Industry groups, Mont. press case against SO2 standard

By Jeremy P. Jacobs | 09/16/2015 01:10 PM EDT

Three industry groups and Montana today pressed federal appeals judges to reverse U.S. EPA’s determinations that three geographic areas failed to meet its air standard for sulfur dioxide, a harmful gas.

In August 2013, EPA designated 29 areas nationwide as not attaining its 2010 sulfur dioxide, or SO2, air standard of 75 parts per billion. SO2 is emitted from power plants and other facilities and can cause respiratory illnesses like asthma, particularly in children and the elderly.

Industry groups are challenging three of those nonattainment determinations at the U.S. Court of Appeals for the District of Columbia Circuit: one in Billings, Mont., near Yellowstone National Park, another in Detroit and a third in central Illinois near Peoria.

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In each, the challengers contend EPA used faulty air monitoring data or drew the lines of the nonattainment areas inaccurately. A nonattainment designation requires the state to come up with a plan to reduce emissions, typically by mandating facilities install costly pollution controls.

The Treasure State Resource Industry Association contends that the Montana determination illogically relied on air monitoring from 2010, even though a local oil refinery was under a binding legal agreement with EPA to conduct testing that led to a boost in SO2 emissions that year. In other years, the group — as well as the state, which has intervened in the case — argues that the area meets the 75 ppb standard.

Attorney William Mercer of the firm Holland & Hart, representing the group, said EPA does not deserve the typical deference from courts on the issue. In this case, he said, there was a "failure of EPA to follow its own rules and guidelines."

The key issue, Mercer said, is whether all the data EPA relied on qualified as "quality assured." Some of the data for 2010, he said, failed to meet that standard and therefore should be excluded. If those data are removed, he said, the area meets the standard.

Mercer seemed to gain some traction with the three-judge panel, which posed tough questions both to Mercer and to EPA’s attorney, Amanda Shafer Berman of the Justice Department.

Berman contended that the challengers were "cherry-picking" data and that EPA determined that, on the whole, the data were reliable. The dates of the Exxon Mobil Corp. refinery testing, for example, did not correspond with the days registering SO2 spikes.

But Judge Patricia Millett, a Democratic appointee, asked if there have ever been other instances where data violates "critical criteria" for assuring its quality where EPA has, ultimately, gone ahead and used it. Berman was unable to provide any such examples.

"One mistake," Berman said, "is not reason to throw out all of the data."

Mich., Ill. challenges

Separately, U.S. Steel Corp. argued that the boundaries of EPA’s nonattainment area for Wayne County in Michigan should be extended to include the largest SO2 emitter in the region, DTE Energy Co.’s coal-fired Monroe Power Plant in neighboring Monroe County. If that plant were included, U.S. Steel would presumably not have to cut its emissions by as much.

But attorney Douglas McWilliams of Squire Patton Boggs ran into difficult questions pressing his case before the judges.

In particular, a majority of the panel seemed unwilling to side with U.S. Steel because EPA has yet to make a determination on the attainment status of Monroe County. Under a separate legal settlement, it will by next July.

Senior Judge Stephen Williams, a Republican appointee, said the fact that EPA hasn’t taken final action with regard to Monroe is "fatal" to U.S. Steel’s claim.

Judge Thomas Griffith, another Republican appointee, added that "nothing in law tells you where the boundary [of a nonattainment area] needs to be drawn."

And Millett noted that there is an area between the Monroe Power Plant and U.S. Steel’s facility — Allen Park — that actually meets the SO2 standard, so perhaps the two facilities shouldn’t be in the same area for attainment purposes.

Lastly, Illinois Power Resources Generating LLC, a subsidiary of Dynegy Inc., argues the opposite — that EPA should not have included Hollis Township in Peoria County — where the utility has a power plant — in the nonattainment area.

Berman broadly argued that all of the challenges are "quibbles" with EPA’s determination and that the agency deserves deference. Further, she contended that the Illinois and Michigan challengers lack standing because the nonattainment designation does not directly regulate the parties in the case. Rather, it forces the states in which they reside to come up with plans to lower emissions.

A decision in Treasure State Resource Industry Association v. EPA is likely within the next year.

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