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State v. United States Environmental Protection Agency

United States District Court, D. Nebraska

October 6, 2014

STATE OF NEBRASKA, Plaintiff,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; and GINA McCARTHY, Administrator, U.S. EPA, Defendants.

MEMORANDUM AND ORDER

JOHN M. GERRARD, District Judge.

This matter is before the Court on the motion to dismiss (filing 8) filed by the defendants, the Environmental Protection Agency and its administrator, Gina McCarthy (collectively, "the EPA"). As the EPA points out, the State of Nebraska's attempt to short-circuit the administrative rulemaking process runs contrary to basic, well-understood administrative law. Simply stated, the State cannot sue in federal court to challenge a rule that the EPA has not yet actually made. Accordingly, the Court will grant the EPA's motion and this case will be dismissed.

I. BACKGROUND

This case concerns the EPA's effort, under the Clean Air Act, 42 U.S.C. § 7401 et seq., to draft new standards that would limit emissions of carbon dioxide from newly-built fossil fuel-fired "electric utility generating units" (i.e., the equipment used to produce electricity, such as in a power plant). The EPA's proposal focuses primarily on coal- and natural gas-fired units. The EPA first proposed a new standard on April 13, 2012. See Standards of Performance for Greenhouse Gas Emissions From New Stationary Sources: Electric Utility Generating Units, 77 Fed. Reg. 22, 392. After considering more than 2.5 million comments, the EPA determined that revisions were warranted. So, the EPA withdrew the 2012 proposal and published a new proposal on January 8, 2014. See Standards of Performance, 79 Fed. Reg. 1, 430 (the "Proposed Rule").

The State contends that by basing the Proposed Rule (in part) on information from energy facilities that have received federal assistance, the EPA has violated a portion of another statute, the Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594. To understand this dispute, it will help to briefly review the relevant portions of the Clean Air Act and Energy Policy Act.

A. THE CLEAN AIR ACT AND NEW SOURCE PERFORMANCE STANDARDS

The Clean Air Act established "a comprehensive national program that made the States and the Federal Government partners in the struggle against air pollution." General Motors Corp. v. United States, 496 U.S. 530, 532 (1990). Section 111 of the Clean Air Act sets forth mechanisms for controlling emissions of air pollutants from "stationary sources" (such as factories and power plants). 42 U.S.C. § 7411. The EPA is tasked with establishing "standard[s] of performance" for "new [stationary] sources." 42 U.S.C. § 7411(a)(2), (b). Standards of performance for new sources are sometimes referred to as "new source performance standards" or "NSPS."

A "standard of performance" is defined as a standard for emissions of air pollutants which reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.

42 U.S.C. § 7411(a)(1) (emphasis supplied). As the emphasized portions show, an NSPS must be based upon the "best system of emission reduction" which has been "adequately demonstrated." This latter concept lies at the heart of the current dispute. Bearing that in mind, the Court turns to the Energy Policy Act.

B. THE ENERGY POLICY ACT

Among other things, the Energy Policy Act of 2005 provided federal funding for the development of coal-based energy projects which were designed to "advance efficiency, environmental performance, and cost competitiveness well beyond the level of technologies" then in commercial service. 42 U.S.C. § 15962(a). Although the Energy Policy Act seeks to encourage the development of cleaner energy facilities, it also includes "several provisions that limit the EPA's authority to rely on information from those facilities in conducting rulemaking or taking other action" under various provisions of the Clean Air Act, including the promulgation of NSPS under section 111. Standards of Performance, Notice of Data Availability, 79 Fed. Reg. 10750, 10752 (Feb. 26, 2014).

In particular, section 402(i) of the Energy Policy Act provides that "[n]o technology, or level of emission reduction, solely by reason of the use of the technology, or the achievement of the emission reduction, by 1 or more facilities receiving assistance under this Act, shall be considered to be... adequately demonstrated for purposes of" section 111 of the Clean Air Act. 42 U.S.C. § 15962(i) (emphasis supplied). In other words, the federal government cannot subsidize construction of facilities with the Energy Policy Act and then claim that the facilities for which it paid demonstrate, for Clean Air Act purposes, that the technology is viable.

C. THE STATE'S CHALLENGE TO THE PROPOSED RULE

As part of its Proposed Rule, the EPA found that certain technology was "adequately demonstrated" for purposes of section 111 of the Clean Air Act. In making that determination, the EPA relied, in part, on data from facilities receiving assistance under the Energy Policy Act. Filing 1 at ¶¶ 4, 18-26; see e.g., Proposed Rule, 79 Fed. Reg. at 1478. The State filed suit, claiming that this violated section 402(i) of the Energy Policy Act. The ...


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