Following this week's U.S. Court of Appeals for the District of Columbia Circuit ruling that U.S. EPA should reconsider budgets for sulfur dioxide and ozone pollution in its Cross-State Air Pollution Rule, what are the next steps the agency could take, and how could this decision influence future air cases before the court? During today's OnPoint, Thomas Lorenzen, a partner at Crowell & Moring and a former assistant chief in the Department of Justice's environment and natural resources division, discusses the ruling's implications.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Thomas Lorenzen, a partner at Crowell and Moring. Tom previously served as assistant chief in the Department of Justice's Environment and Natural Resources Division. Tom, good to have you back on the show.
Thomas Lorenzen: Nice to be here as always. Thank you.
Monica Trauzzi: Tom, the D.C. Circuit Court upheld the broader Cross-State Air Pollution Rule this week, but what they did ask EPA to reconsider are its emissions budgets for SOx and NOx. Where was the agency wrong and does this essentially mean that EPA overregulated?
Thomas Lorenzen: Well, let's answer the second one first. Yes, it means the agency overregulated certain states because what the Supreme Court said, what it heard EME Homer City was that you couldn't require a state to regulate more than necessary to address nonattainment problems in all downwind states. And it allowed parties to assert as applied challenges on that basis, and what the D.C. Circuit held yesterday is that certain states were being overregulated because the emission reductions required were more than necessary to get to attainment in all the linked downwind states.
Monica Trauzzi: So what does this mean -- what does the decision mean for those states that are involved?
Thomas Lorenzen: For those states right now, it means the rule goes forward as usual. Interestingly here, the D.C. Circuit did not vacate CSAPR, the transport rule. It remanded without vacatur, so that the targets would continue to be applicable until EPA reconsiders and comes up with new numbers for those states.
Monica Trauzzi: And how much time do they have to do that?
Thomas Lorenzen: The court didn't put a deadline on, but it did warn EPA to proceed promptly, and it said that the parties who were affected would have remedies if the agency didn't proceed promptly. Now, this is a complicated question. So how quickly the agency can proceed is anybody's guess.
Monica Trauzzi: Are there next legal steps that could potentially make things stretch out a little longer?
Thomas Lorenzen: Well, the agency's going to have to go back now and think about how you calculate goals for each of these affected states, and what that then does to the goals that are set for other states. And the court, in a footnote, even acknowledges that that's a potential problem that the Supreme Court didn't give instruction on. So the agency's going to have to wrestle with that and it's then going to have to determine what is a fair way and what is a reasonable way of allocating the emission-reduction burdens in those sorts of circumstances.
Monica Trauzzi: So at this point, do we have a sense of how much we could see these budgets actually modified?
Thomas Lorenzen: Well, the Supreme Court identified some of them as being quite significant. For instance, I think it identified Texas as being linked to only one area that was likely to attain even if Texas did nothing. So you could see a significant reduction in Texas' budget because you can't say that the emission reductions required were necessary to get to attainment in all linked states. So there could be some significant shifts, but I think overall the rule's going to go forward, EPA's going to try to find a way to deal with this.
Monica Trauzzi: So does this ruling in any way have an impact on future air cases? We're always trying to read the tea leaves.
Thomas Lorenzen: Well, it does have an impact. I mean, right now, this rule and this decision deals with an older set of NAAQS, where we've now got a new NAAQS out, and EPA has just, in the last week or two, put out a notice of data availability on how it is going to model the upwind states' contributions for that ozone NAAQS. This ruling is going to affect how EPA proceeds with that. It's going to make it a more complicated decision for EPA, so yes, it's going to have some impacts.
Monica Trauzzi: Judge Kavanaugh wrote the opinion in this case, and he's been an interesting one to watch on air cases overall. Is there anything in the written decision that stood out to you as potentially significant?
Thomas Lorenzen: The significance of this decision -- I mean, Judge Kavanaugh is no fan of this rule, and he thinks that the lines that are drawn for upwind states' contributions should be strictly tied to their individual contributions. The Supreme Court has tied his hands on that somewhat, but he is also holding EPA to the exact letter of the Supreme Court's opinion, and you'll notice that two or three, or perhaps even four times throughout the opinion, he cites that critical language from the Supreme Court that no state's budget may be more than necessary to achieve attainment in all linked states. And he comes back to that again and again and again and says that he's going to hold EPA to task on that.
The interesting thing about this decision, there's no dissent. Judge Rogers, who thought that EPA had a reasonable approach, goes along with this, as did Judge Griffith. So that, I think, is quite notable. Judge Kavanaugh, I think, is feeling his oats these days. He was basically upheld by the Supreme Court, or I should say his dissent from the, pardon me, the Michigan case at the D.C. Circuit was really the basis for the Supreme Court's decision in its recent Michigan decision. And so he is, I think, asserting his stature on the court, and he is going to hold EPA to task in rules going forward.
Monica Trauzzi: All right, very interesting to continue watching. Thank you for coming on the show.
Thomas Lorenzen: Thank you for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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