission control technology suppliers; (5) a state

energy utility company; and (6) three utility companies that

generate electricity from low-emissions sources. The D.C.

Circuit has consolidated the cases, along with a challenge

by some of the same parties to EPA’s residual risk and

technology review (RTR) that accompanied the 2020 A&N

Rule (Westmoreland Mining Holdings, LLC v. EPA, No.

20-1160 (D.C. Cir.)). In the RTR, EPA evaluated the risk to

public health remaining after applying the MATS Rule’s

technology-based standards and concluded that no changes

to the MATS Rule were warranted.

Westmoreland is seeking review of not only the 2020 A&N

Rule but also the 2016 Supplemental Finding, the 2012

MATS Rule, and the 2000 A&N Finding and listing rule.

 Whether EPA may reverse an A&N finding without

satisfying the Section 112(c)(9) delisting criteria:

EPA asserts that an A&N finding “is structurally and

functionally separate” from the agency’s authority to

delist source categories.

 Whether the 2020 A&N Rule affects the MATS Rule

and EPA’s authority to regulate HAP emissions from

power plants: Westmoreland will likely argue that

rescinding the prior A&N finding leaves the MATS

Rule without a legal basis, and that the MATS Rule

must therefore be vacated.

 Whether EPA’s framework for analyzing benefits

and costs is reasonable: Public health and

environmental organizations, state and local

governments, and utility companies will likely challenge

both the agency’s exclusion of co-benefits and how it

quantified specific costs and benefits.

 Potential effect on related litigation: The court

ordered the parties challenging the 2016 Supplemental

Finding to submit their proposals for how the case

should proceed once it resumes (Chesapeake Climate

Action Network v. EPA, No. 15-1192 (D.C. Cir.)). Those

proposals will likely address whether the case is moot in

light of the reversal of the 2016 Supplemental Finding.

Environmental groups have also challenged EPA’s HAP

emissions standards for certain coal waste-fired plants,

which the agency issued in April 2020 after reevaluating

data from the MATS Rule (Citizens for Pennsylvania’s

Future v. EPA, No. 20-1207 (D.C. Cir.)). A ruling in the

2020 A&N Rule litigation addressing the legal basis of

the MATS Rule may affect the litigation over the April

2020 emission standards.

 Potential effect on existing power plants: Power

plants have already installed controls to comply with the

MATS Rule deadlines. However, the litigation over the

2020 A&N Rule could still affect their emission control

strategies. Some stakeholders are concerned that if the

court vacates the MATS Rule, power plants may shut

off their existing pollution controls absent federal

enforcement of their HAP emissions.

For more information, see CRS In Focus IF11078, EPA

Reconsiders Benefits of Mercury and Air Toxics Limits.

Kate R. Bowers, Legislative Attorney

Linda Tsang, Legislative Attorney

https://crsreports.congress.gov

IF11622

Judicial Review of Mercury and Air Toxics Regulations

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