Case: 11-2328 Document: 56 Filed: 05/08/2012 Page:3 UNITED STATES COURT CF APPEALS FOR THE SIXTH CIRCUIT Disclosure of Corporate Affiliations and Financial Interest Sixth Circuit Case Number: 11?2328 Case Name; United States y. DTE Energy Co. at al. Name of counsel: William L. Wehrun'i Pursuant to 5th Cir. R. 25.11 Utility Air Regulatory lGroup Name ofFarty makes the following disclosure; Is said party a subsidiary or affiliate of a publicly owned corporation? If Yes, list below the identity of the parent corporation or affiliate and the relationship between it and the named party: No 2. Is there a publicly owned corporation, not a party to the appeal1 that has a financial interest in the outcome? If yes, list the identity of such corporation and the nature of the financial interest: He CERTIFICATE SERVICE I certifythat on May 8. 2?'l2 the foregoing document was scored on all parties or their counsel of record through the CMIECF system if they are registered users or, ifthey are not, by placing a true and correct copy in the United States mail, postage prepaid, to their address of record. stilliam L. Wehrum This statement is filed twice: when the appeal is initially opened and later, in the principal briefs, immediately preceding the table of contents. See Eth Cir. R. 26.1 on page 2 ofthis form. EBA-1 SIDE Page 1 ol' 2 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 1 No. 11-2328 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT ________________ UNITED STATES OF AMERICA, Plaintiff-Appellant, v. DTE ENERGY COMPANY and DETROIT EDISON COMPANY, Defendants-Appellees. ________________ On Appeal from the U.S. District Court for the Eastern District of Michigan, No. 10-13101 (Hon. Bernard A. Friedman) ________________ BRIEF OF AMICI CURIAE AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS, AMERICAN PETROLEUM INSTITUTE, AND UTILITY AIR REGULATORY GROUP IN SUPPORT OF DEFENDANTSAPPELLEES Harry M. Ng General Counsel Mara Zimmerman Office of the General Counsel American Petroleum Institute 1220 L Street, NW Washington, DC 20005 (202) 682-8000 Ng@api.org ZimmermanM@api.org Please see inside cover for additional counsel. Richard S. Moskowitz General Counsel American Fuel & Petrochemical Manufacturers 1667 K Street, NW Suite 700 Washington, DC 20006 (202) 457-0480 rmoskowitz@afpm.org DATED: May 8, 2012 Case: 11-2328 Document: 56 William L. Wehrum HUNTON & WILLIAMS LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 (202) 955-1500 wwehrum@hunton.com Counsel for UARG Filed: 05/08/2012 Page: 2 Case: 11-2328 Document: 54 Filed: 05/08/2012 Page: 1 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT Appearance of Counsel Sixth Circuit Case No.: 11-2328 Case Manager: Case Name: USA Client’s or Clients’ Name(s): vs. DTE Energy, et al. (List all clients on this form , do not file a separate appearance form for each client.) Utility Air Regulatory Group Appellant Appellee Petitioner Respondent Amicus Curiae Intervenor Criminal Justice Act (Appointed) Lead counsel must be designated if a party is represented by more than one attorney or law firm. Check if you are lead counsel. Name: William L. Wehrum Admitted: 5/4/2012 (Sixth Circuit admission date only) Signature: /s/ William L. Wehrum Firm Name: Hunton & Williams LLP Business Address: 2200 Pennsylvania Avenue, N.W. Suite: City/State/Zip: Washington, D.C. 20037 Telephone Number: (Area Code) 202-955-1637 Fax: 202-778-7417 Primary E-mail Address: Additional E-mail Address: CERTIFICATE OF SERVICE May 8, 2012 I certify that on _____________________________________ the foregoing docum ent was served on all parties or their counsel of record through the CM/ECF system if they are registered users or, if they are not, by placing a true and correct copy in the United States m ail, postage prepaid, to their address of record. s/ William 6ca-68 3/09 9/08 L. Wehrum Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 13 INTRODUCTION The American Fuel & Petrochemical Manufacturers (“AFPM”), American Petroleum Institute (“API”), and Utility Air Regulatory Group (“UARG”) (collectively, “Amici”) have member companies that own and operate complex industrial facilities – including power plants, petroleum refineries, petrochemical manufacturing facilities, and related operations. These facilities consist of thousands of structures, vessels, and various equipment operated in an integrated fashion to produce the desired products. The failure of any of these parts—from the smallest valve to the largest components or structures—could result in unsafe or unreliable operation. As a result, companies routinely maintain, repair, and replace equipment and systems to help ensure reliable and safe operations to produce the fuels, chemicals, and electricity that our Nation’s economy and individuals need for modern life. These facilities also need to have the flexibility to pursue process changes that can further their business and meet the needs of their customers. One of the key issues presented in this case relates to whether these types of activities constitute “major modifications” under the 2002 New Source Review (“NSR”) Reform Rules, 67 Fed. Reg. 80,186 (Dec. 31, 2002) A major modification triggers an expensive and complex permitting process which can take several years to complete before the work can even begin and serves to deter some companies from undertaking these projects. This case thus deals with 1 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 14 an issue of national importance and Amici have a substantial interest in its proper resolution and ensuring that the 2002 NSR Reform Rules are given their intended meaning without having EPA erode through its enforcement policies the improvements accomplished by the rule. For decades, Amici have participated on behalf of their members in rulemakings and other Clean Air Act (“CAA”) proceedings and in litigation arising from those proceedings. With respect to the 2002 NSR Reform Rules, Amici were heavily involved in the administrative and judicial proceedings that shaped them. They submitted extensive comments to EPA, and participated in the ensuing D.C. Circuit litigation. See New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005). That litigation spanned several years, and involved extensive briefing and participation by Amici. Along with other industry organizations, Amici intervened in New York in support of EPA in defense of the provisions of the 2002 NSR Reform Rules at issue in this case. Amici thus have a unique and deep understanding of the rulemaking process, and how the 2002 NSR Reform Rules were developed and originally interpreted by EPA. Amici’s purpose is to present a history of the enforcement of the NSR program and the extensive rulemaking process that led to the 2002 NSR Reform Rules. This background helps explain why the 2002 NSR Reform Rules were adopted, what improvements they sought to achieve, and why the characterization 2 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 15 of those Rules advanced by the Government in this case was properly rejected by the district court. Under the interpretation of the rules that the Government asserts in this litigation, projects undertaken in reliance on the 2002 NSR Reform Rules could be alleged to trigger liability, and be embroiled in lengthy and expensive litigation, even though the projects were not projected by the company to cause an emissions increase and, in fact, have not caused an emissions increase. The interpretation advanced here is inconsistent with the history and purpose of the 2002 NSR Reform Rules. It is inconsistent with the plain language of the 2002 NSR Reform Rules. And it is inconsistent with the district court’s application of the plain language of those Rules—that a project “is not a major modification if does not cause a significant emissions increase.” 40 C.F.R. § 52.21(a)(2)(iv)(a). If the interpretation of the 2002 NSR Reform Rules advanced by EPA counsel in this litigation is accepted, the certainty and predictability of NSR applicability for routine repair or replacement or process changes that do not result in emissions increases above applicability thresholds would be lost for all of the major industries represented by Amici. This would have a chilling effect on companies conducting these critical projects and would create a significant disincentive for projects that would improve efficiency, productivity, safety, and reliability. 3 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 16 AFPM is a non-profit, national trade association headquartered in the District of Columbia representing nearly 450 members, including virtually all U.S. refiners and petrochemical manufacturers. API is a nationwide, not-for-profit association representing over 470 member companies engaged in all aspects of the oil and gas industry, including science and research, exploration and production of oil and natural gas, transportation, refining of crude oil, and marketing of oil and gas products. UARG is a non-profit, unincorporated trade association of individual electric utilities and national industry trade associations. Neither Party’s counsel authored this brief in whole or in part. No person other than Amici and their members contributed money to the preparation of this brief. Counsel for the Government and Detroit Edison have consented to the filing of this brief. ARGUMENT I. Enforcement of the NSR Program in the Electric Utility Industry and the Advent of NSR Reform. EPA’s enforcement office developed a theory in the late 1990s of universal NSR liability for the electric utility industry. During the fall of 1999, EPA’s enforcement chief claimed that EPA had assembled a clear case that the utility industry systematically violated NSR for two decades: “Unless we’re getting something wrong here,” the EPA official recalls saying to utility executives, “these are violations of the law. Y’all want to step up to the plate?” Bruce Barcott, 4 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 17 Changing All the Rules, N.Y. Times Magazine, Apr. 4, 2004, available at http://www.nytimes.com/2004/04/04/magazine/changing-all-the-rules.html. By inviting industry to “step up to the plate,” it became clear that the Enforcement Office wanted a “global settlement,” under which industry would agree to accelerate future control technology retrofits required under other CAA programs in exchange for EPA eschewing a massive and expensive enforcement initiative. Otherwise, the Enforcement Office expressed concern that the “SIP process” in place would not “result in reduced emissions until well after the millennium.” EPA, Enforcement Focus: Coal-Fired Power Plants, Inside EPA Weekly Report at 9 (Dec. 12, 1997). As it turns out, EPA’s enforcement office was getting “something wrong”— it was advancing a new interpretation of the NSR program contrary to “EPA’s statements in the Federal Register, its statements to the regulated community and Congress, and its conduct for at least two decades . . . .” United States v. Duke Energy Corp., 278 F. Supp. 2d 619, 637 (M.D.N.C. 2003), aff’d on other grounds, 411 F.3d 439 (4th Cir. 2005), vacated in Envtl. Defense v. Duke Energy Corp., 549 U.S. 561 (2007). The head of Wisconsin’s environmental agency, for example, wrote EPA that “the changes in PSD/NSR applicability policy are apparently being enforced retroactively by EPA . . . . To go back now and enforce a revised policy on sources that relied in good faith on decisions by EPA or WDNR is totally 5 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 18 inappropriate.” Letter from George Meyer, Sec’y, Wisconsin DNR, to Francis Lyons, Administrator, EPA Region V (Oct. 18, 1999). Likewise, on October 29, 1999, the head of Virginia’s air programs sent a letter to EPA’s enforcement chief criticizing his proposed enforcement initiative as contrary to law and 25 years of EPA practice: “The way [EPA is] now trying to deal with routine maintenance, repair, and replacement is a significant deviation from the way EPA has considered this since the 1970s . . . . If EPA wants to change the way they have historically looked at routine maintenance, repair, and replacement, they should do it by rulemaking rather than an enforcement initiative that contradicts EPA’s own policies for the last 25 years.” Letter from John Daniel, Jr., Director, Air Program Coordination, Virginia Dept. of Envtl. Quality, to Bruce Buckheit, Director, EPA Office of Enforcement and Compliance Assurance (Oct. 29, 1999). EPA nevertheless commenced an enforcement initiative in November 1999 and filed seven lawsuits against Midwestern and Southern coal-fired utilities, and an administrative action against the Tennessee Valley Authority (“TVA”), the federal government’s own electric utility. Soon thereafter, EPA’s enforcement chief candidly characterized the enforcement initiative as “[p]erhaps … reinvented enforcement.” Transcript of American Bar Ass’n Update re Clean Air Act, Part 2 at 40 (May 23, 2000). 6 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 19 The complaint EPA filed against Detroit Edison in the district court is similar to the complaints it filed against utilities in 1999. Those actions were based upon new interpretations of the NSR program developed beginning in the late 1990s. In those actions, the Government devised a method for calculating whether a project would result in a significant net emissions increase, in the spirit of “think[ing] about what’s the best way to make these [emissions] computations at th[at] point in time.” Transcript of Record at 1012, United States v. Cinergy, No. 1:99-cv-01693 (S.D. Ind. May 13, 2008); see also id. at 1006, 1008, 1009-11. Consistent with its intent to create near-universal liability, this new test invariably resulted in an emissions increase for projects that were historically excluded under NSR. Before the NSR enforcement initiative was launched in 1999, utilities throughout the country undertook projects to maintain the reliability, efficiency and safety of their generating plants. These projects were undertaken with EPA’s knowledge. But EPA never claimed they triggered permitting requirements under NSR. Before 1999 EPA determined that only one project at a utility triggered NSR—a “massive” and “unprecedented” life extension at a Wisconsin Electric Power Company plant that was the subject of the decision in Wis. Elec. Power Co. v. Reilly, 893 F.2d 901, 911 (7th Cir. 1990) (“WEPCO”). 7 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 20 But five months later, EPA reassured industry and the public “that most utility projects will not be similar to the WEPCO situation, and that ruling is not expected to significantly affect power plant life extension projects.” Letter from William Rosenberg, EPA Ass’t Administrator for Air and Radiation, to John Dingell, U.S. Congressman, at 5-6 (June 19, 1991); see also United States v. Ala. Power Co., 681 F. Supp. 2d 1292, 1309 (N.D. Ala. 2008) (“[T]he court believes the EPA meant what it said when it called the modifications in WEPCO extraordinary and that the EPA did not anticipate bringing additional enforcement actions because of WEPCO. The fact that years passed before it did so speaks for itself.”). And EPA confirmed that “in most instances” sources could “readily ascertain whether NSR requirements apply . . . ,” and that they need not “seek applicability determinations . . . .” 57 Fed. Reg. 32,314, 32,332 (July 21, 1992). A. EPA Unlawfully Sought to Revise the NSR Program by Way of the Utility Enforcement Initiative. Because EPA’s positions on the meaning and application of the NSR regulations have been inconsistent, utilities and several states have challenged the NSR enforcement initiative as an unlawful effort to revise the NSR program. In an amicus brief filed with the Supreme Court, ten states and the West Virginia Department of Environmental Protection disproved EPA’s “elaborate conspiracy theory” that “state environmental agencies” and “every major utility-industry player (and, more particularly, every major player’s lawyers) either fundamentally 8 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 21 misunderstood or blatantly ignored EPA guidance on the meaning” of the NSR regulations for over twenty years. Compare Br. of States as Amici Curiae in Support of Respondents, Envtl. Def. v. Duke Energy Corp., 549 U.S. 561 (2007) (No. 05-848), 2006 WL 2689788 at *14 (“States Br.”) with Testimony of Bruce Buckheit before the Senate Democratic Policy Comm. at 6 (Feb. 6, 2004), available at http://dpc.senate.gov/hearings/hearing11/buckheit.pdf (stating that power companies have demonstrated a “cavalier disregard for the law over the past twenty years”). Rather, the states explained that “EPA’s current litigating position just wasn’t the prevailing understanding of NSR/PSD applicability during the two decades that preceded the current enforcement initiative’s launch in 1999.” States Br. at *14; see also Ala. Power, 681 F. Supp. 2d at 1310 (“[EPA] could not tell Congress it envisioned very few future WEPCO-type enforcement actions on the one hand, and then argue in subsequent enforcement actions that the utility industry was unreasonable in relying on those, or similar, EPA statements.”). The utilities have generally prevailed in the NSR enforcement cases. Upon review of the CAA, the NSR rules, and EPA guidance and conduct, many courts have rejected the interpretations of the NSR regulations advanced in the enforcement initiative. See, e.g., United States v. E. Ky. Power Coop., Inc., 498 F. Supp. 2d 976, 993 (E.D. Ky. 2007) (holding EPA deserves no deference where it 9 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 22 “takes an inconsistent view of the regulations, makes inconsistent statements with respect to the regulation, and also enforces the regulation with no discernable consistency . . . .”); Sierra Club v. TVA, No. 3:02-cv-2279-VEH, slip op. at 9 (N.D. Ala. July 5, 2006) (“I do not see how anyone can say with a straight face that EPA’s 1999 interpretation of [routine maintenance, repair, and replacement] and emissions … was the same . . . as [the] published SIP regulations.”); United States v. Duke Energy Corp., No. 1:00CV1262, 2010 WL 3023517, at *7 (M.D.N.C. July 28, 2010) (“EPA is bound by its own interpretation of the PSD regulations, which have consistently referenced industry standards.”); Pa. Dep’t of Envtl. Prot. v. Allegheny Energy, Inc., No. 05-885, 2008 WL 4960100, at *5, *7 (W.D. Pa. Sept. 2, 2008) (adopting standard of courts that “have not accorded deference to the EPA’s narrow interpretation of [routine maintenance, repair, and replacement] RMRR due to the agency’s conflicting guidance on the issue after WEPCO,” but instead comporting with “EPA’s original interpretations of RMRR”). Courts in more recent enforcement actions have dismissed EPA’s complaints almost from the outset of those cases. See United States v. Midwest Generation, LLC, 694 F. Supp. 2d 999, 1008 (N.D. Ill. 2010) (dismissing PSD claims against current owner of facilities); United States v. Midwest Generation, LLC, 781 F. Supp. 2d 677, 694 (N.D. Ill. 2011) (dismissing amended complaint alleging NSR violations by both prior and current owner of facilities); United States v. EME 10 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 23 Homer City Generation, 823 F. Supp. 2d 274, 297, (W.D. Pa., 2011) (same); Opinion and Order Granting Defendants’ Motion for Summary Judgment, United States v. DTE Energy Co., No. 2:10-cv-13101-BAF-RSW (E.D. Mich. Aug. 23, 2011) (the decision below). Citizen suits filed by environmental group plaintiffs reached similar results. See Sierra Club v. Otter Tail Power Co., 615 F.3d 1008, 1023 (8th Cir. 2010) (affirming dismissal of NSR citizen suit); Nat’l Parks & Conservation Ass’n v. TVA, 502 F.3d 1316, 1330 (11th Cir. 2007) (same); Nat’l Parks Conservation Ass’n, Inc. v. TVA, No. 3:01-CV-71, 2010 WL 1291335, at *27-34 (E.D. Tenn. Mar. 31, 2010) (following a bench trial, the court entered judgment for TVA, finding the tube component replacement projects in question did not trigger NSR permitting requirements). In the enforcement cases, EPA took the position that, under the NSR rules in effect at the time the targeted projects were undertaken (i.e., the pre-2002 NSR rules), actual post-project emissions did not matter. Rather, EPA developed its own post hoc “preconstruction” projections purportedly showing that the company should have projected emissions to increase as a result of the projects. That litigation-driven methodology, which invariably predicted emissions increases, was rejected as unreliable in two recent cases. United States v. Cinergy Corp., 623 F.3d 455 (7th Cir. 2010); United States v. Ala. Power Co., 773 F. Supp. 2d 1250 (N.D. Ala. 2011). 11 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 24 Although the defendant companies prevailed in these cases, it took more than ten years to resolve them (the defendants in Cinergy and Alabama Power were both first sued in 1999). Thus, the companies endured an extensive period of regulatory uncertainty and invested millions of dollars and countless hours in defending against inflated emissions estimates that ultimately were proven to be incorrect and inadmissible. This is the problem that the 2002 NSR Reform Rules were designed to fix. B. By 2002, EPA Recognized That NSR Reform Was Necessary. Given the widespread frustration over the NSR enforcement initiative, EPA decided to change the NSR program. EPA concluded in a 2002 Report to the President that “the NSR program ha[d] impeded or resulted in the cancellation of projects which would maintain and improve reliability, efficiency and safety of existing energy capacity.” EPA, New Source Review: Report to the President, at 1 (June 13, 2002), available at www.epa.gov/nsr/documents/nsr_report_to_president.pdf)(“NSR Report to President”). Likewise, EPA acknowledged that NSR was “extremely cumbersome,” and that it “actually put up barriers to facilities modernizing and becoming more efficient[.]” EPA’s Oral Argument, Transcript of Proceedings, at 78, New York v. EPA, No. 02-1387 (D.C. Cir. Jan. 25, 2005). EPA also recognized that “[a]lthough NSR is only triggered when emissions increase, … commenters 12 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 25 argued that the way EPA calculates an increase in emissions can actually have the effect of subjecting a project to NSR that would decrease actual emissions.” NSR Report to President at 29. EPA sought to change the NSR program to “address concerns raised during [its] NSR review as well as many other concerns presented to EPA about NSR over the past decade.” NSR Report to President at 32. The Agency also sought to eliminate “[u]ncertainties inherent in the current major NSR permitting approach,” where it was “difficult for the owner or operator to know with reasonable certainty whether a particular activity would trigger major NSR,” 70 Fed. Reg. 61,081, 61,093 (Oct. 20, 2005); to provide “greater regulatory certainty, administrative flexibility, and permit streamlining . . . ” 67 Fed. Reg. at 80, 186; and to remove “barriers and creat[e] incentives for more energy efficient or lower-emitting processes … without requiring a full NSR permit process,” EPA’s Supplemental Analysis of the Environmental Impact of the 2002 Final NSR Improvement Rules at 1 (Nov. 21, 2002), available at http://www.epa.gov/nsr/documents/nsranalysis.pdf. The result of EPA’s efforts “was NSR Reform, which addressed many of the problems that had become apparent under the prior rules.” Br. of Resp. Lisa Jackson, Administrator of EPA, NRDC v. Jackson, No. 09-1405, 2011 WL 2443956, at *2 (7th Cir. Feb. 8, 2011). 13 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 38 Respectfully submitted, Richard S. Moskowitz General Counsel American Fuel & Petrochemical Manufacturers 1667 K Street, NW Suite 700 Washington, DC 20006 (202) 457-0480 rmoskowitz@afpm.org /s/ William L. Wehrum William l. Wehrum Hunton & Williams LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 (202) 955-1500 wwehrum@hunton.com Counsel for UARG Harry M. Ng General Counsel Mara Zimmerman Office of the General Counsel American Petroleum Institute 1220 L Street, NW Washington, DC 20005 (202) 682-8000 Ng@api.org ZimmermanM@api.org Dated: May 8, 2012 26 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 39 CERTIFICATE OF COMPLIANCE Pursuant to Rule 32(a)(7)(C) of the Federal Rules of Appellate Procedure and Circuit Rule 32, I hereby certify that the foregoing Brief of Amici Curiae American Fuel & Petrochemical Manufacturers, American Petroleum Institute, and Utility Air Regulatory Group in Support of Defendants-Appellees contains 5777 words, as counted by a word processing system that includes headings, footnotes, quotations, and citations in the count, and therefore is within the word limit set by the Court. The brief complies with the typeface requirements of Rule 32(a)(5) and (6) of the Federal Rules of Appellate Procedure as it was prepared using the Microsoft Word 2003 word processing program in 14-point Times New Roman font. /s/ William L. Wehrum Hunton & Williams LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 (202) 955-1500 wwehrum@hunton.com Counsel for UARG Dated: May 8, 2012 27 Case: 11-2328 Document: 56 Filed: 05/08/2012 Page: 40 CERTIFICATE OF SERVICE Pursuant to Rule 25 of the Federal Rules of Appellate Procedure and Circuit Rule 25, I hereby certify that on this 8th day of May, 2012, I served a copy of the foregoing Brief of Amici Curiae American Fuel & Petrochemical Manufacturers, American Petroleum Institute, and Utility Air Regulatory Group in Support of Defendants-Appellees electronically through the Court’s CM/ECF system upon all counsel of record registered in CM/ECF. /s/ William L. Wehrum William L. Wehrum 28 .I A Air?ow ?5 at EUEC 2m 5. San Oiege. CA 2015 Sessiuns A1 AI: POWER PLAN - UPDATE Elmm A1.1 UPDATE Jehn Kinsman. Edisen Electric Institute A1.ZTHE POST-CLEAN POWER PLAN COAL FLEET E. COMPLIANCE WITH OTHER WATER 3. WA STE RULES -- Jay Helleway. Partner. Sutherland Asbill Brennan LLP A1.S STRATEGIC IMPLICATIONS OF NEW ENVIRONMENTAL MI: RULES - Elleeli Andrews. Elurns MeOennell ENRERT TESTIMONY AT ADJUOICATED PERMIT HEARINGS TRC Cale Heffnagle. UP. TRC Enviren mental Cerperatien . . CHALLENGES FOR ELECTRIC UTILITIES Kenneth Weiss. Partner. ERM ERM UARG V. EPA: WHAT DOES IT MEAN FOR GHO REOU LAT IM Partner. Hunten SWilliams A11 PROPOSED CLEAN POWER PLAN REGULATIONI STRATEGIC RESPON SE FOR STATE 3. COMPLIANCE - Michael Cashin. Envirenmental Pellet; Adviser. Iulinneseta ?M'l A12 COMING SOON TO A NEAR SOCIAL COST OF CARBON. .. Ren Crum. A13 GREENHOU SE ISA PERFORMANCE STANDARDS FOR Em" POWER GENERATION: A SURVEY OF ISSUES APPROACHES Jeff ChaITee. President. Bison Engineering. Ins: Kevin Matthews All! ARCHITECTURE SI CLEAN POWER PLAN: SOLID FOUNDATION OR HOUSE OF I-- Mare Chuplcca. Principal, The Elrattle Ore-up A15 POTENTIAL IMPACT OF PROPOSED OHO RULE ON a! Gary Helm. Lead Market Strategist. lntereennestien ALIS CHIS REGULATIONS FOR EVERYONE - NOT JUST UTILITIES Campbell. Enuiren mental Censuiting IS Teehnelegy USCA Case #17-1088 Document #1666605 Filed: 03/14/2017 UNitED at~ES 600fff fit APPIOOS FOR DISTRICT OF COLUMBIA CIACUI'f 1·:,~~ I 4 Z017 Page 1 of 5 -~:-;-- · - --- - - - - IN THE UNITED STATES COURT OF .t~:fliSml=., ~iF APPEALS FOR THE DISTRICT OF COLUMB CI . CCI!.U~~,BIA CIRCUIT FILED RECEIVED UTILITY AIR REGULATORY GROUP, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. ) ) ) ) ) ) ) ) ) ) ) ) MAR 14 2017 CLERK No. ________________________________ ) PETITION FOR REVIEW Pursuant to Rule 15 of the Federal Rules of Appellate Procedure and the Circuit Rules of this Court, and section 307(b)(l) of the Clean Air Act, 42 U.S.C. § 7607(b)(1), the Utility Air Regulatory Group hereby petitions this Court for review of the U.S. Environmental Protection Agency's final action under Clean Air Act § 112 titled "Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act," published at 82 Fed. Reg. 4594 (Jan. 13, 2017). USCA Case #17-1088 Document #1666605 Filed: 03/14/2017 Page 2 of 5 Respectfully submitted, William L. W elirum Makram B. Jaber Andrew D. Knudsen HUNTON & WILLIAMS LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 (202) 955-1500 wwehrum@hunton.com mjaber@hunton.com aknudsen@hunton.com Counsel for the Utility Air Regulatory Group Dated: March 14, 2017 -2- USCA Case #17-1088 Document #1666605 UNiffDs:TI\lDtlfiJJti't~I~ED Filed: 03/14/2017 Page 3. ·---, of 5 r---·-------·---~- UNITED STAll,,o .JUi , (1[: APPEALS FOR DISTRICT OF COLUMBIA CIRCUIT STATES COURT OF FOR DISTRICT:fi7UJtUf~UtiGJ;TRICT OF COLUMBIA CLERK UTILIT~!ifR~ATORY GROUP, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. ) ) ) ) ) ) ) No. ) ) ) ) ) 17-1088 ___________________________________ ) RULE 26.1 DISCLOSURE STATEMENT OF PETITIONER UTILITY AIR REGULATORY GROUP Pursuant to Rule 26.1 ofthe Federal Rules of Appellate Procedure and the Circuit Rules of this Court, Petitioner Utility Air Regulatory Group ("UARG") hereby files the following corporate disclosure statement: UARG is a not-for-profit association of individual electric generating companies and national trade associations. UARG participates on behalf of certain of its members collectively in Clean Air Act administrative proceedings that affect electric generators and in litigation arising from those proceedings. UARG has no outstanding shares or debt securities in the hands of the public and has no parent USCA Case #17-1088 Document #1666605 Filed: 03/14/2017 Page 4 of 5 company. No publicly held company has a 10% or greater ownership interest in UARG. Respectfully submitted, Counsel for the Utility Air Regulatory Group Dated: March 14, 2017 -2- USCA Case #17-1088 Document #1666605 Filed: 03/14/2017 Page 5 of 5 CERTIFICATE OF SERVICE I hereby certify that on this 14th day of March, 2017, I caused one copy of the foregoing Petition for Review and Rule 26.1 Disclosure Statement of Petitioner Utility Air Regulatory Group to be served on each of the following by first class postage pre-paid United States mail: The Honorable Scott Pruitt Administrator Office ofthe Administrator (1101A) United States Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460 The Honorable Jeff Sessions Attorney General of the United States United States Department of Justice 950 Pennsylvania Avenue, N.W. Washington, D.C. 20530-0001 Correspondence Control Unit Office of General Counsel (2311) United States Environmental Protection Agency 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460 Andrew D. Knudsen Cc: Hupp, To: From: Jackson, Ryan Sent: Tue 4f4f2017 10:56:55 PM Subject: with Administrator Bili, I have to be out of town thurs and fri but I would like you and the Administrator to speak this week on the topics we discussed. Because I'll be out Mandy and Byron wiil accompany Pruitt in the meeting. I?ve our scheduler on this to see when would be a convenient time for an hour meeting wed, thurs, or Friday- Big thanks. Ryan Jackson Chief of Staff U.S. EPA EPA Moderator: Andrea Drinkard 04-24-17 /l l :00 a .m. ET Confirmation# 8535873 Page 17 the notice and comment rulemaking procedure. And thank you very much for the opportunity to provide these comments. Andrea Drinkard: Thank you very much, Scott. Operator, next line please? Operator: Our next comment comes from the line of Andrea Field with UARG. Andrea Field: My name is Andrea Field. I'm making this statement on behalf of the Utility Air Regulatory Group, UARG. UARG is a not-for-profit association of individual electric generating companies and national trade associations. Since 1977, UARG has participated in many Clean Air Act administrative proceedings focused on electric generating companies and in the litigation arising from those proceedings. Because electric generating companies have so often been targets of EPA rules, UARG members have substantial experience with the unnecessary burden and excessive cost associated with regulatory compliance. UARG therefore endorses the idea of EPA' s modifying, replacing and repealing agencies' programs that are outdated or unnecessarily costly, complex or burdensome or impose costs that exceed program benefits. UARG believes such changes can be made consistent with the requirements and goals of the Clean Air Act. U ARG will be filing comprehensive comments by May 15th. Today though, we offered just a few comments on some of the regulatory programs that we believe EPA can and should address as it's about complying with Executive Order 13 777. First, UARG believes the Clean Power Plan and Carbon Dioxide New Source Performance Standards for new and modified and constructed -- reconstructed electric generating units are unlawful. UARG, therefore, supports EPA's already commenced review of these rules. 17cv1906 Sierra Club v. EPA- 6/22 Production ED_001523_00009152-00017 EPA Moderator: Andrea Drinkard 04-24-17 /l l :00 a .m. ET Confirmation# 8535873 Page 18 U ARG believes that EPA' s greenhouse gas reporting -- mandatory reporting program exceeds EPA' s information gathering authority under the Clean Air Act. Facilities are now expending enormous resources, tracking, quality assuring and reporting vast amounts of information. EPA also continues to spend significant resources for both its own staff and agency contractors to implement the rule. Since 2009, EPA has promulgated dozens of revisions to the GHG mandatory reporting program, although you are going to understand that many of these rule revisions have been directed at correcting errors or simplifying data collection and reporting the need with so many revisions underscores the already complicated nature of the program. For the reasons pointed out in UARG's pending petition for partial reconsideration, EPA should reconsider and modify key aspects of the crossstate air pollution rule update for the 2008 Ozone Ambient Standards. That rule's serious flaws result in a new regulatory program that imposes cost in excess of any reasonable measure or projected benefits and it threatens jobs in the energy sector. We also have suggestions for changing EPA' s visibility program and the unnecessary cost and burdens of pre-construction permitting. We also recognize that members who spent billions of dollars complying with other Clean Air Act programs, and although most of this cost of compliance come from the purchase and installation and operation of controls, they also come from periodic performance testing, continuous emission monitoring, record keeping and reporting that are also costly. We believe this can be avoided. Andrea Drinkard: Thanks very much, Andrea. Your time is up. Andrea Field: Thank you. Andrea Drinkard: Operator, open the next line. Thank you. 17cv1906 Sierra Club v. EPA- 6/22 Production ED_001523_00009152-00018 EPA Moderator: Andrea Drinkard 04-24-17 /l l :00 a .m. ET Confirmation# 8535873 Page 19 Operator: Our next comment comes from the line of Charlie Jiang with the (Environment for) Defense Fund. Charlie Jiang: Hi. My name is Charlie Jiang with Environmental Defense Fund. I am speaking on behalf of myself today. As a young person, I will be (harmed) by the regulations EPA is attempting to roll back. EPA -- critical regulations that protect millions of Americans including (inaudible) health from the dangerous effects of air pollution. I was lucky enough to grow up in a neighborhood that benefit from 45 years ofEPA's common sense clean air protection. I was able to go to school every day to spend time outside with my friends and to receive an education and upbringing that enables me to be a productive American. But many of my peers across the country are having a different experience. They suffer from asthma, missed school because the air is too dirty for them to leave their house or have lost family members due to toxic air pollution. It is crucial that we preserve and strengthen EPA' s climate and clean air safeguards to ensure all Americans, regardless of race, geography, age or income can enjoy the benefits of a healthy, breathable atmosphere. Any attempt to undo these so-called "burdensome regulations" are dangerous and that will only start to benefit wealthy executives while putting my life and those of millions of my fellow Americans in harm's way. I urge EPA to uphold and strengthen its critical clean air environment protection and listen to the large majority of Americans who support strong regulations that clean up the air we all breathe. Thank you for the opportunity to comment today. Andrea Drinkard: Thank you, Charlie. Operator, would you open the next line please? 17cv1906 Sierra Club v. EPA- 6/22 Production ED_001523_00009152-00019 To: From: Sent: Subject: Gunasekara, Mandy[Gunasekara.Mandy@epa.gov] Wehrum, William L. Tue 5/23/2017 2:41 :10 PM Speaking Invitation Mandy - The Utility Air Regulatory Group is an ad-hoc coalition of the Nation's leading fossil energy producers. UARG focuses on Clean Air Act-related regulatory issues. UARG is holding a meeting here at Hunton's offices in DC on the afternoon of June 22 and the morning of June 23. We would like to invite you to speak to the group at some point during the meeting. Our agenda is flexible, so you can pick the time that works best. If it works for you, we suggest 2:00 on Thursday the 22 nd . We are interested in any Clean Air Act regulatory issue that you are willing and able to address. Topics of interest include the Clean Power Plan, the Mercury and Air Toxics Standard, regional transport, regional haze, and NAAQS/NAAQS implementation. We are not asking you to address pending litigation on any of these issues. We are interested in discussing only possible future regulatory action. Please feel free to contact me if you have questions or need more information. Thanks for your consideration. Bill Wehrum Partner p 202.955.1637 17cv1906 Sierra Club v. EPA ED_001523A_00000115-00001 Koerber, Mike[Koerber.Mike@epa.gov]; Culligan, Kevin[Culligan.Kevin@epa.gov] South, Peter Sent: Mon 5/15/2017 3:51:39 PM Subject: FW: Comments of Utility Air Regulatory Group, Docket No. EPA-HQ-OA-2017-0190 UARGcomments051217 -c. pdf Exhibits 1to3-c. pdf To: From: FYI From: Knudsen, Andrew D.[mailto:aknudsen@hunton.com] Sent: Friday, May 12, 2017 3:59 PM To: Tsirigotis, Peter ; Harvey, Reid ; Page, Steve Cc: Field, Andrea ; Jaber, Makram Subject: Comments of Utility Air Regulatory Group, Docket No. EPA-HQ-OA-2017-0190 Dear Sirs, Attached is a courtesy copy of the Utility Air Regulatory Group's comments responding to EPA's request for input on its evaluation of existing regulations pursuant to Executive Order 13777. These comments have also been filed in Docket No. EPA-HQ-OA-2017-0190 on www.regulations.gov. If you have any questions about this matter, please contact Andrea Field at (202) 955-1558 or afield@hunton.com. Sincerely, Andrew Knudsen ndrew Knudsen aknudsen@hunton.com p 202.955.1640 ED_001598_00014010 Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 hunton.com ED_001598_00014010 HUNTON & WILLIAMS LLP 2200 PENNSYLVANIA A VENUE, NW WASHINGTON, D.C. 20037-1701 HUNTON& WIWAMS TEL 202 • 955 • 1500 FAX 202 • 778 • 2201 ANDREA FIELD DIRECT DIAL: 202 • 955 • 1558 EMAIL: afield@hunton.com May 12, 2017 Samantha K. Dravis Regulatory Reform Officer and Associate Administrator, Office of Policy U.S. Environmental Protection Agency Mail Code 1803A 1200 Pennsylvania Avenue NW Washington, D.C. 20460 Submitted via Electronic Mail and via Regulations.gov Utility Air Regulatory Group's Response to EPA's Request for Comments on Regulations Appropriate for Repeal, Replacement, or Modification Pursuant to Executive Order 13777, 82 Fed. Reg. 17,793 (Apr.13, 2017): Docket ID No. EPA-HO-OA-2017-0190 Dear Ms. Dravis: This letter is submitted in response to the U.S. Environmental Protection Agency's ("EPA" or "Agency") April 13, 2017 Federal Register notice 1 seeking input from the public to inform the Agency's evaluation of existing regulations that may meet the criteria outlined in Executive Order 137772 for repeal, replacement, or modification. More specifically, the notice asks commenters to identify regulations that, among other things, "are outdated, unnecessary, or ineffective; impose costs that exceed benefits; ... or ... derive from or implement Executive Orders or other Presidential directives that have been subsequently rescinded or substantially modified,"3 in accordance with the language of Executive Order 13777. The Utility Air Regulatory Group ("UARG") recommends that EPA examine whether the regulations identified below meet the criteria of Executive Order 13777. UARG is a not-forprofit association of individual electric generating companies and national trade associations. Since 1977, UARG has participated on behalf of certain of its members collectively in scores of Clean Air Act ("CAA" or "Act") administrative proceedings that affect electric generators and in litigation arising from those proceedings. UARG's 40 years of participation in CAA rulemakings and litigation has provided it unique insight as to which CAA programs are 1 82 Fed. Reg. 17,793 (Apr. 13, 2017). 82 Fed. Reg. 12,285 (Mar. 1, 2017). 3 82 Fed. Reg. at 17,793. 2 ATLANTA AUSTIN BANGKOK BEIJING BRUSSELS CHARLOTTE DALLAS HOUSTON LONDON LOS ANGELES McLEAN MIAMI NEWYORK NORFOLK RALEIGH RICHMOND SANFRANCISCO TOKYO WASHINGTON www.hunton.com ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page2 designed and work as Congress intended, which programs are overly burdensome or costly, and which programs are unlawful or unnecessary. Many of the recommendations set out below are described in greater detail in materials that UARG has previously filed with EPA and reviewing courts. These materials include rulemaking comments, technical expert reports, petitions for reconsideration, and court pleadings concerning Agency actions that UARG believes to be unlawful, unjustified, or unduly burdensome or costly. UARG appreciates the opportunity to provide input on this matter and invites Agency representatives and others in the administration to meet with UARG concerning the information that we are providing today. 4 4 Dominion Energy does not join in these comments. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 3 TABLE OF CONTENTS I. Climate Change-Related Rules ......................................................................................... 5 A. Clean Power Plan, 80 Fed. Reg. 64,662 (Oct. 23, 2015), codified at 40 C.F.R. Part 60, Subpart UUUU ............................................................................................................................ 5 B. Carbon Dioxide New Source Performance Standards for New, Modified, and Reconstructed Electric Generating Units, 80 Fed. Reg. 64,510 (Oct. 23, 2015), codified at 40 C.F .R. Part 60, Subpart TTTT .................................................................................................... 5 C. Greenhouse Gas Mandatory Reporting Rule ("GHG MRR"), codified at 40 C.F.R. Part 98 6 II. Cross-State Air Pollution Rule ("CSAPR") Update Rule .............................................. 8 III. Regional Haze and Other Visibility Regulations .......................................................... 10 IV. Regulation of Hazardous Air Pollutants ........................................................................ 12 A. Compliance Provisions of the Mercury and Air Toxics Standards ("MATS") Rule, codified at 40 C.F.R. Part 63, Subpart UUUUU ....................................................................... 12 B. Renewed Analysis of Potentially Delisting Natural Gas-Fired Stationary Combustion Turbines from Regulation Under CAA Section 112 ................................................................. 14 C. National Emissions Standards for Hazardous Air Pollutants and New Source Performance Standards for Stationary Reciprocating Internal Combustion Engines ("RICE"), codified at 40 C.F.R. Part 60 Subparts IIII and JJJJ and 40 C.F.R. Part 63 Subpart ZZZZ ............................ 15 V. Preconstruction Permitting Issues .................................................................................. 16 A. New Source Review ("NSR") Reform .............................................................................. 16 B. Synthetic Minor Sources .................................................................................................... 17 C. Prevention of Significant Deterioration ("PSD") Significant Emissions Rate for Greenhouse Gases .............................................................................................................•...... 18 VI. New Source Performance Standards ("NSPS") Issues ................................................. 19 A. Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills, 81 Fed. Reg. 59,276 (Aug. 29, 2016), codified at 40 C.F.R. Part 60, Subpart Cf ................................. 19 B. Electronic Reporting Under the NSPS, codified at 40 C.F.R. Part 60 ............................... 20 C. Reconsideration of the NSPS for Stationary Combustion Turbines, codified at 40 C.F.R. Part 60, Subpart KKKK ........................................................................................................ ".. 22 D. Reconsideration of the NSPS for Coal Preparation and Processing Plants, codified at 40 C.F .R. Part 60, Subpart Y ......................................................................................................... 23 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page4 E. Revisions to Test Method for Determining Stack Test Gas Velocity Taking Into Account Velocity Decay Near the Stack Walls ....................................................................................... 23 VII. National Ambient Air Quality Standards ...................................................................... 24 A. "Findings of Substantial Inadequacy" of SIPs and "SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction," published at 80 Fed. Reg. 33,840 (June 12, 2015) .................................................................... 24 B. NAAQS Promulgation and Implementation ...................................................................... 25 VIII. Air Quality Modeling Issues ........................................................................................... 27 IX. Demonstration-of-Compliance Issues ............................................................................ 28 A. Outreach on Current Rulemakings ..................................................................................... 28 B. The So-Called "Credible Evidence Rule" .......................................................................... 29 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 5 I. Climate Change-Related Rules A. Clean Power Plan, 80 Fed. Reg. 64,662 (Oct. 23, 2015), codified at 40 C.F.R. Part 60, Subpart UUUU EPA has already commenced review of this rule to determine whether it is appropriate to "initiate proceedings to suspend, revise or rescind the Clean Power Plan. " 5 Any replacement or revision to the Clean Power Plan under CAA § 111 (d) must adhere to the statutory confines of section 111 of the CAA and must: (i) be based on a "best system of emission reduction" that can be applied at the individual electric generating units subject to the rule; (ii) adhere to the requirement of section 111 (d) of the CAA and its implementing regulations that states (and EPA when it is acting on behalf of a state) be allowed to prescribe less stringent standards for certain units on an as-needed, case-by-case basis; and (iii) adhere to the requirement of section 11 l(d) of the CAA that the remaining useful life of the unit be taken into account. Any replacement rule should also allow for compliance flexibility. Likewise, UARG encourages EPA to acknowledge that once it has promulgated emission guidelines for a source category, the CAA does not give the Agency authority to revisit those guidelines and make them more stringent. See Section VI.A below. B. Carbon Dioxide New Source Performance Standards for New, Modified, and Reconstructed Electric Generating Units, 80 Fed. Reg. 64,510 (Oct. 23, 2015), codified at 40 C.F.R. Part 60, Subpart TTTT EPA has already commenced review of this rule to determine whether it is appropriate to "initiate proceedings to suspend, revise or rescind the Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary Sources: Electric Generating Units."6 As part of its comments on EPA's proposed performance standards and its petition for reconsideration of the fmal standards, UARG engaged experts to prepare numerous technical reports explaining to EPA why the performance standards EPA proposed (and later fmalized) were neither based on adequately demonstrated systems of emission reduction nor achievable; these technical reports are available in the rulemaking docket. 7 82 Fed. Reg. 16,329 (Apr. 4, 2017). 82 Fed. Reg. 16,330 (Apr. 4, 2017). 7 See UARG Comments on Proposed GHG NSPS for New Electric Generating Units ("EGUs") at Attachments 1-3, 5, 9, 11 (May 9, 2014), EPA-HQ-OAR-2013-0495-9666; UARG Comments on Proposed GHG NSPS for Modified and Reconstructed EGUs at Attachments B, C, G, K (Oct. 16, 2014), EPA-HQ-OAR-2013-0603-0215; UARG Petition for Reconsideration of Final GHG NSPS at Exhibit J (Dec. 22, 2015), EPA-HQ-OAR-2013-0495-11894. 5 6 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 6 Any replacement or revision to the greenhouse gas ("GHG") standards of performance for new, modified, and reconstructed electric generating units must adhere to the statutory confines of section 111 of the CAA, must be based on a "best system of emission reduction" that has been adequately demonstrated, and must be achievable by the individual electric generating units subject to the rule. Of particular note, any replacement or revision to these standards of performance cannot, for the purposes of determining the "best system of emission reduction," take into account technology that received funding or tax subsidies under the Energy Policy Act of 2005, as consideration of those technologies for that purpose is prohibited by that Act. C. Greenhouse Gas Mandatory Reporting Rule ("GHG MRR"), codified at 40 C.F.R. Part 98 Under the fiscal year 2008 Consolidated Appropriations Act, Congress authorized funding for EPA to develop and publish a rule "to require mandatory reporting of greenhouse gas emissions above appropriate thresholds in all sectors of the economy of the United States."8 The joint explanatory statement accompanying the legislation directed EPA to use its existing authority under the CAA ( e.g., authority under CAA § 114) to develop a mandatory GHG reporting rule covering those upstream production and downstream sources the Administrator deems "appropriate," and to determine "appropriate thresholds" and frequency for reporting. 9 Congress also authorized EPA to rely on the "existing reporting requirements for electric generating units under section 821 of the 1990 CAAAmendments." 10 The reporting program has resulted in facilities expending enormous resources tracking, quality assuring, and reporting vast amounts of information. EPA also continues to spend significant resources for both its own staff and Agency contractors to implement the GHG MRR and its electronic reporting requirements. Since its initial promulgation in October 2009, EPA has revised the regulation dozens of times. Although UARG understands that many of these rule revisions have been directed at correcting errors or simplifying data collection and reporting, the need for so many revisions underscores the complicated nature of the program. In the past, UARG has questioned the "practical utility" 11 of much of the collected information and offered suggestions for simplification of the program. For example, under 8 Pub. L. No. 110-161, 121 Stat. 1844, 2128 (2007). 74 Fed. Reg. 16,448, 16,454 (Apr. 10, 2009). 10 Id. (internal quotation marks omitted). 11 EPA' s authority to collect information under CAA § 114 is limited by the Paperwork Reduction Act and its implementing regulations. To require a data collection, EPA must 9 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 7 Subpart C, which covers general "stationary fuel combustion sources," the term is defined simply as a device that combusts fuel and does not require that the device be used for any particular purpose. 12 As a result, facilities with total emissions above the rule's applicability threshold must include in their facility-wide calculation miscellaneous combustion devices, like small gas-fired heaters, stoves, lawn mowers, or even hot water heaters. Reporting GHG emissions from such miscellaneous devices is time consuming and the information is of little value. UARG previously asked EPA either to define more narrowly what type of device triggers reporting or to adopt a de minimis threshold for reporting emissions from such devices at a stationary fuel combustion source. 13 Now that the program has been in place for more than seven years, and EPA has provided Congress the information it sought, EPA should review how all of the information being collected has been used and whether the Agency's assumptions about the information's "practical utility" are correct. EPA should use this information to tailor the program so that it provides a significant "net benefit" consistent with the objectives of Executive Order 13777. At a minimum, UARG encourages EPA to establish a de minimis cut-off for reporting emissions from miscellaneous activities and streamline by "auto-populating" any emissions already being reported under another federal regulatory program, such as CO2 emissions data collected under 40 C.F.R. Part 75. In addition, as part of the rulemakings discussed in Sections I.A and LB above, EPA amended Part 98 to impose additional reporting requirements on owners of electric generating units that transfer captured carbon dioxide to sites reporting under Subpart RR, while also requiring units to transfer their captured carbon dioxide to Subpart RR reporting sites if they wish to rely on carbon capture to meet an applicable emission limit or earn emission reduction credits. EPA should reconsider this requirement, which is unduly burdensome, costly, and does not have any environmental benefit. demonstrate the "practical utility" of the covered information. 5 C.F.R. § 1320.5(d)(l)(iii). Under 5 C.F.R. § 1320.3(1), Practical utility means the actual, not merely the theoretical or potential, usefulness of information.... In determining whether information will have 'practical utility,' 0MB will take into account whether the agency demonstrates actual timely use for the information .... (emphases added). 12 40 C.F.R § 98.30(a). 13 See, e.g., UARG Comments on Proposed GHG MRR (June 9, 2009), EPA-HQ-OAR2008-0508-0493. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 8 II. Cross-State Air Pollution Rule ("CSAPR") Update Rule EPA should reconsider and modify certain aspects of the Cross-State Air Pollution Rule Update for the 2008 Ozone National Ambient Air Quality Standards ("NAAQS") (known as the "CSAPR Update Rule"). 14 The CSAPR Update Rule establishes stringent "ozone-season" (Maythrough-September) budgets for additional limits on emissions of nitrogen oxides ("NOx") from fossil fuel-fired electric generating units, beginning this month, in each of 22 states: Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas. Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and Wisconsin. The rule is a new regulatory program that imposes costs exceeding any reasonable measure of projected benefits. Indeed, EPA's own modeling showed that the emission reductions required of upwind states under the CSAPR Update Rule are disproportionate to the relatively limited projected reductions in downwind ozone concentrations that the rule's emission limits are estimated to produce. 15 Furthermore, if left unmodified, the CSAPR Update Rule threatens jobs in the energy sector because its stringent emission caps can be expected to have the effect of restricting fuel choice. UARG filed its petition for reconsideration of the CSAPR Update Rule with EPA on December 23, 2016. At least eight other petitions for reconsideration of the rule are pending before EPA. 16 The CSAPR Update Petition describes several aspects of the rule that EPA should reconsider, including: (i) EPA's reliance on modeling projections to identify downwind areas to be addressed by the rule, in disregard of real-world air quality conditions; 17 (ii) EPA' s use of an unjustifiably low one-percent-of-NAAQS "contribution threshold" to "link" upwind states to downwind receptors and thereby to subject those states to additional regulation under the rule; 18 and (iii) EPA's failure, in conducting its air quality modeling, to properly account for effects of emissions from non-U.S. sources, which no state has the authority or ability to regulate. 19 Additional background regarding concerns with EPA's CSAPR Update Rule methodology is provided in the CSAPR Update Petition and in UARG's rulemaking comments submitted to 14 81 Fed. Reg. 74,504 (Oct. 26, 2016). See UARG's Petition for Partial Reconsideration of the CSAPR Update Rule at Section X (Dec. 23, 2016) ("CSAPR Update Petition"), https://www.epa.gov/sites/production/files/201701/documents/the_utility_air_regulatory_group_0.pdf. 16 See https://www.epa.gov/airmarkets/petitions-reconsideration-received-csapr-update. 17 CSAPR Update Petition at Sections I & II. 18 Id. at Section III. 19 Id. at Section IV. 15 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 9 EPA on the December 2015 proposed version of the CSAPR Update Rule. 20 In addition, several petitions for judicial review of the CSAPR Update Rule have been filed and are pending in the U.S. Court of Appeals for the D.C. Circuit, including petitions for review filed by UARG, Murray Energy Corporation, many other industry parties, and several states (Alabama, Arkansas, Ohio, Texas, Wisconsin, and Wyoming) (Wisconsin v. EPA, No. 16-1406 & consolidated cases). EPA should promptly reconsider and modify key elements of the CSAPR Update Rule, as identified in UARG's CSAPR Update Petition, to alleviate unnecessary, costly, and counterproductive regulatory burdens. 21 In doing so, EPA should, for example, consider, propose, and promulgate changes that would increase the levels of states' emission budgets based on corrections to and further review of the existing rule, as well as changes that would appropriately reform EPA's methodology for addressing interstate transport, as described in the attached CSAPR Update Petition and UARG's rulemaking comments. 22 In addition, based on its review and reconsideration of the CSAPR Update Rule and its methodology, EPA should, to the extent supported by appropriate analysis, issue a determination identifying states that currently are subject to that Rule but that do not contribute significantly to nonattainment of the 2008 20 See UARG Comments on Proposed CSAPR Update Rule (Feb. 1, 2016), EPA-HQOAR-2015-0500-0253. UARG also submitted supplemental comments on June 1, June 9, and August 16, 2016, addressing information that became available after the deadline for submitting comments on the proposed rule. UARG's supplemental comments are attached to the CSAPR Update Petition as Appendix A to that document. 21 UARG emphasizes that it will be important for EPA, as it reconsiders the CSAPR Update Rule, to ensure that states may continue to rely on compliance with the NOx and sulfur dioxide ("SO 2") emission limits in CSAPR itself to satisfy "best available retrofit technology" ("BART") requirements for EGUs under the CAA's visibility protection program, as provided in 40 C.F.R. § 51.308(e)(4) (as promulgated at 77 Fed. Reg. 33,642, 33,656 (June 7, 2012)). See also 81 Fed. Reg. 78,954, 78,961-64 (Nov. 10, 2016) (describing EPA's sensitivity analysis reaffrrming the validity of the Agency's determination that participation in CSAPR is a valid BART alternative). 22 As noted in the CSAPR Update Petition, EPA in reviewing and reconsidering the CSAPR Update Rule should not make any change that would result in imposition of an ozoneseason NOx emission budget for any state that is more stringent than the budget for that state under the existing rule. EPA also should not make any change that would affect the continuing validity and effectiveness of the parts of the CS APR Update Rule in which EPA determined that: (i) Florida, North Carolina, and South Carolina are excluded from the ozone-season NOx program under both the original CSAPR and the CSAPR Update Rule; and (ii) Georgia is not subject to any obligations with respect to interstate transport for ozone NAAQS beyond those established for that state in CSAPR itself. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 10 ozone NAAQS in (and do not interfere with maintenance of that NAAQS by) any other state and, consequently, remove those states from coverage under the CSAPR Update Rule. III. Regional Haze and Other Visibility Regulations EPA should reconsider and modify certain aspects (described below) of its January 10, 2017 visibility rule revisions that, if left unmodified, will impose unnecessary and counterproductive regulatory costs and other burdens. Sections 169A and 169B of the Act and EPA regulations at 40 C.F.R. §§ 51.300-51.309 require states to adopt and submit state implementation plans ("SIPs") to achieve "reasonable progress" toward a national goal of preventing and remedying impairment of visibility in certain national parks and wilderness areas, to the extent visibility impairment in those areas results from manmade air pollution. The CAA's visibility program generally requires states to evaluate emission sources or source categories for potential emission controls to help achieve reasonable progress. Although Congress intended that states be the principal decisionrnakers in this area, in many instances over the past eight years, EPA improperly assumed the states' role. During the first "planning period" under the visibility program's "regional haze" provisions-a period that began in 2008 and will end in 2018-the primary regulatory driver was the CAA's BART requirement applicable to many EGUs and industrial sources. Now that decisionmaking on BART is complete for most states, the main focus of the upcoming second planning period, which will run from 2018 to 2028, will be implementation of the CAA's reasonable progress requirement. EPA substantially amended many elements of its visibility protection regulations in its January 10, 2017 rule. 23 Contrary to the version of that final rule as signed on December 14, 2016 (which would have taken effect 30 days after publication in the Federal Register), the final rule as published on January 10 was made effective immediately in order to evade the incoming Administration's normal regulatory review and its "regulatory freeze" pending that review. The January 10 rule is the subject of three petitions for administrative reconsideration filed with EPA and eleven petitions for review in the U.S. Court of Appeals for the D.C. Circuit (Texas v. EPA, No. 17-1021 and consolidated cases). UARG filed a petition for administrative reconsideration24 and a petition for judicial review of the rule. EPA has not yet responded to UARG's petition for reconsideration. As described below and in the Visibility Rule Petition, the rule has several provisions that EPA should now reconsider and repeal or modify. 23 82 Fed. Reg. 3078 (Jan. 10, 2017). See UARG Petition for Partial Administrative Reconsideration of Amended Visibility Requirements (Mar. 13, 2017) ("Visibility Rule Petition") (attached as Exhibit 1). 24 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 11 When Congress enacted the CAA's visibility provisions, it made clear the states have broad discretion in implementing the program. The D.C. Circuit recognized that principle in the leading case in this area, American Corn Growers Ass'n v. EPA, 291 F.3d 1 (D.C. Cir. 2002). As the program was implemented during the previous administration, however, EPA frequently failed to give the deference that it owed to state decisions and often supplanted reasonable state regulatory plans with more stringent and costly federal control requirements in many states, including Arizona, Arkansas, Nebraska, New Mexico, North Dakota, Oklahoma, Texas, Utah, and Wyoming. To address these problems, EPA should modify its January 10, 2017 regional haze rules to emphasize the breadth of state authority and to make clear EPA will not second-guess state determinations. EPA should do this by, for instance, making clear that states are free to decide how to consider and assess each of the statutory "reasonable progress" factors, including the costs associated with additional emission controls, and whether visibility improvements resulting from further controls will be substantial enough to warrant imposing those controls. Although some parts of the January 10, 2017 rule make common-sense revisions that should be preserved-such as a three-year extension, from July 2018 to July 2021, of states' deadline to develop and submit SIPs for the second planning period-other parts of that rule create problems that require additional regulatory action to make necessary modifications. For example, the rule purports to impose on states an improper interpretation-adopted in the last Administration, over many stakeholders' objections-of the relationship between two key elements of the regional haze program: the requirement that states determine and adopt "reasonable progress goals" and the requirement that states identify specific emission control measures to include in "long-term strategies" to achieve reasonable progress. The January 10, 2017 rule requires states to first identify all measures to be included in the state's long-term strategy and then to calculate reasonable progress goals based on the degree of visibility improvement that computer modeling projects those measures will achieve. This aspect of the rule subverts the normal regulatory process by making states' determinations of reasonable progress goals an afterthought and compelling states to consider regulation even where it is unnecessary to stay on track toward reasonable visibility objectives. States should instead be free to develop reasonable progress goals they deem appropriate for a given area and then to determine which specific measures should be included in long-term strategies to achieve those goals. The January 10, 2017 rule also has several other provisions that EPA should reconsider and modify-including (among others) provisions concerning the "uniform rate of progress" and provisions addressing states' consultation processes with other states and with federal land ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 12 management agencies. A detailed description of how EPA should address and reform these and other aspects of the rule is in UARG's Visibility Rule Petition. 25 Consistent with Executive Order 13777, revising EPA's visibility rules as recommended in this comment letter and in UARG's Visibility Rule Petition would alleviate unnecessary regulatory burdens and would be consistent with applicable law. Such revisions would advance the Executive Order's objective of avoiding regulation that unnecessarily imposes costs that outweigh benefits and that inhibit job creation and economic growth. IV. Regulation of Hazardous Air Pollutants A. Compliance Provisions of the Mercury and Air Toxics Standards ("MATS") Rule, codified at 40 C.F.R. Part 63, Subpart UUUUU The MATS Rule, regulating hazardous air pollutants from coal and oil-fired electric generating units, is among the most expensive and burdensome rules EPA has ever promulgated. Although the most significant costs associated with the rule derive from purchase, installation, and use of emission control technologies, the task of demonstrating compliance under the rule through periodic performance testing, continuous emissions monitoring, recordkeeping, and reporting also is costly. Some of those compliance demonstration costs are unavoidable, but other costs and burdens are avoidable. Rules that are written clearly and that offer flexibilitywhere that can be achieved without sacrificing environmental protections-provide the greatest "net benefit." Unfortunately, the MATS Rule has many provisions that are internally inconsistent, ambiguous, or inflexible, each of which adds significantly to the cost and burden of complying with the rule. Although the current rule is the product of multiple rulemakings over a period of more than 5 years, those successive rulemakings have not fully addressed the rule's overall compliance burdens. The 2012 rule contained numerous errors and problems, many of which are described in detail in UARG's first petition for administrative reconsideration. 26 When EPA conducted a reconsideration rulemaking on a few of the issues in the rule pertaining to periods of startup and As noted above and in the Visibility Rule Petition, one provision of the January 10, 2017 rule is an adjustment, from July 2018 to July 2021, of the deadline by which states must submit SIPs for the second planning period. UARG joins numerous states and other stakeholders in supporting that deadline adjustment and urges EPA not to reconsider that element of the rule. 25 See UARG Petition for Reconsideration of MATS Rule at Section VI (Apr. 16, 2012), EPA-HQ-OAR-2009-0234-20180. 26 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 13 shutdown, the Agency's 2014 reconsideration rule created more problems than it resolved. 27 UARG raised those problems and other longstanding issues in comments on the Agency's 2015 proposed "Technical Corrections" to the MATS Rule. 28 Although EPA resolved some of the issues from the prior two rulemakings in its 2016 Technical Corrections rule, a lot of work remains to be done to make the rule clear, consistent, and appropriately flexible. Even after improvements to the rule in the Technical Corrections, facilities are struggling to interpret and reconcile ambiguous and inconsistent provisions. They also remain subject to overly restrictive requirements for the conduct of performance tests that could result in operation of units that otherwise would not operate, simply to conduct tests to measure emissions. This is unnecessary, costly, and grossly inefficient. EPA currently is in the middle of another MATS-related rulemaking, this one focused on improving the electronic reporting requirements of the MATS Rule by allowing all reports to be submitted using the Emissions Collection and Monitoring Plan System ("ECMPS") software system already used by utilities under the Acid Rain Program and CSAPR. Although UARG supports that change, UARG members are concerned that the burdens associated with some of the very detailed electronic reporting EPA has proposed will outweigh the cost savings associated with the move to ECMPS. EPA and utilities also cannot successfully implement the electronic reporting requirements without a common understanding of what other substantive compliance provisions in the rule require. As a result, in comments on that proposal, UARG again asked EPA to resolve some of the issues UARG has identified in the existing rule, in addition to requesting changes in the volume of new information EPA has proposed be submitted electronically. 29 The MATS Rule has the potential to be less costly. EPA should use the opportunity of the ongoing rulemaking to work with UARG to achieve that end by resolving the issues that remain in the existing rule's compliance procedures, and addressing UARG's concerns about the proposed revisions. 27 EPA ultimately denied reconsideration on the remainder ofUARG's 2012 petition without addressing the merits ofUARG's concerns regarding the compliance provisions, concluding only that it had met its procedural obligations under CAA§ 307(d)(7) to solicit comment on the rule. EPA, Denial of Petitions for Reconsideration of Certain Issues: MATS and UtilityNSPS (Mar. 2015), EPA-HQ-OAR-2009-0234-20493. 28 See UARG Comments on Proposed Technical Corrections (Apr. 3, 2015), EPA-HQOAR-2009-0234-20483. 29 See UARG Comments on Proposed MATS Electronic Reporting Rule (Nov. 15, 2016), EPA-HQ-OAR-2009-0234-20609. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 14 B. Renewed Analysis of Potentially Delisting Natural Gas-Fired Stationary Combustion Turbines from Regulation Under CAA Section 112 Gas-fired combustion turbines make up a large and growing portion of the nation's electric generating fleet, and they are an essential part of maintaining electric reliability in the United States. But for over a decade these sources have been in legal limbo with respect to their regulatory status under the CAA's regulatory provisions governing hazardous air pollutants ("HAPs"). The resulting uncertainty presents risks to combustion turbine owners that should be addressed by EPA. EPA listed stationary combustion turbines as a source category for regulation under section 112 of the Act in 1992 and promulgated emission standards limiting HAP emissions from new and reconstructed turbines in 2004. 30 However, almost immediately, EPA proposed to remove natural gas-fired combustion turbines from the list of sources subject to regulation under section 112.31 Based on EPA's own analysis and on a petition for delisting submitted by the Gas Turbine Association, the Agency made a preliminary finding that gas-fired turbines meet the CAA's health-protective criteria for delisting. 32 EPA's 2004 analysis found that even using conservative assumptions about exposure and risk, emissions from gas-fired combustion turbines would meet these health-protective statutory criteria. Accordingly, EPA proposed to delist gas-fired turbines from section 112 regulation. Recognizing that it would be irrational to require compliance with a rule it intended to revoke, EPA also issued a stay of the emission standards for gas-fired turbines until the Agency could take final action on its delisting proposal. 33 However, EPA never took final action on its delisting proposal. According to the terms of the stay, if EPA ultimately decides not to delist gas-fired turbines, then the standards will spring into effect for any turbine built after January 2003. This twelve-year waiting period has generated significant regulatory uncertainty for owners of gas-fired combustion turbines, who cannot say for certain whether or not their turbines built in the interim must comply with the emission standards. That uncertainty is compounded by EPA's upcoming Risk and Technology 30 69 Fed. Reg. 10,512 (Mar. 5, 2004). 69 Fed. Reg. 18,327 (Apr. 7, 2004). 32 Id.; see CAA§ 112(c)(9)(B) (describing criteria). 33 69 Fed. Reg. 51,184 (Aug. 18, 2004). 31 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 15 Review ("RTR") for stationary combustion turbines: turbine owners cannot be sure whether EPA will further tighten the standards that might ultimately apply if the stay is lifted. 34 EPA should revisit its delisting proposal for gas-fired combustion turbines and assess whether those sources still meet the statutory criteria for delisting. The Agency's previous review showed that gas-fired turbines' HAP emissions posed minuscule risks to health and the environment. If the delisting criteria are still satisfied, EPA should promptly delist gas-fired turbines from regulation under section 112. 35 If gas-fired turbines are not delisted, the Agency should, as appropriate, provide for a transition mechanism for gas-fired turbines constructed since 2003, and EPA should be careful in the R TR proceeding not to impose revised standards that would be unduly burdensome and costly. C. National Emissions Standards for Hazardous Air Pollutants and New Source Performance Standards for Stationary Reciprocating Internal Combustion Engines ("RICE"), codified at 40 C.F.R. Part 60 Subparts 1111 and JJJJ and 40 C.F.R. Part 63 Subpart ZZZZ EPA has promulgated a set of interrelated regulations for emissions from RICE units pursuant to both CAA§ 111 (new source performance standards) and§ 112 (national emissions standards for HAPs ). Each set of rules identifies numerous subcategories of internal combustion engines and applies varying requirements to each subcategory based on age, size, fuel type, engine design, use, and other factors. The overlapping regulatory programs and range of subcategories have resulted in a complex set of requirements that can be difficult for source owners to navigate. The RICE regulations generally require manufacturers to install cost-effective state-ofthe-art technology to minimize emissions. UARG agrees that requiring manufacturers (rather than source owners or operators) to install these controls is a reasonable approach to regulation for these sources. But EPA has also promulgated extensive and burdensome testing, maintenance, and record-keeping requirements for owners and operators. These requirements 34 A federal court recently set a March 2020 deadline for EPA to complete its RTR for stationary combustion turbines (along with 19 other source categories). Cal. Cmtys. Against Toxics v. Pruitt, No. 15-cv-512 (TSC), 2017 WL 978974 (D.D.C. Mar. 13, 2017). 35 Although the D.C. Circuit has ruled that CAA§ 112(c)(9)(B)(i) only allows EPA to delist entire source categories (rather than subcategories), see NRDC v. EPA, 489 F.3d 1364 (D.C. Cir. 2007), nothing in the Act prohibits EPA from reclassifying gas-fired combustion turbines as a separate source category and delisting them. See CAA§ 112(c)(l). ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 16 impose substantial costs with little to no benefit. Emissions from RICE sources are already small and do not warrant these onerous and needless regulations. For example, EPA has placed unnecessary restrictions on the operation of emergency engines. These engines are limited to just 50 hours of non-emergency operation, which count toward the 100 hour annual limit for testing and maintenance. Tracking these independent uses of RICE sources is burdensome and achieves no benefit. In addition, the work practice standards for most RICE sources require servicing the unit more often than manufacturer specifications, which is inefficient and does not provide environmental benefits. Finally, for new Tier 4 engines, EPA adopted redundant requirements for both manufacturers and operators restricting operation when certain emission controls are not working properly, which serve only to hinder operators' ability to address emergency situations. These provisions are burdensome, threaten reliability, and inappropriately place manufacturers in the role of policing emergency situations. EPA should eliminate the unnecessary requirements applicable to RICE sources and adopt clear, streamlined replacements. V. Preconstruction Permitting Issues A. New Source Review ("NSR") Reform The Act's NSR program requires major stationary sources to go through an extensive, time-consuming, and costly review and permitting process prior to construction. The NSR program also applies to existing facilities if they are modified in substantial ways and if, as a result, emissions increase by significant amounts (these are known as "major modifications"). The NSR program requires, among other things, that the owner or operator of a proposed new major source or a proposed major modification obtain a pre-construction permit, which will be issued only if the owner/operator (i) demonstrates-normally through air quality modeling-that the proposed major new source or modification will not cause or contribute to a violation of air quality standards; (ii) installs the best available control technologies ("BACT") to reduce levels of specific regulated pollutants, and (iii) demonstrates that the proposed new source or modification will not cause an adverse impact on air quality-related values in federally protected lands (e.g., national parks or wilderness areas). For the first two decades of the NSR program, existing sources rarely triggered it. That is because EPA applied it in a way to be triggered only by unusual projects that would expand the capacity of the source-i.e., projects that create new sources of emissions. It is also because NSR is so time-consuming and expensive that sources generally avoided activities that would expand their capacities because they could trigger NSR. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 17 Starting in the late 1990s, however, EPA's enforcement arm, in an effort to drive policy, filed and/or threatened a large number of lawsuits to force the installation of controls not otherwise required by the Act. To achieve this goal, EPA asserted in the lawsuits a theory of universal liability: any maintenance project-anything larger than day-to-day activity akin to changing a car's oil-is a "change" that could trigger NSR; and any such "change," if it addresses reliability, availability, or efficiency issues that the plant might have experienced in the recent past, according to the lawsuits, will "increase" total emissions as compared to the recent past and therefore will trigger NSR. More than a decade and half later, these types of lawsuits continue, with no certainty as to how the NSR program will apply to existing plants. For example, courts have reached diametrically opposite conclusions with respect to whether similar projects are considered routine maintenance, repair, and replacement ("RMRR") and thus excluded from NSR. 36 EPA's latest revision of the emissions increase provisions has, in a single case, generated five different opinions as to how these provisions should apply. 37 At a minimum, the fact that courts-and even judges within the same court-cannot agree on what these regulations mean and how they should apply in particular circumstances highlights the uncertainty these regulations have created and how inefficient their application has been in the recent past. The NSR rules, as EPA's enforcement arm has sought to apply them to existing facilities for the last decade and a half, discourage-and potentially impose very large costs on-needed projects to maintain and improve existing plants' availability, reliability, safety, and efficiency. Those are precisely the types of projects that maintain American industry's competitiveness and are needed to cost-effectively maintain the reliability of the nation's energy systems. For these reasons, the NSR rules should be revised to remove the uncertainty surrounding their applicability and the perverse incentives they create. B. Synthetic Minor Sources Current NSR regulations contain a provision (40 C.F.R. § 52.21(r)(4)) stating that a synthetic minor source-i.e., a source or modification that took operational or other limitations 36 Compare, e.g., Nat'! Parks Conservation Ass 'n v. TVA, No. 3:01-CV-71, 2010 WL 1291335 (E.D. Tenn. Mar. 31, 2010) (finding economizer and superheater replacements RMRR); with United States v. La. Generating LLC, No. 09-100-JJB-CN, 2012 WL 4107129, at *4 (M.D. La. Sept. 19, 2012) (finding reheater replacements not RMRR). 37 See United States v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017) (three different opinions), 711 F.3d 643 (6th Cir. 2013) (two different opinions). The Sixth Circuit recently denied DTE Energy's petition for rehearing en bane, and currently has pending before it DTE Energy's motion to stay the mandate pending the filing of a petition for certiorari. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 18 to remain minor-becomes subject to NSR when it "becomes a major source or major modification solely by virtue of relaxation in any enforceable limitation" established in a federally enforceable air permit. This provision was placed in the NSR regulations to prevent circumvention of those regulations-that is, sources taking limitations to avoid NSR review when they are constructed, only to seek to relax these limitations a short period thereafter. That provision is too broad, however, in that it sweeps into its scope circumstances in which EPA's concerns about circumvention are clearly not implicated: for example, a situation in which a relaxation of the permit limits may be sought years after the initial construction. As a result, this rule unnecessarily limits production and hinders economic growth, even though the increase in emissions from the later construction is very small and would have a de minimis impact (i.e., even though the proposed change itself is not major). In the utility industry, the result is that generation is shifted to higher cost units, unnecessarily increasing costs for ratepayers and, in all likelihood, resulting in more (not less) emissions. This "relaxation" provision should be revised such that it does not apply in situations in which the risk of circumvention is very unlikely or nonexistent. For example, EPA should consider whether, after a certain amount of time has passed (such as five or more years after a permit containing the operational limitation was issued), the relaxation provision should no longer apply. In these circumstances, a proposed physical or operational change should be analyzed under the base NSR rules, as it would be for any other "true" minor source or modification. Such a change to the regulations would sensibly encourage economic growth while simultaneously ensuring that any physical or operational change that is a major source or modification in its own right would be subject to preconstruction review. C. Prevention of Significant Deterioration ("PSD") Significant Emissions Rate for Greenhouse Gases In UARG v. EPA, 38 the Supreme Court held that EPA's so-called "Tailoring Rule" was unlawful in as much as it would apply the PSD and Title V permitting programs to sources based solely on their GHG emissions. Instead, the Court held, EPA's authority to regulate GHGs under PSD and Title V extends only to "anyway" sources, that is, sources that otherwise would trigger these permitting requirements for non-GHG pollutants. For these "anyway" sources, EPA could require BACT for GHGs "only if the source emits more than a de minimis amount of greenhouse gases."39 On remand, EPA proposed to establish its previous Tailoring Rule threshold, 75,000 tons per year, as that de minimis level or "Significant Emissions Rate" (also known as a 38 134 S. Ct. 2427 (2014). 39 Id. at 2449. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 19 significance threshold). 40 UARG and its members filed comments supporting EPA's authority to establish a significance threshold on de minimis grounds, but objecting to the proposed rule's approach of merely reverse-engineering a pre-determined result-namely, the Tailoring Rule's 75,000 tons per year level-instead of applying the correct legal standard for de minimis authority and properly evaluating the facts and data in the record under that standard.41 Indeed, as UARG's comments explained, applying EPA's historic and well-established approach would have yielded a significance threshold of320,000 tons per year, four times higher than EPA's predetermined, "preferred" result. Yet, not only did the proposed rule reject any significance threshold higher than 75,000 tons per year, it arbitrarily declared that EPA would not even accept comments on such higher thresholds. Establishing an appropriate PSD de minimis level for GHGs falls squarely in the category of action that would alleviate unnecessary, costly, and counterproductive regulatory burdens. EPA should withdraw the current proposal, and propose a new, higher significance threshold for GHGs. VI. New Source Performance Standards ("NSPS") Issues A. Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills, 81 Fed. Reg. 59,276 (Aug. 29, 2016), codified at 40 C.F.R. Part 60, Subpart Cf UARG urges EPA to grant petitions for reconsideration that are pending before the Agency regarding this rule, which revised the existing emissions guidelines for municipal solid waste landfills to make them more stringent. Although EPA possesses authority to amend regulations to correct mistakes or to streamline processes as part of its authority under section 111 (d), the Agency lacks authority under that provision to revise its emission guidelines to direct states to make previously promulgated standards of performance for existing sources more stringent. UARG filed comments on EPA's proposed revision to the emission guidelines that are available in the rulemaking docket. 42 UARG is also challenging this rule (along with other Petitioners) in the U.S. Court of Appeals for the District of Columbia Circuit (Nat'! Waste & Recycling Ass 'n v. EPA, No. 16-1371 and consolidated cases). 40 81 Fed. Reg. 68,110 (Oct. 3, 2016). UARG Comments on Proposed Significance Threshold (Dec. 16, 2016), EPA-HQOAR-2015-0355-0089. 42 See UARG Comments on Proposed Emission Guideline Revisions for Municipal Solid Waste Landfills (Oct. 26, 2015), EPA-HQ-OAR-2014-0451-0198. 41 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 20 B. Electronic Reporting Under the NSPS, codified at 40 C.F.R. Part 60 New source performance standards establish federally enforceable emission standards and related compliance requirements for new, modified, and reconstructed facilities in specific source categories.43 NSPS are established by EPA, but their implementation and enforcement usually are delegated to state agencies. Reporting requirements for the NSPS are established in the general provisions in Subpart A and in individual subparts. The general provisions currently require duplicate reporting to EPA Regional Offices and delegated state agencies, generally in hard copy (although use of electronic media also is permitted for submissions to state agencies with their consent). Electronic reporting of information to a centralized data system has the potential to reduce costs and burdens and improve accessibility of information to regulators, the regulated entities, and the public. Unfortunately, EPA's implementation of such reporting under the NSPS has done the opposite. Beginning in 2009, EPA started inserting into individual subparts of the NSPS a requirement that facilities electronically submit certain reports to EPA using an EPA-designed software system and website that the Agency was in the process of developing. The first of those requirements took effect July 1, 2011. 44 The requirement to submit existing reports electronically to a central location has not been controversial. However, the software system EPA has specified (called the "Electronic Reporting Tool" or "ERT") is controversial because the program is outdated and difficult to use, and because it requires submission of significant volumes of information that are not necessary to demonstrate compliance with any applicable NSPS. 45 EPA's failure to relieve sources from existing duplicate paper reporting requirements also generated objections. 43 UARG members own and operate facilities subject to many NSPS subparts, including those applicable to steam generating units (Subparts D, Da, Db, and De), combustion turbines (Subparts GG and KKKK), coal preparation plants (Subpart Y), and nonmetallic mineral processing plants (Subpart 000). 44 See, e.g., 40 C.F.R. § 60.49a(v)(4) (Subpart Da), § 60.46b(j)(14) (Subpart Db), § 60.45c(c)(l4) (Subpart De),§ 60.258(d) (Subpart Y). 45 EPA has said it is collecting the additional information to assist in development of emission factors. Initially, EPA collected the information simply by mandating use of the ERT software. However, in 2016, EPA revised the general provisions to codify some of those reporting requirements. 81 Fed. Reg. 59,800 (Aug. 30, 2016) (revising 40 C.F.R. § 60.S(f)). ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 21 In 2015, EPA proposed to expand the electronic reporting requirement to all but a few NSPS subparts by revising the general provisions. 46 UARG's objections to the ERT and EPA's proposed expansion of the requirement are described in detail in UARG's comments on that proposal.47 On December 21, 2016, EPA Administrator Gina McCarthy signed a final rule that would impose many of the burdens to which UARG and others objected. The rule has not yet been published. Although that rule includes some extended deadlines, multiple promises to develop alternatives to the use of the ERT, and other improvements as a result of comments, the basic mandate of the rule is the same. If the rule becomes effective, numerous facilities will be required (at least in the short term) to electronically report significant volumes of information to EPA using the ERT, in addition to providing the same information in hard copy to any delegated state that does not waive the duplicate reporting requirement. The final rule also includes drafting errors that would inadvertently impose the new requirements on facilities EPA said it planned to exclude from the rule. If the rule is published, UARG intends to petition for administrative reconsideration. The current NSPS electronic reporting requirements, and the planned expansion of those requirements to include many additional subparts, do not provide a "net benefit." EPA should formally withdraw the signed final rule and issue a new proposal to replace existing requirements for reporting using the ERT with a more workable electronic reporting system and to reduce the volume of information that must be reported electronically. For electric utilities, EPA should consider adapting its existing ECMPS software, which already is used by utilities to report information under the Acid Rain Program and CSAPR, to collect any additional information needed for those sources to demonstrate compliance with an applicable NSPS. As discussed further in Section IV.A above, EPA already is doing that for the MATS Rule at 40 C.F.R. Part 63, SubpartUUUUU. Finally, EPA should act expeditiously-perhaps by direct final rule-to authorize use of electronic reporting (including email submission of electronic media) to EPA Regional Offices and to remove requirements for duplicate reporting to EPA Regions of information already electronically reported to EPA (e.g., to ECMPS or EPA's Central Data Exchange), 46 80 Fed. Reg. 15,100 (Mar. 20, 2015). See UARG Comments on Proposed NSPS Electronic Reporting Rule (June 18, 2015), EPA-HQ-OAR-2009-0174-0093. 47 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 22 C. Reconsideration of the NSPS for Stationary Combustion Turbines, codified at 40 C.F .R. Part 60, Subpart KKKK EPA promulgated the NSPS for new, modified, and reconstructed stationary combustion turbines in July 2006 as Subpart KKKK. 48 UARG filed a petition for administrative reconsideration of that rule raising several objections, including that (i) the rule's NOx standards were unachievable for large gas-fired turbines operating in simple cycle mode, (ii) the rule failed to provide a methodology to calculate compliance for operating periods when several different standards apply, and (iii) several other issues related to emissions monitoring. 49 EPA agreed to reconsider the Subpart KKKK rule and issued a proposed reconsideration rule in August 2012. 50 Instead of simply addressing UARG's reconsideration request, EPA proposed an almost complete rewrite of the rule, creating many new problems. At the same time, the proposal failed to actually address some of the specific issues UARG raised in its reconsideration petition. Further, EPA proposed to radically alter the analysis used to determine whether an existing combustion turbine had been "reconstructed," such that commonplace, insignificant work regularly performed at turbine facilities could subject those units to the stringent standards in Subpart KKKK. UARG submitted comments explaining its objections to the proposed changes to the reconstruction analysis and other problematic aspects of the proposal. 51 EPA never finalized its proposed reconsideration rule. EPA's proposed reconsideration rule has subjected combustion turbine owners to considerable regulatory uncertainty, making it difficult for them to anticipate the legal consequences of necessary maintenance activities or to predict what standards their turbines will ultimately need to comply with. UARG urges the Agency to address this uncertainty by issuing a supplemental proposal on reconsideration of Subpart KKKK that withdraws the 2012 proposal's changes to the reconstruction analysis and that addresses in full the issues in UARG's petition for reconsideration and its comments on the 2012 proposed rule. 48 71 Fed. Reg. 38,482 (July 6, 2006). See UARG Petition for Reconsideration of Subpart KKKK Rule (Sept. 7, 2006), EPAHQ-OAR-2004-0490-0325. 50 77 Fed. Reg. 52,554 (Aug. 29, 2012). 51 See UARG Comments on Subpart KKKK Reconsideration Proposal (Dec. 28, 2012), EPA-HQ-OAR-2004-0490-0418. 49 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 23 D. Reconsideration of the NSPS for Coal Preparation and Processing Plants, codified at 40 C.F.R. Part 60, Subpart Y EPA promulgated revisions to the NSPS for coal preparation and processing plants in October 2009. 52 UARG filed a limited petition for reconsideration of these Subpart Y revisions, noting that the rule was vague as to how one could determine whether an existing coal pile had been "modified" or "reconstructed" and thus become subject to Subpart Y. 53 Because coal piles are always in flux and their emissions are difficult to measure, it is unclear how EPA would determine whether an emissions rate increase occurs for the purposes of modification, or what components would be included in a reconstruction analysis. UARG also asked EPA to reconsider its imposition of the burdensome electronic reporting requirements discussed above in Section VI.B. EPA agreed to reconsider those issues but has never issued a proposed reconsideration rule. EPA' s continued failure to address the treatment of existing coal piles under Subpart Y has created substantial regulatory uncertainty within the industry, making it difficult for them to predict how certain activities at their coal piles might trigger the requirements of Subpart Y. UARG urges the Agency to issue a proposed rule responding to UARG's reconsideration petition that clarifies how existing coal piles will be treated under Subpart Y and adopts a more reasonable mechanism for electronic reporting .. E. Revisions to Test Method for Determining Stack Test Gas Velocity Taking Into Account Velocity Decay Near the Stack Walls In 2009, EPA proposed revisions to Test Method 2H in 40 C.F.R. Part 60, Appendix A, that would reduce regulatory burdens associated with emissions testing. 54 The proposal would incorporate into Method 2H a procedure in Conditional Test Method 041 the use of which EPA was already routinely approving through source-by-source petitions. The proposal, which would make the method more accurate and require less testing, was universally supported and technically sound. 55 UARG asked EPA to move expeditiously to finalize the revisions in order to eliminate the need for source-by-source petitions. More than seven years later, the proposal has yet to be finalized. UARG urges EPA not to delay any further and finalize the revisions as proposed. 52 74 Fed. Reg. 51,950 (Oct. 8, 2009). See UARG Petition for Reconsideration of Subpart Y Rule (Dec. 7, 2009). 54 74 Fed. Reg. 42,819 (Aug. 25, 2009). 55 See, e.g. UARG Comments on Test Method 2H Revisions (Oct. 26, 2009), EPA-HQOAR-2008-0697. 53 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 24 VII. National Ambient Air Quality Standards A. "Findings of Substantial Inadequacy" of SIPs and "SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction," published at 80 Fed. Reg. 33,840 (June 12, 2015) In 2015, EPA Administrator Gina McCarthy in one action issued a group of"SIP Calls" mandating that 36 states revise their previously EPA-approved SIPs, because certain provisions of those SIPs addressing emissions from industrial sources during periods of startup, shutdown, or malfunction of applicable process or control equipment ("SSM") are inconsistent with EPA's most recent interpretations of certain CAA provisions. The SIP Calls are not based on any finding of air quality impacts or finding that removing the provisions is necessary to meet other CAA goals. Rather, they are based on the conclusion that there is a "facial inconsistency" of the called SIP provisions' language with EPA' s recent interpretations of certain CAA provisions, and that inconsistency renders the previously EPA-approved SIPs "substantially inadequate." Under the CAA, states have primary responsibility for attaining, maintaining, and enforcing the NAAQS through their SIPs and EPA has only a secondary role that provides no authority to force states to adopt specific control measures. The SIP Calls are inconsistent with that system of cooperative federalism. The SIP Calls also are inconsistent with agencies' inherent responsibility to consider costs and benefits when exercising discretionary authority. UARG is currently a petitioner challenging the SSM SIP Call in the U.S. Court of Appeals for the D.C. Circuit, and the opening briefs that Industry Petitioners (including UARG), State Petitioners, and Texas Petitioners filed are available in the docket for those consolidated cases. 56 The called SIP provisions are all designed to address the inability of sources to meet otherwise applicable emission control requirements under certain operating conditions, like SSM periods. All of the states subject to the SIP Calls have submitted (or, for revised NAAQS, will submit) demonstrations establishing that their SIP will result in attainment of the NAAQS. Many of the subject states already are achieving some or all of the NAAQS through their existing SIPs. On the other hand, the SIP Calls have imposed on states, and on EPA, the obligation to embark on a years-long and costly process of review and approval/disapproval of revised state rules and potentially development of Federal Implementation Plans. Imposition of such costs, in the absence of quantifiable benefits, also is contrary to the goals of Executive Order 13777. 56 See Walter Coke, Inc. v. EPA, No. 15-1166 (D.C. Cir. Oct. 31, 2016), ECF Nos. 1643502, 1643571, 1643769. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 25 In short, the SIP Calls interfere with state discretion and impose significant costs and burdens without any corresponding finding of air quality-related benefit. EPA should convene a proceeding to withdraw the SSM SIP calls by applying a SIP call standard that is consistent with its limited authority under the CAA and obligation to consider the impacts of its exercise of that authority. B. NAAQS Promulgation and Implementation NAAQS and their implementation are at the heart of the CAA. EPA sets the NAAQS and must review them at least every five years, revising them as appropriate. Unfortunately, when the NAAQS for a particular pollutant are revised, previous NAAQS for that pollutant seem to linger forever in scattered sections of the Code of Federal Regulations. For example, NAAQS for fine particulate matter ("PM 2.5") are found in sections 50.7, 50.13, and 50.18 of 40 C.F.R. Part 50. Such scattered codification of NAAQS is at best confusing and at worst misleading. UARG recommends revision of 40 C.F.R. Part 50 to remove NAAQS that have been replaced and to consolidate the current NAAQS for each regulated pollutant in a single section of the C.F.R. UARG also urges the Agency to consider changes that would simplify the process that it uses to set and revise NAAQS. For example, the present process involves preparation by EPA's career staff of a Policy Assessment. This document is not required by the Act. It could be eliminated, modified to reflect senior management input, or replaced by an Advance Notice of Proposed Rulemaking as was planned in 2006. 57 In addition, to the extent that risk assessment remains a part of the process, UARG urges that the assessment fully capture uncertainty about the estimated number and quality of effects. Preparation of an Integrated Uncertainty Analysis, as the National Academy of Sciences has recommended, would advance this effort. Once NAAQS have been promulgated, rules established by EPA play a vital role in their implementation. UARG recommends revision of certain aspects ofrecently-promulgated NAAQS implementation rules, including EPA's March 2015 rule establishing SIP requirements for the 2008 ozone NAAQS 58 and its August 2016 rule establishing SIP requirements for the 2012 PM25 NAAQS, 59 to eliminate unnecessary and duplicative requirements. Specifically, 57 Memorandum from Marcus Peacock, Deputy Adm'r, EPA, to Dr. George Gray, Assistant Adm'r, Office of Research & Development, & William L. Wehrum, Acting Assistant Adm'r, Office of Air & Radiation (Apr. 17, 2007), https://www3.epa.gov/ttn/naaqs/pdfs/memo_process_for_reviewing_naaqs.pdf. 58 80 Fed. Reg. 12,264 (Mar. 6, 2015). 59 81 Fed. Reg. 58,010 (Aug. 24, 2016). ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 26 UARG urges EPA to revoke the requirement for "anti-backsliding" measures for the 1997 ozone NAAQS, 60 which was replaced in 2008 by a more stringent standard for ozone. 61 Section l 72(e) of the CAA requires such measures only when a NAAQS is "relaxed." In addition, UARG recommends that EPA revise its implementation rule for the 2012 PM2.s NAAQS to revoke the less stringent 1997 standard throughout the nation, not just in areas designated attainment. 62 Although UARG recognizes the need for continuity in the NAAQS program and therefore is not recommending that a superseded NAAQS be rendered null immediately upon promulgation of a revised one, UARG recommends that EPA revoke any superseded NAAQS a year after the effective date of area designations for the new or revised NAAQS. The revocation should be effective nationwide. States should not be required to complete an attainment demonstration (or equivalent) for the superseded NAAQS. 63 Finally, UARG urges EPA to return to its prior approach of relying on air quality monitoring to make initial designations for areas as attainment, nonattainment, or unclassifiable. The S02 NAAQS promulgated in 2010 was the first NAAQS for which the Agency chose to rely on modeling predictions-rather than monitoring data-for making initial designations. Modeling is not as accurate as monitoring. EPA's preferred air quality models and required approaches to modeling are conservative by design to ensure that pollutant concentrations in ambient air are not underestimated. EPA acknowledges that its preferred AERMOD model cannot predict pollutant concentrations accurately at a given time and place. Furthermore, EPA continues to revise its AERMOD modeling system, leading to questions concerning the modeling on which designations will be based. 64 In addition to returning to its prior approach of relying on monitoring for initial designations in the future, EPA should revise nonattainment designations that have already been 60 40 C.F.R. § 51.1105. 61 Compare 40 C.F.R. § 50.10, with id. § 50.15. 62 See 81 Fed. Reg. at 58,142. 63 See Comments by UARG and the American Petroleum Institute on Proposed PM NAAQS Implementation Rule at 61-64 (May 29, 2015), EPA-HQ-OAR-2O13-O691-OO96; see also VARG Comments on Proposed Implementation Rule for the 2015 Ozone NAAQS at 5-8 (Feb. 13, 2017), EPA-HQ-OAR-2O16-O2O2-O1O5. 64 See Memorandum from Richard A. Wayland, Div. Dir., Air Quality Assessment Div., EPA Office of Air Quality Planning & Standards, to Regional Air Dirs., Regions 1-10 (Mar. 8, 2017) (clarification of the version of the AERMOD modeling system to be used for designations in light of recent revisions of the model), https://www3.epa.gov/ttn/scram/guidance/clarification/S02_ DRR_Designation_Modeling_Clarif icaiton_ Memo-O3O82017 .pdf. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 27 made based on modeling. Several areas were designated nonattainment based on modeling in 2016, 65 and states have submitted modeling for several other areas for which designations are required by the end of 2017. 66 EPA should use its correction authority under section 11 0(k)( 6) of the Act to replace modeling-based nonattainment designations made in 2016 with unclassifiable designations. Because of the overestimates inherent in modeled air quality, however, attainment designations based on modeling remain valid and should be retained. Furthermore, areas for which designations must be made at the end of 2017 that have not demonstrated attainment through modeling and that do not have adequate monitoring data should be designated unclassifiable; those with adequate monitoring data should be designated according to those data. EPA should also repeal its 2015 Data Requirements Rule for SO2. 67 That rule places additional burdens on states either to perform modeling or to conduct additional air quality monitoring of SO 2 sources for designations. Although this rule requires the use of either modeling or monitoring, even the monitoring requirement exceeds what is required of states for other criteria air pollutants. 68 VIII. Air Quality Modeling Issues On January 17, 2017, EPA promulgated revisions to its Guideline on Air Quality Models, codified at 40 C.F .R. Part 51, Appendix W ("Appendix W"). 69 This rule, which specifies models, inputs, and techniques for use in preparing SIPs and PSD permit applications, is not yet effective. Although UARG supports some aspects of the rule revisions, others are expected to make SIP preparation and obtaining permits for new or modified sources more time-consuming and costly. Specifically, UARG is concerned about new modeling requirements for sources seeking permits that emit precursors to ozone or PM2.s. Many electric generators fall in this category. The screening tools that EPA suggests-Significant Impact Levels and Modeled Emission Rates for Precursors-are not particularly helpful in their present form. 70 The photochemical grid modeling mandated for sources not helped by these tools is time-consuming 65 81 Fed. Reg. 45,039 (July 12, 2016); 81 Fed. Reg. 89,870 (Dec. 13, 2016). See Fact Sheet: Final Data Requirements Rule for the 2010 1-Hour SO2 Primary NAAQS (undated), https://www.epa.gov/sites/production/files/2017-02/documents/fact_sheet__ final_ data_requirements_rule.pdf. 67 80 Fed. Reg. 51,052 (Aug. 21, 2015). 68 See UARG Comments on the Proposed Data Requirements Rule for the 1-Hour SO 2 NAAQS (July 14, 2014), EPA-HQ-OAR-2013-0711-0075. 69 82 Fed. Reg. 5182 (Jan. 17, 2017). 70 U ARG Comments on Draft Guidance on Development of MERPs (Mar. 31, 2017) (attached as Exhibit 2); UARG Comments on Draft Guidance on SILs for Ozone and Fine Particles (Sept. 30, 2016) (attached as Exhibit 3). 66 ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 28 and costly. EPA does not specify a particular model to be used, meaning the selected model must be approved on a case-by-case basis. Formal new requirements for written approval by EPA's (non-statutory) Model Clearinghouse whenever a model not specified in Appendix Wis used are likely to further delay the process. Accordingly, the NAAQS Implementation Coalition, of which UARG is a member, filed a petition for reconsideration of these and other aspects of the Appendix W revisions. 71 IX. Demonstration-of-Compliance Issues A. Outreach on Current Rulemakings Measures used to demonstrate compliance with emission standards and other requirements, while critical to the effectiveness of a rule, also can significantly increase the rule's cost, particularly if the rule is unclear or contains errors. EPA often initiates rulemakings with the goal of fixing such problems it has identified in rules, but does so without soliciting input from stakeholders on additional ways the rule could be improved. When UARG participates in such proceedings UARG often includes in comments suggestions for other revisions it believes would make the rule more cost effective without sacrificing environmental benefits. Unfortunately, these comments often are rejected as beyond the scope of the rulemaking because they suggest changes the Agency did not propose. To avoid this problem, before engaging in such rulemakings, EPA should solicit input from stakeholders either informally or formally on ways the rule could be made more cost-effective so that the Agency can address those suggestions in its development of the proposal and/or final rule. While some of these suggestions may not by themselves warrant initiating a rulemaking, once EPA decides to initiate a rulemaking it should make a greater effort to ensure that all potential improvements can be achieved. For example, EPA already has on its regulatory agenda plans to revise the rules governing compliance demonstrations under the Acid Rain Program, and CSAPR at 40 C.F.R. Part 75. UARG believes there are many opportunities to relieve regulatory burdens under those rules by, for example, updating fuel sampling and analysis requirements to reflect current market and operating conditions and incorporating relief already provided for individual sources by petition. EPA should engage in outreach to affected sources prior to issuing its proposal to maximize the improvements to the rule. 71 Petition of the NAAQS Implementation Coalition for Reconsideration of Portions of the Final Rule on Revisions to the Guideline on Air Quality Models (Mar. 20, 2017), EPA-HQOAR-2015-0310-0181. ED_001598_00014012 HUNTON& WILLIAMS Samantha K. Dravis May 12, 2017 Page 29 B. The So-Called "Credible Evidence Rule" In 1997, EPA promulgated revisions to 40 C.F .R. Parts 51, 52, 60, and 61 removing restrictions on the use of information other than the EPA or state-specified compliance method to establish violations of, or compliance with, emission limitations. 72 Later, EPA revised its model rules for Federal Permit Operating Programs under Title Vat 40 C.F.R. Parts 70 and 71 to require identification and consideration of information other than the specified compliance method when certifying compliance with permit terms and conditions. 73 These rules, which have so far avoided judicial review, 74 impose significant regulatory burdens and uncertainty on sources regarding the standard for compliance and responsible officials' obligations when making certifications or compliance under penalty of perjury. They also are inconsistent with Congress' limited authorization to use such information when assessing civil penalties only to determine the duration of a violation that already has been established using the specified compliance method. EPA should engage in rulemaking to repeal or revise these rules to limit the methods for establishing violations and determining compliance to those specified in rules and permits, and to limit use of other information to establishing the duration of a violation or compliance, consistent with Congress' direction in CAA§ l 13(e). * * * * * * * * UARG appreciates this opportunity to provide input on EPA regulations that may be appropriate for repeal, replacement, or modification. We look forward to the future opportunities for engagement mentioned in the Federal Register notice. Please feel free to contact me with any questions. Sincerely, Isl Andrea B. Field Andrea Field Counsel for the Utility Air Regulatory Group 72 62 Fed. Reg. 8314 (Feb. 24, 1997). 62 Fed. Reg. 54,900, 54,946-47 (Oct. 22, 1997); 79 Fed. Reg. 43,661 (Jul. 28, 2014). 74 Industry groups, including UARG, challenged both rules when they were promulgated, but the U.S. Court of Appeals for the D.C. Circuit refused to review their validity, finding instead that the challenges were not "ripe for review." Clean Air Implementation Project v. EPA, 150 F.3d 1200 (D.C. Cir. 1998); NRDC v. EPA, 194 F.3d 130 (D.C. Cir. 1999). 73 ED_001598_00014012 To: Cc: From: Sent: Subject: Hupp, Sydney[hupp.sydney@epa.gov] Dickerson, Aaron[dickerson.aaron@epa.gov] Wehrum, William L. Wed 5/31/2017 3:36:47 PM Re: Meeting Request That would be great. Thanks. On May 31, 2017, at 9:56 AM, Hupp, Sydney > Cc: Gunasekara, Mandy > Subject: RE: Meeting Request Hi Sydney. Just checking to see if it might be possible to schedule this meeting. Please let me know if you need anything more from us. Thanks. From: Wehrum, William L. Sent: Monday, May 22, 2017 6:30 PM To: Hupp, Sydney (hupp.sydney@epa.gov) Cc: 'gunasekera.mandy@epa.gov'; Susan J. Miller (smiller@bia.org ); 'Paul Regina' Subject: Meeting Request I am writing on behalf of the Brick Industry Association (BIA) to request a meeting with Administrator Pruitt. BIA is a national trade association representing clay brick manufacturers, distributorships, and their suppliers. Two-thirds of all the brick shipped in North American is manufactured by BIA members. In addition, many BIA member companies are family-owned small businesses. Many of BIA's members are subject to a recently-promulgated National Emissions Standard for Hazardous Air Pollutants for Brick Manufacturing (i.e., the "Brick MACT"). BIA has a pending challenge to this rule in the DC Circuit. BIA does not want to discuss the litigation with the Administrator. BIA does hope to discuss with the Administrator the enormous impact that the rule is having on the industry and some of BIA's ideas as to how the rule could be improved and the burden lessened. A group of BIA members will be in Washington, DC, on Thursday, June 15. A meeting that date would be ideal. If that does not work for Administrator Pruitt, we would appreciate any suggested alternative dates. Please feel free to contact me if you need anything more. Thanks for your consideration. 17cv01906 Sierra Club v. EPA ED_001523B _ 00005970-00001 Bill Wehrum Partner wwehrum@hunton.com p 202.955.1637 bio I vCard blog I Linked In Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 hunton.com 17cv01906 Sierra Club v. EPA ED_001523B_00005970-00002 To: Wehrum, William L.[wwehrum@hunton.com] From: Jackson, Ryan Sent: Fri 6/2/2017 11:39:33 PM Subject: RE: Checking In Great news and big thanks. Looking forward to it. I think Pruitt would appreciate anothersit downin the near future on next steps like you did before. Thanks. From: Wehrum, William L. [mailto:‘wwehrum@hunton.com] Sent: Friday, June 2, 2017 6:28 PM To: Jackson, Ryan Subject: Checking In Ryan — Wanted to let you know that I completed and submitted the last of my forms this afternoon. OPP should have everything they need to movethis along. HUNTONBill Wehrum Partner wwehrum@huntor.com p 202.955.1637 bio vCard blog Linkedin Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 hunton.com 17cv1906 Sierra Club v. EPA - 6/22 Production ED_001523_00004996-00001 To: From: Sent: Subject: Hupp, Sydney[hupp.sydney@epa.gov] Wehrum, William L. Tue 6/6/2017 2:14:01 PM RE: Meeting with Administrator Pruitt That time works well. Thanks. From: Hupp, Sydney [mailto:hupp.sydney@epa.gov] Sent: Tuesday, June 06, 2017 9:10 AM To: Wehrum, William L. Subject: RE: Meeting with Administrator Pruitt How about Monday, the 19t\ at 9:45AM? Sydney Hupp Executive Scheduler Office of the Administrator 202.816.1659 (c) From: Wehrum, William L.[mailto:wwchrum@hunton.com] Sent: Tuesday, June 6, 2017 8:57 AM To: Hupp, Sydney < h ~ > Subject: RE: Meeting with Administrator Pruitt Hi Sydney. I am available any time Monday and Wednesday. I also am available Thursday morning. If those times are not convenient for the Administrator, I will adjust my schedule to fit his availability. From: Hupp, Sydney [mailto:hupp.sydney@epa.gov] 17cv01906 Sierra Club v. EPA ED_001523B _ 00005825-00001 Sent: Tuesday, June 06, 2017 8:39 AM To: Wehrum, William L. Subject: Meeting with Administrator Pruitt Good morning Mr. W ehrum, Ryan let me know that we are looking to hopefully capture another hour of your time this month for you to talk with the Administrator. Do you have much availability the week of June 19? Thank you! Sydney Hupp Executive Scheduler Office of the Administrator 202.816.1659 (c) 17cv01906 Sierra Club v. EPA ED_001523B _ 00005825-00002 From: Bolen, Brittany Location: DCRoomARN3500/OPEI Importance: Normal Subject: FW: Meeting with the Brick Industry Association Start Date/Time: Thur 6/15/2017 5:30:00 PM End Date/Time: Thur 6/15/2017 6:00:00 PM -----Original Appointment----From: Kime, Robin On Behalf Of Bolen, Brittany Sent: Thursday, June 1, 2017 9:05 AM To: Bolen, Brittany; smiller@bia.org; Inge, Carolyn; Wehrum, William L.; Lovell, William; Dravis, Samantha Subject: Meeting with the Brick Industry Association When: Thursday, June 15, 2017 1:30 PM-2:00 PM (UTC-05:00) Eastern Time (US & Canada). Where: DCRoomARN3500/OPEI Directions: Please use the William Jefferson Clinton North Entrance located on your right as you exit the Federal Triangle Metro Station. Please arrive 20 minutes prior to the meeting with photo IDs to clear Security. EPA Contact: For an escort from Security to the meeting call (202) 564-4332; for all other matters call Robin Kime (202)564-6587. Request: I am writing on behalf of the Brick Industry Association (BIA) to request a meeting with Administrator Pruitt. BIA is a national trade association representing clay brick manufacturers, distributorships, and their suppliers. Two-thirds of all the brick shipped in North American is manufactured by BIA members. In addition, many BIA member companies are family-owned small businesses. Many of BIA's members are subject to a recently-promulgated National Emissions Standard for Hazardous Air Pollutants for Brick Manufacturing (i.e., the "Brick MACT"). BIA has a pending challenge to this rule in the DC Circuit. BIA does not want to discuss the litigation with the Administrator. BIA does hope to discuss with the Administrator the enormous impact that the rule is having on the industry and some of BIA's ideas as to how the rule could be improved and the burden lessened. A group of BIA members will be in Washington, DC, on Thursday, June 15. A meeting that date would be ideal. If that does not work for Administrator Pruitt, we would appreciate any suggested alternative dates. 17cv1906 Sierra Club v. EPA ED _001523A_00000022-00001 Contact: Bill Wehrum Partner wwehrum@hunton.com p 202.955.1637 Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 hunton.com 17cv1906 Sierra Club v. EPA ED _001523A_00000022-00002 Gunasekara, Mandy[Gunasekara.Mandy@epa.gov]; Wehrum, William L.[wwehrum@hunton.com] From: Dominguez, Alexander Sent: Fri 6/23/2017 7:12:37 PM Subject: RE: This Afternoon To: On my way -----Original Message----From: Gunasekara, Mandy Sent: Friday, June 23, 2017 3:12 PM To: Wehrum, William L. Cc: Dominguez, Alexander Subject: Re: This Afternoon Alex can you go get Bill? Sent from my iPhone > On Jun 23, 2017, at 3:11 PM, Wehrum, William L. wrote: > > Mandy - I am in the north lobby. 17cv1906 Sierra Club v. EPA ED_001523A_00000290-00001 To: Gunasekara, Mandy[Gunasekara.Mandy@epa.gov] From: Wehrum, William L. Sent: Wed 6/14/2017 5:49:19 PM Subject: RE: Speaking Invitation Hi Mandy. Thanks for confirming. Let’s plan on 2:00. I don’t think we need anything else at this point. From: Gunasekara, Mandy [mailto:Gunasekara.Mandy@epa.gov] Sent: Wednesday, June 14, 2017 12:31 PM To: Wehrum, William L. Subject: RE: Speaking Invitation HeyBill, T hopeall is well! I want to confirm the below request. 2 pm on Thursday works for me — I could even moveit up a little early to 1:30 if needed. Do you need anything else? Thanks, Mandy From: Wehrum, William L. [mailto:wwehrum@hunton.com] Sent: Tuesday, May 23, 2017 10:41 AM To: Gunasekara, Mandy Subject: Speaking Invitation Mandy — The Utility Air Regulatory Group is an ad-hoc coalition of the Nation’s leading fossil energy producers. UARG focuses on Clean Air Act-related regulatory issues. UARGis holding a meeting here at Hunton’s offices in DC on the afternoon of June 22 and the morning of June 23. We would like to invite you to speak to the group at some point during the meeting. 17cv1906 Sierra Club v. EPA ED_001523A_00000336-00001 Our agendais flexible, so you can pick the time that works best. If it works for you, we suggest 2:00 on Thursday the 22"¢. Weare interested in any Clean Air Act regulatory issue that you are willing and able to address. Topics of interest include the Clean Power Plan, the Mercury and Air Toxics Standard, regional transport, regional haze, and NAAQS/NAAQS implementation. We are not asking you to address pending litigation on any of these issues. Weare interested in discussing only possible future regulatory action. Please feel free to contact me if you have questions or need more information. Thanksfor your consideration. HUNTON: Bill Wehrum WILLIAMS Partner wwehrum@hunton.com p 202.955.1637 Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 hunton.com 17cv1906 Sierra Club v. EPA ED_001523A_00000336-00002 To: From: Sent: Subject: Wehrum, William L.[wwehrum@hunton.com] Gunasekara, Mandy Tue 7/11/2017 12:36:33 PM Chat Are you around this morning to touch base on a few items? Mandy M. Gunasekara Senior Policy Advisor for Office of Air and Radiation Office of the Administrator US Environmental Protection Agency 17cv1906 Sierra Club v. EPA ED_001523A_00000415-00001 To: Cc: From: Sent: Subject: Gunasekara, Mandy[Gunasekara.Mandy@epa.gov] Jaber, Makram[mjaber@hunton.com] Wehrum, William L. Thur 7/20/2017 1:50:39 PM UARG MATS Meeting Mandy - I am writing to confirm a meeting with you and Utility Air Regulatory Group representatives for next Thursday, July 27, at 3:00 pm to discuss the Mercury and Air Toxics Standard. UARG will be represented by Makram Jaber (H&W), Andrew Knudsen (H&W), Mikes Gears (Duke Energy) and Justin Walters (Southern Co.). Makram and Andrew are counsel to the UARG HAPs Committee. Mike and Justin are co-chairs of the UARG HAPs Committee. I also may attend. The purpose of the meeting is not to talk about the pending litigation. We are interested in talking about the rule itself. Please feel free to contact me if you have questions or need any additional information. Thanks. ·. Bill Wehrum Partner wwehrum@hunton corn p 202.955.1637 bio I vCard I blog_ I l..inkedln Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 hunton.com 17cv1906 Sierra Club v. EPA ED_001523A_00000358-00001 To: From: Sent: Subject: Wehrum, William L.[wwehrum@hunton.com] Gunasekara, Mandy Tue 8/1/2017 9:11:06 PM RE: This Afternoon Perfect - I'm headed to a 6 pm meeting. Will try to connect either on my way over there or soon after (if not too late). -----Original Message----From: Wehrum, William L. [mailto:wwehrum@hunton.com] Sent: Tuesday, August 1, 2017 4:01 PM To: Gunasekara, Mandy Subject: Re: This Afternoon Just got your VM. Now I don't feel so bad. > On Aug 1, 2017, at 3:59 PM, Wehrum, William L. wrote: > > Mandy - I got hung up this afternoon. Can we move to 5:00? 17cv1906 Sierra Club v. EPA ED_001523A_00000427-00001 To: Jackson' Ryanflackson ryan@epa gov] From: Wehrum' wuuam Sent: Fri 8/11/2017 2:23:01 FM Subject: David Har'ow Ryan Following up: am Wehrum WILLIAMS Partner 'mv'fi'w 202 955 1637 bc' Cad my Hunlon ku-ams LLP 2200 Avenue' NW DC 20037 1. nm non 170/1906 Swerra C'ub v. EPA To: From: Sent: Subject: Jackson, RyanUackson.ryan@epa.gov] Wehrum, William L. Wed 8/23/2017 6:58:49 PM Two Meeting Requests Ryan - I have two meeting requests that I hope you will consider. One for you and the other for the Administrator. The first is an invitation for you to speak to members of the National Stone, Sand, and Gravel Association (NSSGA). They are having a fly-in at the end of September. They are hoping you would be willing to speak to the group on September 25. They have been working with your scheduler (Sharnett Willis), but have not been able to confirm your availability. If you are available and interested, would you ask Shanett to lock in a time with the NSSGA folks? The second is an invitation for the Administrator to speak at an upcoming Air & Waste Management Association (A&WMA) conference. This group invited the Administrator to speak at their annual conference earlier this year in Pittsburgh. Sydney Hupp told them at the time that the Administrator would be out of the country for that conference, but would be willing to consider speaking at a later conference. They are hoping that he would be willing to consider making the keynote address at the following conference in October. I can connect you with A& WMA if you are interested in exploring this possibility. Title: Finding Common Ground on Climate Change Mitigation and Adaptation Dates: October 10-11, 2017 Location: DoubleTree, 300 Army Navy Drive, Arlington, Virginia Preliminary Agenda: 17cv1906 Sierra Club v. EPA ED_001523_00000192-00001 Tuesday, October 10, 2017 Morning: Keynote address followed by panel discussions on climate policy and climate communication Afternoon: Breakout sessions covering national, international, and local policy, corporate policy, and mitigation pathways Wednesday, October 11, 2017 Morning: Keynote address followed by a panel discussion on climate change and it's relation to national security, and breakout sessions on methane emissions and atmospheric processes Afternoon: Panel discussion on climate action and closing remarks At this point, we have confirmations from the following for speakers and/or panel presenters: • Michael McCormick from California Governor Jerry Brown's office, • Delegate Mark Kearn from the Virginia House of Delegates, and • General Ron Keys (Retired) from the Center for Climate & Security's Advisory Board. In addition, we have or will be extending invitations to: • David Kreutzer from the Heritage Foundation, and • Representative Barbara Comstock from the US House of Representatives. Thanks for your consideration of both. 17cv1906 Sierra Club v. EPA ED_001523_00000192-00002 Bill Wehrum Partner p 202.955.1637 Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 17cv1906 Sierra Club v. EPA ED_001523_00000192-00003 Mr. Kevin S. Minoli Designated Agency Ethics Official U.S. EPA (2310A) 1200 Pennsylvania Avenue, NW Washington, DC 20460 Dear Mr. Minoli: The purpose of this letter is to describe the steps that I will take to avoid any actual or apparent conflict of interest in the event that I am confirmed for the position of Assistant Administrator for the Office of Air and Radiation of the United States Environmental Protection Agency. As required by 18 U.S.C. § 208(a), I will not participate personally and substantially in any particular matter in which I know that I have a financial interest directly and predictably affected by the matter, or in which I know that a person whose interests are imputed to me has a financial interest directly and predictably affected by the matter, unless I first obtain a written waiver, pursuant to 18 U.S.C. § 208(b)(l), or qualify for a regulatory exemption, pursuant to 18 U.S.C. § 208(b)(2). I understand that the interests of the following persons are imputed to me: any spouse or minor child of mine; any general partner of a partnership in which I am a limited or general partner; any organization in which I serve as officer, director, trustee, general partner or employee; and any person or organization with which I am negotiating or have an arrangement concerning prospective employment. Upon confirmation, I will resign from my position with the law firm of with Hunton & Williams LLP. I currently have a capital account with the firm, and I will receive a refund of that account after my resignation. Until I have received this refund, I will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on the ability or willingness of the firm to pay this refund, unless I first obtain a written waiver, pursuant to 18 U.S.C. 208(b)(l). I will continue to receive my monthly draw at the current rate until I resign from the law firm. I will not qualify for any additional partnership payments. If the law firm decides to pay me a discretionary partnership distribution for work I performed during the firm's fiscal year ending March 31, 2018, I will not accept that distribution and will forfeit it, unless I receive it before I assume the duties of the position of Assistant Administrator for the Office of Air and Radiation. If I receive the discretionary partnership distribution, I will not participate personally and substantially in any particular matter involving specific parties in which I know the law firm is a party or represents a party for a period of two years from the date on which I receive the distribution. If I do not receive the distribution, I will not participate personally and substantially in any particular matter involving specific parties in which I know the firm is a party or represents a party for a period of one year from the date of my resignation, unless I am first authorized to participate, pursuant to 5 C.F.R. § 2635.502(d). In addition, I will not participate personally and substantially in any particular matter involving specific parties in which I know a former client of mine is a party or represents a party for a period of one year after I last provided service to that client, unless I am first authorized to participate, pursuant to 5 C.F.R. § 2635.502(d). If I have a managed account or otherwise use the services of an investment professional during my appointment, I will ensure that the account manager or investment professional obtains my prior approval on a case-by-case basis for the purchase of any assets other than cash, cash equivalents, investment funds that qualify for the exemption at 5 C.F.R. § 2640.201(a), obligations of the United States, or municipal bonds. I will meet in person with you during the first week of my service in the position of Assistant Administrator in order to complete the initial ethics briefing required under 5 C.F.R. § 2638.305. Within 90 days of my confirmation, I will document my compliance with this ethics agreement by notifying you in writing when I have completed the steps described in this ethics agreement. I understand that as an appointee I will be required to sign the Ethics Pledge (Exec. Order No. 13770) and that I will be bound by the requirements and restrictions therein in addition to the commitments I have made in this ethics agreement. I have been advised that this ethics agreement will be posted publicly, consistent with 5 U.S.C. § 552, on the website of the U.S. Office of Government Ethics with ethics agreements of other Presidential nominees who file public financial disclosure reports. Sincerely yours, William L. Wehrum 2 Nominee Report U.S. Office of Government Ethics; 5 C.F.R. part 2634 Form Approved: OMB No. (3209-0001) (March 2014) Executive Branch Personnel Public Financial Disclosure Report (OGE Form 278e) Filer's Information Wehrum, William Ludwig Assistant Administrator for Air and Radiation, Environmental Protection Agency Other Federal Government Positions Held During the Preceding 12 Months: None Names of Congressional Committees Considering Nomination: ● Committee on Environment and Public Works Electronic Signature - I certify that the statements I have made in this form are true, complete and correct to the best of my knowledge. /s/ Wehrum, William Ludwig [electronically signed on 06/02/2017 by Wehrum, William Ludwig in Integrity.gov] Agency Ethics Official's Opinion - On the basis of information contained in this report, I conclude that the filer is in compliance with applicable laws and regulations (subject to any comments below). /s/ Fugh, Justina, Certifying Official [electronically signed on 09/08/2017 by Fugh, Justina in Integrity.gov] Other review conducted by /s/ Fugh, Justina, Ethics Official [electronically signed on 09/08/2017 by Fugh, Justina in Integrity.gov] U.S. Office of Government Ethics Certification /s/ Apol, David, Certifying Official [electronically signed on 09/08/2017 by Apol, David in Integrity.gov] 1. Filer's Positions Held Outside United States Government # ORGANIZATION NAME CITY, STATE ORGANIZATION TYPE POSITION HELD FROM TO 1 Hunton & Williams LLP Washington, District of Columbia Law Firm partner 9/2007 Present VALUE INCOME TYPE INCOME AMOUNT Partnership Share $2,154,504 2. Filer's Employment Assets & Income and Retirement Accounts # DESCRIPTION EIF 1 Hunton & Williams LLP (law firm) N/A 2 Hunton & Williams LLP capital account N/A $250,001 $500,000 None (or less than $201) 3 T. Rowe Price Institutional Large Cap Core Growth Fund (TPLGX) Yes $15,001 $50,000 $1,001 - $2,500 4 Dodge & Cox Stock Fund (DODGX) Yes $15,001 $50,000 $1,001 - $2,500 5 Vanguard Inst. Index Fund (VINIX) Yes $15,001 $50,000 $2,501 - $5,000 6 Neuberger Berman Genesis Fund (NRGSX)-Class R6 Yes $1,001 - $15,000 $201 - $1,000 7 Vanguard Extended Mkt Index (VIEIX) Yes $1,001 - $15,000 $201 - $1,000 8 Fidelity Diversified International Fund (FDIVX) Yes $50,001 $100,000 $5,001 - $15,000 9 NT Collective Emerging Mkts Equity Index Fund Yes $15,001 $50,000 $1,001 - $2,500 10 Vanguard Total Bond Mkt. Index Fun -- Inst. Shares (VBTIX) Yes $250,001 $500,000 $15,001 $50,000 11 Federated Treasury Obligations Inst. Money Mkt. (TOIXX) Yes $50,001 $100,000 $2,501 - $5,000 # DESCRIPTION EIF VALUE 12 Fidelity Puritan K (FPUKX) Yes $500,001 $1,000,000 $50,001 $100,000 13 Longleaf Partners Fund (LLPFX) Yes $100,001 $250,000 $15,001 $50,000 14 Dodge & Cox Income Fund (DODIX) Yes $100,001 $250,000 $1,001 - $2,500 15 US brokerage money market account (cash) N/A $1,001 - $15,000 None (or less than $201) 16 Hunton & Williams LLP (discretionary partnership distribution) $100,001 $250,000 None (or less than $201) See Endnote INCOME TYPE INCOME AMOUNT 3. Filer's Employment Agreements and Arrangements # EMPLOYER OR PARTY CITY, STATE STATUS AND TERMS DATE 1 Hunton & Williams LLP Washington, District of Columbia The full amount of the capital account would be returned to me after departure. 9/2007 2 Hunton & Williams LLP Washington, District of Columbia I will continue to participate in this defined contribution plan. The plan sponsor will not make further contributions after my separation. 9/2007 3 Hunton & Williams LLP Washington, District of Columbia I will continue to participate in this defined contribution plan. The plan sponsor will not make further contributions after my separation. 9/2007 4 Boyle Investment Co. Memphis, Tennessee I will continue to participate in this defined contribution plan. The plan sponsor will not make further contributions after my separation. 11/2009 5 Hunton & Williams LLP Washington, District of Columbia discretionary partnership distribution for work performed during the firm’s fiscal year ending March 31, 2018. I will not accept this distribution and will forfeit it unless I receive it before I assume the duties of the position as Assistant Administrator. 6/2017 4. Filer's Sources of Compensation Exceeding $5,000 in a Year # SOURCE NAME CITY, STATE BRIEF DESCRIPTION OF DUTIES 1 Hunton & Williams LLP Washington, District of Columbia I am an equity partner in the firm. 2 American Forest & Paper Ass'n Washington, District of Columbia Legal Services 3 American Fuel & Petrochemical Mfrs. Washington, District of Columbia Legal Services 4 American Petroleum Institute Washington, District of Columbia Legal Services 5 B10 Litigation Coalition Washington, District of Columbia Legal Services 6 Brick Industry Ass'n Cary, North Carolina Legal Services 7 Diageo Norwalk, Connecticut Legal Services 8 Evonik Corp. Parsippany, New Jersey Legal Services 9 Gas Processor Ass'n Washington, District of Columbia Legal Services 10 Kinder Morgan Inc. Westminster, Colorado Legal Services 11 Koch Industries Witchita, Kansas Legal Services 12 Lowe's Companies Inc. Charlotte, North Carolina Legal Services 13 National Stone, Sand and Gravel Ass'n Alexandria, Virginia Legal Services 14 Pfizer Inc. New York, New York Legal Services # SOURCE NAME CITY, STATE BRIEF DESCRIPTION OF DUTIES 15 Salt River Project Phoenix, Arizona Legal Services 16 Spectra Energy Corp. Houston, Texas Legal Services 17 Sunflower Electric Power Corp. Hays, Kansas Legal Services 18 Tile Council of North America Anderson, South Carolina Legal Services 19 Utility Air Regulatory Group Washington, District of Columbia Legal Services 20 Whitaker Greer Co. Alliance, Ohio Legal Services 5. Spouse's Employment Assets & Income and Retirement Accounts None 6. Other Assets and Income # DESCRIPTION EIF VALUE INCOME TYPE INCOME AMOUNT 1 U.S. bank account No. 1 (cash) N/A $250,001 $500,000 Interest $201 - $1,000 2 U.S. bank account No. 2 (cash) N/A $250,001 $500,000 Interest $15,001 $50,000 3 U.S. bank account No. 3 (cash) N/A $250,001 $500,000 Interest $15,001 $50,000 4 U.S. Brokerage Money Mkt (cash) N/A $100,001 $250,000 Interest $201 - $1,000 5 U.S. bank account No. 4 (cash) N/A $250,001 $500,000 Interest $5,001 - $15,000 6 U.S. bank account No. 5 (cash) N/A $250,001 $500,000 Interest $2,501 - $5,000 # DESCRIPTION EIF VALUE INCOME TYPE INCOME AMOUNT 7 U.S. bank account No. 6 (cash) N/A $15,001 $50,000 Interest $201 - $1,000 8 U.S. bank account No. 7 (cash) N/A $250,001 $500,000 Interest None (or less than $201) 7. Transactions (N/A) - Not required for this type of report 8. Liabilities None 9. Gifts and Travel Reimbursements (N/A) - Not required for this type of report Endnotes PART # ENDNOTE 2. 16 NOTE: This is an estimate only. The amount could be as low as zero. To: Cc: From: Sent: Subject: Wehrum, William L.[wwehrum@hunton.com] Jackson, RyanUackson.ryan@epa.gov] Ringel, Aaron Thur 9/7/2017 7:50:30 PM Re: Update for you Thanks! Sent from my iPhone > On Sep 7, 2017, at 2:59 PM, Wehrum, William L. wrote: > > fyi > > -----Original Message----> From: Wehrum, William L. > Sent: Thursday, September 07, 2017 2:46 PM > To: 'Locetta, Jennifer R. EOP/WHO' > Subject: RE: Update for you > > Jennifer - Thanks for the update. Great news! Attached is a short bio. Please let me know if you need anything more. > > -----Original Message----> From: Locetta, Jennifer R. EOP/WHO [mailto:Jennifer.R.Locetta@who.eop.gov] > Sent: Thursday, September 07, 2017 1:51 PM > To: wehrum@comcast.net; Wehrum, William L. > Subject: Update for you > > Hi Bill, > > I just left you a quick voicemail. > > I wanted to touch base with you and let you know that clearance counsel has cleared you for nomination. The WH would likely issue a press release either tonight or tomorrow. In order to do so, I need a quick bio from you of 150 words or less. Please send this to me when you can today. > ! i > Congratulations again and talk to you soon. My cell is l Ex. 6. Personal Privacy i l___________________________ i > > Thanks, > Jennifer R. Locetta > Special Assistant to the President > Associate Director for Presidential Personnel > > > 17cv1906 Sierra Club v. EPA ED_001523_00000662-00001 To: From: Sent: Subject: Wehrum, William L.[wwehrum@hunton.com] Gunasekara, Mandy Thur9/7/201710:51:43 PM FW: ENVIRONMENTAL LEADERS PRAISE BILL WEHRUM EPA NOMINATION Yay! From: EPA Press Office [mailto:press=epa.gov@cmai119.com] On Behalf Of EPA Press Office Sent: Thursday, September 7, 2017 6:50 PM To: Gunasekara, Mandy Subject: ENVIRONMENTAL LEADERS PRAISE BILL WEHRUM EPA NOMINATION ENVIRONMENTAL LEADERS PRAISE BILL WEHRUM EPA NOMINATION Wehrum Nominated to Head Air and Radiation Office WASHINGTON (September 7, 2017) Today, President Donald J. Trump announced his intention to nominate Bill Wehrum to serve as EPA Assistant Administrator for the Office of Air and Radiation (OAR). Mr. Wehrum has a long history of public service, and previously served as EPA's acting assistant administrator for Air and Radiation from 2005 to 2007 and as EPA's principal deputy assistant administrator and counsel to the assistant administrator for Air and Radiation. He is currently partner and head of the Administrative Law Group at Hunton & Williams LLP where his practice focuses on air quality issues. Mr. Wehrum's career includes over 31 years working in the environmental field through engineering, legal practice, and administrative duties. His nomination is receiving high accolades from environmental leaders across the country: Sean Alteri, director, Kentucky Division for Air Quality and 2017 president of the Association of Air Pollution Control Agencies: "Considering his education and experience as a chemical engineer and an environmental attorney, Mr. Wehrum will be well-positioned to provide clear, concise direction to address the many diverse, complex air quality issues. As a student of the Clean Air Act, Mr. Wehrum's knowledge and experience will greatly benefit EPA, state, and local air pollution control agencies. We look forward to working with Mr. Wehrum and EPA's senior leadership to improve air quality in Kentucky and throughout our nation. The Kentucky Division for Air Quality supports Mr. Wehrum's nomination to serve as the assistant administrator of EPA's Office of Air and Radiation." John Cruden, president-elect of the American College of Environmental Lawyers and assistant attorney general, Environment and Natural Resources Division, U.S. Department of Justice (12/2014-1/2017): "I have worked with Bill Wehrum while he was a senior official at EPA during the Bush Administration, and have followed his impressive career in private practice. I believe he is committed to achieving clean air for all citizens and carefully following sound and current science." 17cv1906 Sierra Club v. EPA ED _001523A_00000362-00001 Jeff Holmstead, assistant administrator, Office of Air and Radiation, EPA (2001 -2005): "Bill is committed to the goals of the Clean Air Act and to the rule of law. He is also a person of the highest integrity. I am confident that, within the framework established by Congress, he will work to protect public health and the environment while at the same time pursuing regulatory reforms that will reduce unnecessary regulatory burdens. Truly, there is no better person to serve as the assistant administrator of EPA's Office of Air and Radiation." Marcus Peacock, EPA deputy administrator (08/2005 - 01/2009): "Bill Wehrum's understanding of the Clean Air Act may be second to none. His desire to pull up his sleeves and actually make the Clean Air Act work as a practical matter is second to none." Clint Woods, executive director, Association of Air Pollution Control Agencies: "Through his comprehensive knowledge of the law and experience in the federal government, Bill possesses the background to manage challenging Clean Air Act issues at U.S. EPA and help continue the tremendous air quality progress that has been achieved in our country over the last several decades. Under his leadership, the Office of Air and Radiation will be well-situated to pursue a back-to-basics agenda grounded in cooperative federalism." U S Environmental Protection Agency 1200 Pennsylvania Avenue Northwe$t Washington, D.C. 20004 Unsubscribe 17cv1906 Sierra Club v. EPA ED _001523A_00000362-00002 Subject Location Reminder Show Time As FL/GA Media Interviews re: Hurricane Preparedness Administrator's Office 15 minutes Busy POC: Liz/Amy Attendees Name b(6) Administrator Attendance < b(6) Administrator Organizer Bowman, Liz Required Graham, Amy Required Lincoln Ferguson (ferguson.lincoln@epa.gov) Required Friday, September 8, 2017 Time Subject Location Reminder Show Time As Attendees 8:30 AM – 9:15 AM Radio Interviews re: Hurricane Preparedness Administrator's Office 15 minutes Busy Name b(6) Administrator Subject Location Reminder Show Time As Attendees Attendance < b(6) Administrator Organizer Bowman, Liz Required Abboud, Michael Required Hewitt, James Required Briefing: (ESA) Endangered Species Act Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Beck, Nancy Required Dravis, Samantha Required Baptist, Erik Required Bolen, Brittany Required 88 Time Subject Location Reminder Show Time As 10:15 AM – 11:00 AM Briefings Administrator's Office 15 minutes Busy Topics to cover will include the following: Philadelphia Energy Solutions Fiat Chrysler Colorado Springs DTE Energy Attendees Name b(6) Administrator Subject Location Reminder Show Time As < b(6) Administrator Organizer Traylor, Patrick Required Gunasekara, Mandy Required Schwab, Justin Required Baptist, Erik Optional Bodine, Susan Optional Call with Governor of Puerto Rico Administrator's Office 15 minutes Busy POC: Troy Attendees Name b(6) Administrator Subject Location Reminder Show Time As Attendees Attendance Attendance < b(6) Administrator Organizer Lyons, Troy Required Lincoln Ferguson (ferguson.lincoln@epa.gov) Required Cory, Preston (Katherine) Required HOLD: Media Interviews Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Hewitt, James 89 Organizer Required To: Gunasekara, Cc: Dunham, From: Lewis, Josh Sent: Tue 9/32/2017 6:17:46 PM Subject: Re: NSR Memo Got it, thanks Mandy. We?11 share with OAQPS and go from there. On Sep 12, 2017, at 1:57 PM, Gunasekara, Mandy wrote: Foliowing up from Friday, attached are a few points regarding the NSR memo I mentioned. This Shou1d get things started. Mandy M. Gunasekara Senior Poiicy Advisor for Office of Air and Radiation Office of the Administrator US Environmental Protection Agency From: Rodrick, Christian Location: EPA 3428 Importance: Normal Subject: Meeting with Bill Regarding Hearing Start Date/Time: Thur 9/28/2017 2:00:00 PM End Date/Time: Thur 9/28/2017 2:30:00 PM From: Palich, Christian !..!..!..!!===-'---'-'--""--'-'--"=====, Sent: Wednesday, September 27, 2017 9:00 AM To: Wehrum, William L. Cc: Ringel, Aaron; Lyons, Troy; Frye, Tony (Robert) Subject: Quick Chat Today Hi Bill, I wanted to see if you would have a couple minutes today to talk about some potential questions and themes that you would like majority members to question you on. We have an idea of these but of course what your input. Please let me know when you have some time to talk today and we will give you a call. Thank you! Christian R. Palich Deputy Associate Administrator 17cv1906 Sierra Club v. EPA ED_001523A_00000169-00001 Statement of William L. Wehrum Nominated to Be Assistant Administrator, Office of Air and Radiation U.S. Environmental Protection Agency Chairman Barrasso, Ranking Member Carper, and members of the Committee, thank you for the opportunity to appear before you today as the nominee for the position of Assistant Administrator for the Office of Air and Radiation at the U.S. Environmental Protection Agency. I am honored that President Trump nominated me for this position. As you may know, I previously was nominated in 2005 by President Bush for this position. Under Senator Inhofe’s leadership, this Committee approved of my nomination at that time. I appreciate the opportunity to appear before you again. President Trump and Administrator Pruitt have set a clear agenda that I intend to implement if confirmed to this position. The President has issued Executive Orders that will eliminate needless and burdensome regulations, simplify and streamline compliance obligations, and strike a better balance between the twin goals of protecting human health and the environment and promoting the economic vitality of the Nation. Administrator Pruitt emphasized three key objectives in his remarks to this Committee during his confirmation hearing. First, we are a Nation of laws. He explained that “EPA’s role is to administer those laws faithfully” and that the Agency should avoid the temptation to “bootstrap its own powers and tools through rulemaking.” Second, Administrator Pruitt committed that the Agency would acknowledge, respect, and promote the critical role of the states in implementing Federal environmental laws and in protecting human health and the environment. “Cooperative federalism” is one of the cornerstones of the Clean Air Act. In the very first section of the Act, Congress declares that “air -1- pollution control at its source is the primary responsibility of States and local governments.” Administrator Pruitt’s commitment to state involvement carries out Congress’s stated intent. Third, Administrator Pruitt emphasized the important role that the public plays in the regulatory process. He said that “it is critical to me that EPA also truly listen to the diverse views of the American people, and learn from them.” He rightly stated that “[w]e can simultaneously pursue the mutual goals of environmental protection and economic growth,” but cautioned that “that can only happen if EPA listens – listens to the views of all interested stakeholders.” These are the goals and objectives that have been established by our leadership. I concur in them and, if confirmed, will do all I can to achieve them. Mr. Chairman and members of the Committee, thank you again for the opportunity to appear before you. I am happy to answer any questions that you may have. -2- WILLIAM WEHRUM Ranking Member Carper: 1. For decades, both Republican and Democratic administrations alike have had written policies limiting White House contacts with agencies that have investigatory and enforcement responsibilities. These policies have recognized that even a simple phone call from the White House to an agency inquiring about or flagging a specific matter can upset the evenhanded application of the law. I recently learned that Devon Energy, a strong political supporter of Administrator Pruitt’s, informed the EPA just 5 days after Mr. Pruitt was sworn in as Administrator that it was no longer willing to install air pollution technology or pay a high penalty to EPA for its illegal air emissions of cancer-causing benzene and other chemicals. We also know that Trump family casinos, hotels and golf courses have been the subject of EPA enforcement actions for violations of the Clean Air Act and Clean Water Act. a. Do you agree that it is essential that in making decisions, EPA’s OAR must be shielded from political influence and spared even the appearance of being subject to political influence or considerations? If confirmed, I commit to work with Administrator Pruitt and his team to ensure strict compliance with all legal and ethical obligations. b. Will you commit to restricting communications between OAR and the White House staff regarding specific matters under the authority of OAR? If confirmed, I commit to work with Administrator Pruitt and his team to ensure strict compliance with all legal and ethical obligations. c. Will you commit to ensuring the staff of OAR is familiar with those restrictions? If confirmed, I commit to work with Administrator Pruitt and his team to ensure strict compliance with all legal and ethical obligations. d. Will you commit to advising this Committee within one week if any inappropriate communications from White House staff to OAR staff, including you, occur? If confirmed, I commit to work with Administrator Pruitt and his team to ensure strict compliance with all legal and ethical obligations. 2. Recently, EPA conducted “anti-leaking” training for its employees1. According to EPA sources, the briefing stated that “Prohibitions we will discuss do not refer to “Whistleblowing”. Agency employees have the right to make lawful disclosures to anyone, including, for example, management officials, the Inspector General, and/or the Office of Special Counsel. Employees may make disclosures to the EPA Office of the Inspector General through the EPA OIG Hotline at 888-546-8740.” This presentation evidently failed to note the rights of federal employees have to make disclosures to Congress. 5 U.S.C. § 7211, provides that: The right of employees, individually or collectively, to petition Congress or a Member of Congress or to furnish information to either House of Congress, or to a committee or Member thereof, may not be interfered with or denied. Pursuant to 5 U.S.C. § 2302(b)(8), it is a violation of federal law to retaliate against whistleblowers. That law states: Any employee who has authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority ... take or fail to take, or threaten to take or fail to take, a personnel action with respect to any employee or applicant for employment because of. ... (A) any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences- (i) a violation of any law, rule, or regulation, or (ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, any disclosure to the Special Counsel, or to the Inspector General of an agency or another employee designated by the head of the agency to receive such disclosures, of information which the employee or applicant reasonably believes evidences a violation of any law, rule, or regulation... " In addition, pursuant to 18 U.S.C. § 1505, it is against federal law to interfere with a Congressional inquiry: Whoever corruptly, or by threats or force, or by any threatening letter or communication influences, obstructs, or impedes or endeavors to influence, obstruct, or impede the due and proper administration of the law under which any pending proceeding is being had before any department or agency of the United States, or the due and proper exercise of the power of inquiry under which any inquiry or investigation is being had by either House, or any committee of either House or any joint committee of the Congress. a. If you are confirmed, will you commit to protect the rights of all career employees in OAR to make lawful disclosures, including their right to speak with Congress? b. Will you commit to communicate employees’ whistleblower rights via email to all OAR employees within a week of being sworn in? If confirmed, I will work closely with EPA Office of Administration and 1 https://www.washingtonpost.com/politics/whitehouse/federal-employees-are-ordered-to-attend-anti-leakingclasses/2017/09/21/032b40d6-9edd-11e7-b2a7-bc70b6f98089_story.html?utm_term=.e2bfc5e54d95 Resources Management to ensure all OAR employees continue to apprised of their rights as federal employees. 3. In the wake of Hurricane Irma, at least 11 deaths and numerous injuries have been reported in Florida due to accidental carbon monoxide poisoning from gasoline-powered portable generators.2 One additional death has also been reported in North Carolina, along with other injuries throughout the Southeastern United States.3 Many of these deaths and injuries could have been prevented had stronger safety standards been in place for portable gasoline generators. In November 2016, the U.S. Consumer Product Safety Commission (CPSC), following years of work on the issue, voted to issue a Notice of Proposed Rulemaking (NPRM) to implement a mandatory safety standard for portable generators.4 Since then, Administrator Pruitt and Acting CPSC Chairman Buerkle have separately opined that section 213 of the Clean Air Act precludes CPSC action. a. Section 213 of the Clean Air Act is intended to regulate emissions from non-road engines or vehicles when the EPA determines that such emissions “are significant contributors to ozone or carbon monoxide concentrations in more than 1 area which has failed to attain the national ambient air quality standards for ozone or carbon monoxide.” In your opinion, would the occasional indoor use of portable generators following a power outage be likely to be a significant contributor to ambient carbon monoxide concentrations in more than 1 area that has failed to attain the national ambient air quality standards for carbon monoxide? Why or why not? b. There are currently no areas in the United States that have failed to attain the national ambient air quality standards for carbon monoxide, and this has been the case since 20105. As a matter of law, could section 213 of the Clean Air Act be used to regulate carbon monoxide emissions due to the indoor use of portable generators if there are no areas in the United States that fail to attain the national ambient air quality standards for carbon monoxide? Why or why not? I do not have experience with interpreting or applying CAA § 213 to these circumstances. If confirmed, I will work with Administrator Pruitt as needed to properly implement this section of the Act. 4. Your public financial disclosure material lists, among others, several clients such as the American Petroleum Institute and others that are trade or other associations that consist of individual member companies. For each such association or organization listed on your financial disclosure form, please provide a complete list of the individual companies and other entities that comprise its members. 2 http://www.miamiherald.com/news/weather/hurricane/article174097351.html http://www.sunsentinel.com/news/weather/hurricane/sfl-carbon-monoxide-deaths-20170914-story.html 3 http://www.charlotteobserver.com/news/article173612361.html 4 https://www.federalregister.gov/documents/2016/11/21/2016-26962/safety-standard-for-portable-generators 5 https://www.epa.gov/green-book/green-book-carbon-monoxide-1971-area-information The trade associations listed in my financial disclosure are my clients and not their individual members. As such, I do not have current member lists for my trade association clients. 5. In addition to employees or representatives of the trade associations or organizations listed as your clients, have you met or otherwise communicated with employees or representatives of the companies that are members of the associations or organizations as part of your work for the client itself? If so, which ones? The trade associations listed in my financial disclosure are my clients and not their individual members. I routinely meet with member companies, but do not keep comprehensive records of such contacts. 6. Your ethics agreement states that you “will not participate personally and substantially in any particular matter involving specific parties in which I know a former client of mine is a party or represents a party for a period of one year after I last provided service to that client, unless I am first authorized to participate, pursuant to 5 C.F.R. 2635.502(d).” a. Please provide a list of all such particular matters involving specific parties that you will either need to recuse yourself from or seek authorization to participate in. For each such particular matter, please also indicate whether you plan to seek authorization to participate. b. If that list does not include particular matters involving the list of individual companies and other entities described in question 4, why not? c. 5 C.F.R 2635.502(a) states that “where an employee knows that a particular matter involving specific parties is likely to have a direct and predictable effect on the financial interest of a member of his household, or knows that a person with whom he has a covered relationship is or represents a party to such matter, and where the employee determines that the circumstances would cause a reasonable person with knowledge of the relevant facts to question his impartiality in the matter, the employee should not participate in the matter unless he has informed the agency designee of the appearance problem and received authorization from the agency designee in accordance with paragraph (d) of this section.” Do you agree that your representation of numerous industry clients in litigation to repeal or weaken EPA regulations would cause a reasonable person with knowledge of the relevant facts to question your impartiality if you are confirmed and continue to participate either in the litigation or in an administrative action designed to accomplish the identical outcome – repeal or weakening of an EPA regulation – that the litigation sought to accomplish? Why or why not? Attachment A is a list of particular matters involving specific parties to which I believe my ethics agreement will apply. If confirmed, I will work closely with EPA ethics officials to understand and strictly comply with my ethical obligations. 7. Do you intend to participate in non-public meetings with your former clients or their member companies (as applicable) if you are confirmed, even if the meetings are about the repeal or weakening of the very same EPA regulations you sought, on behalf of those clients, to repeal or weaken through litigation? If so, please explain why this would not cause a reasonable person with knowledge of the relevant facts to question your impartiality in the matter at hand. If confirmed, I will work closely with EPA ethics officials to understand and strictly comply with my ethical obligations. 8. Your Ethics Agreement also states that you will either recuse yourself from or seek authorization to participate in “any particular matter involving specific parties in which I know the law firm [Hunton & Williams] is a party or represents a party.” Please provide a list of all the EPA-related particular matters involving specific parties in which Hunton & Williams is a party or represents a party, and indicate whether you plan to seek authorization to participate in each such matter. I do not have a list of all particular matters involving specific parties in which Hunton & Williams is a party or represents a party. If confirmed, I intend to ascertain Hunton’s involvement on a case-by-case basis before becoming involved in any particular matter involving specific parties. 9. On February 28, 2017, President Trump directed EPA and the Army Corps to review and possibly rescind or repeal the Clean Water Rule in Executive Order 13776. EPA recently ended the public comment process on the first step of a two-step process to repeal the rule and replace it with a rule that will protect far fewer sources of drinking water. Individuals with first-hand knowledge of the process EPA utilized to prepare its have informed my staff that: a) When EPA first submitted the proposed repeal rule to OMB, the draft stated that the agency would undertake a new cost-benefit analysis as part of the second step of its process. b) OMB interpreted EPA’s first proposal to mean that the rule’s repeal would not avoid any costs to industry or have any economic impact at all. EPA’s political staff then directed the career staff to undertake a new economic analysis. In response to this direction from OMB, EPA career staff reportedly changed the table included in the 2015 rule to a) reflect 2016 dollars instead of 2014 dollars, b) convert “annual costs incurred” under the Clean Water Rule to “annual costs avoided” due to its repeal and c) convert “annual benefits gained” under the Clean Water Rule to “annual benefits forgone” due to its repeal. This new table was sent to OMB on June 8, 2017. c) OMB correctly concluded from EPA’s June 8 submittal that repealing the rule would cost more in lost benefits than it would save industry in compliance costs. On June 13, 2017, presumably to avoid such an admission on the part of EPA, EPA career staff were verbally directed by political staff to solve this ‘problem’ by simply deleting the majority of the benefits of the rule from the table and resubmitting it to OMB, which they did6. The direction that was reportedly provided to the EPA career staff to make the various revisions to what was submitted to OMB was verbal, not written. If you are confirmed, do you commit to ensure that career staff in OAR will receive appropriately documented, rather than verbal, direction from political officials before they take action? If not, why not? If confirmed, I will work closely with EPA ethics officials to understand and strictly comply with my ethical obligations. 10. As Attorney General of Oklahoma, Administrator Pruitt copied and pasted materials sent to him by industry onto his own letterhead and sent them to EPA. Similarly, when you last served in EPA’s air office, language drafted by your old law firm found its way into an EPA mercury regulation that you helped write. You also repeatedly prevented EPA employees from verifying the public health benefits of reducing mercury exposure. a. If confirmed, do you commit that you will not allow industry to exert an undue influence on any of the regulatory and policy efforts you will be charged with leading? If not, why not? b. Do you commit not to censor or exclude the dedicated and knowledgeable career EPA staff? If not, why not? If confirmed, I will work closely with EPA ethics officials to understand and strictly comply with my ethical obligations. 11. Do you agree to provide complete, accurate and timely responses to requests for information submitted to you by any Member of the Environment and Public Works Committee? If not, why not? Administrator Pruitt has made responsiveness to Congress an important priority. The 2800 pages of EPA responses provided to Members of the Environment and Public Works Committee on display at the nomination hearing is a testament to this commitment. Accordingly, I will continue to be a part of EPA’s transparent and responsive culture. 6 https://www.epa.gov/sites/production/files/2017-06/documents/economic_analysis_proposed_step1_rule.pdf See Table 1 12. Recently, EPA announced that Administrator Pruitt would be publishing brief summaries of his calendars biweekly, after dozens of Freedom of Information Act requests for this information as well as a March request by me and my colleagues that he do so. During the Obama Administration, the Administrator, regional Administrators and all those serving in confirmed roles published their calendars daily7. If you are confirmed, will you commit to publishing your calendars daily? If not, why not? If confirmed, I will make my calendar available on a timely basis. 13. In 2006, when you were last nominated to lead the Office of Air and Radiation (OAR), the then-Bush Administration requested for FY 2007 $1.33 billion (adjusting to 2017 dollars) for State and Tribal Assistance Grants, of which $250 million (in 2017 dollars) was for Air and Radiation programs. Earlier this year, the Trump Administration requested for FY 2018 $597 million, of which $168 million was for Air and Radiation programs. This is more than 50% less for the STAG program in general, and almost 1/3 less for Categorical Grants for OAR programs. a. Did you support the request for FY 2007, and do you support the request for FY 2018? Why, or why not? b. If you support both the requested levels in FY 2007 and FY 2018, why do you believe that a 1/3 cut to the funding levels in FY 2018 from FY 2017 levels is appropriate? If confirmed, I will manage OAR’s programs within the authorities and budget provided by Congress, including STAG grants. 14. How many legal cases have you filed, or joined others in filing against the EPA, since leaving the agency? Please provide a full list with the outcome of each case, including those cases in which the court disagreed with your argument, agreed with your argument, and those in which the court refused to hear the matter. I believe that I have been involved in five cases against EPA that have been decided: (1) a challenge to EPA’s E15 waiver (dismissed on standing); (2) a challenge to EPA’s misfueling mitigation rule (dismissed on standing); (3) a challenge to EPA’s most recent PM2.5 NAAQS (petition denied); (4) a challenge to the Wise Co., TX nonattainment area designation for the 2008 ozone NAAQS (petition denied); and (5) a challenge to CSAPR (mixed result). I continue to search my files and will update this answer if I find more cases. In addition, Attachment 1 is a table listing all of my pending cases against EPA. 15. You’ve represented industry in at least thirty-one cases against the EPA since you left the agency. Can you name one Clean Air Act regulation that was promulgated by the Obama Administration – not a voluntary or grant program – that you dosupport and why? If you support more than one, please name these as well. 7 https://yosemite.epa.gov/opa/admpress.nsf/Calendars?OpenView I represent clients in private practice. It is my legal ethical duty to zealously represent their interests. 16. Delaware is already seeing the adverse effects of climate change with sea level rise, ocean acidification, and stronger storms. While all states will be harmed by climate change, the adverse effects will varyby state and region. Would you comment on why it is imperative that we have national standards to reduce carbon pollution? If you do not believe it is imperative, why not? If confirmed, my primary responsibility will be to faithfully implement the Clean Air Act, including authorities and restrictions applicable to greenhouse gases. 17. In a per curiam opinion, the U.S. Circuit Court of Appeals for the District of Columbia affirmed the Endangerment Finding and the U.S. Supreme Court declined to issue a writ of certiorari on the D.C. Circuit’s decision. The Endangerment Finding set in motion EPA’s legal obligations to set greenhouse gas emissions standards for mobile and stationary sources, including those established by the Clean Power Plan in August 2015.8 During an exchange with Senator Gillibrand during Administrator Pruitt’s confirmation hearing before the Environment and Public Works Committee, he stated, “I believe that the EPA, because of the Mass v. EPA case and the endangerment finding, has obligations to address the CO2 [carbon dioxide] issue.” a. Do you agree with Administrator Pruitt’s statement? b. If the Clean Power Plan is withdrawn, and if confirmed, how will you lead the agency to fulfill its legal obligations to address climate change? I agree with Administrator Pruitt. If confirmed, my primary responsibility will be to faithfully implement the Clean Air Act, including authorities and restrictions applicable to greenhouse gases. 18. EPA policy prohibits the use of non-EPA e-mail accounts and instructs employees to: "not use any outside e-mail system to conduct official Agency business. If, during an emergency, you use a non-EPA e-mail system, you are responsible for ensuring that any e-mail records and attachments are saved in your office's recordkeeping system." When last at the EPA, did you ever use personal email to conduct official EPA business? Did you ever use an email alias to conduct official EPA business when you last served at the agency? Do you commit that if confirmed, you will not use an email alias or use personal email addresses to conduct EPA business? I do not recall using personal e-mail to conduct official business when last at EPA. I did not use an e-mail alias to conduct official business when last at EPA. If 8 https://www.epa.gov/climatechange/us-court-appeals-dc-circuit-upholds-epas-action-reduce-greenhouse-gases-under-clean confirmed, I intend to use my EPA e-mail account to conduct official business. 19. Clean car standards save consumers money at the pump and help reduce oil imports. Automakers are complying with vehicle standards ahead of schedule. If confirmed, will you commit to support, defend and enforce EPA’s current programs to address greenhouse gas emissions from vehicles? If confirmed, my primary responsibility will be to faithfully implement the Clean Air Act, including authorities and restrictions applicable to greenhouse gases. 20. For the most part, patients and their families only participate in scientific trials and studies once they know their privacy - and any resulting health-related information - will remain confidential and secure. If confirmed, do you commit to respecting confidentiality agreements that exist between researchers and their subjects? Will you protect the health information of the thousands of people that have participated in health studies in the past? If confirmed, I will comply with appropriate standards to continue the protection of sensitive or confidential information. 21. In December 2007, President Bush’s EPA proposed to declare greenhouse gases as a danger to public welfare through a draft Endangerment Finding, stating, “The Administrator proposes to find that the air pollution of elevated levels of greenhouse gas (GHG) concentrations may reasonably be anticipated to endanger public welfare…Carbon dioxide is the most important GHG (greenhouse gas) directly emitted by human activities, and is the most significant driver of climate change.” 9 a. Do you agree with these statements, if not, why not? b. Did you participate in drafting the proposed Bush Endangerment Finding document in any way? If so, how? I believe that the climate is changing and that anthropogenic emissions contribute to the change. I did not participate in drafting the proposed Bush Endangerment Finding document. 22. When you last served in the EPA OAR office, did the EPA ever propose to disapprove state mercury emissions control programs that were stronger than the Clean Air Mercury? If so, please provide how many times this happened and what your role was in these actions. Please also provide how this fits in Administrator Pruitt’s views of “cooperative federalism.” I do not recall that EPA proposed to disapprove any state program proposed 9 https://insideclimatenews.org/sites/default/files/2007_Draft_Proposed_Endangerment_Finding.pdf pursuant to the Clean Air Mercury Rule. 23. The Rule of Law Defense Fund is an affiliate of the Republican Attorneys General Association. Have you ever contributed any money or time to the Rule of Law Defense Fund? No. 24. Have you ever contributed any money or time to two election fundraising groups, Oklahoma Strong PAC and Liberty 2.0 PAC? No. 25. How many legal cases have you filed, or joined others in filing, that involved the Renewable Fuel Standard, biofuels or biodiesel since leaving the EPA? Please provide a summary of your argument and the outcome of each case, including those cases in which the court disagreed with your argument. I was counsel of record on three cases related to the RFS (principal clients are included in parentheses): (1) a challenge to EPA’s E15 waiver (API and the Grocery Manufacturers Association); (2) a challenge to EPA’s misfueling mitigation rule (API); and (3) a challenge to Minnesota’s B10 mandate (API, the Auto Alliance, the American Fuel and Petrochemical Manufacturers). 26. Have you ever argued in court, or been part of a legal argument, that the Renewable Fuel Standard, as being implemented by the EPA, will lead to an increase in the overall demand for corn, which will lead to an increase in the price of corn? If so, please cite the case and the data used for the argument. I am not authorized by my clients to discuss relevant cases. 27. In your 2005 EPW confirmation hearing, you answered a question, with the following, “I was barred for 1 year starting September 29, 2001, from participating in the particular matters listed in Attachment A of the memorandum and from taking official action on any particular matter in which my former clients, listed in Attachment B, were or represented a party to the matter. The ethics memorandum also addressed the general rulemakings on which I had represented various clients…With respect to the ethylene MACT rule and the semiconductor MACT rule, he [Kenneth J. Wernick, EPA's then Alternate Agency Ethics Official] concluded that it would be prudent for me not to handle these matters during my first year at EPA. Subsequent to that time, there was no bar to my participating as an EPA official in these rulemakings... In accordance with the ethics memorandum referenced above, I refrained for 1 year starting September 29, 2001, from participating in the particular matters identified by the memorandum and from taking official action with respect to any particular matter involving the entities listed in the memorandum. I also did not participate in the ethylene and semiconductor MACT rules in my first year at EPA (https://www.gpo.gov/fdsys/pkg/CHRG-109shrg42275/pdf/CHRG-109shrg42275.pdf). a. Please provide a full list of the cases you filed, joined others in filing, or participated in some way related to the ethylene and semiconductor MACT rules prior to you joining the EPA in 2001. Please include any other work that you may have done while employed at Latham and Watkins – or any other organization – prior to coming to the EPA in 2001 that was related to the ethylene and semiconductor MACT rules. b. What led Kenneth J. Wernick, EPA's then Alternate Agency Ethics Official to conclude it wouldn’t “be prudent” for you to handle the ethylene MACT rule and the semiconductor MACT rule during your first year at EPA? c. In 2001, what other issues and rulemakings did you have to recuse yourself for one year to meet the ethical standards set by the EPA? Prior to and upon joining EPA in 2001, I sought, obtained, and strictly followed advice from EPA’s ethics officials as to my ethical obligations related to my prior work in private practice. My prior ethics agreement is a matter of public record. 28. How many legal cases have you filed, or joined others in filing, since leaving the EPA that challenged rules the Obama EPA had to re-write because the courts said the original rules written by the Bush Administration were illegal? To my knowledge, I have been involved in three cases challenging rules that EPA issued on remand from court decisions on Bush Administration air rules. 29. On July 8, 2003, Jeff Holmstead, then-EPA Assistant Administrator for Air and Radiation provided the following remarks in his written testimony to the House Energy and Air Quality Subcommittee of the Energy and Commerce Committee, “Clear Skies would also reduce mercury emissions from power plants. EPA is required to regulate mercury because EPA determined that mercury emissions from power plants pose an otherwise unaddressed significant risk to health and the environment, and because control options to reduce this risk are available.”11 At the time Mr. Holmstead provided these remarks, you were serving as his chief counselor within the EPA OAR office. a. Did you agree at the time with Mr. Holmstead’s determination, if so why? If not, why not? b. Did you ever provide legal counsel to Mr. Holmstead, or others within the EPA, that helped provided the legal basis for these remarks? c. Do you agree with Mr. Holmstead’s remarks today? I believe Mr. Holmstead was referring to Administrator Browner’s 1999 “appropriate and necessary” determination, which was still in effect at the time. That determination, as amended in the Mercury and Air Toxics Rule, was determined to be illegal by the US Supreme Court. 30. On July 8, 2003, Jeff Holmstead, then-EPA Assistant Administrator for Air and Radiation provided the following remarks in his written testimony to the House Energy and Air Quality Subcommittee of the Energy and Commerce Committee: “Mercury, a potent toxin, can cause permanent damage to the brain and nervous system, particularly in developing fetuses when ingested in sufficient quantities. People are exposed to mercury mainly through eating fish contaminated with methylmercury… EPA estimates that 60% of the mercury falling on the U.S. is coming from current man-made sources. Power generation remains the largest man-made source of mercury emissions in the United States…Mercury that ends up in fish may originate as emissions to the air. Mercury emissions are later converted into methylmercury by bacteria. Methylmercury accumulates through the food chain: fish that eat other fish can accumulate high levels of methylmercury”.12 At the time Mr. Holmstead provided these remarks, you were serving as his chief counselor within the EPA OAR office. a. Did you have any involvement in the drafting of these remarks? If so, what was your involvement? b. Did you agree at the time with Mr. Holmstead’s remarks, if so why? If not, why not? c. Do you still agree with Mr. Holmstead’s remarks today? If not, why not? I do not recall being involved in drafting Mr. Holmstead’s remarks. I believe that, for the most part, mercury emissions from power plants are dispersed widely in the global atmosphere. I believe that global mercury emissions inventories have significantly changed since my prior time at EPA. Therefore, I cannot speak to his comments related to domestic and global emissions inventories. I believe his comments about the movement and transformation of mercury in the environment are correct. 31. In the White Stallion Energy Center v. EPA, February 2012, industry argued, “the record does not support EPA’s findings that mercury, non-mercury HAP metals, and acid gas HAPs [hazardous air pollutants] pose public health hazards.”13 Do you agree with this statement? Did you have any involvement with this case, if so, please explain. I believe that comments were submitted to the record in this rulemaking demonstrating significant flaws in EPA’s exposure and risk assessment. I was not counsel of record in this case. 12 https://archive.epa.gov/ocir/hearings/testimony/108_2003_2004/web/pdf/2003_0708_jh.pdf 13 https://www.cadc.uscourts.gov/internet/opinions.nsf/284AC47088C07D0985257CBB004F0795/%24file/12-1100-1488346.pdf 32. On April 17, 2012, Dr. Jerome Paulson, Chair, Council on Environmental Health, American Academy of Pediatrics, testified before the EPW Committee, stating, “Methyl mercury causes localized death of nerve cells and destruction of other cells in the developing brain of an infant or fetus. It interferes with the movement of brain cells and the eventual organization of the brain…The damage it [methylmercury] causes to an individual’s health and development is permanent and irreversible. …There is no evidence demonstrating a “safe” level of mercury exposure, or a blood mercury concentration below which adverse effects on cognition are not seen. Minimizing mercury exposure is essential to optimal child health.”14 a. Do you agree with the American Academy of Pediatrics’ finding on the importance of minimizing mercury exposures for child health? If not, please cite the scientific studies that support your disagreement. b. Do you agree the record supports EPA’s findings that mercury, non-mercury hazardous air pollutant metals, and acid gas hazardous air pollutants emitted from uncontrolled power plants pose public health hazards? If not, why not? I am not familiar with Dr. Paulson’s testimony. I believe that comments were submitted to the record in this rulemaking demonstrating significant flaws in EPA’s exposure and risk assessment. 33. On July 8, 2003, Jeff Holmstead, then-EPA Assistant Administrator for Air and Radiation provided the following remarks in his written testimony to the House Energy and Air Quality Subcommittee of the Energy and Commerce Committee, “We have not developed methodologies for quantifying or monetizing all the expected benefits of Clear Skies…These estimates [for Clear Skies] do not include the many additional benefits that cannot currently be monetized but are likely to be significant, such as human health benefits from reduced risk of mercury emissions, and ecological benefits from improvements in the health of our forests, lakes, and coastal waters.”15 At the time Mr. Holmstead provided these remarks, you were serving as his chief counselor within the EPA OAR office. a. Did you have any involvement in the drafting of these remarks? If so, what was your involvement? b. Did you agree at the time with Mr. Holmstead’s remarks, if so why? If not, why not? c. Do you agree with Mr. Holmstead’s remarks today that it is currently difficult, or impossible, to monetize the reduced risk of human health and ecological benefits from reducing mercury emissions from power plants? If so, please explain. If not, why not? 14 https://www.epw.senate.gov/public/_cache/files/4/3/4324fd62-dc89-4820-bd93- ff3714fcbe30/01AFD79733D77F24A71FEF9DAFCCB056.41712hearingwitnesstestimonypaulson.pdf 15 https://archive.epa.gov/ocir/hearings/testimony/108_2003_2004/web/pdf/2003_0708_jh.pdf I do not recall being involved in drafting Mr. Holmstead’s testimony. I believe that EPA was not able in 2003 to monetize all benefits associated with reducing mercury emissions. I do not know the current state of EPA’s knowledge. 34. In 2005 GAO report that reviewed EPA’s cost-benefit analysis for the Clean Air Mercury Rule, which you have testified you were heavily involved in writing, GAO identified, “four major shortcomings in the economic analysis underlying EPA's proposed mercury control options that limit its usefulness for informing decision makers about the economic trade-offs of the different policy options.”16 a. Can you explain the cost-benefit analysis used for the proposed Clean Air Mercury Rule and why it was used? b. Can you explain why the GAO found short-comings with this approach? c. Do you agree that co-benefit pollution reductions should be considered when EPA is quantifying the benefits and costs of regulations? If not, why not? d. While you were at EPA, did the agency ever use co-benefits to justify a clean air rule and has this approach ever been used in the past? I do not recall being involved in preparing the cost-benefit analysis for the Clean Air Mercury Rule. If confirmed, I intend to address the question of how co-benefits should be considered in cost-benefit analyses. I cannot prejudge the outcome because any such analysis would be an integral part of informal legislative rulemaking. 35. You were substantially involved in EPA’s proposal and adoption of the Clean Air Mercury Rule and accompanying Delisting Rule. In 2005, for your EPW confirmation hearing you were asked the following question for the record: “With regard to trading of mercury, in your view, would it have been legally acceptable for EPA, taking into account the requirements of the Clean Air Act, to propose and adopt a facility specific mercury MACT that did not allow trading?” You answered, “After considering the utility unit emissions that would remain following imposition of the requirements of the Act, EPA determined that it was neither appropriate nor necessary to regulate utility units under section 112 of the Clean Air Act. Once EPA made that determination, it would not have been legally appropriate for EPA to issue a MACT standard.” Three years later, the D.C. Circuit vacated the EPA’s decision to delist power plants as a source under Section 112. Six years later under the Obama Administration, the EPA issued the Mercury and Air Toxics Rule to address mercury and air toxic emissions from power plants under the Section 112 of the Clean Air Act. 16 http://www.gao.gov/products/GAO-05-252 a. Did you disagree with the court’s ruling and legal reasoning against the EPA’s actions while you were at the agency on mercury and air toxic power plant emissions? Do you continue to disagree today? b. Do you still hold the position that it is not “appropriate nor necessary” for the EPA to regulate utility units under Section 112 of the Clean Air Act and therefore, still agree it is not legally appropriate for EPA to issue a MACT standard, as the EPA did through the Mercury and Air Toxics Standard? If so, please explain. c. If you do not agree that EPA has met the “necessary and appropriate” criteria found in Section 112(n), what is your understanding of what that would mean for the Mercury and Air Toxics Rule? I respect the court’s decision with regard to the Clean Air Mercury Rule. I also respect the US Supreme Court’s determination that the “appropriate and necessary” finding relied upon in the Mercury and Air Toxics Rule was illegal. 36. The US Supreme Court has expressly declined to consider whether EPA should have chosen some other mechanism “under section 112” in regulating power plant mercury and all the other HAPs emitted by the industry. What is your position on that precedent? The Supreme Court chooses which areas they should consider providing judgement on when issuing decisions and which areas they decline to consider. I cannot infer the intent of the court from their decision not to consider this one specific issue. 37. Do you agree that the EPA’s recent consideration of the costs of the Mercury and Air Toxics Rule shows that the agency has met the "necessary and appropriate" criteria Congress provided under 112(n) to direct the EPA to regulate power plant mercury (and other air toxic) emissions under Section 112, and more specifically under Section 112(d)? If not, why not? If confirmed, I likely will be involved in assessing this question. I cannot prejudge the outcome. 38. The Edison Electric Institute (EEI), the association that represents all U.S. investor-owned electric companies, has told my staff that, to their knowledge, about five facilities received an approval from the EPA to operate for up to an additional year, which was through April 2017. According to EEI, to their knowledge all of their member companies have fully implemented the Mercury and Air Toxics Standard Rule. EPA staff has reported to my staff something similar. The Mercury and Air Toxics Rule protects our children from harmful mercury and air toxics pollution; and by industry accounts is already being met with technology that is already bought, paid for and running on almost all our power plants. a. Do dispute reports that nearly all covered facilities are already in compliance with the Mercury and Air Toxics Standard? If so, please explain. b. According to a recent report by Bloomberg New Energy Finance Report and the Business Council for Sustainable Energy, “consumers now pay 3% less per kilowatt-hour for electricity than in 2007.”17 This means the near universal compliance of the Mercury and Air Toxics Rule has been achieved without significant impacts to electricity reliability or affordability, in fact electricity prices have gone down. Do you agree? If not, why not? c. Even though industry has achieved near universal compliance with the Mercury and Air Toxics Standards and electricity prices have gone down, not up, Administrator Pruitt is currently reviewing whether it is “appropriate and necessary” to issue the standards in the first place. Do you agree that the EPA should be conducting this review, if so, why? d. If the EPA determines the agency has not met the “necessary and appropriate” criteria found in Section 112(n), and revokes the Mercury and Air Toxics Rule, what does that mean for all the pollution control technology that has been bought, paid for and running on our power plants helping the industry be in full compliance of the rule? e. When you were last at the EPA, or after, do you know of any instances when a power plant bought and installed air control technology and decided not to run the technology? If so, please explain the instance. Please include in your explanation if there were any impacts to downwind states or to air pollution levels. If confirmed, I likely will be involved in assessing the question of how to appropriately respond to the US Supreme Court’s remand of the MATS “appropriate and necessary” determination. I cannot prejudge the outcome of that assessment. I will note that MATS imposed substantial costs on electric power generators. The fact that power prices have declined in recent years does not necessarily mean that MATS did not impose substantial incremental costs. 39. In a 2016 Law 360 article, you are quoted as saying, “The reason this [the Mercury and Air Toxics Standards Rule] was such a big issue for us is because by EPA’s own analysis, if you look at the benefits generated by the hazardous air pollutant reductions this rule would achieve, the costs vastly outweigh the benefits. So from our perspective, it’s a regulation that made no sense and wasn’t justified.”18 In April 2017, the EPA asked the D.C. Circuit Court of Appeals to delay oral arguments scheduled the Mercury and Air Toxics Standards (MATS) as it reviews the rule. 17 18 http://www.bcse.org/wp-content/uploads/2017-Sustainable-Energy-in-America-Factbook-Executive-Summary.pdf https://www.law360.com/articles/742955/environmental-group-of-the-year-hunton-williams a. It is clear from this statement you already have a formed view of the validity of the Mercury and Air Toxics Standard going into the agency. Will you commit to this Committee that you will recuse yourself from the review and any possible rewriting of the Mercury and Air Toxics Rule? If not, why not? b. Do you continue to believe the Mercury and Air Toxics Standards is a regulation that made no sense and wasn’t justified? If so, why? The quantifiable monetized benefits of the HAP reductions predicted to occur under MATS measured only a few million dollars. I understand that EPA has recalculated the benefits attributable to MATS in response to the Supreme Court remand. I am not familiar with the new estimates. If confirmed, I intend to consider them objectively. 40. Will you commit, that if confirmed, you will not act to weaken the Mercury and Air Toxics Standards, if not, why not? I cannot prejudge any decision that might be made by EPA if I am confirmed. 41. This year, you represented the American Petroleum Institute as an intervenor in defense of Administrator Pruitt’s 90-day stay of oil and gas pollution standards, which the D.C. Circuit found violated the Clean Air Act. In my office, you refused to recuse yourself from participating in this rule, is that still true and how do you justify that, if confirmed, you will come into the EPA as impartial regulator as it relates to this issue? Do you agree with the court’s decision, and why not? Comprehensive rules of ethics govern the transition from private practice to government service. If confirmed, I will work closely with EPA ethics officials to understand and strictly comply with my ethical obligations. 42. Section 109 of the Clean Air Act is very clear. It requires EPA to review the NAAQS for six common air pollutants including ground-level ozone, particulate matter, sulfur dioxide, nitrogen dioxide every 5 years. The Clean Air Act requires EPA to set these standards that “are requisite to protect the public health," with "an adequate margin of safety," and secondary standard necessary to protect public welfare. a. If confirmed, will you continue to hold to the five-year National Ambient Air Quality Standards review time period that the Clean Air Act requires of the EPA? b. The science was clear that the 2008 ozone standard was not protecting public health, so EPA was required to Act. Is that not your understanding of the Clean Air Act? c. If confirmed, will you commit to not further delay the implantation of the 2015 ozone NAAQS? If not, why not? d. Do you agree with Justice Scalia’s opinion in Whitman v. American Trucking Associations that it is “fairly clear that [the Clean Air Act] does not permit the EPA to consider costs in setting the standards” and if so, will you commit not to include consider costs when setting the National Ambient Air Quality Standards? If you do not agree, why not? If confirmed, I will endeavor to meet all statutory deadlines. I am not familiar with the record for the 2015 ozone NAAQS decision, so cannot comment on the decision to change the standard. I respect all US Supreme Court decisions. 43. In 2006, while you served as Acting Assistant Administrator for Air, the EPA proposed to eliminate lead as a criteria pollutant under the Section 109 Clean Air Act National Ambient Air Quality Standard (NAAQS) process. Did you have any involvement in this proposal? If so, please explain. Yes, I was involved in developing that proposal. CAA § 108(a)(1)(B) states that ambient levels of a criteria pollutant should “result[] from numerous or diverse mobile or stationary sources.” Information at the time indicated that there were few industrial sources of lead emissions and that lead emissions from mobile sources had been virtually eliminated. The proposal asked for comment on whether lead continued to meet the § 108(a)(1)(B) criterion. 44. Like you, I am an avid runner. In Delaware during the summer, we often have code orange days warning about the high levels of ozone for that day. Much of Delaware’s ozone pollution is coming across the state boundary from upwind states. a. Can you describe how high levels of ozone could damage my lungs if I were to take a long run during a code orange day? b. Do you agree that ground-level ozone is a dangerous pollutant that causes respiratory and cardiovascular harm? If not, on what basis do you disagree? c. If confirmed, how would you direct states to work together to reduce ozone pollution? Inhaling too much ozone can cause a wide range of adverse cardiovascular effects. CAA §§ 110(a)(2)(D) and 126 are designed to address interstate transport (i.e., emissions from upwind states that significantly contribute to downwind nonattainment). 45. Clean Air Act section 110(a)(2)(D)(i)(I), also known as the “Good Neighbor” provision, requires that state implementation plans to address air pollution “contain adequate provisions prohibiting, consistent with the provisions of this subchapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard.” Under this provision of the Clean Air Act, “[w]henever the Administrator finds that the applicable implementation plan for any area is substantially inadequate . . . to mitigate adequately [] interstate pollutant transport . . . or to otherwise comply with any requirement of this chapter, the Administrator shall require the State to revise the plan as necessary to correct such inadequacies.” a. Do you support the “Good Neighbor Provision” in the Clean Air Act and agree that this provision does not “encroach upon state sovereignty”? If not, why? b. If confirmed, do you commit to fully apply and enforce the Good Neighbor provision? CAA § 110(a)(2)(D) describes one of many elements that must be included in an approval State Implementation Plan. My hope is that more states address this obligation in the first instance so that US EPA does not need to make findings of substantial inadequacy. If confirmed, my goal is to faithfully implement all aspects of the Clean Air Act. 46. Currently, under the Clean Air Act section 110(a)(2)(D)(i)(I), also known as the “Good Neighbor” provision, Delaware has sent four petitions to the EPA that identify facilities in other states that are emitting air pollution that are significantly contributing to Delaware’s air quality and impacting Delaware’s ability to maintain or be in attainment for the 2008 national ambient air quality standards (NAAQS) for ozone and the 2015 ozone NAAQS. The petitions are for: 1) Brunner Island facility's electric generating units located near York, Pennsylvania; 2) Homer City Generating Station's electric generating units located in Indiana County, Pennsylvania; 3) Harrison Power Station's electric generating units located near Haywood, Harrison County, West Virginia; and 4) Conemaugh Generating Station's electric generating units located in Indiana County, Pennsylvania. In addition, Maryland has filed a petition that requests EPA make a finding that 36 electric generating units located in the states of Indiana, Kentucky, Ohio, Pennsylvania, and West Virginia are emitting air pollutants that significantly contribute to nonattainment or interfere with maintenance of the 2008 and the 2015 ozone NAAQS in Maryland. The EPA has granted itself six months extension on every petition and has done nothing after that. All of the extensions have long since expired. a. If confirmed, will you commit to promptly act on Good Neighbor petitions so states, like Delaware and Maryland, can protect their citizens from upwind pollution in neighboring and distant states? If not, why not? b. If confirmed, will you support, defend and enforce EPA’s Good Neighbor provisions to address air pollution that crosses state borders? If not, why not? c. In some of these situations, like the Harrison Power Station near Haywood in West Virginia, the power plant in question has the needed technology on the facility to help reduce ozone pollution in downwind Delaware and West Virginia ratepayers are already paying for the technology, but the pollution control isn’t running. If confirmed, what will you do to ensure pollution control technology already on facilities runs to ensure downwind states have clean air? d. If confirmed, will you fully implement the Cross State Air Pollution Rules? e. If the Mercury and Air Toxics Rule is revoked, do you expect there will be an increase in upwind ozone and particulate pollution and have an impact on downwind states? If so, please explain. If not, why? I think your question relates to CAA § 126 and not to § 110(a)(2)(D). I am not familiar with the specific petitions described in this question. But, I will note that CSAPR and the CSAPR update rule were intended to address interstate transport under § 110(a)(2)(D), such that there should not be a need or justification for § 126 petitions addressing the same plants, pollutants, and standards. If confirmed, I will endeavor to meet all CAA deadlines and my goal will be to faithfully implement all aspects of the CAA. 47. Just last month, you argued against an Obama Administration Occupational Safety and Health Administration indoor air rule that protects construction workers against silica dust, a type of dust that is linked to cancer and lung disease. During your arguments, you are quoted as saying, “People are designed to deal with dust — people are in dusty environments all the time, and it doesn’t kill them,” 19The American Industrial Hygiene Association has stated that delaying the full enforcement of this rule will put – and this is their words, quote “2.3 million workers at greater risk to exposure, especially the construction industry — the backbone of our economy” a. Please provide the scientific studies that provided the basis for your argument in this case. b. When you stated “people are designed to deal with dust,” what did you mean by that statement? c. When you were last in the EPA, did you ever work on a rule was deemed later to ignore all of the science dealing with particle matter pollution? d. Do you agree that there is robust science linking small particle pollution to negative health impacts, even death? If so, why is the science here different than for silica pollution? The silica case dealt with the unique toxicological properties of silica and not with the pollutant “particular matter” that is regulated by EPA. The quote in this question was taken out of the context of a broader argument related to 19 https://www.eenews.net/greenwire/stories/1060061731/search?keyword=silica the question of whether there is an exposure threshold for respirable silica below which significant adverse health effects should not be expected to occur. The silica case remains an active matter and I am not authorized by my clients to say more. 48. Do you agree with President Trump’s decision to withdraw the United States from the International Paris Climate Accord? If so, please explain. President Trump is the Nation’s Chief Executive. I believe it was within his authority to withdraw. I respect his decision. 49. In part of his justifications for withdrawing from the Paris Climate Agreement, President Trump stated the Paris Accord could, “cost America as much as 2.7 million lost jobs by 2025 according to the National Economic Research Associates (NERA).”20 This economic statistic and others linked to the NERA study were also distributed in White House materials as reasons the President was deciding to withdraw from the Paris Accord. Soon after the President’s speech, NERA stated, “In a set of talking points distributed by the White House in conjunction with its announcement of the US withdrawal from the Paris Agreement, the Trump Administration selectively used results from a NERA Economic Consulting study, “Impacts of Greenhouse Gas Regulations on the Industrial Sector.” ... Use of results from this analysis as estimates of the impact of the Paris Agreement alone mischaracterizes the purpose of NERA’s analysis, which was to explore the challenges of achieving reductions from US industrial sectors over a longer term. Selective use of results from a single implementation scenario and a single year compounds the mischaracterization.”21 a. In light of the NERA statement, do you think the President misspoke when he wrongly cited information from the NERA study in his Paris speech? If not, why not? b. If confirmed, will you commit that you will not distort the NERA study – or any other economic study - to justify the U.S. withdrawing from the Paris Climate Accord or to justify the elimination or delay of climate policies? c. After the President’s Paris Climate Accord speech, MIT’s Joint Program on the Science and Policy of Global Change issued a statement stating the President’s characterization of their analysis of the Paris Accord to be misleading.22 If confirmed, will you commit that you will not distort the climate science studies to justify the U.S. withdrawing from the Paris Climate Accord or to justify the elimination or delay of climate policies? 20 https://www.whitehouse.gov/the-press-office/2017/06/01/statement-president-trump-paris-climate-accord 21 http://www.nera.com/news-events/press-releases/2017/nera-economic-consultings-study-of-us-emissions-reduction-polici.html http://news.mit.edu/2017/mit-issues-statement-research-paris-agreement-0602 22 I am not familiar with the NERA study, so I cannot assess NERA’s comments. If confirmed, my goal would be not to “distort” anybody’s statements. 50. In a Law360 interview, you were asked, “What is the most challenging case you have worked on and what made it challenging?” You responded, “Without a doubt, it would be Massachusetts v. EPA. I was at the EPA at the time, working as counsel to the assistant administrator for air, Jeff Holmstead.”23 Please explain in detail, what your involvement was while in the EPA regarding regulations that led to, and the agency’s defense of the Massachusetts v. EPA case. There were no regulations that led to the Mass v EPA decision. The decision under review was EPA’s denial of a citizen petition asking EPA to regulate GHG emissions from motor vehicles. OAR was responsible in the first instance for preparing the proposed and final denial. OAR staff – including myself – provided support to the government litigation team while the case was pending in the DC Circuit and the US Supreme Court. ATTACHMENT 1 - WEHRUM Wehrum – Pending Cases October 12, 2017 Case Number Title Party Attorney Originating Case Number Origin 08-1277 American Petroleum Institute v. EPA American Fuels & Petrochemical Manufacturers Association; American Petroleum Institute; National Petrochemical & Refiners Association; Western States Petroleum Association EPA-1 : EPA-73FR35838 Environmental Protection Agency 08-1281 Env. Integrity Project v. EPA 09-1332 Kinder Morgan CO2 Co., LP v. EPA 11-1023 Gas Processors Association v. EPA American Fuels & Petrochemical Manufacturers Association; American Petroleum Institute; National Petrochemical & Refiners Association Kinder Morgan CO2 Co., LP Gas Processors Association American Petroleum Institute; 11-1309 Independent Petroleum Association of American Petroleum Institute, et al v. America EPA EPA-1 : EPA-73FR35838 Environmental Protection Agency EPA-1 : EPA-74FR56260 Environmental Protection Agency EPA-1 : EPA-75FR74458 Environmental Protection Agency EPA-1 : EPA-76FR38748 Environmental Protection Agency 12-1208 National Rural Electric Coop. v. EPA National Rural Electric Cooperative Association 12-1352 National Rural Electric Cooper v. EPA National Rural Electric Cooperative Association 12-1405 American Petroleum Institute v. American Petroleum Institute EPA 12-1406 Gas Processors Association v. EPA American Petroleum Institute 11/13/2012 Open American Fuel & Petrochemical 12-1442 American Petroleum Institute, et al v. Manufacturers; American Petroleum Institute EPA 13-1063 American Petroleum Institute v. EPA American Petroleum Institute EPA-1 : EPA-77FR10324 Environmental Protection Agency EPA-1 : EPA-77FR34830 Environmental Protection Agency EPA-1 : EPA-77FR49490 Environmental Protection Agency EPA-1 : EPA-77FR49490 Environmental Protection Agency EPA-1 : EPA-77FR56422 Environmental Protection Agency EPA-1 : EPA-78FR2210 Environmental Protection Agency 13-1108 American Petroleum Institute v. EPA 13-1233 Conservation Law Foundation, American Petroleum Institute National Rural Electric Cooperative Association et al v. EPA 13-1256 Sierra Club, et al v. EPA 13-1289 American Petroleum Institute v. EPA 14-1199 PSEG Power LLC, et al v. EPA 14-1267 Georgia-Pacific LLC v. EPA 15-1021 Gas Processors Association v. EPA 15-1044 American Petroleum Institute v. EPA 15-1197 American Petroleum Institute v. EPA 15-1473 Gas Processors Association v. EPA 15-1487 Sierra Club, et al v. EPA, et al EPA-1 : EPA-77FR49490 Environmental Protection Agency EPA-1 : EPA-78FR6674 Environmental Protection Agency American Coke and Coal Chemicals Institute; American Forest & Paper Association; American Iron and Steel Institute; American Wood Council; Biomass Power Association; Chamber of Commerce of the United States of America; Corn EPA-1 : EPA-76FR15608 Refiners Association; National Association of Environmental Protection Agency Manufacturers; National Oilseed Processors; Rubber Manufacturers Association; Southeastern Lumber Manufacturers Association American Petroleum Institute National Rural Electric Cooperative Association EPA-1 : EPA-78FR58416 Environmental Protection Agency EPA-1 : EPA-79FR48072 Environmental Protection Agency EPA-1 : EPA-79FR60898 Environmental Protection Agency Georgia-Pacific LLC Gas Processors Association EPA-1 : EPA-79FR70352 Environmental Protection Agency American Petroleum Institute EPA-1 : EPA-79FR79018 Environmental Protection Agency American Petroleum Institute EPA-1 : EPA-80FR25068 Environmental Protection Agency Gas Processors Association EPA-1 : EPA-80FR64262 Environmental Protection Agency Brick Industry Association -2- EPA-1 : EPA-80FR65470 Environmental Protection Agency 15-1492 Brick Industry Association v. EPA 16-1021 Sierra Club, et al v. EPA, et al Brick Industry Association American Chemistry Council; American Coke and Coal Chemicals Institute; American Forest & Paper Association; American Iron and Steel Institute; American Wood Council; Biomass Power Association; Coalition for Responsible Waste Incineration; Council of Industrial Boiler Owners; National Association of Manufacturers; National Oilseed Processors Association; Southeastern Lumber Manufacturers Association, Inc. EPA-1 : EPA-80FR65470 Environmental Protection Agency EPA-1 : EPA-80FR72790 Environmental Protection Agency American Fuel & Petrochemical 16-1033 Manufacturers; American Petroleum American Fuel & Petrochemical, et al Institute v. EPA EPA-1 : EPA-80FR75178 Environmental Protection Agency American Fuel & Petrochemical 16-1035 Air Alliance Houston, et al v. EPA, et Manufacturers; American Petroleum al Institute EPA-1 : EPA-80FR75178 Environmental Protection Agency 16-1179 Brick Industry Association v. EPA EPA-1 : EPA-81FR31234 Environmental Protection Agency 16-1270 American Petroleum Institute v. EPA 16-1271 American Petroleum Institute v. EPA 16-1345 American Petroleum Institute v. EPA 16-1425 Natural Resources Defense Coun v. EPA Brick Industry Association American Petroleum Institute EPA-1 : EPA-81FR35824 Environmental Protection Agency American Petroleum Institute EPA-1 : EPA-81FR35944 Environmental Protection Agency American Petroleum Institute EPA-1 : EPA-81FR51102 Environmental Protection Agency American Petroleum Institute EPA-1 : EPA-77FR49490 Environmental Protection Agency Utility Air Regulatory Group 17-1088 Utility Air Regulatory Group v. EPA EPA-1: EPA-82FR4594 Environmental Protection Agency USCA Case #15-1487 Document Filed: 10/03/2017 Page 2 of 3 A r- We ls? @050? m9 E. SCOTT October 2, 2017 Ms. Linda Miller Counsel for the Brick Industry Association Hunton Williams 2200 Avenue, NW Washington, DC. 20037 Ms. Valerie Green Counsel for Kohler Company Michael Best Friedrich LLP 601 Avenue, NW Washington, DC 20004 Mr. Jeffrey Longsworth Counsel for the Tile Council of North America, Inc. Barnes Thornburg LLP 1717 Avenue, NW, Suite 500 Washington, DC. 20006-4623 Mr. Nicholas Morales Mr. James Pew Counsel for Sierra Club and National Resources Defense Council Earthjustice 1625 Massachusetts Avenue, NW Washington, DC. 20036 Re: Review of final rule titled ?National Emissions Standards for Hazardous Air Pollutants for Brick and Structural Clay Products Manufacturing; and National Emissions Standards for Hazardous Air Pollutants for Clay Ceramics Manufacturing; Final Rule,? 80 FR 65470 published October 26, 2015 Dear Ms. Miller, Ms. Green, Mr. Longsworth, Mr. Morales and Mr. Pew: This letter concerns the US. Environmental Protection Agency ?nal rule titled ?National Emissions Standards for Hazardous Air Pollutants for Brick and Structural Clay Products 1300 N't?l' - Mm. (?um - DC Ell - [202) .?ali - FAX: {202] 301-1 Lil} o} This paper :5 prmtod vegetable-osl-baseo loss and Is IOU-percent postconsur?ner recycled maternal. :hIDrInE-lreovprucesscd and racyclablo. (Page 11 of Total) USCA Case #15?1487 Document #1696614 Filed: 10/03/2017 Page 3 Of 3 Manufacturing; and National Emissions Standards for Hazardous Air Pollutants for Clay Ceramics Manufacturing; Final Rule? (?Brickalay Ceramics Rule") published at 80 Fed. Reg. 65470 (Oct. 26, 2015), which is currently the subject of pending petitions for review in the United States Court of Appeals for the District of Columbia Circuit in Sierra Club v. EPA, No. 15-1437 (and consolidated cases). I am writing to inform you that I have decided that it is appropriate and in the public interest for the EPA to review the provisions of the Brick/Clay Ceramics Rule. As part of this review, the EPA will consider, among other things, the issues that you have raised in the pending litigation. The EPA intends to undertake this review as expeditiously as possible to determine which aspects of the rule, if any, might warrant revision. If the EPA decides to begin the process of potentially revising provisions of the Briclu'Clay Ceramics Rule, the agency will develop a proposed rule package and publish that in the Federal Register to give interested persons the opportunity for public comment. If you have any questions about the review process concerning the Brick/Clay Ceramics Rule, please contact Mr. Peter Tsirigotis in the Of?ce of Air Quality Planning and Standards at (883) 627-7764 or airaction@epa.gov. If you have any questions about or wish to discuss the pending litigation concerning the Briclo?Clay Ceramics Rule, please contact Kate Bowers at (202) 30720930. Respectfully you E. Scott Pruitt (Page 12 of Total) USCA Case #15-1487 Document #1696614 Filed: 10/03/2017 Page 1 of 9 ORAL ARGUMENT SCHEDULED FOR NOVEMBER 9, 2017 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT ____________________________________ ) SIERRA CLUB, et al., ) ) Petitioners, ) ) v. ) ) UNITED STATES ENVIRONMENTAL ) PROTECTION AGENCY, et al., ) ) Respondents. ) ____________________________________) No. 15-1487 (and consolidated petitions) RESPONDENTS’ MOTION TO CONTINUE ORAL ARGUMENT AND HOLD PROCEEDINGS IN ABEYANCE Respondents United States Environmental Protection Agency and E. Scott Pruitt, in his official capacity as Administrator (collectively “EPA”), hereby respectfully request that the Court continue oral argument currently scheduled for November 9, 2017 and hold all proceedings in abeyance in these consolidated petitions for review. The petitions challenge EPA regulations establishing major-source hazardous air pollutant emission standards for facilities that manufacture brick and structural clay products and clay ceramics (the “Brick/Clay Rule”). The (Page 1 of Total) USCA Case #15-1487 Document #1696614 Filed: 10/03/2017 Page 2 of 9 regulations were promulgated by the previous Administration, and EPA officials in the new Administration have determined that they will be closely scrutinizing the Brick/Clay Rule to determine whether it should be revised in whole or in part. By letter dated October 2, 2017, Administrator Pruitt informed the petitioners that EPA intends to review the Rule and may potentially propose to revise the Rule. Ex. A. EPA anticipates that the prior positions taken by the Agency may not necessarily reflect EPA’s ultimate conclusions. Accordingly, continuance of the oral argument will promote judicial economy. EPA respectfully requests that the Court hold all proceedings in abeyance and further direct EPA, within 90 days of the Court’s Order on this Motion and every 90 days thereafter, to file a status update informing the Court of the status of the Agency’s review of the Brick/Clay Rule until a final determination is made by the Agency. Counsel for EPA contacted counsel for Petitioners and Intervenors concerning their positions on this Motion. The Brick Industry Association (“BIA”), the Tile Council of North America (“TCNA”), and Kohler Co. consent to the relief requested. Sierra Club and Natural Resources Defense Council oppose the Motion. -2(Page 2 of Total) USCA Case #15-1487 Document #1696614 Filed: 10/03/2017 Page 3 of 9 BACKGROUND The Clean Air Act requires EPA to identify, list, and set emission limits for categories of major stationary sources of hazardous air pollutants. 42 U.S.C. § 7412(b), (c), (d). In 2003, EPA initially promulgated hazardous air pollutant standards for major sources manufacturing brick and structural clay products and clay ceramics. 68 Fed. Reg. 26,690 (May 16, 2003). This Court vacated those standards in 2007. Sierra Club v. EPA, 479 F.3d 875, 876 (D.C. Cir. 2007). EPA proposed new standards on December 18, 2014, 79 Fed. Reg. 75,622, and promulgated the final Brick/Clay Rule on October 26, 2015, 80 Fed. Reg. 65,470. In December 2015, Sierra Club and Natural Resources Defense Council jointly, and Kohler, BIA, and TCNA individually, filed petitions for review of the Brick/Clay Rule. Those petitions were consolidated by this Court’s December 29, 2015 Order. Following publication of the Brick/Clay Rule, Industry Petitioners BIA, TCNA, and Kohler each submitted petitions for administrative reconsideration. On May 12, 2016—during the prior Administration—EPA denied BIA’s and TCNA’s petitions, and granted in part and denied in part Kohler’s petition. 81 Fed. Reg. 31,234 (May 18, 2016). BIA challenged EPA’s denial action and that challenge was consolidated with the challenges to the underlying rule. -3(Page 3 of Total) USCA Case #15-1487 Document #1696614 Filed: 10/03/2017 Page 4 of 9 EPA filed its proof brief on January 19, 2017. The Parties filed final briefs on April 28, 2017. In a September 12, 2017 Order, the Court scheduled oral argument for November 9, 2017. At this time, however, EPA officials in the new Administration intend to review the entire Brick/Clay Rule to determine whether the Agency should propose to revise the Rule or some part of it. 1 ARGUMENT Agencies have inherent authority to review past decisions and to revise, replace or repeal a decision to the extent permitted by law and supported by a reasoned explanation. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009); Motor Vehicle Mfrs. Ass’n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 42 (1983) (“State Farm”); ConocoPhillips Co. v. EPA, 612 F.3d 822, 832 (5th Cir. 2010). EPA’s interpretations of statutes it administers are not “carved in stone” but must be evaluated “on a continuing basis,” for example, “in response to . . . a change in administrations.” Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (internal quotation marks and citations omitted). See also Nat’l Ass’n of Home Builders v. EPA, 682 F.3d 1032, 1038, 1 EPA recognizes and appreciates that it is imperative that the Court be notified promptly when a potential issues arises that affects the date of oral argument. In this case, EPA officials did not determine that they would review the Brick/Clay Rule until following the scheduling of oral argument, and EPA has submitted this motion at the earliest possible opportunity. -4(Page 4 of Total) USCA Case #15-1487 Document #1696614 Filed: 10/03/2017 Page 5 of 9 1043 (D.C. Cir. 2012) (a revised rulemaking based “on a reevaluation of which policy would be better in light of the facts” is “well within an agency’s discretion,” and “‘[a] change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency’s reappraisal of the costs and benefits of its programs and regulations’”) (quoting State Farm, 463 U.S. at 59 (Rehnquist, J., concurring in part and dissenting in part )). EPA requests that the Court continue the oral argument currently scheduled for November 9, 2017, in these consolidated cases to allow the Administration adequate time to review the Brick/Clay Rule to determine whether to propose revisions to the Rule. As indicated in the Administrator’s October 2 letter, EPA officials in the new Administration will be closely scrutinizing the entire Brick/Clay Rule to determine whether it should be maintained, modified, or otherwise reconsidered. The Agency needs sufficient time to complete this review in an orderly fashion because the Brick/Clay Rule is based on an extensive administrative record involving a large and complex body of scientific, medical, and technical evidence. The Agency will also need to evaluate its legal and policy positions concerning the proper interpretation and application of the relevant Clean Air Act provisions. An abeyance would preserve the resources of the Court and the Parties, as it is possible that EPA’s forthcoming review of the Rule could result in further -5(Page 5 of Total) USCA Case #15-1487 Document #1696614 Filed: 10/03/2017 Page 6 of 9 rulemaking that would revise or rescind some or all of the portions of the Brick/Clay Rule, thereby obviating the need for judicial resolution of some or all of the issues addressed in the Parties’ briefs. Continuance is also warranted because were the Court to hold oral argument as scheduled on November 9, 2017, counsel for EPA would likely be unable to represent the current Administration’s conclusive position on the Rule. Nor would it be proper for counsel for EPA to speculate on the likely outcome of the current Administration’s review. Finally, continuing oral argument would not prejudice the Parties because existing sources potentially affected by the Brick/Clay Rule have until December 26, 2018 to comply with the Rule, 80 Fed. Reg. at 65,483/2, and EPA is not aware of any new sources for which compliance would be required prior to that date. For the foregoing reasons, continuance of the oral argument and abeyance of all proceedings in this case is warranted. CONCLUSION WHEREFORE, EPA respectfully requests that the Court issue an order: (a) staying oral argument presently scheduled for November 9, 2017; (b) holding all proceedings in this case in abeyance; and (c) directing EPA to report to the Court, within 90 days of the Court’s Order on this Motion and every 90 days thereafter, the status of the Agency’s review of the Brick/Clay Rule until a final determination is made by the Agency. -6(Page 6 of Total) USCA Case #15-1487 Dated: October 3, 2017 Document #1696614 Filed: 10/03/2017 Page 7 of 9 Respectfully submitted, JEFFREY H. WOOD Acting Assistant Attorney General Environment & Natural Resources Div. s/ Kate R. Bowers KATE R. BOWERS SONYA J. SHEA SCOTT JORDAN United States Department of Justice SONJA RODMAN Environment & Natural Resources Div. Office of General Counsel P.O. Box 7611 U.S. Environmental Protection Agency Washington, D.C. 20044 1200 Pennsylvania Avenue, NW (202) 307-0930 Washington, D.C. 20460 kate.bowers@usdoj.gov OF COUNSEL: Counsel for Respondents -7(Page 7 of Total) Wood, Anna[Wood.Anna@epa.gov] David Friedman Sent: Fri 11/3/2017 5:57:35 PM Subject: RE: November 2 AFPM Meeting on NSR Wehrum Weiss NSR Reform in 2017 - Whats Next ENV-2017-19.pdf To: From: Anna- we appreciated your time as well as your staffs time yesterday. We thought it was a robust discussion and we look forward to future meetings on this topic. I have attached the paper that formed for the basis for Bill's presentation at our Environmental Conference in October. From: Wood, Anna [mailto:Wood.Anna@epa.gov] Sent: Friday, November 3, 2017 10:25 AM To: David Friedman Subject: Re: November 2 AFPM Meeting on NSR Hi David, thank you again for the conversation yesterday. It was very helpful to hear and better understand your members' perspective. Please send when you have a moment the presentation that Bill W used at your recent meeting as that would be very helpful and appreciated. Many thanks again and have a good weekend, Anna Sent from my iPhone On Oct 30, 2017, at 2:10 PM, David Friedman wrote: Anna- I am just confirming our meeting with you and your staff on Thursday, November 2 from 10-12. I have attached an agenda and the following folks will be in attendance: Name Company David Friedman AFPM Matthew Hodges Valero Energy Michael Hopperton BP David Pavlich Phillips 66 State Virginia Texas Georgia Oklahoma Please let me know if you have any additional questions and we look forward to our ED_001598_00026507 meeting on Thursday. David N. Friedman Vice President Regulatory Affairs American Fuel & Petrochemical Manufacture1rs 1667 K Street NW Suite 700 Washington, DC 20006 202.457.0480 office 202.602 6604 direct 202.457.0486 fax dfriedman@afpm.org CONFIDENTIALITY NOTICE: This electronic message contains information from the American Fuel & Petrochemical Manufacturers that may be confidential or privileged. The information is intended solely for the use of the individual(s) or entity(ies) named above . If you are not the intended recipient, be aware that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this e-mail in error, please notify us immediately by telephone at (202) 457-0480 or by reply e-mail and permanently delete this e-mail, any attachments, and all copies thereof. ED_001598_00026507 2017 Environmental Conference Air Permitting/NSR/NAAQS Session October 15-17, 2017 Grand Hyatt Denver Denver, CO ENV-2017-19 NSR Reform in 2017 - What's Next? Presented By: Kenneth Weiss, ERM William Wehrum, Hunton & Williams LLP American Fuel 8PetrochemicaManufacturers 1667 K Street Suite700 Washington.DC 20006 202.457.0430 voice 202.457.0486 fax www.afpmorg ED_001598_00026508 These materials have been reproduced for the author or authors as a courtesy by the American Fuel & Petrochemical Manufacturers. Publication of this paper does not signify that its contents reflect the opinions of the AFPM, its officers, directors, members, or staff. Requests for authorization to quote or use the contents should be addressed directly to the author(s). Any discussion of impacts on supply or product prices is hypothetical and does rot reflect the unique market considerations and variables applicable to individual facilities or member companies. ED_001598_00026508 NSR Reform in 2017 - What's Next: Kenneth N. Weiss, P.E., BCEE, ERM Introduction Fifteen years after the last major effort to reform the New Source Review (NSR) program, the Trump administration is undertaking a major initiative aimed at regulatory reform. Not surprisingly, NSR is at the forefront as it remains as one of the most controversial regulatory program enforced by the U.S. Environmental Protection Agency (EPA). These rules historically have had substantial adverse impacts on the refining and petrochemical sector, in part due to lack of rule clarity and inconsistent rule application across the country and have been identified by AFPM as one of the five stationary source regulations of most concern to American Fuel & Petrochemical Manufacturers (AFPM) members 1. This paper discusses regulatory changes that would be most beneficial to the refining and petrochemical sector and examines prospects to make such changes in the NSR program. The discussion is informed and enhanced by revisiting aspects of the 2002 NSR reform effort that ultimately were not successfully implemented and includes recommendations for a path forward. Refining and Petrochemical Sector Challenges with NSR The industry largely needs to concern itself with the impact of the NSR program on modifications to existing facilities as very few new facilities are being planned or constructed. Industry innovation has allowed the sector to meet demand by improving existing operations to accommodate needed demand. Yet the NSR regulations present challenges to refiners and petrochemical plants on two overarching fronts: 1. The time required to obtain a permit widely varies across the United States for no real identifiable reasons and in many instances appears to extend for unreasonable periods of time. A search of EPA's RACT /BACT / LAER Clearinghouse (RBLC) shows that the average time for final permit issuance of a new or modified source at a refinery since about 2005 is 14 months after submission of a complete application, with regional 1 May 15, 2017 letter from David Friedman to Sarah Rees, EPA Office of Policy, and available at Docket ID Nmnber EPA-HQ-OA-2017-0190 Page I of 13 ENV-2017-19 ED_001598_00026508 variability from 1 month to 7.5 years (RBLC search, 8/23/2017). There are thirty entries in the RBLC captured in the data search and 13 of them required at least a year to obtain a final permit. This data is consistent with other industry wide studies. For example, Frass, Graham and Holmstead report that, "during the period from 2002 to 2014, the nationwide average time to obtain an NSR permit for coal- and natural gas-fired electric generating units (EGUs) and refineries was roughlyl 4 months. This represents a substantial increase in average processing time for NSR permits compared with the reported permitting times for the 1997-2001 period. The distributions are skewed-median values are less than the mean-with some projects requiring substantially longer to obtain NSR approval. In addition, there was a significant variation across EPA regions in the processing time required for approval of new natural gas-fired EGUs- from seven months for Region 7 (Iowa, Kansas, Mississippi, and Nebraska) to 19 months for Region 9 (Arizona, California, and Nevada). "2 2. The actual implementation of the existing NSR rules is very complex and fraught with opportunities for error. A library of approximately 700 guidance documents sets out Agency interpretations and includes confusing and, at times, conflicting information. Moreover, the New Source Review Workshop Manual has not been updated since 1990 and, although, it is EPA's primary guidance document, it is chock-full of outdated information. It is this complexity that leads to the widely variable and inconsistent application of the regulations and that subjects the refining and petrochemical industry to needless and unwarranted potential enforcement exposure. This is not conjecture as NSR was one of the four marquis issues upon which EPA's refinery enforcement initiative was founded. The results of that effort since March 2000 are informative: a. Ninety-five percent of the nation's refining capacity have entered into settlement agreements with EPA in 37 settlement agreements; b. 112 refineries are impacted by these agreements; c. Settling companies have agreed to invest more than $7 billion in control technologies and payed civil penalties of more than $116 million. In the NSR area much of the dispute between industry and the refining 2 EP A's New Source Review Pro gram: Time for Reform by Art Fraas, John D. Graham, and Jeff Holmstead, Environmental Law Institute 2017 Page 2 of 13 ENV-2017-19 ED_001598_00026508 sector hinged on different understanding and interpretations of the NSR rules. A more straight-forward program would be beneficial to all parties. NSR Reform History and Related Actions Practically, there are three mechanisms available to streamline the NSR rules and to provide clarity: 1. EPA can issue guidance memoranda and policy updates that have substantial impacts on the actual implementation of the rules either negatively or positively. Some policy documents add clarity to the process while others add administrative burden and complexity. These memoranda and guidance documents do not have equal standing to the actual regulations and are subject to judicial challenge but they often result in almost immediate changes to the rules. The downside to the policy approach is that policy can be changed by new policy. An example of this process is the "Wehrum Memo" 3 where the EPA, under the Bush administration, attempted to clarify the source definition for oil and gas fields. The then Acting Assistant Administrator for Air issued the Wehrum memo to clarify how EPA would address oil and gas fields. But when the Administration changed, the new Assistant Administrator reversed field 4 and walked back the Wehrum memo, which resulted in confusion that ultimately was resolved with a rulemaking (which, ironically, largely adopted the Wehrum memo approach). There are other policy and guidance issues that are nowhere near as well known as the Wehrum memorandum that can ease the burden associated with NSR permitting. A recent example is the revised Guideline on Air Quality Models5 which contains several enhancements to guidance that can potentially offer relief to historically challenging and burdensome elements associated with PSD air quality modeling analyses. Among other enhancements, the revised guideline suggests that nearby sources to include in a PSD modeling analysis do not necessarily have to extend to over 50 km from the project site, which differs from the prescriptive approach described in the Draft 1990 New Source Review Workshop Manual. Additionally, the guidance now allows for consideration of actual emissions when doing a cumulative (multi-source) analysis, compared to Memorandum from William L. Wehrum, Acting Assistant Administrator, Office of Air and Radiation, to Regional Administrators 1-X, Source Determinations for Oil and Gas Industries, January 12, 2007. 4 Memorandum from Gina McCarthy, Assistant Administrator, Office of Air and Radiation, to Regional Administrators 1-X, Withdrawal of Source Determinations for Oil and Gas Industries 5 40 CFR 51 "Revisions to the Guideline on Air Quality Models: Enhancements to the AERMOD Dispersion Modeling System and Incorporation of Approaches To Address Ozone and Fine Particulate Matter", Federal ResisterNol. 82, No. 10/ January 17, 2017 3 Page 3 of 13 ENV-2017-19 ED_001598_00026508 previous guidance that required the use of potential-to-emit emissions for background sources which is a substantial and important improvement. The revised guideline also includes an option to utilize meteorological data derived from prognostic meteorological models in situations where representative meteorological data are not readily available. This should substantially reduce the need for in-the-field meteorological stations and already has streamlined the NSR process in some real examples. 2. EPA can promulgate changes to the existing NSR rules through a typical rulemaking process requiring the development of a proposed rule package, consideration of public comments and ultimately promulgation of revisions to the PSD rules. This is a time consuming process and requires substantial dedication of time and resources (as is the situation with any complex rule) and often leads to litigation. The last significant effort to accomplish a regulatory update of the NSR rules were the reforms promulgated in December 31, 2002. As discussed below, several of the changes EPA attempted to implement were successful while others ultimately were either abandoned or revoked. The industry should look to this history to better understand how to support successful updates to the NSR program that aim to address the lack of certainty and unpredictable permitting cycle time associated with the existing program. These issues are addressed in the next section of this paper. 3. Some changes to the NSR program can only be accomplished by amending the underlying Clean Air Act (CAA). Of course, any changes to the statute would require congressional action. For example, EPA does not have the authority to remove petroleum refineries from the list of 28 source categories subject to NSR when the potential to emit of a regulated pollutant equals at least 100 tpy as that requirement is part of the CAA. Only Congress can do this. Changes that AFPM suggested in their comments to EPA about this subject potentially could be accomplished through any of these three categories. AFPM made the following recommendations to EPA with respect to the NSR Program: 1. Eliminate the need to consider emissions increases from non-modified affected emission units. This could be accomplished initially by policy and then by regulation. Note that EPA attempted this in the 2002 Reforms and this issue is addressed in a later section of the paper. 2. Allow project netting so that emissions reductions associated with a project can be considered in Step 1 of the PSD /NNSR applicability Page 4 of 13 ENV-2017-19 ED_001598_00026508 analysis. This was once EPA policy and was an accepted approach. The 2006 proposed revisions to the NSR regulations included preamble language that appears to clearly allow project netting in some situations: "U::e of tte phra!:B 'sum of tte differenre' bet1111€en projected and baseline emissions indicates that one must look at the difference between the projection and the baseline. That difference may either be a positive number (representing a projected increase) or a negative number (representing a projected decrease). In either case, the values must be taken into consideration in determining the overall incl'ef:J!:B, or OOCl'el::fB, in emissions resulting from tte project. "6 Project netting should be restored for all purposes. This could most easily be accomplished by finalizing the still-pending 2006 proposal. 3. Use a "potential to potential" comparison of emissions to determine whether PSD /NNSR is triggered. Use of this test to trigger PSD would have to be squared with DC Circuit precedent holding that actual emissions must be used to determine whether a project results in a significant net emissions increase. At a minimum, regulatory language would be required as the existing rules do not accommodate this approach. This would likely be a contentious change to the regulations and would be litigated for certain. 4. Provide a definition of "project" to address uncertainty around project aggregation. EPA's existing policies addressing the "project" definition are confusing and adoption of a definition would certainly address this issue. It should be noted however that the Agency promulgated a Project Aggregation rule in January 20097 with no changes to the existing NSR rule text, so the preamble language provides EPA's most current interpretation or policy on aggregating projects. Under the subsequent Administration, EPA stayed the effectiveness of this rule and indicated that it planned to rescind the rule. This was never accomplished. Guidance published by EPA since staying the effectiveness of the rule leans on more restrictive prior guidance memoranda. There is nothing preventing EPA from removing the stay and allowing the 2009 rule to take effect although NRDC would object. This would provide some immediate certainty to the permitting process. The ENGO's still-pending challenge to the rule likely would go forward at that point. 6 7 71 FR 54235 74 FR2376 Page 5 of 13 ENV-2017-19 ED_001598_00026508 The 2002 and 2003 NSR Reforms and Lessons Learned In 1996, USEPA embarked upon a program to simplify the NSR program. The Agency proposed a series of changes to the PSD and non-attainment NSR rules that were intended to add clarity to the program applicability requirements. EPA also hoped to revise or eliminate program elements that created barriers to innovation, reliability, and efficiency without providing any real environmental benefit. These changes are commonly known as" NSR Reform." Table 1 provides a snapshot of the current status of the NSR Reforms of most importance to the petroleum industry that USEPA attempted to finalize in 2002 and 2003 in summary form as well as some important later efforts. Table 1 - NSR Reform Scorecard In Effect 10 yr. Baseline Emissions !Look back k\ctual to Future Actual Methodology k\ctual Plantwide k\_pplicability Limits (P ALs) tlean Unit Test !Pollution Control Project !Exclusion !Flexible Permitting and NSR Green Groups IRMRR Bright-Line Test Abandoned, Stayed or Revoked Comment V V V V V V V !Project Aggregation Rule V Source Aggregation Policy V !Reasonable Possibility Rule V !Fugitive Emissions Rule V There are many interesting history lessons to be learned from the 2002/ 2003 NSR Reform experience. Three of the most interesting issues that impact the refining and petrochemical sector include the: • Actual to Future Actual Methodology (ATFA) Page 6 of 13 ENV-2017-19 ED_001598_00026508 • Project Aggregation Rule • Clean Unit/PCP Revocation There are different lessons from each that should be remembered as efforts are aimed at updating the rule in the current years. Use of the Actual to Future Actual Methodology The use of the 10-year baseline and actual to future actual methodology (ATFA) to determine emissions increases can be enormously beneficial. Proper application of these elements of the NSR program allows the regulatory agency and the emissions source to focus time on those projects that result in real increases in air pollution. However, time has shown that what should be a relatively straight-forward determination is not in fact so straight-forward. There is a long running dispute between EPA and DTE Energy Company that is informative. The issue at the center of the DTE controversy involves the proper application of the ATFA method of determining emissions increases promulgated as part of the 2002 NSR reform rules. This is the first case addressing the revised applicability provisions of the reform rules. The facts of the case are relatively straight-forward. DTE undertook a project at the Monroe Station in 2010 to replace various boiler tube components. As required, the company provided notice to the Michigan permitting authority of the planned projects along with emissions projections that showed no significant emissions increase or applicability of the NSR rules. The permitting authority did not question the emissions projections. In 2010, the Department of Justice filed a complaint against Detroit Edison alleging violations of Michigan's NSR rules related to certain maintenance projects. Essentially, EPA did not agree with DTE's emissions projections and even though post change actual emissions have, in-fact, been lower than baseline emissions, EPA's position has been that it nevertheless may second-guess the company's projection. The enforcement action against Detroit Edison's Monroe station is the first post NSR Reform dispute on this topic. DTE in the protracted litigation claimed that actual emissions after the upgrades showed NSR should not have been triggered and that EPA does not have authority under the 2002 rules to second guess DTE's projection. The district court agreed. The 6th Circuit in the first appeal of the suit in 2013, known as DTEl, reversed the district court, but only on the narrow grounds that EPA should be able to challenge a pre-project emissions projection that does not facially conform to the rule. On remand, the U.S. District Court for the Eastern Page 7 of 13 ENV-2017-19 ED_001598_00026508 District of Michigan again found in favor of DTE, finding no facial flaw in DTE's projections -- only to be reversed again in the Jan. 10 ruling known as DTE2. This is a fractured decision that overturned the district court, but provided no clarity on the law because the three judges issues three separate, and disparate, opinions. DTE is currently seeking review of DTE2. The lesson here is that even though a regulatory change is indeed promulgated as the ATPA reforms were promulgated in 2002, explicit regulatory language or detailed preamble guidance is necessary to ensure proper interpretation of the rule language. Project Aggregation Rule As noted previously, EPA addressed the Project Aggregation issue in a 2006 proposed rule and a 2009 final rulemaking8• Under this rule, sources and permitting authorities should combine emissions only when nominally separate changes are "substantially related." Further, two nominally-separate changes are not substantially related if they are only related to the extent that they both support the plant's overall basic purpose. This rule adopted a rebuttable presumption that nominally-separate changes at a source that occur three or more years apart are presumed to not be substantially related. EPA has stayed the effective date of that final rule due to a petition for reconsideration and EPA continues to follow its historic approach to aggregation. 9 Removing the stay would resolve many of the issues refiners face and could provide the improved certainty that would benefit refiners. This may be a path to avoid a new rulemaking process. The new Administration would need to resolve the NRDC petition for reconsideration and pending judicial challenge in this event. Clean Unit Test/Pollution Control Project Exclusion Revocation The2002/2003 NSR Reform rules included the introduction of a new "Clean Unit" Test exempting certain emissions units that meet emission limitations by installing stringent air pollution controls from NSR, and an expansion upon the pollution control project NSR exemption initially promulgated on July 21, 1992 (57 FR 32314). The United States Court of Appeals for the District of Columbia vacated both the Clean Unit Test and pollution control project exemption in an opinion issued on June 24, 2005. The court's basis for vacating these two 8 9 71 Fed. Reg. 54235 (Sept. 14, 2006) (proposed rule); 74 Fed. Reg. 2376 (Jan. 15, 2009) (final rule). 72 Fed. Reg. 19567 (April 5, 2010). Page 8 of 13 ENV-2017-19 ED_001598_00026508 exemptions from the NSR program is that actual emissions must be used in determining whether a project results in a significant net emissions increase. This decision should inform the viability of certain changes to the NSR rules. Notably suggested updates to the rules that could be viewed to allow increases in actual emissions without requiring preconstruction review may require amendments to the underlying Clean Air Act. Some parties, for example, might argue that a potential to potential emissions test to determine NSR applicability would result in allowing increases in actual emissions and, thus, such an applicability test might run counter to DC Circuit precedent. Other Rule Changes Being Suggested to EPA EPA's regulatory reform docket (No. EPA-HQ-OA-2017-0190) currently contains approximately 63,500 comments providing input to EPA on the topic of regulatory reform. Suggestions to improve the NSR permitting program are prominently featured in the docket along with some very damning comments such as: • • • New Source Review (NSR) is the CAA's most broken program "NSR imposes the most burden on NEDA/CAPs members speaking about all EPA regulations" "As a group, the multiple conservative and burdensome set of air quality regulations surrounding NSR permitting are a deterrent to manufacturing • facility modifications and expansions" The American Fuel & Petrochemical Manufacturers (AFPM) said that NSR reform was the one change they would make, if it could, to the federal permitting process • "The NSR program has become a significant impediment to the construction and expansion of manufacturing facilities in the United States" These comments fall in broad categories and included many recommendations to improve the NSR permitting program. Most of the comments can be parsed into one of four categories: 1. 2. 3. 4. Changes that will streamline the permitting process and certainty Changes to the applicability determination Changes to the BACT determination Changes to Ambient Impact Analysis Page 9 of 13 ENV-2017-19 ED_001598_00026508 Based on the lessons learned from the 2002/2003 reform efforts, it is possible to understand which of the recommendations can be accomplished by policy and could occur in the relatively short-term future, which require regulatory updates and thus are probably five or more years off before being implemented, and which might require amendments to the Clean Air Act, which are unpredictable but will also include follow-on regulations and thus have the longest time frame to implementation. Recommendations Regarding Streamlining and Certainty • Redefine State vs. EPA Role defaulting to state leadership and avoiding EPA second-guessing-This can be accomplished by policy and is consistent with tte current Administration's approach • Rethink "Begin Actual Construction" allowing some construction at riskIt should be possible to accomplish this by policy. Some State SIP approved NSR programs actually use this approach • Reduce the need to rely upon a library of more than 700 guidance documents -Reliance on guidance can be reduced, but there will still be a need and a role for guidance. • Update guidance documents and put into an easy to understand form - This should happen. There is no reason that the guidance library is not better maintained. • Update and codify the 1990 draft New Source Review Workshop Manual- The Manual should be updated. The Air & Waste Management Association, in fact, has just released an update to fill the vacuum created by EPA. It is disappointing that such an important guidance manual has not been updated in 27 years. Codifying the Manual would require rulemaking and is not likely to occur in the near term. • Add rigor to the "completeness determination" -This can be accomplished by policy • Define RMMR - e.g. as a percentage of new unit cost - The author agrees that the RMMR definition needs improvement. Use of this metric, i.e. percentage of new unit cost did not survive the prior effort to streamline the NSR rules. Some people view such an approach as inconsistent with the CAA and thus this approach might require revisions to the CAA. This is not to say that the existing definition of RMRR could not be updated by policy. Recommendations Regarding Applicability Page 10 of 13 ENV-2017-19 ED_001598_00026508 • Use the NSPS hourly emissions applicability test for the NSR trigger or use the hourly emissions to trigger the significant emissions increase test - this approach is very similar to a potential to potential emissions test and faces the challenges previously discussed. It may require an update to the CAA. • Provide a definition of "project" to address uncertainty around project aggregation - See the prior discussion. A rule is ready to be implemented • Reinstate the Pollution Control Policy - see the prior discussion but this would appear to require an update to the CAA. • Eliminate the need to consider emissions increases from non-modified affected emission units - this is an approach to resolving the debottlenecking challenge and could potentially be resolved through policy or rulemaking. • Allow Project Netting - see prior discussion. This was the policy once and could easily be implemented by finalizing the pending proposal. • Develop source-specific major modification definitions for the 28 source categories akin to Permits by Rule - this would require rule revisions and thus is a longer term change BACT/LAER Recommendations • Rethink BACT Process: Top-Down is 30 years old - The BACT Process is policy so this can be accomplished as a policy update or by rule. • Expand the economic analysis to include job losses and other costs - This is a policy decision • Reconsider Clean Unit Exemption - See prior discussion as this might require an amendment to the CAA • Rethink SERs - for example, GHGs might be 250,000 tpy - this would require rulemaking. EPA 'spending proposal for GHGs oould te finalized relatively quickly. For other pollutants, it is not a short-term effort. • Make clear that CCS is not BACT for refineries - EPA could issue a policy document on this topic. Page 11 of 13 ENV-2017-19 ED_001598_00026508 • Use NSPS and MACT as presumptive BACT - This might require an update to the CAA as BACT is a defined CAA term. • Submit the Top-Down BACT process to review and comment -In essence this means codifying the Top-Down BACTprocess and would require rulemaking. Although this could be accomplished over time the benefits might be elusive. • Issue consistent cost guidance - This does not require rulemaking by definition • Rethink LAER using Offsets as a backstop - this might require changes to the CAA as LAER is a defined term in the Act. Ambient Impact Analysis and Related Issues Including Emissions Offsets • Addressing Dispersion Model Conservatism & Worst-Cast assumptions- Policy can be used to address such issues as emissions variability, meteorology variability, and background concentration variability among other issues. • Address the use of Ambient Monitoring vs Dispersion Modeling results where current policy defaults to model results -policy updates can make a significant difference. • Rethink role of EPA and Model Clearinghouse - a collaborative state approach could resolve bottlenecks created by the Model Clearinghouse. • Availability (or Unavailability) of Emissions Offsets especially in Areas of the Country where Emissions Offsets are Constrained such as the Northeast, California and Rural communities that have no significant industry but are Ozone or PM2.s Non-attainment areas - regulatory changes could be used to secure some relief These include expanding areas where offsets may originate, expanding the contemporaneous time period, and lifting certain restrictions on generating offsets at minor sources. Conclusions There are many opportunities to improve the NSR permitting program. The lowest hanging fruit are those changes and improvements that can be accomplished by policy or regulations that are ready now to be promulgated. For the refining sector, many of the most important suggested improvements can be accomplished by such updates including better definition of the Project, use of Project netting and the need to consider emissions increases from units that are unchanged. Some changes, however, require rule revision or Page 12 of 13 ENV-2017-19 ED_001598_00026508 statute rev1s1on. These are not likely to occur in the short-term and should be addressed as part of a longer term look at regulatory reform. Regulatory changes do happen. The 2002 Reforms prove the benefit of updating the regulation but the time to make such changes is measured in more than a few years or a decade. The best approach is to understand which updates can be accomplished by policy and which deserve more attention through a more intensive effort. Page 13 of 13 ENV-2017-19 ED_001598_00026508 To: From: Sent: Subject: Jackson, RyanUackson.ryan@epa.gov]; Lyons, Troy[lyons.troy@epa.gov] Wehrum, William L. Fri 11/3/2017 3:34:16 AM Fwd: 15-1487 Sierra Club, et al v. EPA, et al "Arguing Attorney Form" (EPA-80FR65470) Rest assured ... Begin forwarded message: From: > Date: November 2, 2017 at 6:38:02 PM EDT To: > Subject: 15-1487 Sierra Club, et al v. EPA, et al "Arguing Attorney Form" (EPA-80FR65470) ***NOTE TO PUBLIC ACCESS USERS*** Judicial Conference of the United States policy permits attorneys of record and parties in a case (including prose litigants) to receive one free electronic copy of all documents filed electronically, if receipt is required by law or directed by the filer. PACER access fees apply to all other users. To avoid later charges, download a copy of each document during this first viewing. United States Court of Appeals for District of Columbia Circuit Notice of Docket Activity The following transaction was entered on 11/02/2017 at 6:38:02 PM EDT and filed on 11/02/2017 Case Name: Sierra Club, et al v. EPA, et al Case Number: 15-1487 Document(s): Document(s) Docket Text: FORM 72 submitted by arguing attorney, Felicia Barnes, on behalf of Intervenor for Respondent Brick Industry Association in 15-1487, Petitioner Brick Industry Association in 15-1492 (For Internal Use Only: Form is restricted to protect counsel's personal contact information). [15-1487, 15-1492, 15-1493, 151496, 16-1179] (Barnes, Felicia) Notice will be electronically mailed to: Mr. Roger Joseph Marzulla: roger@marzulla.com, nancie@marzulla.com, filings@marzulla.com, Annette@marzulla.com Mr. Charles Murray Denton, II: cdenton@btlaw.com, nholzgen@btlaw.com, kgaldys@btlaw.com 17cv1906 Sierra Club v. EPA ED_001523_00000461-00001 Mr. Howard Larry Gilberg: gilberg@gsfpc.com, maturey@gsfpc.com Todd Palmer, Attorney: tepalmer@michaelbest.com William L. Wehrum, Jr.: wwehrum@hunton.com, caapleadings@hu nton .com, sfisher@hunton.com, jacksonp@hunton.com James Samuel Pew: jpew@earthjustice.org, lfuhrmann@earthjustice.org, alin@earthjustice.org, rwinz@earthjustice.org Mr. Jeffrey Stewart Longsworth, Attorney: jlongsworth@btlaw.com Mrs. Valerie Layne Green, Attorney: vlgreen@michaelbest.com Felicia Hope Barnes: fbarnes@hunton.com, caapleadings@hunton.com, jacksonp@hunton.com Kate Rochelle Bowers, Attorney: kate.bowers@usdoj.gov, efile_eds.enrd@usdoj.gov Ms. Jean Mclemore Flores, Litigation Counsel: flores@gsfpc.com, maturey@gsfpc.com Sonya Shea: sonya.shea@usdoj.gov, EFILE_EDS.ENRD@USDOJ.GOV Document to be served by alternative means on: Mr. Cameron F. Field Michael, Best & Friedrich One South Pickney Street PO Box 1806 Madison, WI 53701-1806 The following document(s) are associated with this transaction: Document Description: Arguing Attorney Form with Addendum Original Filename: 2017-11-02 - Form 72 - F. Barnes - Petitioner and Intervenor - with Addendum.pdf Electronic Document Stamp: [STAMP acecfStamp_ID= 1109186823 [Date= 11/02/2017] [Fi leN umber=1702858-0] [491cb171 ace5f3895418fab52b20b23d3944a8640f83a4250b 7f4 7213eccde60ac46457922c837fb30bfc0b 7fbb5d86abcbfed89625c1628fea90bcb043164 7a]] 17cv1906 Sierra Club v. EPA ED_001523_00000461-00002 To: Harlow, From: Dominguez, Alexander Sent: Fri 10/6/2037 2:26:09 PM Subject: Fwd: NSR Policy Memo UGO NSR DTE issue oetions analysis ?20?4 am draftdoex .ntm NSR oolicv memo draft iO~447P8Lrevdoex Sent from my iPhone Begin forwarded message: From: "Lewis, osh" Date: October 5, 2017 at 12:42:01 PM EDT To: "Gueasekara, Mandy" @eoa.eov> Cc: ?Dominguez, Alexander" "Dunham, Sarah" ; Palich, Christian ; Bowman, Liz ; Gunasekara, Mandy ; Harlow, David ; Dominguez, Alexander ; Brown, Byron ; Frye, Tony (Robert) Cc: Wehrum, William L.; Ford, Hayley ; Munoz, Charles Subject: W ehrum Importance: High Voting now to end debate. Troy M. Lyons Associate Administrator Office of Congressional & Intergovernmental Relations U.S. Environmental Protection Agency 202-309-2490 (cell) 17cv1906 Sierra Club v. EPA ED_001523A_00000088-00001 FYI, the Administrator is flying in Monday morning. Do you want him present for this I believe? If so, can we do 1:45PM or so? If he doesn't need to be here, we can do first thing Monday morning, but I think you want him here. Hayley Ford Deputy White House Liaison and Personal Aide to the Administrator Environmental Protection Agency ford.ha le @cpa.go_y Phone:202-564-2022 Cell: 202-306-1296 From: Jackson, Ryan Sent: Wednesday, November 8, 2017 2:05 PM To: Lyons, Troy ; Ford, Hayley ; Bowman, Liz Cc: Wehrum, William L.; Gunasekara, Mandy ; Harlow, David ; Dominguez, Alexander ; Bowman, Liz ; Brown, Byron ; Vizian, Donna Subject: Re: Timing on Bill Wehrum All, Bill will arrive Monday for the swearing in. Hayley, we'd like to do it in the Administrator's office. Very short swearing in with Bill's immediate family. Liz, we'll take some shots with the official photographer. We won't need the green room. We'll all be set. Mandy and company can then escort him to the 5th floor. Donna, can we get Bill's computer and accounts set up for his arrival Monday? Thanks all. Ryan Jackson Chief of Staff U.S. EPA 17cv1906 Sierra Club v. EPA ED_001523A_00000028-00003 To: Jackson, Ryan jackson.ryan@epa.gov] Cc: Gunasekara, Mandy[Gunasekara.Mandy@epa.gov]; Palich, Christian[palich.christian@epa.gov]; Dominguez, Alexander[dominguez.alexander@epa.gov); Harlow, David[harlow.david@epa.gov]; Ford, Hayley[ford.hayley@epa.gov]; Munoz, Charles[munoz.charles@epa.gov}; Bowman, Liz[Bowman.Liz@epa.gov]; Wehrum, William L.[wwehrum@hunton.com] From: Lyons, Troy Sent: Thur 11/9/2017 5:00:24 PM Subject: RE: Vote NOW on Bill Wehrum CONFIRMED 49-47 From: Jackson, Ryan Sent: Thursday, November 9, 2017 11:41 AM To: Lyons, Troy Ce: Gunasekara, Mandy ; Palich, Christian ; Dominguez, Alexander ; Harlow, David ; Ford, Hayley ; Munoz, Charles ; Bowman, Liz ; Wehrum, William L. Subject: Re: Vote NOW on Bill Wehrum Dang. I can't watch cspanlive. Hugecongratulations. I can't imagine whatit's like to watch your confirmation. It was an incredible high walking off the floor after the final vote of a bill or amendment I got to work on. I miss the red benches. Ryan Jackson Chief of Staff ! Ex. 6 - Personal Privacy ! Leese tere neces rere 17cv1906 Sierra Club v. EPA - ED_001523A_00000319-00001 On Nov9, 2017, at 11:22 AM, Lyons, Troy wrote: 15 minute vote Troy M. Lyons Associate Administrator Office of Congressional & Intergovernmental Relations U.S. Environmental Protection Agency 202-309-2490 (cell) 17cv1906 Sierra Club v. EPA ED_001523A_00000319-00002 Senate Confirms William Wehrum to Lead EPA Air Office U.S. EPA News Releases US EPA An official website of the United States government. We've made some changes to EPA.gov. If the information you are looking for is not here, you may be able to find it on the EPA Web Archive or the January 19, 2017 Web Snapshot. United States Environmental Protection Agency Close Close Menu Search EPA.gov News Releases CONTACT US SHARE News Releases from Headquarters › Air and Radiation (OAR) Senate Confrms William Wehrum to Lead EPA Air Offce 11/09/2017 Contact Information:  (press@epa.gov) WASHINGTON (November 9, 2017) – Today, U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt praised the U.S. Senate vote to confirm William (Bill) Wehrum to serve as the Assistant Administrator for EPA’s Office of Air and Radiation.  “I want to thank Leader McConnell and Chairman Barrasso for their continued partnership and outstanding leadership with getting Bill confirmed to such an important role at the agency.  Bill Wehrum has a long history of public service, including over 30 years working in the environmental field.  I look forward to him joining EPA to help us implement our positive environmental agenda and administer programs that ensure that Americans have access to clean air,” said EPA Administrator https://www.epa.gov/newsreleases/senate-confirms-william-wehrum-lead-epa-air-office[4/11/2018 1:42:02 PM] Senate Confirms William Wehrum to Lead EPA Air Office U.S. EPA News Releases US EPA Scott Pruitt. On October 25, 2017, the U.S. Senate Committee on Environment and Public Works, led by U.S. Senator John Barrasso (R-WY) advanced William Wehrum’s nomination out of committee. Contact Us to ask a question, provide feedback, or report a problem. Discover. Connect. Ask. Accessibility Data.gov Contact Us EPA Administrator Inspector General Hotlines Budget & Performance Jobs FOIA Requests Contracting Newsroom Frequent Questions Grants Open Government January 19, 2017 Web Snapshot Regulations.gov No FEAR Act Data Privacy Privacy and Security Notice Subscribe USA.gov Follow. White House https://www.epa.gov/newsreleases/senate-confirms-william-wehrum-lead-epa-air-office[4/11/2018 1:42:02 PM] LAST UPDATED ON NOVEMBER 9, 2017 EPA-HQ-20 18-005078 To: Cc: From: Sent: Subject: Wehrum, William[wehrum.william@epa.gov] wwehrum@hunton .com[wwehrum@hunton .com] Dourson, Michael Mon 11/13/2017 8:31:35 PM Fwd: Welcoming Bill Wehrum as the Assistant Administrator for the Office of Air and Radiation Bill Congratulations! Michael Sent from my iPad Begin forwarded message: From: Message from the Chief of Staff Colleagues, I am pleased to announce that last Thursday the U.S. Senate confirmed Bill Wehrum to serve as the Assistant Administrator for EPA's Office of Air and Radiation, and he was sworn in today. Please join me in welcoming him to EPA. Bill has a long history of public service and his career includes over 31 years working in the environmental field through engineering, legal practice, and administrative duties. He previously served as EPA's Acting Assistant Administrator for Air and Radiation from 2005 to 2007 and also as EPA's Principal Deputy Assistant Administrator and counsel to the Assistant Administrator for Air and Radiation. He most recently worked as a partner and head of the Administrative Law Group at Hunton & Williams LLP, where his practice focused on air quality issues. Bill comes to the agency with years of institutional knowledge that will help guide him through administering air quality issues for all Americans, and his experience will be vital to the agency's mission ED_001717 _00003735-00001 EPA-HQ-20 18-005078 to bring about regulatory reforms. I would like to give a special thanks to Sarah Dunham, who has served as Acting Administrator for the Office of Air and Radiation. Ryan Jackson, Chief of Staff ED_001717 _00003735-00002 so . =3 . isms ETHICS PLEDGE As a condition. and in consideration. of my employment in the United States (iovemment in an appointee position invested with the public trust. I commit myselt'to the following obligations. which I understand are binding on me and are enforceable under law: I. I will not. within 5 years after the termination ot'my employment as an appointee in any executive agency in which I am appointed to serve. engage in lobbying activities with respect to that agency. 2. if. upon my departure from the Government. I am covered by the post-employment restrictions on communicating with employees of my former executive agency set forth in section 207(c) of title l8. United States Code. i agree that I will abide by those restrictions. 3. In addition to abiding by the limitations of paragraphs and 2. I also agree. upon leaving Government service. not to engage in lobbying activities with respect to any covered executive branch official or non-career Senior Executive Service appointee for the remainder ofthe Administration. 4. will not. at any time after the tennination of my employment in the United States Government. engage in any activity on behall'ol?any foreign government or foreign political party which. were it undertaken on January 20. 20 I 7. would require me to register under the Foreign Agents Registration Act of [938. as amended. 5. I will not accept gifts from registered lobbyists or lobbying organizations for the duration oi? my service as an appointee. 6. 1 will not for a period of 3 years from the date of my appointment participate in any particular matter involving speci?c parties that is directly and substantially related to my former employer or further clients. including regulations and contracts. 7. If I was a registered lobbyist within the 2 years hel?ore the date of my appointment. in addition to abiding by the limitations of paragraph b. I will not for a period of 2 years after the date of my appointment participate in any particular matter on which I lobbied within the 2 years before the date of my appointment or participate in the speci?c issue area in which that particular matter falls. 8. 1 agree that any hiring or other employment decisions I make will be based on the candidate's quali?cations. competence. and experience. 9. I acknowledge that the Executive Order entitled "Ethics Commitments by Executive Branch Appointees." issued by the President on January 28. 20?, which I have read before signing this document. de?nes certain terms applicable to the foregoing obligations and sets forth the methods for enforcing them. 1 expressly accept the provisions of that Executive Order as a part of this agreement and as binding on me. i understand that the obligations ol'this pledge are in addition to any statutory or other legal restrictions applicable to me by virtue ol?(?iovemment service. MW .201} Signature Date (A) ?Poem {Aldem Print or type your full name (last. ?rst. middle) Show Time As Busy Attendees Name b(6) Administrator Attendance < b(6) Administrator Kelly, Albert Organizer Required Friday, November 17, 2017 Time 11:15 AM – 12:00 PM Subject Speaking Engagement: Federalist Society National Lawyers Convention Location Mayflower Hotel, 1127 Connecticut Ave NW, WDC Attachments EPA Event Request Form.docx Pruitt Invite.pdf (ETHICS) Federalist Convention - Friday, November 17.pdf Reminder 15 minutes Show Time As Busy Attendees Name Attendance b(6) Administrator < b(6) Administrator Organizer Tate Bennett (Bennett.Tate@epa.gov) Required Bowman, Liz Required Hewitt, James Required Sarah Greenwalt (greenwalt.sarah@epa.gov) Required Subject Location Reminder Show Time As HOLD: On the Record Interview Mayflower Hotel 15 minutes Busy Subject Location Reminder Show Time As Attendees Briefing: WOTUS Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Sarah Greenwalt (greenwalt.sarah@epa.gov) Required Forsgren, Lee Required Bodine, Susan Required 127 Subject Location Reminder Show Time As Attendees Briefing: Oil and Gas Proposed Rule Administrator's Office 15 minutes Busy Name b(6) Administrator Subject Location Reminder Show Time As Attendees Attendance < b(6) Administrator Organizer Wehrum, Bill Required Dravis, Samantha Required Schwab, Justin Required Gunasekara, Mandy Required Ryan Jackson (jackson.ryan@epa.gov) Required Briefing: New Source Review Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Wehrum, Bill Required Ryan Jackson (jackson.ryan@epa.gov) Required Dravis, Samantha Required Gunasekara, Mandy Required Lincoln Ferguson (ferguson.lincoln@epa.gov) Required Monday, November 20, 2017 Time Subject Location Reminder Show Time As Attendees 8:30 AM – 9:15 AM Briefing: Worker Protection Rule Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator 128 Organizer USCA Case #17-1088 Document #1705629 Filed: 11/22/2017 Page 1 of 2 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT UTILITY AIR REGULATORY GROUP, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. ) ) ) ) ) ) ) ) ) ) ) ) ) No. 17-1088 NOTICE OF WITHDRAWAL OF COUNSEL Petitioner Utility Air Regulatory Group respectfully withdraws the appearance of William L. Wehrum, Jr., as he is no longer affiliated with Hunton & Williams LLP. Makram B. Jaber will continue to serve as counsel for Utility Air Regulatory Group. Respectfully submitted, /s/ Makram B. Jaber Makram B. Jaber HUNTON & WILLIAMS LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 (202) 955-1500 mjaber@hunton.com Counsel for Petitioner Utility Air Regulatory Group November 22, 2017 USCA Case #17-1088 Document #1705629 Filed: 11/22/2017 Page 2 of 2 CERTIFICATE OF SERVICE I hereby certify that on this 22nd day of November, 2017, a copy of the foregoing document was served on the counsel of record for all parties through the CM/ECF system. /s/ Makram B. Jaber Makram B. Jaber To: Harlow, David[harlow.david@epa.gov]; Dominguez, Alexander[dominguez.alexander@epa.gov] From: Gunasekara, Mandy Sent: Mon 11/27/2017 2:15:43 PM Subject: NSR Reform Memo NSR policy memo draft 10-4-17PSLrev.docx First one attached. Mandy M. Gunasekara Principal Deputy Assistant Administrator Office of Air and Radiation US Environmental Protection Agency ED_001598_00006856 ?3 i ?19 1/ 3'5' ?333,? 3 X. 94w a 3* ?*Wia? M33 {gwmw 332$: HER W??rm ww- W?w with 6% ?2 a??mEWw?m?g mm: ?Mm? $223232: M??f?fm WM ?xM ?mm?w mm ?fa: am; Mariam Gummkam; Man?y; k?wi?; ?mh; Wm, Mikg; amm; Sarah; i?army, Wi?; Kri?igi?? ia?ki?z; V?ttw, {Sm-mfg Ram Raj ??amm Lam; Wamaw; Lang, ?am Internal/Deliberative Draft 7 November 30, 201 7 CAA Permit Streamlining Possibie New Source Review (NSR) and Title Streamlining Actions Actions iisted below were assembled from pubiic comments received on the Department of Commerce?s 2017 solicitation on permit streamlining and reiated executive orders. The timing for individual actions is dependent on availability of staff and contractor resources, and if the action wouid be a guidance document or a rulemaking. Once we receive direction from OAR management, we can better assess timing and resource needs. NSR Actions in Process 1. PM25 and Ozone Guidance 2. MERPs Guidance 3. and Ozone Permit Modeling Guidance 4. GHG Signi?cant Emission Rate Rulemaking Possible NSR Actions (awaiting management direction for which actions to pursue) 1. Pro} ect Netting Guidance/Rulemaking 2. Non-Emitting Construction Activities Guidance 3. Actual-to-Proj ected-Actual Applicability Test Guidance 4. Pro} ect Aggregation Reconsideration 5. Contemporaneous Netting Guidance 6. Guidance for allowing ?exibility in creation and use of emissions offsets 7. Reasonabie Possibility Reconsideration 8. Debottlenecking Rulemaking 9. Fugitive Emissions Reconsideration 10. Ethanoi Production Reconsideration 11. Timely issuance of Permits Best Practices Guidance 12. Best Practices Guidance 13. Routine Maintenance, Repair Repiacement Rulemaking 14. Clearinghouse improvements 15. Poiicy Memo and/ or Rulemaking on considerations for biomass use in air permitting for stationary sources consistent with the goals of HR. 244 Title Actions in Process 1. Limiting re?review of construction permit decisions in title lookback) 2. Deveioping electronic permit submission system 3. Deveioping Flexibie Permitting website to communicate options for streamlining permitting by using PALS and advance approvais) Possible Title Actions (awaiting management direction for which actions to pursue) 1. Deveiop guidance to encourage the use of administrative amendments, minor permit modi?cations and/ or off permit procedures as a method of adding new appiicable requirements . 2. Compiete Title Petitions Process ruiemaking Internal, Deliberative, Privileged Permit Streamlining Activities Brie?ng for Assistant Administrator Bill Wehrum November 30, 2017 Purpose of Brie?ng Provide a high level overview of permit streamlining-related actions and activities since January 2017. Activities include (1) presidential actions regarding permit streamlining; (2) permit ?lean?; and (3) development of an e-permitting database. Obtain feedback/direction on responsive actions to take to simplify and accelerate NSR and title permitting. Timeline: Pursuant to Department of Commerce (DOC) report on permit streamlining and the Executive Order (EO) 13783 Report, an ?action plan? is due from the Regulatory Reform Task Force by December 31, 2017. The ?action plan? should address ll areas of New Source Review permitting and one area for title permitting (involving a statutory change). Presidential Actions on Permit Streamlining January 24, 2017, Presidential Memorandum. Directed DOC to conduct outreach regarding the impact of federal rules on domestic manufacturing and solicit comments to streamline permitting and reduce regulatory burden. Air Permitting Topics Covered. (1) NSR permit processing; (2) NSR applicability; (3) NSR permit development control technology, air quality impacts, emission offsets); (4) state/local relationships cooperative federalism); and (5) title permit processing. Recommended approaches included statutory, regulatory, and other types of changes guidance). Final Report issued by DOC on October 6, 2017. included 3 recommendations: (1) agency action plans due by December 31, 2017 addressing ?priority areas for reform?; (2) establishment of annual regulatory reduction forum; and (3) expand the process model of FAST-41. Priority areas for reform included 11 NSR related areas and 1 (statutory) title area. See CAA-related areas summarized in the attached table along with potentially responsive EPA actions. Final Report on E0 13783 (?Promoting Energy Independence and Economic Growth?) issued on October 25, 2017. This Report called for the establishment of an Task Force? which the Administrator would be announcing in a forthcoming memorandum (not yet issued). EO Comments and NSR Reform Other Title Thoughts Internal, Deliberative, Privileged Permit Lean EPA-wide effort led by Henry Darwin, Asst. Deputy Administrator and Chief of Operations. Approximately 11 areas selected as ?priority areas? including permitting across EPA and all media. This group, called the ?Permitting Area Kaizen? or is comprised of SES level representatives from OAR, Office of Water, and waste office (OLEM). The group is largely comprised of HQ representatives with two from regional water offices (R1 and R6). Initial focus is on EPA issued permits (across all media) and EPA ?touch time? on state/local/tribal issued permits. ?Phase will be to work with state/local/tribal agencies to reduce their permit issuance timelines. Problem statement: EPA and states often take too long to issue federal environmental permits. Stretch Goal: to issue all individual permits in less than 6 months and all general permits are done on time and in less than 12 months by 2022. Next steps involve data collection on EPA issuance of permits to assess current status and identi?cation of permits/permit processes for kaizen events to be led by outside kaizen specialists. First kaizen events are anticipated to begin in January 2018. Development of an E-Permitting Database Development of a national electronic system for EPA to collect and review of state issued title permits. Phase 1: Focus on collecting state-issued permits, centralizing the storage and review of permits, publish permit review status to EPAs public website, receiving and processing applications, handling communications with the source on the application, and posting draft permits. Phase 2: Further development to include operating as a national permits database (public notice, receipt of public comments, development and issuance of the final permits, and storage of permits in a centralized location). Development of a national electronic system for EPA to collect and review state issued NSR permits. Initial effort would focus on a national system for tracking state issued permits, including a control technology information database. This would be followed by a fully integrated e-permitting system for EPA issued permits that would allow applicants to electronically submit permit applications and track permitting milestones public notice, receipt of public comments, development and Internal, Deliberative, Privileged issuance of ?nal permits) and serve to store finai permits in a centralized location. Additional Related Efforts - Developing a Fiexible Permitting Website to encourage the use of streamlined mechanisms (such as PALS) to limit the number of permit revisions. - Participating in E-Enterprise Leadership Council (with ECOS) on air agency-EPA workgroup to identify common metrics by which permit improvements can be measured. The purpose of this group is to make recommendations regarding consistent metrics/measures by which to evaluate success of permit streamlining efforts. 0 Within EPA, OAR is engaged With regional offices and OCFO regarding measures/metrics to assess status and continuous improvement of EPA permitting programs and processes. Internal, Deliberative, Privileged Attachment DOC Report ?Priority Areas for Reform? On October 6, 2017, the Department of Commerce issued a report in response to the January 24, 2017, Presidential Memorandum titled ?Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing?. The DOC Report identi?ed 20 sets of regulations and permitting reform issues as being a top priority for immediate consideration in a section titled ?Recommendations and Priority Areas for Reform?, including seven issues related to Clean Air Act activities. (Note, because some of these issues contain sub-issues, there are a total of 19 Ciean Air Act Table 1 identi?es these 19 issues/sub-issues, along with EPA actions identi?ed in footnotes in the DOC Report and other possible actions suggested by OAR. Table 2 identi?es other issues identi?ed in the DOC Report. NSR Conduct outreach with state/iocal permitting Prevention of Signi?cant Permit authorities regarding best practices, consult Deterioration (PSD) permits: Processi with regionai of?ces about best practices, and La. Enforce the one-year ng develop guidance focusing on timely issuance turnaround time on of permits. Such guidance would likely include permit appiications. checklists, process steps and suggested will coordinate with state timelines, and other tools to promote timeiy and local air agencies, as well as issuance of permits. EPA regional of?ces, to deveiop Guid EPA guidance to Regional Of?ces in reviewing Mid best practices, guidance, or ance and evaluating NSR permit actions and regulatory revisions necessary to programs (or overaii NSR oversight guidance). ensure that NSR permits are issued Guidance would ciarify and limit role in consistent with the 12-month state NSR permit actions timeline described in the CAA. Rule Initiate process for considering how to enforce Long existing statutory/regulatory permit processing timelines (as appiicable to PSD) and/or ruiemaking to establish additional timeline requirements to include NNSR, completeness determination, draft permit issuance/denial timeframe). Lb. Reduce statute of limitations NSR NA EPA is not proposing actions to address the See on challenges or appeals to one Permit statute of limitations issue. Related to the item year. Processi second statement, potential title 2 is pursuing reguiatory ng streamlining actions are outiined below under 2. belo action intended to streamline the Titie process. Congressional action would be required to reduce statute of limitations. 1.c. Allow non-emitting NSR Rule/ After considering whether or not there are Long construction activities to Permit Guid situations in which sources can initiate some pre- commence prior to receiving a Processi ance permit activities, evaluate options to address permit. ng this topic, including initiating ruiemaking would need to review process to clarify and revise de?nition of begin existing regulations and guidance actuai construction and/or issuing guidance to and identify situations for which it identify activities that could occur prior to would be appropriate to provide issuance of an NSR permit under the current additional clarity and/or regulations. opportunities to begin construction I The Timing is described as ?short? (0-6 months); ?mid? (6-12 months); and ?iong (more than 12 months). 4 Internal, Deliberative, Privileged without a PSD permit. 1.d. Consider options to revise the NSR Rule Initiate process for evaluating viability of rule Long de?nition of Routine Maintenance, Appiicab prep. options to exclude certain activities from NSR Repair Replacement (RMRR) to ility work inciuding, but not limited to, provide more RMRR, ef?ciency projects, clean units, and *Legisiation would be required for pollution control projects. a change to the statutory de?nition. Respondents recommended considering potentiai regulatory actions to provide clari?cation and 1.e. Promote and facilitate use of NSR Outre Move forward to develop ?exible air permitting Short ?exibie permitting mechanisms Appiicab ach website and outreach to promote plantwide associated with PSD and Titie ility applicability limits (PALs) and other ?exible air including, but not limited to, plant? permitting approaches. Engage in wide limits (PALs) with state/local and aiternative operating permitting authorities about these permitting scenarios. As part of this, consider ?exibilities. any regulatory or other changes NSR Rule Initiate process for identifying ruiemaking Long guidance) that couid Appiicab options to revise PAL regulations to increase facilitate more widespread use of ility ?exibility. Evaiuate for these ?exible permitting tools. partiai PALs and aiiowabies PALS. could conduct outreach to educate sources and permitting agencies on the bene?ts of ?exible permitting tools and also consider minor changes to PAL provisions to provide more incentives for sources to use PALs. EPA intends to highlight and encourage use of ?exibie air permitting options. 1.f. Consider opportunities to NSR Guid Initiate process to review previously issued Mid streamline NSR applicability Appiicab ance policy statements that have become outdated, determinations and/or to reduce ility raise national consistency concerns, and/or the number of facilities and could be more ?exible under current projects that may be subject to regulations, and consider issuing guidance to NSR through evaiuating and ciarify or present current interpretations. pursuing regulatory and guidance Reievant topics potentially include options for addressing contemporaneous netting, project netting, aggregation, project netting, procedures and excludable debottlenecking, and the emissions, modeling emission rates, and methodology by which pre and aggregation. Identify options for releasing post construction emissions are updated statements on these documents. calculated. NSR Rule Initiate internal discussions and research on Short should review existing Appiicab prep. options for rulemakings described below. regulations and guidance to ility work identify opportunities to address NSR Rule Project Netting. Consider ruie options to Long these issues and provide more Appiicab increase ?exibility regarding step 1 of the NSR through regulatory ility emissions increase test. Consider allowing actions. Litigation is pending over accounting of emission decreases in step 1. 2009 aggregation and NSR Rule Debottlenecking. Consider rule options to Long project netting rule; this litigation Appiicab change the methodoiogy for calcuiating is pending resoiution 0f ility emission increases at unchanged units. Note: reconsideration process. EPA proposed changes in 2006, but then we Internal, Deliberative, Privileged withdrew our proposal. NSR Rule Hourly emissions test. Consider rule options to Long Applicab apply an NSPS applicability test or screen to the ility NSR applicability provisions. NSR Rule Project Aggregation. Consider rule options to Long Applicab clarify the principles and criteria to be ility considered in aggregating nominally separate changes into a ?project? for purposes of NSR applicability. The 2009 aggregation rule remains under reconsideration with stayed litigation. 1.g.lssue guidance on modeling NSR Air NA practice is to provide timely modeling NA concurrent with promulgation of Quality guidance as appropriate concurrent with future revised National Ambient Air Impacts revised NAAQS. There are no forthcoming Quality Standards (NAAQS), to NAAQS revisions to which this action could ensure. timely clari?cation on t? ltxf/ modeling requ1red as part of a . NSR application. has committed to timely issuance of guidance. 1.h. Consider opportunities to NSR Air NA This has been practice since 2012, but is NA "grandfather" NSR applications Quality currently being litigated in the litigation on the following revision of a NAAQS. Impacts 2015 03 NAAQS. EPA will consider *Existing regulations provide grandfathering provisions for any future some opportunities for NAAQS revisions. There are currently no .egrandfathering? NSR proposed applications. could apply {5 t1 $3 Li. Consider opportunities to NSR Guid Con51der options for new guidance Mid emphasize key aspects of the Best Control ance development to emphasize existing ?exibilities Available Control Technology Technolo through examples and highlights of strategies (BACT) analysis including, but gy for streamlining BACT analyses and not limited to, expectations determinations. There may be some regulatory regarding technology options here as well but further research would determinations. be needed to identify those. would need to evaluate what could be provided to streamline BACT determinations. 1.j. Consider opportunities to Nonattai Guid Consider options for new guidance Mid expand the purchasing of offsets nment ance development to increase flexibility on emissions outside of the local areas as well NSR reductions that may qualify for use as offsets as other offset related revisions Emission under NNSR, speci?cally addressing which would provide increased Offsets secondarily formed pollutants and transport flexibility and burden reduction. issues. Title Operating Permits Title NA Section 502 of the CAA limits the period of a NA 2. Extend the term of title Permits title permit to 5 years. Congressional action is permits from 5 to 10 years. 1 4? is completing the petitions rulemaking that will revise part 70 to clarify and streamline the Title Rule Take ?nal action on petitions rulemaking and Mid process by which EPA receives Permits consider whether to include some description of and reviews title petitions, how EPA reviews issues when raised thereby increasing transparency in the context of a title petition. Evaluate and ef?ciency for regulated comments received to identify if additional Internal, Deliberative, Privileged entities and environmental agencies. This action wiil address how EPA intends to review title petitions in an effort to reduce opportunities to raise NSR issues in the context of titie V. poiicy statements couid be added to preambie of the finai rule consistent with recentiy signed orders in two titie petition responses signed in October 2017 (PacifiCorp Hunter and Big River Steei), EPA articuiated a new policy and legai rationaie for iimited NSR lookback in the context of title permit actions and petitions). National Emission Standards for Looking for opportunities to consolidate rules Hazardous Air Pollutants NESHA Rules and to reduce reporting and recordkeeping Mid (NESHAP) burden as are reviewed under court 3.a. EPA shouid increase efforts to Reviews ordered deadlines in 2018, and harmonize consider opportunities to reduce requirements with other rules as appropriate. costs and avoid duplicative requirements in conducting reviews of NESHAP standards. 3.b. EPA should take steps to Working closely with the coatings industry to ensure that any new requirements RTR Rules evaluate strategies to revise and improve Mid considered under Residuai Risk Reviews/ effectiveness of reguiations. and Technoiogy Reviews (RTRs) NSPS would not be redundant or Reviews Reviewing leak detection and repair (LDAR) unreasonably costly. and monitoring, record keeping, and reporting *Under its existing authorities (MRR) requirements and frequency in EPA is taking action to harmonize upcoming NESHAP, NSPS and other speci?c NESHAP and NSPS obligations. ruies as deemed appropriate) to explore opportunities for consolidation and simpli?cation. Startup, Shutdown and Rules Continuing to seek input and evaluate SSM Malfunctions (SSM) NSR, requirements across regulatory program(s). Mid 4. Consider options to provide SIPS, reiief for facilities through NESHA af?rmative defenses or other P, NSPS avenues to account for unforeseeable and uncontroliable emissions during periods of SSM. EPA previousiy adopted an interpretation which exempted SSM periods from the emissions restrictions that appiy under normal operating periods. *Pending litigation. Whether such exemptions and affirmative defenses can be allowed under the CAA is central to the litigation. National Ambient Air Quality NAAQS Guideline on Air Quality Models allows NA Standards (NAAQS) for monitoring in lieu of modeling for situations 5.3. EPA should deveiop options where it has been demonstrated that available that consider ?real world models are inappropriate to characterize measurements? instead of impacts from a modifying source under PSD. models? for PSD We are not aware of any demonstrations under purposes. this provision. In the recent revisions to the ED _001598_00012098 Internal, Deliberative, Privileged is concerned that this Guideline, EPA emphasized the need to rely approach would result in a upon ambient monitoring data to adequately directive that wouid impose represent ?background sources? and in cases greater costs on regulated where nearby sources are modeled to use actual facilities. This issue is similar to emissions rather than allowable emissions/ it? many raised in the f: . i /g suggestion. ,y 5.b. EPA should extend NAAQS NAAQS Rules Section 109 of the CAA requires the EPA NA reviews from 5 to 10 years. Administrator to review, and revise as may be *Altering the NAAQS timeframe appropriate, the national ambient air quality would require congressional standards every ?ve years Congressional gction f} :ction. EPA should con51der is eneded alter thi/r/eme/?gt/ pportunities to ensure that any 25% g; (/92/5 if; forthcoming reviews are not redundant and are completed expeditiously. 5.c. Ozone: deiay impiementation NAAQS Rules In accordance with section 109 of the CAA, on NA of the 70 parts per (ppb) October I, 2015, the EPA Administrator standard or retain the eariier 75 concluded her review of the ozone NAAQS and standard. determined that the 2008 standard should not be retained. The primary and secondary ozone standard leveis were revised to 70 ppb. The indicators (03), forms (fourth-highest daily maximum averaged across three consecutive years) and averaging times (elght hours) were a NSPS Evaluating opportunities and challenges to 6. Consistent with its authorities NSPS TBD consider providing exemptions for related Mid under section 111 of the CAA, activities in NSPS, particularly for the coatings EPA should consider adding industry. exemptions for related activities or otherwise streamline requirements for activities for New Source Performance Standards promulgated under Section 111 of the CAA. is evaluating its authority to exempt related activities under section 111. EPA has routineiy considered adding exemptions for R859 related activities and has added speci?c exemptions in the past. Uni?ed Coatings Ruie EPA is working ciosely with the coatings NA 7. EPA should issue a Uni?ed industry to evaluate strategies to revise and Coatings Ruie (UCR) that facilities could choose to meet (replacing the eight overlapping NSPS and NESHAP regulations that apply to coatings.) *There is ongoing litigation regarding several NESHAP. EPA cannot provide speci?cs. EPA has Internal, Deliberative, Privileged approaches. court ordered options with an UCR to provide ?exibility that encourages facilities to meet the rule by using poliution prevention Table 2. Other Issues Identified in DOC Report, but Not Included in List of ?Priority Areas for Reform? ate? NESHAP -- 2:0 herlssues The NESHAP and NSPS requirements should be consolidated and rationalized the National Association of Manufacturers (NAM) gives a speci?c example of the opportunity to rationalize 8 different regulations for different coating processes). Residual Risk and Technology Reviews lead to additional requirements with no (or limited) environmentai benefit. Once-in-aiways-in policy creates a disincentive for companies to reduce emissions since a major source remains subject to a MACT standard even if the ?facility undertakes pollution prevention or installs control devices to reduce emissions below the major source applicability thresholds.? Length and complexity of the industrial and commerciai boilers/process heaters MACT rulemaking process has created uncertainty for manufacturers. EPA is using enforcement actions to impose iimits beyond what is required in the NSPS. NSR (Overlap, Duplication, and Coordination) Companies are often required to separately report the same information to multiple regulatory of?ces and programs. For example, date on air emissions are typically reported as part of permit compliance reports, to state air emission inventories, and to Toxic Release Inventory program. One association suggested a ?reporting portai? be created by EPA with state/local regulators to allow manufacturers to report information needed by regulatory programs only once. GHG Requirements EPA should prioritize an expedited and judicious review of SER threshoids for GHGs. proposed threshold of 7 5,000 tpy is too low. NAAQS Improve air quality and dispersion models. Some suggestions for improvement include: a. Re?examining assumptions about background concentration levels b. Re-examining the treatment of fugitive emissions c. Use of actual emissions rather than theoreticai or maximum operating rates d. Employing probabilistic models e. Reconsider inappropriate ?ambient air receptor? locations where individuals will not generally be exposed to emissions Re-examine and ciarify how to account for international and long-range transport of ozone, and exceptional events. EPA has a policy which would allow it to ?disregard exceedances ofa NAAQS caused by certain types of exceptional events,? such as stratospheric intrusions. However, in practice it is dif?cult to obtain EPA ?recognition? of exceptional events in an NSR application. Regionai Haze EPA is interfering with the impiementation of the Regional Haze Ruie by implementing restrictions in emissions and emissions from electric generators, and forcing states to impose high cost, low bene?t poliution controis. States are to have the primary roie in determining how best to make emissions reductions and define their own ?glide-path? to achieving the goal. Ru lemaking Process Cost bene?t analysis methods should be re?ned and made more rigorous. Cumulative costs should be rigorously weighed where appropriate. There should be meaningful public engagement prior to issuing signi?cant proposed rules. Regulations should be more sensitive to the impact on small business. Reguiations should oniy be enacted and enforced when there are adequate resources available for review, implementation and oversight. From: Loving, Shanita Lmanm WJC-N 5400 Video with OAQPS 1; EParticipant Code: Emu-Personal Privacy 2 importance Normal Subject: NSR Improvement Start DateJTime: Thur 11J30J2017 4:00:00 PM End DateJTime: Thur 118012017 4:45:00 PM Wehrum Meeting Request NSR Improvementdocx To: Wehrum, Hariow, David; Gunasekara, Mandy; Lewis, Josh; Page, Steve; Koerber, Mike; Harnett, Bill; Wood, Anna; Korny?ak, Vera; Santiago, Juan; Wayland, R?chard; Dunham, Sarah; Harvey, Reid; Krieger, Jackie; Vetter, Cheryi; Rao, Raj Cc: Alston, Lala; Johnson, Yvonnew; Long, Pam From: Loving, Shanita - Location WJC-N 5400 Video with OAQPS ?Ii iParticipant Code: importance: Normal Subject: NSR Improvement Start DateJTime: Fri 12J1J201T 4:30:00 PM End DateiTime: Fri 12J1l20?i?? 5:15:00 PM Wehrum Meetino Request NSR Improvementdoex To: Wehrum, Biil; Hariow, David; Gunasekara, Mandy; Lewis, Josh; Page, Steve; Koerber, Mike; Harnett, Bill; Wood, Anna; Korny?ak, Vera; Santiago, Juan; Wayland, R?chard; Dunham, Sarah; Harvey, Reid; Krieger, Jackie; Vetter, Cheryi; Rao, Raj Cc: Alston, Lala; Johnson, Yvonnew; Long, Pam [3 11:00 AM 12:00 PM 12:00 PM 12:30 PM 12:30 PM 1:15 PM 12:30 PM 1:15 PM 1:00 PM 2:00 PM 1:30 PM 2:00 PM 2:00 PM 3:00 PM 3:00 PM 3:45 PM 3:45 PM - 4:00 PM 4:00 PM 4:45 PM 4:00 PM 5:00 PM 5:00 PM - 6:00 PM After 6:00 PM . WJC-N 5400 Video with OAQPS Participant Code:? Wehrum, Bill 3: 2 5400 Participant Code:- Wehrum, Bill Welsh: Mandy's Office Gunasekara, Mandy El" l'E 2.5. TBD Wehrum, Bill I I . . Administrator's Office Alm Conference Room . . Green Room . 3 i' ll 5400 Video with OAQPS Participant Code:? Wehrum, Bill Free ?AiQLiuquLQdem via video; call-in:- - code:- (no 202) Orme?Zavaleta, Jennifer I . Ill . {2 5400 Video with AA Participant Code:? Wehrum, Bill Free Free Tue, Dec 5 I Before 8:00 AM 8:00 AM - 8:30 AM 8:30 AM 9:00 AM 9:00 AM - 9:30 AM Free Free General Discussion Bill's Office Wehrum, Bill Management Roundtable 5? 9:00 AM 9:30 AM 9:30 AM - 10:30 AM 10:30 AM - 11:15 AM 11:15 AM 12:00 PM 12:00 PM 12:30 PM 12:30 PM 1:00 PM 1:00 PM 1:45 PM 1:45 PM - 2:00 PM 2:00 PM 3:00 PM 3:00 PM 4:00 PM At 4:00 PM 4:00 PM 4:30 PM 4:30 PM 5:00 PM 5:00 PM 5:30 PM 5:30 PM 6:30 PM After 6:30 PM WJC-N 5400 Dia :_ Conference 10:5 - Participant Code:- Wehrum, Bill Briefing: FACAZ RTBT Administrator's Of?ce Free CAA Section 126 Brunner Island Petition WJC-N 5400 Video with OAQPS Participant Code:? Wehrum, Bill 5400 Video with 0174 and RTP 1- - Participant Code:? Wehrum, Bill MW Bill's Office Wehrum, Bill HOLD - Management Time 5400 Vidoe with OAQPS Participant Code:? Wehrum, Bill Free Meeting with AHAM (Confirmed) WJC-N 5400 Participant Code;- Wehrum, Bill Ozone Designation Meeting, Part - Continuation 5400 Video with OAQPS Participant Code:? Wehrum, Bill WAVES submitted by Shanita. Wehrum, Bill from EPA Courtvard to EEOB Silver Dodge Caravan, Tag- Wehrum, Bill Mike: Meeting with EPA EEOB 224 (WAVES link in calendar notes) Delahoyde, Magdelana A. WW Wehrum, Bill General Discussion (Confirmed) WJC-N 5400 Wehrum, Bill Free Gunasekara, Mandy[Gunasekara.Mandy@epa.gov]; Ferguson, Lincoln[ferguson.lincoln@epa.gov]; William L. Wehrum[wwehrum@hunton.com]; Dominguez, Alexander[dominguez.alexander@epa.gov]; Harlow, David[harlow.david@epa.gov] Cc: Ringel, Aaron[ringel.aaron@epa.gov]; Jackson, RyanUackson.ryan@epa.gov] From: Lyons, Troy Sent: Wed 12/6/2017 4:12:26 PM Subject: RE: Methane To: Thank you! -----Original Message----From: Gunasekara, Mandy Sent: Wednesday, December 6, 2017 11 :09 AM To: Ferguson, Lincoln ; Lyons, Troy ; William L. Wehrum ; Dominguez, Alexander ; Harlow, David Cc: Ringel, Aaron ; Jackson, Ryan Subject: RE: Methane Alexis is on it. Will follow-up in a few. -----Original Message----From: Ferguson, Lincoln Sent: Wednesday, December 6, 2017 11 :03 AM To: Lyons, Troy ; William L. Wehrum ; Gunasekara, Mandy ; Dominguez, Alexander ; Harlow, David Cc: Ringel, Aaron ; Jackson, Ryan Subject: RE: Methane Mandy/Bill - if you could update him on this during your briefing this afternoon that should be sufficient. -----Original Message----From: Lyons, Troy Sent: Wednesday, December 6, 2017 10:38 AM To: William L. Wehrum ; Gunasekara, Mandy ; Dominguez, Alexander ; Harlow, David Cc: Ringel, Aaron ; Jackson, Ryan ; Ferguson, Lincoln Subject: Methane The Admin has requested a one pager on methane in prep for tomorrow's hearing. Sent from my iPhone 17cv1906 Sierra Club v. EPA ED _001523A_00000032-00001 William L. Wehrum[wwehrum@hunton.com] Microsoft Outlook Sent: Wed 12/6/2017 4:08:46 PM Subject: Undeliverable: RE: Methane RE: Methane To: From: l~I Your message to wwehrum@hunton.com couldn't be delivered. wwehrum wasn't found at hunton.com. Gunasekara.Mandy Office 365 Action Required wwehrum Recipient Unknown To address How to Fix It The address may be misspelled or may not exist. Try one or more of the following: • Send the message again following these steps: In Outlook, open this non-delivery report (NDR) and choose Send Again from the Report ribbon. In Outlook on the web, select this NOR, then select the link "To send this message again, click here." Then delete and retype the entire recipient address. If prompted with an Auto-Complete List suggestion don't select it. After typing the complete address, click Send. • Contact the recipient (by phone, for exam pie) to check that the address exists and is correct. • The recipient may have set up email forwarding to an incorrect address. Ask them to check that any forwarding they've set up is working correctly. • Clear the recipient Auto-Complete List in Outlook or Outlook on the web by following the steps in this article: Fix email delivery issues for error code 5.1.1 in Office 365, and then send the message again. Retype the entire recipient address before selecting Send. If the problem continues, forward this message to your email admin. If you're an email admin, refer to the More Info for Email Admins section below. Was this helpful? Send feedback to Microsoft. More Info for Email Admins 17cv1906 Sierra Club v. EPA ED_001523A_00000033-00001 [j 4:15 PM 5:00 PM 5:00 PM 6:00 PM After 6:00 PM WJC-N 5400 Participant Code:- Wehrum, Bill ll 'll' . ill: E. ll Wehrum, Bill Free Free Thu, Dec 7 I Before 8:00 AM 8:00 AM - 8:30 AM 8:30 AM 9:00 AM 9:00 AM 9:30 AM 9:30 AM 10:00 AM 10:00 AM 11:00 AM 11:00 AM - 11:05 AM 11:05 AM 11:30 AM 11:30 AM 12:30 PM 12:30 PM 1:00 PM 1:00 PM - 1:15 PM 1:15 PM 2:00 PM 2:00 PM 2:30 PM Free Free Meet with the Ute Tribe (Confirmed) 5400 Mike Koerber by video Wehrum, Bill Management Roundtable WJC-N 5400 Dia :_ Conference lDz? - Participant Code:- Wehrum, Bill from EPA WJC-N Courtvard to Auto Alliance Sgeech Black Chevy Volt, Tag- Wehrum, Bill Auto Alliance Board Speech (Confirmed) Auto Alliance office 803 7th Street, NW Suite 300 (Office is located on the corner of 7th Street and Street NW) Wehrum, Bill Free from Auto Alliance Speech to EPA Black Chevy Volt, Tag- Wehrum, Bill Fuels Weekly 5400 Video with AA Participant Code:? Wehrum, Bill HOLD - Management Time Free Limetree Bav Terminals Refinerv. St. Croix. US. Virgin Islands 5400 Video with OAQPS Participant Code:? Wehrum, Bill General with OGC/Ethics Bill's Office, WJC-N Room 5406A Wehrum, Bill I 2:30 PM Motorpool from EPA WJC-N Courtvard to Hunton Black Chevy Volt, Tag- Wehrum, Bill I 3:00 PM ?4:00 PM Speech at Hunton with American Electric Power. The Southern Company. Duke Energy. Dominion Energy, and the Utility Air Regulatory Group (Confirmed) Hunton Williams Offices, 2200 Avenue NW 9th Floor Wehrum, Bill 4:00 PM 4:05 PM Free I 4:05 PM ?4:30 PM Motorpool from Hunton to EEOB Black Chevy Volt, Tag- Wehrum, Bill I 4:30 PM - 5:00 PM WAVES submitted by Shanita 5:00 PM 6:00 PM NADA Cordell Hull, EEOB 208 (WAVES link and Call-in info located in Calendar notes) Delahoyde, Magdelana A. El After 6:00 PM Free FriBefore 8:00 AM Free [3 8:00 AM - 9:45 AM Free 9:45 AM 10:15 AM Administrator's Of?ce 10:15 AM - 10:20 AM Free I 10:20 AM - 10:30 AM We I 10:30 AM 12:00 PM El 12:00 PM - 12:05 PM I 12:05 PM - 12:30 PM (4 12:30 PM 1:00 PM I 1:00 PM 1:30 PM Black Chevy Volt, Tag- Wehrum, Bill . E'l White House Conference Center (WHCC), 726 Jackson Place, half a block North of the White House Wehrum, Bill Free WM Black Chevy Volt, Tag- Wehrum, Bill l' . 5400 Dial:? Conference ID: - Participant Code:- EPA-HQ-20 18-005078 Atkinson, Emily[Atkinson.Emily@epa.gov] Millett, John[Millett.John@epa.gov]; Deluca, lsabei[Deluca.lsabel@epa.gov]; Loving, Shan ita[Loving. Shan ita@epa .gov] From: Jaber, Makram Sent: Mon 11/27/2017 1:18:20 PM Subject: RE: Invitation to speak To: Cc: Hi Emily, Thank you! Thursday, December 7 at 3:00 pm works for us . We greatly appreciate the AA's willingness to speak to our group. Please find attached the completed event form . Please let me know if you need other infonnation. Best Regards . Makram Jaber From: Atkinson, Emily [mailto:Atkinson.Emily@epa.gov] Sent: Wednesday, November 22, 2017 2:25PM To: Jaber, Makram Cc: Millett, John; Deluca, Isabel; Loving, Shanita Subject: FW: Invitation to speak Hi Makram, Bill Wehrum has reviewed this request and asked that I get in touch with you to make arrangements for him to participate in this event. ED_001717_00000031-00001 EPA-HQ-20 18-005078 It looks like we could fit this in as a one hour speech at the Hunton office on Thursday, December 7 at 3:00pm. I will hold that time on Bill's calendar until I hear back from you, so please advise if this could work on your end. Also, fill out and return the attached event form no later than Friday, December 1. Thank you. Emily Emily Atkinson Management Analyst/Office Manager Immediate Office of the Acting Assistant Administrator Office of Air and Radiation, USEPA Room 54128, 1200 Pennsylvania Avenue NW Washington, DC 20460 Voice: 202-564-1850 Email: atkinson.emily@epa.gov From: Jaber, Makram l!mlli!QJJQlil_~@JMllii!:L..Q<:m!j Sent: Tuesday, November 21,2017 6:21AM To: Wehrum, Bill Subject: Invitation to speak Dear Bill, On behalf of American Electric Power, The Southern Company, Duke Energy, Dominion Energy, and the Utility Air Regulatory Group, I am pleased to invite you to speak to our group regarding air regulations and regulatory outlook. Our meeting is on the afternoon of Thursday, December 7, and the morning of Friday, December 8. We are flexible in terms of what time you ED_001717_00000031-00002 EPA-HQ-20 18-005078 would speak to us within those periods, so we ask you to let us know what time would be best for you. Best Regards, Makram Makram Jaber Partner p 202.955.1567 202.828.3750 Hunton & Williams LLP 2200 Pennsylvania Avenue, NW Washington, DC 20037 This communication is confidential and is intended to be privileged pursuant to applicable law. If the reader of this message is not the intended recipient, please advise by retum email immediately and then delete this message and all copies and backups thereof. ED_001717_00000031-00003 EPA-HQ-20 18-005078 &EPA United States Environmental Protection Agency Clean Air Act: Update on Stationary Source Regulations Presentation for American Electric Power, The Southern Company, Duke Energy, Dominion Energy, and the Utility Air Regulatory Group December 7, 2017 William L. Wehrum Assistant Administrator Office of Air and Radiation ED_001717_00000171-00001 EPA-HQ-20 18-005078 Outline ... Air Quality Trends ... Clean Power Plan ... Mercury and Air Taxies Standards ... NAAQS Implementation Ozone 502 ... Good Neighbor Transport SIPS Ozone NAAQS ... Cross State Air Pollution Rule ... Regional Haze ... Permitting 2 ED_001717_00000171-00002 EPA-HQ-20 18-005078 Air Quality Trends ... Emissions are down as economy grows: Between 1970 and 2016, combined emissions of the six common pollutants (PM2.5 & PM10, S02, NOx, CO, and Pb) dropped by 73% Since 2000, number of days reaching /{Unhealthy for Sensitive Groups" or higher on the Air Quality Index decreased 66% (based on ozone and PM 2.5 measurements in 35 major cities) Since 2010, no violations in NAAQS standards for CO and N02 Visibility in national parks and wilderness areas has improved over the majority of the 155 areas monitored by EPA and other agencies ... Areas for improvement: Levels of ground-level ozone and fine particle pollution have decreased over the years, but continue to pose air quality problems in many areas EPA is continuing to work with partners to ensure healthy air for all communities 3 ED_001717_00000171-00003 EPA-HQ-20 18-005078 GHG Regulations/Clean Power Plan (CPP) .... Executive Order 13783- Promoting Energy Independence and Economic Growth March 28, 2017: Directed the EPA to review the CPP and the Clean Air Act (CAA} section 111(b} GHG NSPS and, if appropriate, to initiate reconsideration proceedings to suspend, revise or rescind the rule(s} .... Proposed CPP repeal On October 16, 2017, EPA proposed that the CPP exceeds the EPA's statutory authority and would be repealed • Public comment period open through January 16, 2018 • November 28-29, 2017: Public hearing in Charleston, West Virginia. More than 200 individuals presented oral testimony .... Advance Notice of Proposed Rulemaking Coming soon-- currently under interagency review Will solicit information on systems of emission reduction that are in accord with the legal interpretation in the proposed CPP repeal (i.e., those that are applicable at and to an individual source). Will also solicit information on compliance measures and state planning requirements .... New Sources EPA continues to review the 111(b} rule, as required under the Executive Order 4 ED_001717_00000171-00004 EPA-HQ-20 18-005078 Mercury and Air Taxies Standards (MATS) ~ Final MATS Rule: in place for affected coal and oil-fired power plants ~ Section 202(c) orders: EPA works with DOE to address any grid reliability concerns ~ Legal Challenges in abeyance Outstanding challenges to final rule include ARRIPA v. EPA (related to waste coal provisions) and Murray Energy v. EPA (related to supplemental Appropriate & Necessary finding). 5 ED_001717_00000171-00005 EPA-HQ-20 18-005078 Ozone NAAQS Implementation ... 2008 Ozone NAAQS Implementation EPA continues to review required SIPs submitted by states and to determine whether nonattainment areas are attaining the 2008 standard by their respective attainment dates ... 2015 Ozone NAAQS Implementation On October 1, 2015, EPA revised the 8-hour primary and secondary NAAQS for ozone by lowering the level from 75 parts per billion (ppb) to 70 ppb. On November 6, 2017, EPA issued final designations of "attainment/unclassifiable" for 85% of the counties in the U.S. EPA is continuing to work with states on the remaining areas and intends to address these areas in a separate future action. 6 ED_001717_00000171-00006 EPA-HQ-20 18-005078 502 NAAQS Implementation Round 3 Proposed Designations sent to states and tribes in August of 2017 ..- Round 3 Final designations to be completed by December 31, 2017 Will designate all areas of the country, except those areas where states have sited new monitors consistent with the 502 Data Requirements Rule ..- Fourth round to be completed by December 31, 2020 Will designate all remaining areas (approx. 50 areas) 7 ED_001717_00000171-00007 EPA-HQ-20 18-005078 Ongoing NAAQS Implementation .,... NAAQS- Consent Decree to finalize review of primary NAAQS for N02 and 502 N02- On July 14, 2017, EPA issued the proposed rule to retain, without revision, the health based or primary NAAQS for N02; final action required April 6, 2018 502- In August, EPA issued the 1st draft Policy Assessment; required to issue finaiiSA in December 2017, proposal May 25, 2018, and final January 28, 2019 PM and Secondary NOx/SOx- Reviews are ongoing. Final actions are projected for 2022. 8 ED_001717_00000171-00008 EPA-HQ-20 18-005078 Cross-State Air Pollution Rule (CSAPR) ~ CSAPR (finalized July 2011) addresses interstate transport obligations for the 1997 ozone NAAQS (and the 1997 and 2006 PM2.s NAAQS) ~ CSAPR Update (finalized September 7, 2016) updates CSAPR ozone season program by addressing summertime transport of ozone for the 2008 ozone NAAQS in the eastern US • Covers 22 eastern states and sets power sector ozone season NOx emission budgets for each covered state starting with the 2017 ozone season (May 1, 2017) • Establishes a new ozone season NOx allowance trading program for CSAPR Update states • Facilitates a smooth transition by creating a starting bank of allowances, converted from 2015-2016 allowances banked under the original CSAPR ozone season NOxtrading program 9 ED_001717_00000171-00009 EPA-HQ-20 18-005078 CSAPR Update (cont.) .,... Emissions impact: Preliminary data indicate that the 2017 ozone season NOx were 21 percent (78,000 tons) below 2016 emissions Collectively, total emissions across the region were 7 percent {23,000 tons) below 2017 CSAPR update budgets. 10 ED_001717_00000171-0001 0 EPA-HQ-20 18-005078 Good Neighbor Transport SIPS Ozone NAAQS ~ 11 Good Neighbor" Provision: Section 110(a)(2)(D)(i)(l) requires upwind states to implement a share of the emission reductions needed for downwind areas to attain and maintain the NAAQS ~ Outstanding good neighbor obligations for the 2008 ozone NAAQS CSAPR Update was a partial remedy for 21 eastern states (full remedy for TN) CSAPR Update Rule did not address 2008 transport obligations for western states To help states develop, supplement or resubmit their good neighbor SIPs for the 2008 standards, EPA signed the 11 Supplemental Transport Memo" on October 27, 2017 11 ED_001717_00000171-00011 EPA-HQ-20 18-005078 Regional Haze Background: The Regional Haze Rule calls for state and federal agencies to work together to improve visibility in 156 national parks and wilderness areas The first State plans for regional haze were due in December 2007. States, tribes, and five multi-jurisdictional regional planning organizations worked together to develop the technical basis for these plans. Comprehensive periodic revisions to these initial plans are currently due in 2021, 2028, and every 10 years thereafter. 12 ED_001717_00000171-00012 EPA-HQ-20 18-005078 Status of Regional Haze SIP and FIP Actions (First Implementation Period, November 2017) Approved {34 plans) Partial disapproval with FIP (12 plans) --· Full FIP (3 plans) r:-::l L_____}j Remaining obligation (3 plans) .... - Virgin Islands e Plans with ongoing litigation 13 ED_001717_00000171-00013 EPA-HQ-20 18-005078 Permit Streamlining Actions for New Source Review (NSR) and Title V Operating Permits ..- Presidential memorandum signed January 24, 2017, titled 11 Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing" Department of Commerce was in the lead and provided an opportunity for public comment on ways to achieve the goals of the memorandum. • The final report was issued on October 6, 2017and actions plans are due December 31, 2017. Included 11 recommendations involving NSR and Title V permitting . 11 ..- Final Report on Review of Agency Actions that Potentially Burden the Safe, Efficient Development of Domestic Energy Resources Under Executive Order 13783," issued on October 25, 2017 Identifies four key initiatives: • • • • Comprehensive new source review reform National ambient air quality standards reform Robust evaluations of the employment effects of EPA regulations A sector-based outreach program 14 ED_001717_00000171-00014 EPA-HQ-20 18-005078 Permitting Actions Underway ... Finalize "Guidance on Significant Impact Levels (Sils) for Ozone and PM2.s in the Prevention of Significant Deterioration (PSD) Permitting Program" Compliance demonstration tool to help determine whether a proposed PSD source causes or contributes to a violation of the NAAQS or PSD increment (draft issued in August 2016 for comment; comments being considered) ... Finalize /(Revisions to the Petition Provisions of the Title V Permitting Program" Increase transparency and stakeholder understanding of the petition process, as well as ensure the Agency is able to efficiently address related programmatic and air quality issues (proposed August 2016; comments being considered) 15 ED_001717_00000171-00015 To: Gunasekara, Cc: Sehwab. Traylon Wehrum. From: Bodine, Susan Sent: Thur 12171201? 5:24:37 PM Subject: RE: NSR Memo At a minimum the ?rst two ofthe three sentences a Ex. 5- Deliberative PrecesslAttorney Client ?Humming . I i Ex. 5 - Deliberative ProceslAttorney Client Privilege From: Bodine, Susan Sent: Thursday, December 7, 2017 12:10 PM To: Gunasekara, Mandy Cc: Wehrum, Bill Schwab, Justin Patrick Traylor (traylor.patrick@epa. gov) Subject: RE: NSR Memo Importance: High Ex. 5 - Deliberative ProceslAttorney Client Privilege From: Gunasekara, Mandy Sent: Thursday, December 7 2017 12:06 PM To: Bodine, Susan Subject: NSR Memo Attacljled *5 ?nal. C?uclmg back 0? th'S: Ex. 5- DeIIberatIve ProceslAttorney Client Privilege nu. 1 1 Ex. 5- DeIIberative ProceslAttorney Client Privilege Principal Deputy Assistant Administrator Office of Air and Radiation US Environmentai Protection Agency To: Gunasekara, Cc: Bodine, Trayior, Burke, From: Schwab, Justin Sent: Thur 12/7/2037 4:59:59 PM Subject: NSR memo--taiking points--attorney-client NSR Memo TPS for aressidocx ATTORNEY CLIENT COMMUNICATIONS ATTORNEY WORK PRODUCT Ex. 5 - Deliberative Work Produc?Attorney Client Privilege Ex. 5 - Deliberative ProcessiAttorney Work Preduc?Attorney Client Privilege To: Gunasekara, Cc: Bodine, Trayior, From: Schwab, Justin Sent: Thur 12/7/2037 4:52:54 PM Subject: NSR memo--general OGC thoughts on legal risk (Expanding on some of the comments on the draft.) Ex. 5 - Deliberative ProcesslAttorney Work ProductiAttorney Client Privilege Ex. 5 - Deliberative ProcessiAttorney Work ProductlAttorney Client Privilege U .$ 0111 ·1. I (j ()\'I.R' \ [FYI' E TI ncs Ccn,ficauon ot F th, c ,\grccmcnt Compliance (Jum 2tJ 17 vcnnn) CERTIFICATION OF ETHICS AGREEMENT COMPLIANCE Senate Confirmed Presidential Appointee 111 a. Appointee's Name: I lt : I• William L. Wehrum lll b. Position Title: bl rn•nJ'k tc·d b) Ol' llllltpk (Ld h) ( )( ; I ' Assistant Administrator for the Office of Air and Radiation rn be n,111pkttd l>y ( I( , I· 1. ppointee's Information c. Agency: U.S . Environmental Protection Agency to d. Date Ethics ,-\greement Signed: b, cc ,mpil-rl'll b, c 1c ; I August28,2017 '" lll e. Date Confirmed: f. Due Date for Certification of thics Agreement Compliance: 2. I completed all of the resignations indicated in ethics agree111ent hefore I assu111ed the duties of11ty current govem1J1ent position. Lt1mplt1C1 l J:-.c ':-- 1,.,tr1plt,~t 1, h.1\ 'l ' :-pt.•ll:-.L':- l 'Ufft.'111 dlLlH. L ll",), d. I receil'ed ti 111aim·pmwanl to 5 C.F. R § 2635.503(c). I QYes ~ o ··-·-········· ···-··............1...... - -·· ... ~-- -- .. --- Date: Former emplO) er or payer: I I • t ,, 1n d1c.H,· rh, dJr\.' 111 rh , \I ~i,t r :m d 1Jt·11u 1·:, rhL (,,1mc•r ,n.pl .. ~t·r,,rp1 )c· r THIS CERTIFICATION WILL BE POSTED FOR PUBLIC VIEWING ON OGE'S WEBSITE. 2 //{(q/(1- ~ U,;;, ()111 I·. OF G O\ l·:Jl, ~11 -' 1 ETIIICC,·ru r.caoon Ethics ,\ cement Compliance Ounc I I 17 1·crs10n) or a. If Tco11111dlled that I /11011/d 8. Payments, Accelerations, or Divestitures Required to be Completed Prior to William L. Wehrum Mark this box-if not jo,jeit t1 fina11dt1! interest or pqyment unless it was received or accelerated prior to JJ(Y assumption rf the dutie.r ~/thego11em111enl position: applicable: Entering D Government Service (/:) 1 receiJ1ed ii (or it 111as accelerated) .P1ior to "!Y ' - am111rption of !he duties of the posilio11. Q J rereil ed ii (or ti J//as accelerated) qf!er "!JI 0 I faifei1ed it. asslf111ptio11 of thr d11lies of the position. b. Financial interest or payment at issue: 1 /Jan compleled ll(Y i11itia/ et/Jic.r b1i(ji.ng, p111wanl lo 5 C.F.R § 2638.305. 9. Requirements for Regular Appointees I Q o I J11}lv,u.. 'Lf\l\·,t11111.r f .'u Q N/A ,,111.11\.'J~I, 11ll11,,~r1111u.1H 1,1 ,,rurLcrf .. rt•i:1 k I'\ \ l have signed !he elhics pledge p11rs11cmt to ..:xemtti1e Order 13770. ~Ye II l•IJ 'II\.·':-< ,I '" Urtll ]•',\ J ,,.,,wd ili. •I, ii~ ,,·!,,, 1 \ 10. dditional (' f Q o prn tl'!J:-h 1 am co111p/yi11g 111ith these requiremenls as desaihed in the acfjacenl ho •. Ethics Agreement Requirements Q o 11. Comments of ppointee ny intentionally false or misleading statement or response provided in thi certification i a violation of law punishable by a fine or imprisonment, or both, under 18 .. C. § 1001. 1 certify thal the i1ifo1wation 1 have provided is co1Jrplete and accHrate. Date: THIS CERTIFICATION WILL BE POSTED FOR PU BLIC VIEWING ON OGE'S WEBSITE . 3 EPA-HQ-20 18-005078 To: From: Sent: Subject: jkinsman@eei.orgUkinsman@eei.org]; Wehrum, Biii[Wehrum.Bill@epa.gov] Harlow, David Fri 12/8/2017 9:53:08 PM RE: Many thanks John, Thank you for your kind words. I very much appreciated having the opportunity to meet with you and your group. David S. Harlow Senior Counsel Immediate Office of the Assistant Administrator Office of Air and Radiation, USEPA WJC-N Room 5409K 1200 Pennsylvania Avenue NW Washington, DC 20460 202-564-1233 From: Kinsman, John [mailto:JKinsman@eei.org] Sent: Friday, December 8, 2017 4:44PM To: Wehrum, Bill Cc: Harlow, David Subject: Many thanks Bill- Many thanks for sharing your thoughts with EEl's Air Quality Subcommittee. Your maiden voyage was very well received and we appreciate your time. ED_001717_00003741-00001 EPA-HQ-20 18-005078 Congratulations on assembling an outstanding core team, including David. John John Kinsman Sr. Director, Environment Edison Electric Institute 701 Pennsylvania Avenue, N.W . Washington , D.C. 20004 202/508-5711 (p) 202/255-9531 (cell) 202/508-5150 (f) jkinsman@eei.org ED_001717_00003741-00002 HUNTON& WILUAMS I !UNTON & WILLIAMS LLP 2200 PENNSYLVANIA AVENUE, NW WASHINGTON, 0 C. 20037-1701 TEL 202 • 955 • I500 FAX 202 •778 • 2201 F. WILLIAM BROWNELL DIRECT DIAL; 202 • 955 • I555 EMAIL: bbrowncll@hunton.com December 8, 2017 FILE NO. 55788.000042 By Hand The Honorable Scott S. Harris Clerk of the Supreme Court Supreme Court of the United States One First Street, N.E. Washington, D.C. 20543-0002 Re: Case No. 17-170, DTE Energy Company, et al. v. United States Dear Mr. Harris: In its brief in opposition in the above-captioned case, the United States states that "the EPA is currently reviewing its New Source Review policies and regulations" and that "[t]hat review may result in changes." Br. for the United States in Opp'n at 17 (Nov. 1, 2017). A memorandum released by EPA late yesterday addressing the initial results of that review is enclosed. F. William Brownell Counsel ofRecordfor Petitioners DTE Energy Company and Detroit Edison Company Enclosure cc: Noel J. Francisco Michael Soules Cynthia Rapp, Deputy Clerk ATLANTA AUSTIN BANGKOK BEIJING BRUSSELS CHARLOTTE DALLAS HOUSTON LONDON LOS ANGELES MIAMI NEW YORK NORFOLK RALEIGH RICHMOND SAN FRANCISCO TOKYO TYSONS WASHINGTON www hunton.com ENCLOSURE E. ScenT PlUTIT . \IHII~ ISTH.\TOH December 7, 2017 MEMORANDUM SUBJECT: New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to-Projected-Actual plicability Test in Determining Major Modification Applicability FROM: E. Scott Pruitt TO: Regional Administrators I. Introduction and Purpose of Memorandum In accordance with presidential priorities for streamlining regulatory permitting requirements tbr manufacturing and other types of facilities. the U.S. Environmental Protection Agency is conducting a review of the agency's implementation of the prcconstruction permitting requirements under the Clean Air Act, which are generally known as the New Source Review program. This review will involve an assessment of opportunities for the I:::P A to make improvements by clarifying or revising the EPA regulations impJemcnting the NSR program. providing technical support and oversight to lhe states that administer the program and evaluating the agency's enforcement of the NSR requirements. With respect to the latter, there continue to be disputes pending in the United States courts in NSR enforcement cases that began before the EPA initiated the current review of the NSR program. The United States is represented in those matters by the Department of Justice and the Office of Solicitor General. As those cases proceed toward resolution, the EPA continues to have implementation and oversight responsibilities tbr the NSR progr.tm. Based on an initial assessment. l understand that two recent appellate court decisions' in the pending enforcement proceeding against DTE Energy have created uncertainty regarding the applicability of NSR permitting requirements in circumstances where the owner or operator of an l!xisting major stationary source projects that proposed conslruction will not cause an increase in actual emissions that triggers NSR requirements. As we begin the EPA's current review of the 1 These appellate decisions are U.S. v. DT£ £nerzy Co. , 711 F.Jd 643 (6th Cir. :!OIJ) and US. v. DTE Enerf!J•Cu.. 845 F.Jd 735 (6th Cir. 2017). ! .!OII PI " '\11\'\ I\ \11 . '\\\" • \I111.Coon~ II II I .\ • \\"\,1 11 '\ r .l"' · llC ~ I I I fJII • L!IJ:! I .ilol- li OO • F 1\: I:!O:tt .ill l -ll.i4l NSR program, this memorandum communicates how the EPA intends to apply and enforce certain aspects of the applicability provisions of the NSR regulations~that have been addressed in these appellate decisions. In particular, this memorandum addresses the EPA's intended approach concerning the procedures contained in the NSR Rcfonn Rules2 (and approved state regulations that reflect the content of those rules) for sources that have used or intend to use " projected actual emissions'" in determining NSR applicability and the associated pre· and post-project source obligations. While this memorandum describes our current intended approach for future matters, decisions about how to proceed in ongoing enforcement matters will be made on a case-by-case basis. We hclieve this memorandum is necessary to provide greater clarity tor sources and states implementing the NSR regulations. The guidance is also generally consistent with the NSR Reform Rules and with EPA objectives and ongoing efforts to clarify and streamline the NSR program requirements and reduce burden on regulated sources in accordance with recent Presidential actions.3 The remainder of this memorandum is organized into two sections. Section II contains relevant CAA, regulatory and litigation background. Section Ill contains a discussion of the issues raised by the DTE litigation and addresses the EPA's current intended approach concerning the tollowing specinc topics: l ) consideration of post-project emissions management in determining NSR applicability; 2) the role of post-project actual emissions in major modification applicability; 3) the EPA oversight and enforcement of pre-project NSR applicability analyses involving the uctual-to-projected-actual applicability test; and 4) the role of EPA-approved state and local NSR programs. in implementing NSR requirements. This memorandum explains how the EPA intends to apply and enforce certain requirements of the NSR regulations as we begin review of that program. This document is not a rule or regulation, and the guidance it contains may not apply to a particular situation based upon the individual facts and circumstances. This memorandum does not change or substitute tor any law, regulation or other legally binding requirement and is not legally enforceable. This memorandum is not final agency action, but merely clarifies the EPA's current understanding regarding certain elements of the NSR regulations. II. Background on CAA and Regulatory Provisions and DTE Litigation :l. Relevant CAA and EPA Regulatory Provisions ·n1e NSR provisions of the CAA and of the EPA' s implementing regulations require new major stationary sources and major modifications at existing major stationary sources to. among other things, obtain an air quality permit before beginning construction. This permitting process tor major stationary sources is required whether the major source or major modification is planned for an area where the national ambient air quality standards (NAAQS) are exceeded 1 ln 2002, the t:PA issued a final rule that revised the regulations governing the major NSR program. 67 FR 80186. We refer generally to these rule provisions as "NSR Refonn. " ' See e.g.. Presidential Memorandum: Streamlining Pennitting and Reducing Regulatory Burdens tor Domestic Manutiu:turing (January 24, 2017): Executive Order 137n: Enforcing the Regulatory Refonn Agenda (February 24, 2017). (nonattainment areas) or an area where the NAAQS have not been exceeded (attainment and unclassifinble areas). Jn general. permits for sources in attainment areas and for other pollutants regulated under the major source program are referred to as prevention of significant deterioration (PSD} permits, while permits for major sources emitting nonattainment pollutants and located in nonattainment areas are referred to as nonattainment NSR (NNSR) permits. The entire preconstruction permitting program, which includes the PSD and the NNSR permitting programs, is referred to as the NSR program:' The CAA defines a "'moditication" as "any physical chooge in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted:' 42 U.S.C. § 74ll(a)(4). A ..major modification" is defined in the regulations as ..any physical change in or change in the method of operation of a major stationary source that would result in: a significant emissions increase (as defined in paragraph (b)(40) of this section) of a regulated NSR poUutant (as defined in paragraph (b)(50} of this section}; and a significant net emissions increase of that pollutant from the major stationary source." 40 C.F.R. ~ 52.2l(b)(2)(i). The NSR applicability procedures in the regulafions reaffinn the role of the ..project" emissions increase 5 and ••net emissions increasc"b in determining major modification applicability: •· ... a project is a major modification for a regulated NSR pollutant if it causes two types of emissions increases - a significant emissions increase (as defined in paragraph (b)(40) of this section), and a significant net emissions increase (as defined in paragraphs (b)(3) and (b)(23} of this section). The project is not a major modification if it does not cause a significant emissions increase. If the project causes a significant emissions increase, then the project is a major modification only if it also results in a significant net emissions increase." 40 C.F.R. § 52.2l(a)(2)(iv){a). Prior to beginning construction of a project the owner or operator of the major stationary source must calculate the emissions increases that it projects will be caused by the project and potentially the net emissions increase to determine if NSR permitting is required. The procedure tor calculating whether a significant emissions increase will occur as a result of a modification is emission unit specific and depends upon whether the emissions unit is new or existing. For new emissions units, increases are calculated using the "actual-to-potential" test. and for existing emissions units, increases are calculated using the ••actual-to-projected-actual" applicability test. ~ The CAA requirements for PSD programs set forth under at 42 U.S.C. §§ 7470-7479 are implemented by the FPA 's PSD regulations tbund at 40 C.F.R. § 51.166 (minimum requirermnts for nn approvable PSD State Implementation Plan) and 4U C.F.R. § 52.2 1 (PSD permitting program for permits issued under the EPA's federal permitting authority). 'Ole CAA sets forth requirements tor state implementation plans for nonottainmcntaren.'l at 42 U.S.C. §§ 7501-7515. and the general provisions include NNSR pennitting requirements at 42 U.S.C. §§ 7502(c)(5) and 7503. The CAA 's NNSR permitting requirements are implemented by the EPA's NNSR regulations tbund ar: 40 C.F. R. § S1.165, § 52.24 and pan 51 of Appendix S. This memorandum cites certain detinitions and requirements m the federal PSD regulations at 40 C.F.R. § .52.21. However. the other NSR regulations identified contain analogous definitions nnd requirements, and the statements in this memorandum also apply to those analogous provisions. s A "project" is defined as ·•a physical change in. or change in the method of operation of, an existing major 5tationary source.'' 40 C.F.R § 52.21 (b)(52). ~ TI1e net emissions increase is calculated as the sum of the project emissions increase. calculated pursuant to 40 C.F.R. § 52.:!1(a)(2)(iv). and any other increases and decreases in actual emissions at the major stationury sour~c that are contemporaneous and otherwi~e creditable. See 40 C.F.R. § 52.21(b)(3). J ' See 40 C .F.R § 52.2l(a)(2)(iv). Under both applicability tests. pre-project actual emissions are established using ·•baseline actual emissions," which are defined specitically for existing eleclric utility steam generating units and separately for all other existing emissions units. See 40 C'.F.R § 52.21 (b)(48). Under the actual-to-potential test, an emissions increase is calculated as the difference between the potential to emit (as detincd at 40 C.F.R § 52.21(b)(4)) following completion of the project and the baseline actual emissions. Under the actual-to-projected-actual applicability test. an emissions increase is calculated as the difference between the projected actual emissions (as detined at 40 C.F.R § 52.21(b}(41)) and the baseline actual emissions. 7 The focus of this memorandum is on the actual-to-projected-actual applicability test and associated requirements in the NSR regulations. "Projected actual emissions·• is <.letincd as 11he maximum annual rate, in tons per year, at which an existing emissions unit is projected to emit a regulated NSR pollutant in any one of the 5 years following the date the unit resumes regular operation after the project, or in any one of the 10 years following that date, if the project involves increasing the emissions unit's design capacity or its potential to emit that regulated NSR pollutant and full utilization of the unit would result in a significant emissions increase or a significant net ~missions increase at the major stationary source." 40 C.F.R § 52.21(b)(41)(i). In making a projection, the owner or operator ''[slhall consider all relevant infonnation, including but not limited to, historical operational data, the company's own representations, the company's expected business activity and the company' s highest projections of business activity, the company's tilings with the State or federal regulatory authorities, and compliance plans under the approved State Implementation Plan." 40 C.F.R § 52.21 (b)(41 )(ii)(a). In order to determine the projected increase that results from the particular change consistent with the defmition of"major modification." the owner or operator "[s]hall exclude, in calculating any increase in emissions that results from the particular project, that portion of the unit's emissions following the project that an existing unit could have accommodated during the consecutive 24-month period used to establish the baseline actual emissions under paragraph (b)(48) of this section and that are also unrelated to the particular project, including any increased utilization due to product demand growth." 11 40 C.F.R § 52.21 (b)( 41 )(ij)(c). Finally, the rules contain objective calculation requirements (e.g. for electric utility steam generating units, baseline actual emissions must be based on a consecutive 24-month period in the 5-year period immediately preceding the project, and in order not to trigger NSR permitting requirements. the calculated emissions increase may not equal or exceed numerical "signiticance" thresholds). See 40 C.F.R. §52.2l(b)(23), (48). With respect to the role of post-project actual emissions in the major modification applicability provisions. the regulations s tate the following: ·'Regardless of any such preconstruction projections. a major modification results if the project causes a significant emissions increase and a significant net emissions increase." 40 C.F.R. § 52.21(a)(2)(iv)(b). In addition, the regulations contain specilic recordkecping, monitoring and reporting provisions set forth at 40 C.F.R. § S2.21(r)(6) that apply in circumstances where there is a ''reasonable ' In lieu ofu.~ing projected a<:tual emissions, owners or operntors may use potential to emit. See40 C.F.R § 52.21(b)(41 XiiXd). ~ This provision is sometimes referred to as the "demand growth exclusion," when used in the context or utilities or the ·'independent factors exclusion,•· when used in the context of other manufacturing operations, and qualifying ~missions are sometimes referred to ali "exclu!.lable em i.~sions." l11cre is no presumption that an emissions increase following that change was caused by the change. but rather, this is the analysis required under §52.21 (b)(41 )(ii)(c). possibility;· as that term is detined at 4U C.F.R. § 52.21 (r)(6)(vi). that a project that is not projected to cause a signiticant emissions increase may nevertheless result in an actual significant emissions increase of a regulated NSR pollutantY Depending on the reasonable possibility criteria applicable to a project and the type of emissions unit(s) involved, owners or operators must comply with one or more of the following requirements: I} document and maintain a pre-project record of the NSR ~1pplicability information idcntitied at 40 C.F.R. §52.21(r)(6)(i): 2) for electric utility steam generating units only, submit the information set out in paragraph (r)(o)(i); 3) monitor and record emissions. on a calendar·year basis. tor a period of five or 10 years after the unit resumes regular operations after the change (depending on whether there is an increase in the design capacity or potential to emit); 4) for electric utility steam generating units only, submit a report of annual emissions for each year that monitoring is required; and 5) for all other units. submit a report if annual emissions exceed the baseline actual emissions by a signiticant amount and if such emissions difter from the pre-construction projection. See 40 C.F.R. § 52.2l(r)(6)(i) • (v). For projects subject to 5-ycar post·changc emissions tr.tcking, the EPA indicated in the NSR Retorm rule preamble that it would ·•presume that any increases that occur after 5 years are not associated with the physical or operational changcs.'' 16 B. DTE Lilixation Since 2010, the EPA has been involved in an enlbrccmcnt action and litigation concerning 3 construction project at the DTE Monroe. Michigan power plant. At issue in that litigation has been a dispute between the EPA and DTE on the relationship between the requirements in the regulations that govern pre-project NSR emission projections and the role of post-project emissions monitoring. The DTE litigation has resulted in two separate decisions by the same panel of three judges on the U.S. Court of Appeals for the Sixth Circuit. Neither of these decisions were unanimous. and in the second decision. each judge wrote a separate opinion. In the first decision. two of the three judges agreed that the EPA could pursue enforcement based solely on a claim that the source had failed to properly project, in accordance with the regulations. luture emissions. even though actual emissions from the source had not increased after the construction was completed and the source resumed operation. See US. v. DTE Energy Co., 711 f.Jd 643, 649-650. 652 (6th Cir. 2013). In allowing cntbrccmcnt based solely on violations of EPA regulations governing future emission pr~jcctions. the majority opinion cautioned against EPA ..second guessing., a projection. The third judge dissented based on her view that there was no entorccable violation of the EPA's projection regulations when there was no post-construction emissiuns increase. See id at 652-53. After the case reached the Sixth Circuit tor the second time. the two judges who had agreed in the tirst case (that the EPA could pursue entorcement based solely on an allegedly improper projection) were unable to agree on the extent to which the EPA could "second guess·· such a projection. United Stales v. DTE Enerzy Co., 845 F.3d 735 (6th Cir. 2017). One of these two judges concluded that DTE had satistied the basic requirements for making projections and the other concluded DTE had not. Compare id. at 738-740 witlr id at 751-55. The third judge (the same one who dissented in the tirst case) concluded that she was required to follow the majority holding in the lirst case that the EPA could pursue entorcement based solely on an improper projl.-ction and then sided with the 'These provisions are som~times referred to as the "rca.c;onable possibility" rule provisions. ' 67 FR 80 197 I December 31, 20112). 1 5 judge who tound DTE had not adequately justified its projection (while declining to support the parts of her colleague's opinion that could be read to expand the majority opinion in the first case). See id. at 742. The matters at issue in the DTE litigation are complex, and the appellate court decisions have left ambiguity regarding the scope of the applicable regulations and what sources must do lo comply. Further, the Supreme Court has been asked to review the second appellate court opinion. Considering this uncertainty, the EPA believes it would be helpful to explain to stakeholders how the EPA plans to proceed in implementing and exercising its authority under those regulations pending further review of these issues by the EPA. Ill. Discussion As described previously, the NSR regulations require owners or operators to perform a preconstruction applicability analysis to determine whether a proposed project would result in a significant emissions increase and a significant net emissions increase. thus triggering the requirement to obtain an NSR permit. The regulations also specify the infonnation used in that analysis that, when certain criteria in the "'reasonable possibility" rule provisions are met, shall he documented, maintained and in certain cases submitted to the reviewing authority prior to beginning construction. See 40 C.F.R. §§ 52.21(a)(2). 52.2l(r)(6)(i). (ii). If required, the preprojectrecord must contain: I) a description of the project; 2) identification of the emissions unit(s) whose emissions of a regulated NSR pollutant could be affected by the project; and 3) a description of the applicability test used to determine that the project is not a major modification for any regulated NSR pollutant, including the baseline actual emissions. the projected actual emissions, the amount of emissions excluded under paragraph (b)(4l)(ii){c) and an explanation for why such amount was excluded and any netting calculations, 11 if applicable. See 40 C.F.R. § 52.2l{r)(6)(i). One issue that hns arisen with respect to detcnnining projected actual emissions resulting from a proposed project is whether it is pennissible under the regulations for an owner or operator to factor into the projection an intent to actively manage future emissions from the project on an ongoing basis to prevent a significant emissions increase or a significant net emissions increase from occurring. The EPA notes that the rule language spccitically provides that ••at) relevant infonnation" shall be considered in making a projection. See 40 C.F.R § 52.2l(b)(41)(ii)(a). Pending further review of the issues described above by the EPA, the EPA intends to apply the NSR regulations in accordance with this language such that the intent of an owner or operator to manage emissions from a unit in that manner after a project is completed represents relevant information in the context of projecting future actual emissions from that unit that could be considered along with other relevant infonnation in making Wl emissions projection, as provided in the NSR reb'lllations. In finalizing the 2002 NSR rule revisions. the EPA explained that owners or operators "will not be required to make the projected actual emissions projection through a pennitting action" and 11 The tenn ..nening" refers to detennining the net emissions increase. The net emissions increase is calculated as the sum of the projected emissions increase, calculutcd pursuant to 40 C.F.R. § 52.2l(nX2)(iv), and any olher increases and decreases in actual emissions nl the major stntionnry source that nre contemporaneous and otherwise creditable. Sett40 C.F.R. § 52.21(b)(J). 6 that it ••also believef dl that it is not necessary to make .. . future pr~jections ~:ntorceable in order to adequately enforce the majur NSR requirements. The Act provides ample authority to cnlorcc the major NSR requirements if ... physical or operational change results in a signiticant net cmis.c;ions increase at [a] major stationary source." 68 FR 80204 (December 31. 2002). Moreover. the rcgulatinns are clear that owners or operators need not obtain approval nftheir pre-project NSR applicability analyses from the reviewing authority betorc construction. 12 As the EPA explained in 2002. a key objective of the projected actual emissions provisions was to avoid the need for permitting authority review ot'NSR applicability determinations prior to implementation of a project. The rules instruct the affected source to consider ..all relevant intormation," (as defined in 40 C .F.R. §52.21(b)(4l)(ii)) in making an applicability determination. They also include spccitic instructions as to when and how actual emissions projections must be documented and when post-project emissions monitoring and reporting is required. If an affected source complies with those requirements. it has satisticd the source obligations that are required under our NSR rules. The NSR rules instruct the source to exclude from a projection those emissions that both could have been accommodated during the baseline period and that arc unrelated to the project. Because increased emissions may be caused by multiple factors. the EPA has recognized that the source must exercise judgement to exclude increases for which the pmject is not the •·predominant cause." 45 Fed. Reg. 32.327 (1992). The NSR rules provide no mechanism for agency review of procedurally compliant emission projections. To infer the existence of such a mechanism would be tantamount to inferring agency authority to require pre-approval of emissions projections. Such an outcome is inconsistent with the text of the EPA rules and with the agency's clearly stated intent in adopting those rules. Consistent with these regulations, the EPA intends to focus on the tact that it is the obligation of source owners or operators to pertbrm pre·project NSR applicability analyses and document and maintain records of such analyses as required by the regulations. It also intends to focus on the fact that the post·project monitoring, rccordkecping and reporting requirements provide a means to evaluate a source's pre-project conclusion that NSR does not apply and that the NSR applicability procedures make clear that post-project actual emissions can ultimately be used to determine m~jor modification applicability. This is reflected in the lollowing sentence: •·Regardless of any such prcconstruction projections. a major modification result-; if the project causes a signilicant emissions increase and a signilicant net emissions increase." 40 C.F.R. § 52.2l (al(2)(iv )(b). In addition, the post-project monitoring and recordkecping requirements under the "reasonable possibility" rule provisions described previously further continn the important role that actual pnst·projcct emissions data play in determining NSR applicability. Based on the toregoing, and while further review of these issues by the EPA is pending. the EPA intends to implement and exercise its authority under the NSR provisions to clarity that u With respect to existing electric utility steam generating unit(s). for which liubmiltal of the pre-project record is required betore beginning actual construction. the regulations explicitly state: "Nothing in this paragrnph ... shall be construed to require I he owner or operator or such n unit to obtain any Jetennination from the Administrator before beginning actual construction." 40 C.F.R. ~ 52.21 ( r)(6 )( iil. For all other emissions unit c:llegories. there is no requirement to submit the pre-project applicability record befure construction. 7 when a source owner or operator perthnns a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations. and Jilllows the applicable recordkeeping and notitication requirements in the regulations. that owner or operator has met the pre-project source obligations of the regulations, unless lhcre is clear error (e.g. the source applies the wrong signiticunce threshold). l11e EPA does not intend to substitute its judgement for that of the owner or operator by •·second guessing'' the owner or opemtor's emissions projections. Furthermore. when an owner or op~rntor projects that a pr~ject will result in an emission increase or a net emissions increase less than the signiticant emissions rate in accordance with the NSR regulations. the EPA intends to Jbcus on the level of actual emissions during the 5- or 10year recordkeeping or reporting period after the project for purposes of determining whether to exercise its entorccmcnt discretion and pursue an entbrccment action. That is, the EPA does not presently intend to initiate enforcement in such future situations unless post-project actual emissions data indicate that a signitic:mt emissions increase or a signiticant net emissions increase did in tact occur. Although the m~jority in the tirst DTE opinion held that the EPA may pursue enforcement of its pr~jection regulation where a source owner or operator has Jailed to perform a ret.luircd pre-project applicability analysis or has tililed to follow the objective calculation requirements of the regulations regardless of the level of post-project emissions, the court decision does not compel the EPA to pursue cntorccment in such situations. The EPA has substantial discretion regarding prosecution of violations of the CAA and the first DTE opinion does not limit the EPA' s discretion to consider whether prosecution of other sources is warranted in similar circumstances. Thus. pending further review of these issues by the courts and the EPA. the agency does not intend to pursue new enforcement cases in circumslances such as those presented in the DTE matter. Finally, the EPA notes that while this memorandum refers to federal NSR regulations at 40 C.F.R. § 52.2l, in states with EPA-approved NSR programs~ the state and local regulations that the EPA has approved into the SIP are the governing Jederal law. To be approvable, the NSR requirements in a state plan must be at least as stringent as the tederat rule requirements in 40 C.F.R. §§ 5l.l65 and 51.166 for NNSR and PSD programs. respectively, but may be more stringent at the state' s discretion. The implementation of the NSR program is one exwnple of ..:ooperative federalism under the CAA under which the state regulations have primacy once they are approved by the EPA. However, if it is tater determined that the NSR progmm approved into the SIP is deticient. the EPA has the authority under 42 U.S.C. § 74l0(k)(5) to call for a state to revise its regulations. In the absence of such a SIP call, it is the EPA-approved state regulations that govern NSR applicability. cc: Ryan Jackson Mandy Gunasekara No. 17-170 IN THE SUPREME COURT OF THE UNITED STATES DTE ENERGY COMPANY AND DETROIT EDISON COMPANY, Petitioners, v. UNITED STATES OF AMERICA, Respondent. CERTIFICATE OF SERVICE I hereby certify that on December 8, 2017, one copy of the foregoing letter was served, as required by U.S. Supreme Court Rule 29.5(b), on the following: Noel J. Francisco SOLICITOR GENERAL OF THE UNITED STATES Thomas A. Benson Attorney U .S . DEPARTMENT OF JUSTICE 950 Pennsylvania Avenue, N.W. Room 5614 Washington, D.C. 20530-0001 (202) 514-2203 SupremeCtBriefs@usdoj.gov thomas.benson@usdoj .gov Michael Soules EARTHJUSTICE 1625 Massachusetts Avenue, N.W. Suite 702 Washington, D.C. 20036 (202) 797-5237 msoules@earthjustice.org Counsel for Sierra Club Counsel for Respondent United States of America The following e-mail addresses have been served electronically: SupremeCtBriefs@usdoj.gov 1 thomas. benson@usdoj .gov msoules@earthjustice.org sfisk@earthj ustice. org Pursuant to Rule 29.5 of the Rules of this Court, I certify that all parties required to be served have been served. ~~ F. William Brownell Counsel of Record for Petitioners HUNTON & WILLIAMS LLP 2200 Pennsylvania Avenue, N.W. Washington, D.C. 20037 (202) 955-1500 2 Time Subject Location Reminder Show Time As Attendees 10:00 AM – 11:00 AM House Congressional Testimony 2123 Rayburn 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Jackson, Ryan Required Lyons, Troy Required Ringel, Aaron Required Subject Location Reminder Show Time As RFS Meeting Oval Office 15 minutes Busy Subject Location Reminder Show Time As Attendees House Congressional Testimony 2123 Rayburn 15 minutes Busy Name b(6) Administrator Subject Location Reminder Show Time As Attendees Organizer Attendance < b(6) Administrator Organizer Ryan Jackson (jackson.ryan@epa.gov) Required Lyons, Troy Required Meeting: Kinder Morgan Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Bolen, Brittany Required Dravis, Samantha Required Harlow, David Required Friday, December 8, 2017 24 Time Subject Location Reminder Show Time As Attendees 9:45 AM – 10:15 AM Briefing: OAR/OECA Update Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < Organizer b(6) Administrator Bodine, Susan Required Wehrum, Bill Required Gunasekara, Mandy Required Traylor, Patrick Required Wagner, Kenneth Required Lincoln Ferguson (ferguson.lincoln@epa.gov) Required Call: Ambassador Kelly Craft Administrator's Office 15 minutes Busy Sarah: (b) (6) International Dial-In – Attendees Name Subject Location Reminder Show Time As b(6) Administrator < ; Code (b) (6) b(6) Administrator Sarah Greenwalt (greenwalt.sarah@epa.gov) Subject Location Reminder Show Time As Attendees Attendance Organizer Required Meeting: Inspector General Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Elkins, Arthur Required Ryan Jackson (jackson.ryan@epa.gov) Required Sheehan, Charles Optional 25 Subject Location Reminder Show Time As Attendees Briefing: EPA Litigation Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Baptist, Erik Subject Location Reminder Show Time As Attendees Organizer Required Interview: Chris Beach Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Bowman, Liz Required Lincoln Ferguson (ferguson.lincoln@epa.gov) Required Munoz, Charles Required Ryan Jackson (jackson.ryan@epa.gov) Required Subject Location Reminder Show Time As Call: Senator Blunt Administrator's Office 15 minutes Busy Subject Location Reminder Show Time As Attendees Meeting: RFS Administrator's Office 15 minutes Busy Name b(6) Administrator Attendance < b(6) Administrator Organizer Wehrum, Bill Required Gunasekara, Mandy Required Baptist, Erik Required 26 To: Gunasekara, Cc: Koerber, From: Lewis, Josh Sent: Fri 12/8/20t7 4:33:43 PM Subject: RE: NSR you know if Ryan is planning to send to the RAs today? OAQPS wants to send to the Air Division Directors, but didn't want to get ahead of anything Ryan was planning to do Josh Original Message--?-? From: Gunasekara, Mandy Sent: Thursday, December 07, 2017 6:27 PM To: Lewis, Josn Miliett, John DeLuca, Isabel White, Elizabeth Hope, Brian Subject: NSR Thanks for your help today in getting the memo over the finish line! Sent from my iPhone To: Wehmm, Gunasekara, Cc: Traylor, From: Bodine, Susan Sent: Fri 1218:9017 3:46:19 PM Subject: NSR memo I t0 SP H0 suggested imEx. 5 - Deliberative ProcessiAtlorney Client I -E I.-. i El. 5 - Deliberative Pmcassfh?nmay Elionl I i MY recommendation remains? Ex. 5 - Deliberative ProcesslAttorney Client I n~ ,P-Jleta -- ?w grates gaunt: comma?tar om ENVIRONMENT AND PUBLIC WORKS WASHINGTON LJC I 25-1., sin.? . a. .. .- "1731'" December 21, 2017 The Henorable Scott Pruitt Administrator Environmental Protection Agency (EPA) 1200 Ave., NW Washington, DC 20004 Dear Administrator Pruitt: I write to request information about several troubling developments related to environmental enforcement efforts. I believe these developments may enable regulated industry to violate air and water pollution rules and to avoid accomtability for any such violations. First, I am concerned that EPA is not undertaking adequate enforcement activities. For example, a recent report] in The New York Times found a signi?cant decline in environmental enforcement cases initiated by EPA, the penalties EPA sought and the information EPA requested from polluting industries. The EPA told The New York Times that ?[vv]e focus more on bringing people back into compliance than bean counting." However, the article notes that EPA sought only about 39% of the financial penalties sought during the same period during the Obama Administration. It also states that EPA sought only 12% (by cost) of the environmental retro?tting remedies to clean up pollution that were sought during the comparable period by the Obama Administration and initiated only about two-thirds the number of enforcement cases. Even more troublingly, the article states that EPA has radically changed the policy for the agency goes about determining whether violations of air and water pollution regulations have occurred. It describes that regional of?ces have been directed not to send ?requests for information? to suspected polluters without ?rst seeking permission from EPA headquarters. I am concerned that by discouraging local environmental cops on the beat to even ask questions, EPA may be seeking to ignore the existence of dangerous air and water pollution. Second, I am troubled that EPA appears to be moving away from using its own data to evaluate whether pollution violations are occurring. I request information about your recent memorandum2 with respect to the New Source Review provisions of the Clean Air Act. Under those provisions, EPA can require companies to install pollution-control technologies as a condition of undertaking new construction at an existing facility. In your memorandum, you announced that EPA will no longer use its ovm data to determine whether a company might be subject to the New Source Review provisions of the Clean Air Act, even if the company submits inaccurate or even fraudulent estimates of future air pollution to EPA. This decision is made Til 2! 2 pol icv memo. 12.7. - IN FII Pruitt, pg. 2 December 21, 2107 even more shocking by the Supreme Court?s December 11, 2017 decision not to hear arguments in the DTE Energy Co., at of. v. United States case. In that case, DTE Energy was seeking a similar outcome to that described in your memorandum. Since DTE Energy was represented3 in the case by Hunton and Williams, the most recent former employer of both Assistant Administrator for Air and Radiation Bill Welirum and EPA Senior Counsel David Harlow, this raises additional ethical questions surrounding the development of this new policy. new policy amounts to an abdication of its Clean Air Act enforcement responsibilities and is akin to allowing industry to design, write, and grade its own take-home air pollution exam. Finally, it is distressing that the Administration appears to be abandoning the use of certain enforcement tools that help to improve environmental quality. I request information about the environmental implications of a new policy promulgated by the Department of Justice that appears to have the effect of preventing any settlement from including Supplemental Environmental Projects. These projects have historically been used in lieu of steeper monetary penalties as a means by which to derive additional environmental benefit from the entity found to have violated the law. It seems that this new policy, had it been in effect at the time, might have prevented EPA from including the almost $5 billion in such projects that will bene?t all 50 States, Washington DC, Puerto Rico and tribal entities as part of the Volkswagen defeat device settlement. So that I can understand more about the development and implementation of these disturbing new approaches to environmental enforcement, I ask that you provide responses to the following requests for information: 1. For each regional office of EPA, please provide, for each of the years 2009-2016, the number of Requests for Information sent by the agency. 2. Starting in 201? (and going forward), please provide quarterly totals of Requests for Information that were a) sent by each regional of?ce of EPA to EPA headquarters for approval and b) that were approved andr?cr sent.. For each Request for Information that was either not approved or not sent, please include an explanation describing the reason for the disapproval or the failure to send it. Please also indicate the date on which headquarters received the request for approval from the enforcement of?cer, the date on which the request was granted or denied, and the date on which the Request for Information was sent. 3. Please provide a copy of the memo described in The New York Times story that set forth the process by and conditions under which EPA employees have been directed to request permission before sending Requests for Information to suspected polluters. Please also provide a copy of all documents (including emails, memos, white papers, meeting 3 7f08f07fdocumentjm_? 1 .pdf Pruitt, pg. 3 December 21, 2107 minutes and correspondence) received or obtained by EPA (including by members of the EPA transition team) that are related to the development of this memo. . The New York Times article described a disturbing pollution situation in East Liverpool, Ohio. This situation was so concerning that the East Liverpool City Council sent a letter of complaint to EPA because EPA had not ?moved to punish the plant?s owner, even after extensive evidence was assembled during the Obama Administration that the plant repeatedly, and illegally, released harmful pollutants into the air.? For each of the years 2009420172 and quarterly thereafter, please provide: a) a copy of each letter requesting EPA enforcement action (or complaining about a lack thereof) sent to EPA by a state or local government entity; b) a description of response to the letter, including but not limited to the date, type and outcome of EPA enforcement action taken; and c) if EPA decided not to proceed with an enforcement action, please explain why not. . For each of the years 2009-2017, and quarterly thereafter, please provide: a) the number of judicial enforcement referrals sent by each Regional EPA of?ce to EPA headquarters; b) the nature of the referral (Le. statute and type of violation, identity of alleged violator, city and State, date of referral, etc); c) the manner in which the matter was resolved and d) if EPA decided not to proceed with an enforcement action, please explain why not. Please provide a list of every Notice of Violation sent to an alleged polluter by the Obama Administration EPA that was not concluded by the end of the Obama Administration. Please include in your list: a) the recipient, city and state of the entity that received the notice, and a description of the violation, b) the resolution of each action, if any, that was entered into by the Trump Administration, including the date of resolution and the amount of any penalty or remedy, and c) for any action that has been resolved without a penalty or remedy, an explanation of why not. Please update this list quarterly until all Notices of Violation that issued by the Obama Administration are resolved. . Please provide a list of every consent decree lodged by the Obama Administration EPA that was not entered by the end of the Obama Administration. Please include in your list: a) the name, city and state of the entity subject to the consent decree, b) a description of the violation(s) that the entity had engaged in, c) the date and a copy of any motion to enter ?led on behalf of EPA, d) whether the consent decree has since been entered, on what date, and how the ?nal consent decree differed from what had been proposed, (1) if the consent decree has not been entered, why not. Please update this list quarterly until all consent decrees lodged by the Obama Administration are entered 0r otherwise resolved. Pruitt, pg. 4 December 21, 2107 8. Please provide a copy of all documents (including emails, memos, white papers, meeting minutes and correspondence) received or obtained by EPA (including by members of the EPA transition team) that are related to the development of December 7 memo on New Source Review. 9. Did Mr. Wehrum participate in any way in the development of the December 7 memo? If so, please provide all documents (including emails, memos, white papers, meeting minutes and correspondence) related to a determination by Designated Agency Ethics Of?cial that his participation was consistent with applicable ethics regulations, the Trump Ethics Pledge, and Mr. Wehrum?s Ethics Agreement. 10. Did David Harlow, senior counsel and political appointee in Of?ce of Air and Radiation participate in any way in the development of the December 7 memo? If so, please provide all documents (including emails, memos, white papers, meeting minutes and correspondence) related to a determination by Designated Agency Ethics Of?cial that his participation was consistent with applicable ethics regulations, the Trump Ethics Pledge, and Mr. Harlow?s Ethics Agreement. 11. Supplemental environmental projects (SEPs) are environmental projects that violators have historically voluntarily agreed to perform as part of an enforcement settlement with the EPA, often in exchange for lower monetary penalties. For example, some projects require the violator to provide payments to third parties to help retro?t or replace school bus diesel engines or address other local air quality or environmental needs. This practice has occurred across Administrations for decades. In June 2017, Attorney General Sessions announced that the Department of Justice would no longer allow payments to be provided to ?any non-government person or entity that is not a party to the dispute? 4 in settlement agreements. We are concerned that this new policy could eliminate the practice of using SEPs in settlement agreements. This is not a theoretical concern. On December 11, 2017, the Department of Justice asked the US. District Court for the District of Columbia to revise the consent decree in the case United States v. Harfey Davidson, e: at, to remove the SEP from the agreement, which would have dedicated $3 million towards cleaning up old woodstoves. The Department of Justice cited the Islew policy prohibiting third-party payments as the reason why the SEP was removed. a. Please confirm whether or not the new policy prohibits the Department of Justice from including SEPs in any Department of Justice settlement agreement. If SEPs can still be included in Department of Justice settlements, what, if any, limitations now apply? lawandenvironment.co mpr-contentfuploadsfs itesf5 EEO 7(06f3essions-S EP-memo. 5 Pruitt, pg. 5 December 21, 2107 b. Please provide a copy of all documents (including emails, memos, white papers, meeting minutes and correspondence) received or obtained by EPA (including by members of the EPA transition team) that are related to the new DOJ policy. c. Please confirm whether or not the new DOJ policy prohibits the EPA from including SEPs in any direct settlement agreements that do not include the Department of Justice. d. In the United States 12. Harley Davidson, er a! case, the Department of Justice eliminated the $3 million SEP, but did not at the same time increase the penalty. Will the EPA, in working with the Department of Justice, pursue higher penalties if SEPs are no longer available to assist with environmental mitigation? e. After the Volkswagen defeat device settlement was proposed, you sued? Volkswagen for damages in your past capacity as the Attorney General of Oklahoma. That $15 billion settlement? required Volkswagen to spend $4.5 billion on clean vehicles and other air emissions reductions projects. Oklahoma expects to receive $21 million as part of the ?nal settlement agreement, and these funds can be used for environmental remediation projects that include procuring more ef?cient diesel engines and airport ground support equipment.3 Would the Volkswagen settlement have been allowed to include these funds for Oklahoma?s (and other states?) environmental remediation projects under the new DOJ policy, and if not, do you believe that this outcome would have bene?ted Oklahoma as much as a settlement that did not include these funds would? Thank you very much for your attention to this important matter. Please provide your response no later than January 26, 2017. If you or members of your staff have further questions, please feel free to ask them to contact Michal Freedhoff at the Committee on Environment and Public Works at (202) 224~8332. Sincerely yours, <3 Thomas R. Carper Ranking Member *5 7 Included 3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON , D.C. 20460 MEMORANDUM SUBJECT: Recusal Statement FROM: David S. Harlow Senior Counsel TO: William L. Wehrurn Assistant Administrator DATE: December 28, 2017 OFFICE OF AIR AND RADIATION I have previously consulted with the Office of General Counsel/Eth ics (OGC/Ethics) and been advised about my ethics obligations. This memorandum fom1ally notifies you of my continuing obligations to recuse myself from participating personally and substantially in certain matters in which I have a financial interest, or a personal or business relationship. I also understand that I have obligations pursuant to Executive Order 13770 and the Trump Ethics Pledge that I signed, as well as my own bar obligations. FINANCIAL CONFLICTS OF INTEREST As required by 18 U.S.C. § 208(a), I will not participate personally and substantially in any particular matter in which I know that I have a financial interest directly and predictably affected by the matter, or in which I know that a person whose interests are imputed to me has a financial interest directly and predictably affected by the matter, unless I first obtain a written waiver, pursuant to 18 U.S.C. § 208(b)(l), or qualify for a regulatory exemption, pursuant to 18 U.S.C. § 208(b)(2). I understand that the interests of the following persons are imputed to me: any spouse or minor child of mine; any general partner of a partnership in which I am a limited or general partner; any organization in which I serve as officer, director, trustee, general partner or employee; and any person or organization with which I am negotiating or have an arrangement concerning prospective employment. I have consulted with OGC/Ethics and been advised that I do not currently have any financial conflicts of interest but will remain vigilant and notify OGC/Ethics immediately should my financial situation change. OBLIGATIONS UNDER EXECUTIVE ORDER 13770 Pursuant to Section 1, Paragraph 6 of the Executive Order, I understand that I am Internet Address (URL) • http://www.epa .gov Recycled/Recyclable • Printed with Vegetable Oil Based Inks on 100~0 Postconsurner. Process Chlorine Free Recycled Paper prohibited from participating in any particular matter involving specific parties in which my former employer, Hunton & Williams LL P, or any former client to whom I provided legal services during the past two years is a party or represents a party. I understand that my recusal lasts for two years from the date that I joined federal service. I have been advised by OGC/Ethics that, for the purposes of this pledge obligation, the term "particular matters involving specific parties.,' is broadened to include any meetings or other communication relating to the performance of my official duties, unless the communication applies to a particular matter of general applicability and participation in the meeting or other event is open to all interested parties. I am further advised that the term "open to all interested parties" means five or more parties. Set forth below are my former clients identified in consultation with OGC/Ethics that have or may have environmental interests that could potentially arise with respect to my duties here at EP A. 1 RECUSAL LIST In effect until October I, 2019 FORMER EMPLOYER: - Hunton & Williams LLP FORMER CLIENTS: 2 Agrium Inc.; Nu-West Industries, Inc. Chevron Corporation DTE Energy Company LG&E and KU Energy, LLC National Stone, Sand and Gravel Association Sunflower Electric Power Corporation, Inc. Utility Air Regulatory Group AITORNEY BAR OBLIGA TIONS Pursuant to my obligations under my bar rules, I recognize that I am obliged to protect the confidences of my former clients. I also understand that I cannot participate in any matter that is the same as or substantially related to the same specific party matter that I participated in personally and substantially while in private practice, unless my bar provides for and I first obtain informed consent and notify OGC/Ethics. Attached is a list of cases I am recused from given my participation at Hunton & Williams LLP. SCREENING ARRANGEMENT In order to ensure that I do not participate in matters relating to any of the entities listed above, I will instruct Josh Lewis, Chief of Staff, and Mandy Gunasekara, Principal Deputy 1 For my former clients who are not listed, I understand that I am personally obliged not to participate in specific party matters for the duration of my ethics obligations. 2 One confidential client is not listed. This client has a written confidentiality agreement expressly prohibiting disclosure. 2 - Assistant Administrator, to assist in screening EPA matters directed to my attention that involve these entities. All inquiries and comments involving the entities on my recusal list should be directed to Josh and Mandy without my knowledge or involvement until after my recusal period ends. If Josh or Mandy determine that a particular matter will directly involve any of the entities listed on my "specific party" recusal list, then he/she will refer it for action or assignment to another, without my knowledge or involvement. In the event that he/she is unsure whether an issue is a particular matter from which I am recused, then he/she will consult with OGC/Ethics for a de.termination. I will provide a copy of this memorandum to my principal subordinates with a copy to Justina Fugh, Senior Counsel for Ethics. UPDATE AS NECESSARY In consultation with OGC/Ethics, I will revise and update my recusal statement whenever warranted by changed circumstances, including changes in my financial interests, changes in my personal or business relationships, or any changes to my EPA duties. In the event of any changes to my recusal or screening arrangement, I will provide a copy of the revised recusal statement to you and OGC/Ethics. ~2)S.J4J~ David S. Harlow Senior Counsel cc: Elizabeth Shaw, Deputy Assistant Administrator Justina Fugh, Senior Counsel for Ethics 3 David S. Harlow RECUSAL LIST - ATTORNEY BAR OBLIGATIONS CASE NAME: CITATION: Utility Air Regulatory Group v. EPA No. 12-1166 (D.C. Cir.) (consolidated with No. 12-1100) American Petroleum Institute v. EPA No. 13­ 1063 (D.C. Cir.) (consolidated with No. 11-1309) Utility Air Regulatory Group v. EPA No. 15-1370 (D.C. Cir.) (consolidated with No. 15-1363) LG&E and KU Energy v. EPA No. 15-1418 (D.C. Cir.) Utility Air Regulatory Group v. EPA No. 17-1018 (D.C. Cir.) (consolidated with No. 17-1015) To: Wehrum, Gunasekara, Cc: Woods, From: Harlow, David Sent: Tue 1/2/2018 11:26:23 PM Subject: EPA's RMRR determination for Detroit Edison's proposed "Dense Pack" turbine blade project {Detroit Edison RMRdef ?12 2000 FRi?gdf MA5 was briefly mentioned earlier afternoon at meeting attached your Information Ex 5 Deliberative Process . m. I Ex. 5 - Deliberative Process EPA subsequently provided notice of this applicability determination in the Federal Register, a few weeks before the end of the Clinton Administration. Ex. 5 - Deliberative Process In sum, in these actions and elsewhere, EPA has assessed routineness by considering the following factors: Nature . Whether major components of a facility are being modified or replaced; specifically, whether the units are of considerable size, function, or importance to the operation of the facility, considering the type of industry involved . Whether the change requires pre-approval of a state commission, in the case of utilities . Whether the source itself has characterized the change as non-routine in any of its own documents . Whether the change could be performed during full functioning of the facility or while it was in full working order . Whether the materials, equipment and resources necessary to carry out the planned activity are already on site Extent . Whether an entire emissions unit will be replaced . Whether the change will take a significant time to perform . Whether the collection of activities, taken as a whole, constitutes a non- routine effort, notwithstanding that individual elements could be routine . Whether the change requires the addition of parts to existing equipment Purpose . Whether the purpose of the effort is to extend the useful life of the unit; similarly, whether the source proposes to replace a unit at the end of its useful life . Whether the modification will keep the unit operating in its present condition, or whether it will allow enhanced operation will it permit increased capacity, operating rate, utilization, or fuel adaptability) Frequency . Whether the change is performed frequently in a typical unit?s life Cost . Whether the change will be costly, both in absolute terms and relative to the cost of replacing the unit Whether a significant amount of the cost of the change is included in the source?s capital expenses, or whether the change can be paid for out of the operating budget whether the costs are reasonably reflective of the costs originally projected during the source's or unit's design phase as necessary to maintain the day?to?day operation of the source) These categories are interrelated, Many facts could be relevant to both nature and extent, while others could overlap with purpose. Moreover, none of these factors standing alone conclusively determines a project to be routine or not. Instead, a permitting authority should take account of how each of these factors might apply in a particular circumstance to arrive at a conclusion considering the project as a whole. David S. Harlow Senior Counsel Immediate Office of the Assistant Administrator Office of Air and Radiation, USEPA WJC-N Room 5409K 1200 Avenue NW Washington, DC 20460 202-564-1233 Hariow?avidwemwdov From: "Jackson, Ryan" Date: January 5, 2018 at 5:51:44 PM EST To: [All OGC Staff] Subject: Staff announcement Good evening Office of General Counsel – I wanted to provide a notice of a change in the Air and Radiation Law Office. Beginning on Monday Gautam Srinivasan will serve as the Acting Associate General Counsel in the Air and Radiation Law Office. As you may be aware, Gautam joined the Office of General Counsel in 1999 in the Pesticides and Toxics Law Office and has served in a number of roles in the OGC over the years having served as the Deputy Associate General Counsel in the Air and Radiation Law Office for the previous two and a half years. I appreciate Gautam’s willingness to take on this new challenge. I also appreciate Lorie Schmidt’s service at EPA. She will be detailed to assist with special projects in the OGC. Thank you. Ryan Jackson Chief of Staff U.S. Environmental Protection Agency (202) 564-6999 An official website of the United States government. We've made some changes to EPA.gov. If the information you are looking for is not here, you may be able to find it on the EPA Web Archive or the January 19, 2017 Web Snapshot. United States Environmental Protection Agency Close Close Menu Search EPA.gov News Releases CONTACT US SHARE News Releases from Headquarters › Air and Radiation (OAR) Reducing Regulatory Burdens: EPA withdraws “once in always in” policy for major sources under Clean Air Act 01/25/2018 Contact Information:  (press@epa.gov) WASHINGTON – Today, the U.S. Environmental Protection Agency (EPA) issued a guidance memorandum withdrawing the “once in always in” policy for the classification of major sources of hazardous air pollutants under section 112 of the Clean Air Act.  With the new guidance, sources of hazardous air pollutants previously classified as “major sources” may be reclassified as “area” sources when the facility limits its potential to emit below major source thresholds.  “This guidance is based on a plain language reading of the statute that is in line with EPA’s guidance for other provisions of the Clean Air Act,” said Bill Wehrum, assistant administrator of EPA’s Office of Air and Radiation. “It will reduce regulatory burden for industries and the states, while continuing to ensure stringent and effective controls on hazardous air pollutants.” Today’s memo is another step by which EPA is reducing unnecessary regulatory burdens that deterred innovative efforts to improve the environment.  The “once in always in” policy has been a longstanding disincentive for sources to implement voluntary pollution abatement and prevention efforts, or to pursue technological innovations that would reduce hazardous air pollution emissions. States, state organizations and industries have frequently requested rescission of this policy, which was one of the most commonly cited requests in response to President Trump’s Executive Order 13777.   Today’s EPA action is an important step in furtherance of the president’s regulatory reform agenda while providing a meaningful incentive for investment in HAP reduction activities and technologies. The Clean Air Act defines a “major source” as a one that emits, or has the potential to emit, 10 tons per year of any hazardous air pollutant, or 25 tons per year or more of any combination of hazardous air pollutants.  Sources with emissions below this threshold are classified as “area sources.” Different control standards apply to the source depending on whether or not it is classified as a “major source” or an “area source.” In a 1995 memo, EPA established a “once in always in” policy that determined that any facility subject to major source standards would always remain subject to those standards, even if production processes changed or controls were implemented that eliminated or permanently reduced that facility’s potential to emit hazardous air pollutants. Today’s memo finds that EPA had no statutory authority under the Clean Air Act to place a time limit on when a facility may be determined to be an area source, and that a plain language reading of the Act must allow facilities to be reclassified as area sources once their potential to emit hazardous air pollutants falls below the levels that define major sources.  EPA anticipates that it will soon publish a Federal Register notice to take comment on adding regulatory text that will reflect EPA’s plain language reading of the statute as discussed in this memorandum. More information is available online at https://www.epa.gov/stationary-sources-airpollution/reclassification-major-sources-area-sources-under-section-112-clean EPA-HQ-20 18-005078 To: From: Sent: Subject: Holmstead, Jeff[jeff.holmstead@bracewell.com] Wehrum, Bill Tue 2/20/2018 2:47:41 PM Tomorrow Jeff- I will not be able to switch our lunch tomorrow with John Graham to dinner. I have a prior dinner commitment. Does th~_r·-·-E·~~·-·S-·-~--p~-~~-~-~-~"1·-·P-~i·~~~-Y·-·-·-·1.; ..'!, -·-·-·L·-·-h!, ork .cor ou? y !VV 11 L·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·l ! '"' '"'"''"""""" ! t·-·-·-·-·-·-·J Bill Wehrum Assistant Administrator Office of Air and Radiation U.S. Environmental Protection Agency (202) 564-7404 ED_001717_00003818-00001 EPA-HQ-20 18-005078 To: From: Sent: Subject: Holmstead, Jeff[jeff.holmstead@bracewell.com] Wehrum, Bill Tue 2/20/2018 3:44:27 PM RE: Tomorrow Thanks for making the reservation. See you tomorrow. Bill Wehrum Assistant Administrator Office of Air and Radiation U.S. Environmental Protection Agency (202) 564-7404 From: Holmstead, Jeff [mailto:jeff.holmstead@bracewell.com] Sent: Tuesday, February 20, 2018 10:36 AM To: Wehrum, Bill Subject: Re: Tomorrow Sounds good. If you haven't already made a reservation, I will do so and will assume that 12:00 works for you. I will look forward to seeing you tomorrow. Sent from my iPhone JEFF HOLMSTEAD Partner T: + 1.202.828 .58521 F: + 1.800.404.3970 ED_001717_00003861-00001 EPA-HQ-20 18-005078 BRACEWELL LLP 2001 M Street NW, Suite 9001 Washington , D.C.I20036-3310 illill~~~l I~~~~~ CONFID ENTIALITY STATEMENT This message is sent by a law firm and may conta in information that is privileged or confidential. If you rece ived th is transm ission in error, please notify the sender by rep ly e-ma il and delete the message and any attachments. On Feb 20, 2018, at 9:48AM, Wehrum, Bill wrote: Jeff- I will not be able to switch our lunch tomorrow with John Graham to dinner. I have a prior dinner commitment. Does the Occidental Grill on Pennsylvania Ave. work for you? Bill Wehrum Assistant Administrator Office of Air and Radiation U.S. Environmental Protection Agency (202) 564-7404 ED_001717_00003861-00002 arrhontil-iil'u'si'ii' SHARE . - ?il? II Mn" News Releases .-.-- - News Releases from Headquarters Air and Radiation (OAR) EPA Clarifies NSR Project Evaluations, Removes Obstacles to Reducing Pollution EPA to base emission control requirements on real world impacts DBMBIZUIS Contact Information: WASHINGTUN {March 13, 2013} Today, Environmental Protection Agency PHOTOS Administrator Scott Pruitt issued a guidance memorandum clarifying the process for evaluating projects under the major New Source Review program. The memo streamlines permitting without sacrificing environmental protections, and reduces burdens to develop and expand facilities while encouraging companies to reduce pollution. ?Today?s NSR guidance advances President Trump?s goal to streamline permitting requirements for manufacturing facilitates as well as efforts to reform the overly complicated and burdensome NSR program,? said EPA Administrator Scott Pruitt. ?The memo outiines a common?sense interpretation of NSR rules that will remove unnecessary administrative barriers to the construction of cleaner and more efficient facilities,? said EPA Of?ce of Air and Radiation Assistant Administrator Bill Wehrum. ?This is an important step toward achieving better outcomes based on real world impacts.? NSR provisions require covered facilities to obtain a preconstruction permit prior to the construction of a new major stationary source or a ?major modification? to an existing stationary source. Determining whether a proposed project triggers the threshold to obtain an NSR permit is a two-step process, which is laid out in the Agency's comprehensive Stephen Higley [hiarathonjc Andy Dodson [American 1 applicability procedures regulatory requirements. Step 1 determines whether a proposed Wood {?v?alerop?ane Fiose . . . . . . . . . . . . Itseif, result In a significant emissions Increase. If an Increase IS projected to ?um ?i mfg" a ?in? Association of Manufacturers}, Tim i?Iu nr [American occur, the process moves to Step 2 to determine whether the project, combined with other Forestand PaperAssociationll, and Paul Balserak unrelated recent projects, will result in a significant net emissions increase. today's NSR memo signing. Given previous inconsistent application and interpretation of the Step 1 evaluation accounting, this process has prevented environmentally beneficial projects from moving forward. The memo clarifies that companies can consider projected decreases in emissions of air pollution, as well as projected emissions increases, during Step 1. This removes regulatory obstacles, saves time and money, and reduces pollutants. If the Step 1 evaluation shows that the proposed project will not resuit in a significant emissions increase, the project then proceeds under a state-issued minor source permit and avoids the complex mu [ti?year evaluation to obtain a major NSR permit. Fo re info rm atio see: LL I do, . r; org-j t-e i eggs 1 L: r. t? s. __?115?l Background The first step in reforming the NSR program came in December Elli, when Administrator Pruitt issued a um making clear the Agency will not ?second guess? an owner or operator?s analysis, as long as it is done in a manner consistent with NSR requirements. it was followed by EPA foice of Air and Radiation Assistant Administrator Bill Wehrum?s memo withdrawing the as in policy, a major deterrent to improving environmental outcomes. Contact 'th to ask a question, provide feedback, or report a problem. L?h' l'Hll?i? 1C. St?trr'r March 13, 2013 MEMORANDUM SUBJECT: Project Emissions Ac ?\$New Source Review Preconstruction FROM: E. Scott Pru' T0: Regional Adm' 'strators In accordance with presidential priorities for streamlining regulatory permitting requirements for manufacturing, and in line with my prior recognition that ?opportunities exist to simplify? the New Source Review process and thereby ?achieve meaningful NSR reform,?' the US Environmental Protection Agency has been undertaking an assessment of the agency?s implementation of the preconstruction permitting requirements under the NSR provisions of the Clean Air Act. As part of this assessment. the EPA has identi?ed certain elements of the NSR regulations and associated EPA policies that have been sources of confusion and uncertainty.2 One such element that has given rise to uncertainty among both permitting authorities and stakeholders alike is whether emissions decreases from a proposed project at an existing major stationary source may be taken into account under Step 1 of the major modification applicability process in the EPA NSR regulations. The purpose of this memorandum is to communicate the interpretation that its current NSR regulations provide that emissions decreases as well as increases are to be considered at Step 1 of the NSR applicability process, provided they are part of a single project. The EPA has at times indicated that the relevant provisions of the NSR regulations preclude the consideration of emissions decreases at Step 1, but for the reasons discussed below, the agency will no longer apply any such interpretation re?ected in prior statements on this issue.3 See Final Report on Review of?Agency Actions that Potentially Burden the Safe, Ef?cient Development of Domestic Energy Resources Under Executive Order 13783 (Oct. 3. 3 See, eg. ?New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to- Projected-Actual Applicability Test in Determining Major Modi?cation Applicability? (Dec. 7, 201?). 3 Thus, for example, the EPA no longer subscribes to the reading ofthc NSR regulations that is re?ected in the Letter From Barbara A. Finazzo, U.S. EPA Region 2 to Kathleen Antoine, LLC, ?Re: HOVENSA Gas Turbine Hut. Cum EH l-fitl .36 FAX: Jill?l Li? Thl?? paper I5 DFIHIEU vegetab!e-oiI-bnsod inks and IS loo-percent postconsumer recycled material_ chlorina-frco-paocessod and recyclable. . . Background Under EPA regulations, the process for determining whether a project at an existing major stationary source triggers the requirement to obtain an NSR permit is a two-step process. Step I requires a determination of whether the proposed project, by itself, is projected to result in a signi?cant emissions increase. If such an increase is projected to occur, the process moves to Step 2. Under Step 2, an evaluation is made as to whether the project will result in a signi?cant net emissions increase, considering any other increases and decreases in actual emissions at the source that are contemporaneous with the particular project and are otherwise creditable. The EPA has generally referred to Step 2 as ?netting? or ?contemporaneous netting.? In the past, the EPA has sometimes described the consideration of both increases and decreases in emissions under Step 1 of the NSR applicability process as ?project netting.? The EPA now recognizes that using the term ?project netting? at Step 1 has resulted in confusion among stakeholders, permitting authorities and within the EPA itself. A more appropriate term to characterize the consideration of a proposed project?s emissions increases and decreases at Step I is ?project emissions accounting.? 1n the context of Step 1, the term ?netting? is misplaced, insofar as ?netting? more properly describes looking at those other projects that may have been or will be undertaken at a given facility over the contemporaneous period i.e. an evaluation that takes place under Step 2. In contrast, ?project emissions accounting? more accurately captures what Step 1 of the NSR applicability process is really all about i.e. taking account of the true emissions impacts of the project itself. The EPA believes that those prior agency statements that interpreted the NSR regulations as precluding project emissions accounting have had the practical effect of preventing certain projects from going forward and signi?cantly delaying others, even though those projects would not have resulted in a signi?cant emissions increase.4 The EPA recognizes that because of the inherent complexities associated with doing multi-year contemporaneous netting under Step 2 at a large facility,5 some companies may have been dissuaded from undertaking some projects. As a consequence, the lack of clarity in this matter likely foreclosed projects with the potential to make production more ef?cient across a wide variety of industrial sectors. Such ef?ciencies can result in reduced emissions, even while production is maintained or expanded. The interpretation provided here is consistent with the language of the NSR regulations and should result in sounder regulatory outcomes. Nitrogen Oxides (GT Prevention of Signi?cant Deterioration (PSD) Permit Application- Emission Calculation Clari?cation? (March 30, 2010} {March 30 HOVENSA Letter). 4 See, e.g. National Mining Association Response to Request for Comments on Regulations Appropriate for Repeal, Replacement, or Modi?cation Pursuant to Executive Order [3771 82 FR 7,'i'93 (Apr. 2017). at 3-4, EPA-HQ- Testimony of Paul Noe for Am. Forest 3: Paper Ass?n and Am. Wood Council, House Comm. on Energy Commerce, Subcomm. on Env?t, Oversight Hearing on ?New Source Review Permitting Challenges for Manufacturing and infrastructure,? at 2, 5, 7-8 (Feb. 2018) ("Noe Testimony?). 5 See. e.g. Noe Testimony at ?it-8. Relevant CAA and Regulatory Provisions The NSR provisions of the CAA and the implementing regulations require that a preconstruction permit be obtained prior to beginning (1) the construction of a new major stationary source or (2) a ?major modi?cation" to an existing major stationary source. In general, preconstruction permits for sources emitting pollutants for which the area is designated attainment or unclassi?able and for other pollutants regulated under the major source program are called prevention of signi?cant deterioration (PSD) permits. Permits for major sources emitting nonattainment pollutants and located in nonattainment areas are referred to as nonattainment NSR (NNSR) permits. The preconstruction permitting program, including the PSD and the NNSR permitting programs, is known as the NSR program. The CAA contains no statutory de?nition of the term ?major modi?cation." The (3AA does, however, de?ne the term ?modi?cation? is. ?any physical change in, or change in the method of Operation of, a stationary source which increases the amount ofany air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.? 42 U.S.C. 741 CAA 11 Reflecting the fact that the preconstruction review provisions of the PSD and nonattainment area permitting programs are phrased in terms of the construction or modi?cation of a ?major emitting facility? (under the PSD program) and of a ?major stationary source? (under the nonattainment program? The implementing regulations have from their earliest days been framed in terms of how one goes about determining whether a particular activity at an existing ?major stationary source" will be deemed to be a ?major modi?cation.?8 The EPA regulations specify that one determines whether a modi?cation is ?major" based on whether the modi?cation results in an increase of emissions above speci?ed rates defining whether the increase is ?signi?cant" (or greater than a de minimis amount).9 A project?I constitutes a major modi?cation for a regulated NSR pollutant if (and only if) it would result in two types of emissions increases i.e. a signi?cant emissions increase ?5 This de?nition of?modi?cation,? originally enacted by Congress in 1970 as part ofthe New Source Performance Standards (NSPS) program, was incorporated by reference for purposes ofthe newly enacted PSD and nonattainment programs by the Clean Air Act Amendments of1927.See42 U.S.C. 7479; (3AA 169((3) (?The term ?construction? when used in connection with any source or facility, includes the modi?cation (as de?ned in section 74] 1(a) of this title) ofany source or facility?): 42 U.S.C. 250] 121 (4) ("The terms ?modi?cations? and ?modi?ed? mean the same as the term ?modi?cation? as used in section 741 ofrhis title?). 7 42 FR 57419, 57430 (Nov. 3. 1977). 3 See, e.g. 40 CFR 983e, e.g. 40 CFR 52.2 (2017). The EPA adopted this current approach after a court rejected the initial attempt to determine whether a modi?cation was ?major" based on the thresholds of 100 and 250 tons per year from the statutory de?nition of?major emitting facility.? Port-var v. Castle, 636 F.2d 323, 399-400 (DC. Cir. 2012); 44 FR 51924, 51937 (Sept. 9, 45 FR 52636, 57705 (Aug. 7, 1980). ?l A ?project? is de?ned as ?a physical change in, or change in the method ofoperation of, an existing major stationary source." 40 CFR 52.2 (determined at Step 1), and a signi?cant net emissions increase (determined at Step See, e.g. 40 CFR These NSR applicability procedures, adopted as part of the 2002 NSR Reform rule,l3 codi?ed a prior EPA practice of looking ?rst at whether any emissions increase that may result from the project itself would be signi?cant before evaluating whether there would be a signi?cant ?net emissions increase? from the major stationary source as a whole. The regulations further specify that the particular procedure for calculating whether a proposed project would by itself result in a signi?cant emissions increase depends upon the type of emissions units that would be included in the proposed project. '4 See 40 These different procedures are required because, under the NSR regulations, the speci?c requirements for determining both the ?baseline actual emissions? and the post-change ?projected actual emissions? for existing emissions units are different than the requirements for determining the ?baseline actual emissions? and the post-change ?potential to emit" for new emissions units. As relevant here, the NSR regulations currently provide as follows: 52.21 Prevention of signi?cant deterioration of air quality. it: 3i: at: (2) Applicability procedures. The requirements of this section apply to the construction of any new major stationary source (as de?ned in paragraph of this section) or any project at an existing major stationary source in an area The net emissions increase is calculated as the sum ofthe emissions increase attributable to the particular project, calculated pursuant to 40 CFR and any other increases and decreases in actual emissions at the major stationary source that are contemporaneous and otherwise creditable. See 40 CFR Notwithstanding the interpretation ofStep communicated in this memorandum, source-wide netting (Le. Step 2) will continue to have an important role in the NSR applicability process. For example, source-wide netting always will be needed, as appropriate, to allow for consideration ofemissions associated with past projects within the contemporaneous period. '3 This memorandum cites certain provisions in the federal PSD regulations at 40 CFR The other NSR regulations, including 40 CFR 5 40 CFR and Appendix 5 of Part 5 (Part Subpart contain analogous de?nitions and requirements, and the interpretation set forth in this memorandum also applies to those analogous provisions. However, there are certain modi?cation provisions under the Title I. Subpart ofthe CAA and the EPA nonattainment NSR regulations that apply to certain nonattainment area classi?cations (see, e.g. CAA l82(e)(2); 40 CFR Part Appendix This memorandum does not address those speci?c modi?cation provisions in the Act or the EPA regulations for nonattainment areas. and. thus, does not communicate any EPA view regarding interpretation of those provisions. '3 in 2002, the EPA issued a final rule that revised the regulations governing the major NSR program. 67 FR BOISE: (Dec. 31,2002). The agency refers generally to these rule provisions as the Reform rule.? "1 ?Emissions unit" is de?ned, in relevant part, as ?any part ofa stationary source that emits or would have the potential to emit any regulated NSR pollutant and includes an electric utility steam generating unit as defined in paragraph ofthis section.? 40 CFR 52.2 An ?emissions unit" can be either a ?new" unit or an ?existing" unit. with a ?new? unit being further de?ned as ?any emissions unit that is {or will be} newly constructed and that has existed for less than 2 years from the date such emissions unit ?rst operated." id at {5 An ?existing emissions unit" is any unit that is not a ?new emissions unit.? id. at 4 designated as attainment or unclassi?able under sections 107(d)( or of the Act. (iv) The requirements of the program will be applied in accordance with the principles set out in paragraphs through of this section. (ii) The procedure for calculating (before beginning actual construction) whether a signi?cant emissions increase the ?rst step of the process) will occur depends upon the type of emissions units being modi?ed, according to paragraphs through of this section. The procedure for calculating (before beginning actual construction) whether a signi?cant net emissions increase will occur at the major stationary source the second step of the process) is contained in the de?nition in paragraph of this section. Regardless of any such preconstruction projections, a major modi?cation results if the project causes a signi?cant emissions increase and a signi?cant net emissions increase. A applicability test for projects that oniy involve existing emissions units. A signi?cant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the difference between the projected actual emissions (as de?ned in paragraph of this section) and the baseline actual emissions (as de?ned in paragraphs and (ii) of this section), for each existing emissions unit, equals or exceeds the signi?cant amount for that pollutant (as de?ned in paragraph of this section). Actuat?to-potentiol test for projects that only invoive construction ofo new emissions nnitts). A signi?cant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the difference between the potential to emit (as de?ned in paragraph of this section) from each new emissions unit following completion of the project and the baseline actual emissions (as de?ned in paragraph of this section) ot?these units before the project equals or exceeds the signi?cant amount for that pollutant (as de?ned in paragraph of this section). [Reserved?'il '5 While now designated as ?reserved," what had been clause of40 CFR 52.2 was promulgated as part ofthe 2002 NSR Reform rule. As originally promulgated, clause read as follows: Emissions test for projects that invoive Clean Units. For a project that will be constructed and operated at a Clean Unit without causing the emissions unit to lose its Clean Unit designation. no emissions increase is deemed to occur. See 67 FR 80275. The Clean Unit provision ofthe 2002 NSR Reform rule was subsequently held to be unlawful and vacated by the U.S. Court of Appeals for the D.C. Circuit in State ofNew thrill v. EPA, 4 3 F.3d 3. 38-40 (D.C. Cir. 5 Hybrid test for projects that involve types of emissions units. A signi?cant emissions increase of a regulated NSR pollutant is projected to occur if the sum of the emissions increases for each emissions unit, using the method specified in paragraphs through of this section as applicable with respect to each emissions unit, for each type of emissions unit equals or exceeds the signi?cant amount for that pollutant (as defined in paragraph of this section). 40 CFR The Interpretation of the NSR Applicability Provisions Based on the reconsideration of some previous conclusions and an examination of the regulations as a whole, the EPA now interprets the provisions set forth in 40 CFR through as providing that any emissions decreases that may result from a given proposed project are to be considered when calculating at Step 1 whether the proposed project will result in a signi?cant emissions increase. This interpretation is grounded in the principle that the ?plain language of the CAA indicates that Congress intended to apply NSR to changes that increase acrnai emissions." State ofNew York U. EPA, 413 F.3d at 40 (emphasis added). Central to the de?nition of ?modification" is that there must be a causal link between the physical or operational change at issue i.e. the ?project" and any change in emissions that may ensue. In other words, it is necessary to account for the full and direct effect of the proposed change itself. Accordingly, at the very outset of the process for determining whether NSR may be triggered, the EPA should give attention to not only whether emissions may increase from those units that are part of the project but also whether emissions may at the same time decrease at other units that are also part of the project. The use of the phrase ?sum of the difference? in clauses and of 40 CFR makes this clear. The ?difference? between a unit?s projected actual emissions or potential to emit (following the completion of the project) and its baseline actual emissions (prior to the project) may be either a positive number (representing a projected increase) or a negative number (representing a projected decrease). In either case. the values that result from ?summing? the ?difference? are to be taken into consideration at Step 1 in determining the emissions impact of the project. Some have argued that, in the case of projects involving only new units, the ?sum of the difference? could never include a decrease in emissions, because the applicable test compares the potential to emit following the project to pre-project baseline actual emissions, which are equal to 2005). Thereafter, all ofthe regulatory language related to the Clean Unit provision, including clause of40 CFR was stricken from the NSR Reform rule. See 22 FR 32526, 32528 (June 2007). Also affected by the D.C. Circuit?s vacatur was certain language of clause of 40 CFR as it had originally been promulgated in 2002. Struck from clause (I) was a ?nal sentence that provided: ?For example, ifa project involves both an existing unit and a Clean Unit, the projected increase is determined by summing the values determined using the method speci?ed in paragraph ofthis section for the existing unit and using the method speci?ed in paragraph ofthis section for the Clean Unit.? See 6? FR 30275: 22 FR 32529. 6 zero.? What this argument overlooks is that the NSR regulations de?ne a ?new unit? as ?any emissions unit that is (or will be) newly constructed and that has existedfor less than 2 years from the date such emission unit ?rst operated? 40 CFR (emphasis added), and for a new unit ?the baseline actual emissions for purposes of determining the emissions increase that will result from the initial construction and operation ot?such unit shall equal zero,? and ?thereafter, for all other purposes, shall equal the unit?s potential to emit.? 40 CFR Therefore, following initial construction or permitting. a ?new unit? one that has existed for less than two years since it first operated) could. as the result of a particular project, experience a decrease in potential emissions that is. the ?sum of the difference" could be a negative number if that project involved, for instance. the installation of controls on the unit, resulting in a decrease in the unit?s potential to emit. [7 The phrase ?sum of the difference? does not appear in clause of 40 CFR This omission, and the fact that clause speaks of the ?sum of the emissions increasesSeptember 2006 notice of proposed rulemaking that this ?challenges whether an emissions increase at an individual emissions unit can be a negative number.? See 71 FR 54249 (Sept. 14, 2006). While the EPA went on to say that it was ?reasonable to conclude that a source can perform project netting for hybrid [projects] as well,? the agency also indicated that the ?current rule . . . would not allow a source to include reductions from units that are part of the project until Step 2 of the calculation.? I'd. It was on that basis that the EPA proposed new regulatory language that was directed at making it explicit that emissions decreases as well as increases would be accounted for at Step 1 for projects involving both existing and new units. Id. at 54252. Based on a more thorough consideration of the surrounding context in the regulations, the EPA ?nds that the negative inference which the agency drew in 2006 from the fact that the phrase ?sum of the difference? is absent from clause was unwarranted.? Other language in clause 1? it was on this basis that the EPA previously said that, because the ?sum ofthe difference? for a project that only involves new emissions units must entail summing only emissions increases, this result should also inform the reading of the ?sum of the difference" as the phrase is applied to projects involving only existing units. leading to the conclusion that taking account ofemissions decreases at Step I is not permitted at all. See March 30 HOVENSA Letter at 5. As was previously noted. the EPA no longer subscribes to the reading of the NSR regulations re?ected in the March 30 HOV ENSA Letter. ?7 In its March 30 HOVENSA Letter. the EPA also stated that would not have needed to provide a special provision and unique rationale for the replacement unit rule if EPA had intended to allow project netting under the 2002 NSR Reform Rule.? March 30 HOVENSA Letter at 4. But this does not follow. Absent the provision, a replacement unit would be deemed a new emissions unit to which the actual-to-potential test would apply instead of the actual-to-projected?actual test applicable to existing units (including replacement units). This difference between the two applicability tests remains regardless ofwhether emissions decreases are accounted for at Step '3 This negative inference previously led the EPA to adopt the view that this provision did not allow ?project netting," 21 FR at 54249. and thus that it was necessary to propose an amendment to 40 CFR to allow project emission accounting for hybrid projects. 7 FR at 5425]. Since the EPA no longer considers the negative inference to be warranted. the agency also does not believe it is necessary to ?nalize the proposed 2006 revision before project emissions accounting can be conducted in Step I of the NSR applicability analysis for hybrid projects. However. the EPA is not taking action at this tilne to withdraw the project netting elements of the 2006 notice of proposed rulemaking. The EPA is still evaluating whether a revision of the text off-10 CFR 52.2 is desirable to provide additional clarity on this issue. indicates that emissions decreases are also to be accounted for. Clause speci?cally provides that the ?sum of the emissions increases for each emissions unit? is to be calculated o?er the speci?c impact of the proposed project has been ascertained with respect to each type of unit involved, ?using the method speci?ed in paragraphs through of this section as applicable with respect to each emission unit.? (emphasis added). That is, for a project involving both existing and new units, this accounting is to be done on a unit type-by-unit type basis, in which both emissions decreases (if any) and emissions increases (if any) are to be taken into consideration. Moreover, the history of this provision in the regulations indicates that the EPA originally intended that project emissions accounting be allowed at Step 1 for projects involving different types of units. The concluding ?For example . . sentence that had originally been part of clause but which had been stricken (for unrelated reasons) when the Clean Unit provision was vacated, see note 15 above, illustrates the agency?s intention. That sentence provided that, where a proposed project involves different types of units. the determination whether there is a projected increase is to be made by ?summing the values determined using the method speci?ed in paragraph of this section for the existing unit and using the method speci?ed in paragraph of this section for the Clean Unit.? (emphasis added). If one were to substitute ?new unit? for ?Clean Unit? and ?paragraph for ?paragraph by way of providing a different ?example,? the point remains. Since the ?values? derived from calculating the ?sum of the difference? with respect to both existing units and new units could be a negative number, the language used in clause (19 ?sum of the emissions increases? presents no ?challenge? to the use of project emissions accounting. i.e. taking account of emissions decreases as well as emissions increases, under the current regulatory language pertaining to projects that involve both existing and new units. The EPA does not interpret the existing regulations as requiring that a decrease be creditable or enforceable as a practical matter in order to be considered at Step 1. The issue of whether an emissions decrease is creditable and enforceable is relevant to Step 2, but not to Step 1. Regarding this, in the 2002 NSR Reform rule, the EPA expressly declined to adopt a requirement under which a source?s post-project projected actual emissions would have become an enforceable emission limitation. Such an approach had previously been suggested by the EPA, but the agency ultimately rejected it. See 67 FR 80193, 80197. The same reasoning that underpinned the 2002 NSR Reform rule?s treatment of projected actual increases applies equally to projected emissions decreases at Step 1. One exception to this is where an emissions decrease is calculated using the potential to emit of a unit after the project. In such a case, the requirements of 40 CFR would continue to apply. The EPA also promulgated, as part of its adoption of provisions addressing the use of the ?projected actual emissions? methodology, provisions pertaining to the tracking, documenting, and, under certain circumstances, the reporting of post-project emissions increases. See, e.g. 40 CFR Those provisions would impose on sources the same obligations with reSpect to emissions decreases taken account of at Step 1. Given this, the EPA should not treat projected increases and projected decreases differently at Step 1, by requiring that decreases be ?creditable? and ?enforceable,? as would be the case with contemporaneous decreases accounted for at Step Finally, it is important to point out that project emissions accounting, as described above, is a calculation that is done in conjunction with ascertaining, prior to beginning actual construction, the applicability of NSR to a particular project at a source that the owner/operator is itself proposing to undertake. In this regard, the EPA recognizes that as a general matter, the source itself is responsible for de?ning the scope of its own ?project," subject to the understanding that the source cannot seek to circumvent NSR by characterizing the proposed project in a way that would separate into multiple projects those activities that, by any reasonable standard, constitute a single project. Subject to the equivalent understanding that it might be possible to circumvent NSR through some wholly arti?cial grouping of activities, the EPA does not interpret its NSR regulations as directing the agency to preclude a source from reasonably de?ning its proposed project broadly, to re?ect multiple activities. The EPA will speak more to this issue in planned upcoming action on ?project aggregation.? arses The EPA Regional Of?ces should send this memorandum to states within theirjurisdiction. For any questions concerning this memorandum, please contact Anna Marie Wood in the Office of Air Quality Planning and Standards at (919) 541-3604 or wood.onna@epo. gov. ?9 In the September 2006 notice of proposed rulemaking, the EPA had proposed to adopt regulatory language that speci?ed, for the purposes of what was then termed ?project netting,? that emissions decreases must be creditable or otherwise enforceable as a practicable matter. See 7] FR 54252. At that time, the EPA provided no explanation why it considered such a requirement to be either necessary or warranted, and the agency now recognizes that other provisions in existing regulations serve to alleviate concerns that projected emissions decreases would escape the same tracking, documentation and reporting requirement applicable to projected emissions increases. As discussed in footnote the EPA is not withdrawing the September 2006 proposal at this time, pending further consideration of whether a revision ofthe regulatory text is desirable to provide further clarity. 9 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460 April 5, 2018 OFFICE OF AIR AND RADIATION Ms. LeAnn Johnson Koch Perkins Coie 700 13th Street, NW Suite 600 Washington, D.C. 20005-3960 Re: Limetree Bay Terminals, St. Croix, U.S. Virgin Islands - Permitting Questions Dear Ms. Johnson Koch: This is in response to your February 1, 2018, letter to the U.S. Environmental Protection Agency's (EPA) Region 2 Office, in which you sought EPA's concurrence on three New Source Review (NSR) permitting questions pertaining to the Limetree Bay Terminals (LBT) facility in St. Croix, U.S. Virgin Islands (USVI). In your letter, you specifically asked whether EPA concurs with LBT that: (1) restarting some of the idled refinery units as part of the "MARPOL Project"1 (to produce fuel compliant with the maritime sulfur regulations taking effect January 2020) will not result in the facility being viewed as a new stationary source under EPA's current so-called Reactivation Policy; (2) the MARPOL Project and another LBT project to produce Renewable Diesel Fuel are independent and should not be considered a single project for purposes of applicability under the Prevention of Significant Deterioration (PSD) regulations; and (3) the addition of a deeper water loading configuration (Single Point Mooring or SPM) should be considered a modification to an existing emissions unit (i.e., the dock system and associated loading terminal) and not a new emissions unit for the PSD applicability analysis. In addition to the foregoing inquiries, you previously sought EPA guidance regarding when emission decreases from a project can be considered within the NSR applicability analysis. 1 MARPOL is the International Convention for the Prevention ofPollution from Ships. Internet Address (URL)• http://www.epa.gov Recycled/Recyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum 50% Postconsumer content) Based on EPA's review of your submitted analyses and supporting documents, we concur that: (1) restarting of the refinery's idled units for the MARPOL Project should not be treated as a new stationary source under the current Reactivation Policy; (2) the MARPOL Project and the Renewable Diesel Fuel Project are independent of each other and therefore separate projects for PSD applicability; and (3) constructing the SPM would be considered a modification to an existing emissions unit rather than a new emissions unit. Discussion on. each of these issues is provided below, along with information to address your previous question regarding accounting of emission decreases within the NSR applicability analysis. Restarting Refinery Units and the Current Reactivation Policy The current policy on the reactivation of sources provides that a major stationary source that has been idled for 2 or more years is presumed to be permanently shut down. See In the Matter ofMonroe Electric Generating Plant Entergy Louisiana, Inc., Proposed Operating Permit, Petition No. 6-99-2 (June 11, 1999). That policy states that if a source is permanently shut down, upon reactivation it is considered a "new" stationary source for purposes of PSD review. Accordingly, PSD applicability would be based on the reactivated source's potential to emit. Importantly, however, this 2-year presumption is rebuttable. EPA will not consider the shutdown to have been permanent upon the owner or operator of the source making a demonstration that, at the time of the shutdown, and continuously throughout the shutdown period, they intended to restart the facility. Among the factors that EPA in the past has considered in evaluating the owner or operator's intent are: • • • • • • Length of time the facility has been shut down and concrete plans for restart; Statements by the owner or operator of intent; The cause of the shutdown; Status of permits, including but not limited to Clean Air Act operating permits, acid rain permits and other required permits, and emission inventory; Maintenance and inspections during shutdown; and Time and capital needed to restart. In evaluating these factors, no single factor is likely to be conclusive in determining intent. Instead, EPA generally has considered the totality of all such factors and the relevant supporting documentation in evaluating whether there was a continuous intent to restart the facility. 2 In the case of LBT's facility in St. Croix, our review of the information you have submitted leads us to conclude that both LBT and HOVENSA displayed a continuous intent to restart the refinery operations. Therefore, applying the criteria of the current Reactivation Policy, we have determined that LBT's St. Croix facility was not permanently shut down and should not be considered a "new source" for purposes of PSD applicability. As this description indicates, the current Reactivation Policy has been derived from a series of EPA site-specific determinations and guidance issued over the course of many years. Further, EPA has not cited any specific regulatory provisions of the NSR program to support its position on source "reactivation." We are applying the current Reactivation Policy to resolve the LBT issue, but we intend to reconsider the policy in the near future. 2 2 LBT's facility in St. Croix was previously owned by HOVENSA until 2016, at which time LBT purchased the refinery and terminal operations. As LBT explains, an economic downturn caused HOVENSA to idle the refinery operations in 2012. Nevertheless, since that time, the terminal operations, wastewater treatment plant, and power generation have continued to operate at this location. Even before HOVENSA announced, on February 21, 2012, that it had completed the final idling of all refinery units, HOVENSA had informed the USVI government of its plans to retain its permits and implement maintenance procedures on their equipment so that it could restart the refinery. LBT represents that over the next several years, HOVENSA spent over $400 million to maintain the restart capability of the refinery operations, which included removing residual material from equipment, retaining control room operability, and conducting other process equipment mothballing activities. LBT provided EPA with a timeline and supporting information that included evidence of this continuous intent by HOVENSA and LBT to restart the facility. The supporting information included company statements, press releases, and various correspondence from 2011 through 2017. LBT also confirmed that HOVENSA and LBT maintained all environmental permits in active status and submitted timely renewal applications. Further, LBT stated that these companies continued to comply with the Refinery MACT, NSPS Subpart J, and all of the applicable RCRA regulations while the refinery units were idled. LBT represents that the companies maintained critical refinery equipment, such as compressors, pumps, utilities, wastewater treatment units in working order and conducted multiple walkthrough inspections at the plant, activities that are necessary for a restart. In order to demonstrate that the maintenance activities were performed, LBT provided a list of critical equipment and the timeline of significant maintenance activities performed at the refinery. LBT also represents that neither it nor HOVENSA made any statements to any party or issued any press release indicating any intent not to restart the plant in the future. Project Aggregation - Renewable Diesel Project and Refinery Restart (MARPOL Project) The term "project aggregation" describes the process of grouping "nominally separate changes that are sufficiently related based on established criteria ... into a single common project for the purpose of determining PSD applicability."3 More specifically, the emissions of the nominally separate changes are combined for the purposes of detennining whether a "significant emissions increase" - referred to as "Step I" of the NSR applicability test - will occur from the project. EPA's project aggregation policy aims to ensure the proper permitting of modifications that involve multiple physical and/or operational changes. Where the projects at issue are more reasonably deemed to constitute a single project for purposes ofNSR, a source will not be allowed to circumvent major NSR by seeking to permit the individual activities separately under minor source NSR. Letter from Stephen Page, Director, Office of Air Quality Planning and Standards, to David Isaacs, Vice President, Government Policy, Semiconductor Industry Association (August 26, 20 I I). (SIA Letter) 3 3 LBT plans to construct the Renewable Diesel Project and the MARPOL Project at the current plant site in late 20 l 8. Given that these projects will begin close in time to one another, LBT has sought EPA 's concurrence that these projects should not be aggregated (i.e., considered to be a single project) for the purposes of the PSD applicability analyses. LBT representatives have been clear in statements to EPA that, while they are pursuing the Renewable Diesel Project and the MARPOL projects concurrently, they are separate and distinct projects. Based upon EPA's review of all the information LBT provided, we concur that the two projects are independent of each other and, therefore, should not be aggregated for purposes of PSD applicability. In analyzing whether the two LBT projects at issue here should be aggregated, we have followed our current policy on project aggregation, which takes into account indicia oferelatedness among the individual actions at a source in order to determine whether the activities, in the aggregate, are one physical or operational change as those terms are used in the statute and regulations.4 Our policy on aggregation outlines an approach relying upon case-specific factors (e.g., timing, funding, and the company's own records) and the relationship between nominally separate changes. As explained in your letter, the MARPOL Project involves restarting certain existing refinery units to process crude oil, heavy fuel oil, and petroleum intermediates into refined petroleum products. This project will involve restarting a crude unit, a reformer, two naphtha hydrotreating units, a coker unit, two distillate hydrotreating units, an isomerization unit, and two sulfur recovery plants. These units will be configured to produce low-sulfur fuels (i.e., gasoline, diesel, and fuel oil) and are scheduled to begin operation just before January 2020, when the relevant MARPOL amendments and EPA implementing regulations take effect. LBT represents that the economic viability of the MARPOL Project depends on the value generated from converting petroleum crude into refined petroleum products and market advantages that may exist due to an anticipated market shortfall of MARPOL-compliant marine fuel in 2020. Your letter explains that the proposed Renewable Diesel project will convert vegetable, animal, and recycled cooking oils into renewable diesel fuel. This project involves building a feedstock pretreatment train and a new hydrogen unit to convert the oils into diesel compounds, and repurposing an existing hydrotreating unit (previously used for the hydrotreating of petroleum liquids) as the reactor for the conversion. LBT represents that the Renewable Diesel Project will produce fuel meeting the requirements of the Renewable Fuel Standard (RFS) and California's Low Carbon Fuel Standard (LCFS) programs, and that the fuel could be blended with transportation fuel sold in the United States to generate Renewable Identification Numbers (RINs) under the RFS as well as LCFS credits. Further, LBT suggests that the renewable diesel fuel may be eligible for a federal blender's tax credit. According to LBT, the economic viability of the Renewable Diesel Project depends heavily on the future value of converting vegetable, animal, and recycled cooking oils into renewable fuel, as well as the value of RlNs, LCFS, and other tax credits. Significantly, none of these factors relate to the MARPOL project. While EPA issued a revised policy on project aggregation in 2009, the policy has been stayed and is currently under reconsideration by the Agency. See 74 FR 2376 (January 15, 2009), 74 FR 7193 (Feb. 13, 2009), 75 FR 27643 (May 18, 2010). See 75 FR 19570-71 (April 15, 20 I 0) for a collection of memoranda that provide examples of EPA 's current approach to project aggregation. 4 4 LBT has shown that each of these two projects is technically distinct and does not depend on the other in terms of decision-making and timing, interaction between units, the process technologies used, feedstocks involved, or products produced. LBT stated that the MARPOL Project will be fully self-contained as the selected units are inspected, reconditioned as needed, and restarted. More specifically, LBT maintains that the raw materials, piping, process equipment, and material transfer systems for each project will be completely unshared and independent of the other project. LBT represents that the construction of one project does not necessitate or otherwise influence the construction of the other project. LBT has demonstrated to our satisfaction that the economic viability of each project stands on its own, such that the Renewable Diesel Project could proceed on its own financial merits, regardless of the future of the MARPOL Project, and vice versa. In particular, LBT noted the unique opportunity presented to timely and economically reconfigure the idled hydrotreating equipment and the current availability of renewable fuel and tax credits as proof of lack of economic dependency between the Renewable Diesel and MARPOL Projects. Each project's feasibility is based on its own set of incentives and market realities and does not depend on the other project going forward. We note that the one thing that may be considered to be common to both projects is the potential for shared utilities. However, sharing utilities does not in and of itself mean that activities at a source are functionally or economically dependent on one another. Since both projects will produce fuel gas, the power and steam required to operate each project can be generated from fuel gas produced by either the renewable diesel unit or the MARPOL refining unit, and in some cases the projects may combust fuel oil, so neither project is dependent on the other project for steam or power generation. In addition, LBT stated that each project will rely on the existing wastewater treatment and water production facilities at the terminal. LBT maintains there is no appreciable cost benefit that the Renewable Diesel Project will receive by virtue of the MARPOL Project because the utilities are already in operation as part of the ongoing terminal operations. Single Point Mooring - Modification to an Existing Emission Unit LBT also seeks a determination that the addition of a single point mooring (SPM) project to its existing marine loading/unloading system should be considered a modification to an existing unit at the facility rather than a new unit pursuant to the PSD regulations. In your letter, you explain that the existing marine loading/unloading system consists ofeten marine docks, each of which can load and unload multiple petroleum products. According to LBT, the proposed SPM addition would "extend from the jetty on the seabed for approximately 5,800 feet to a Pipeline End Manifold" that would be connected to a buoy via a flexible hose, and the buoy would load/unload crude oil onto ships via two floating hoses. Based on the information provided by LBT, EPA believes that the addition of the SPM is reasonably considered to be an extension of the existing marine loading terminal. Therefore, EPA concludes that the SPM should be treated as a modification of the existing marine terminal emissions unit. 5 The definition of "emissions unit" in the PSD regulations does not speak to how broadly or narrowly to consider the scope of an emissions unit at a stationary source, nor does it address how to treat a new emissions point, such as the SPM, that is added to an existing stationary source with existing emission units. The definition at 40 CFR §52.21 (b)(7) states: Emissions unit means any part of a stationary source that emits or would have the potential to emit any regulated NSR pollutant and includes an electric utility steam generating unit as defined in paragraph (b)(31) of this section. For purposes of this section, there are two types of emissions units as described in paragraphs (b)(7)(i) and (ii) of this section: (i) A new emissions unit is any emissions unit that is (or will be) newly constructed and that has existed for less than 2 years from the date such emissions unit first operated. (ii) An existing emissions unit is any emissions unit that does not meet the requirements in paragraph (b)(7)(i) of this section. A replacement unit, as defined in paragraph (b)(33) of this section, is an existing emissions unit. This regulatory language can be reasonably interpreted to provide that multiple pieces of related process equipment (or emission points) comprise a single emissions unit. Prior EPA determinations interpreting the PSD regulations provide specific guidance on this question. Those determinations illustrate that ascertaining the proper scope of an "emissions unit" often requires very case- and fact-intensive analyses. For instance, in a letter to the Semiconductor Industry Association, EPA confirmed that it was appropriate to treat an entire semiconductor fabrication building, or "fab," as one emissions unit.5 EPA based this decision on the ''interconnected nature of the 'tools' in the fab" and the systems that deliver materials and manage discharges. The letter also pointed out that fab units could be located in adjoining buildings if they are "physically connected, integrated, and operated" in a continuous and consolidated manner, and that it may be more appropriate to treat physically separated operations as a separate emissions unit. In that letter, EPA also referenced other detenninations by EPA Regions, in which the Regional office provided rationale for why grouping related processes and equipment into a single emissions unit made sense given the circumstances. 6 In analyzing the SPM project, we note that the existing marine terminal currently loads and unloads crude oil in addition to other petroleum products. Based on the information provided in LBT's recent permit application to the Virgin Islands Department of Planning and Natural Resources, the SPM will load and unload only crude oil. Since LBT is currently loading and 5 SIA Letter. Letter from Judith M. Katz, Region Ill, U.S. EPA, to John M. Daniel, Director, Air Program Coordination, Commonwealth of Virginia, Depa11ment of Environmental Q uality, (November 30, 2000); Letter from Douglas M Skie, Region VIII, U.S. EPA, to Brad Beckham, Director, Air Pollution Control Division, Colorado Department of Health ( February 6, 1990) . 6 6 unloading crude oil at the existing marine terminal, the proposed SPM would not change the nature of the pollutant-emitting activity occurring at the terminal. Furthermore, the SPM will be physically connected to the existing marine loading terminal by way of an underwater piping system and will be completely integrated with the loading and storage operations at the existing terminal. Consequently, the SPM and current marine terminal appear to share the same interconnectedness that EPA previously found persuasive in its analysis of semiconductor fabs, which supports treating LBT's proposed SPM and the existing terminal as a single emissions unit. We also note that state agency permit actions have also reflected the flexibility within the definition of emissions unit. There are several examples of state permitting agencies treating multiple marine loading berths/docks as a single emissions unit in the context of Title V permits. 7 Thus, the treatment of multiple loading docks or berths as a single emissions unit is not unusual. Finally, in other correspondence LBT has informed EPA that it will be installing a vapor capture and collection system at the existing marine terminal, although LBT has indicated the system will not be used to reduce emissions that occur while loading ships at the SPM. Instead, LBT has indicated it intends to comply with the submerged loading requirements8 when the ships are loaded at the SPM, and that the control of emissions from the existing docks will help offset the emission increases from the operation of the SPM. We note that, in the context of the PSD program, a BACT determination for a major modification is focused on each emissions unit. However, this approach does not foreclose a determination that different emission points within an emissions unit can have distinct BACT requirements due to technical or economic feasibility or other factors considered under a BACT review. Consequently, for LBT to install a vapor recovery system at the existing loading berths and apply a different control strategy for the SPM emission point does not necessitate that the SPM be treated as a separate emissions unit under the PSD program. EPA views the proposed SPM and the new vapor control system as being part of the overall integrated loading/unloading operation at the terminal, and views this operation as an integrated emissions unit for PSD purposes. Consideration of Emission Decreases from the Project While not specifically raised in your February 1 , 201 8 letter, LBT previously asked EPA whether, under the NSR applicability procedures (e.g., 40 CFR §52.2l (a)(2)), emission decreases may be taken into account when a "significant emissions increase" calculation of projects which involve only existing units is undertaken at Step 1 of the NSR applicability analysis. As you should be aware, EPA has recently clarified that emission decreases from a project are to be considered at Step 1 . This applies not only to existing emission units for but all categories of projects. See Project Emissions Accounting Under the New Source Review Preconstruction Pennitting Program (March 1 3 , 2018). See, e.g., Indiana Department of Environmental Management, Part 70 Operating Permit, BP Products North America, Inc. - Whiting Business Unit (December 14, 2006); Commonwealth of Virginia, Department of Environmental Quality, Federal Operating Permit, TransMontaigne Operating Company, L.P. - Norfolk Terminal ( April 7, 2014). EPA is also aware of analogous non-marine loading activities, such as truck loading racks, being treated as a single emissions unit. 7 8 46 CFR 153.282. 7 Conclusion EPA's responses contained within this letter are based on the information LBT has provided EPA through letters and emails pertaining to your permitting questions. Since EPA does not have emissions information and other specifics regarding your planned projects, EPA is not providing any final determination on the applicability of the PSD regulations to your projects. A final determination on PSD applicability will be made on the basis of the information provided in your application and supporting materials. Finally, nothing in this letter's discussion of PSD policies should be interpreted to reflect EPA's views on the applicability or requirements of any other programs, including the New Source Performance Standards and the National Emissions Standards for Hazardous Air Pollutants. If you have any questions about this letter, please contact Anna Marie Wood in the Office of Air Quality Planning and Standards at (919) 541-3604 or wood.anna@epa.gov. - �:? 2.)� Assistant Administrator cc: Alexander Dominguez David Harlow John Filippelli Bill Hamett Peter D. Lopez Peter Tsirigotis Anna Marie Wood 8 SHELDON WHITEHOUSE RHODE ISLAND 0C9: [?621 22?~Hu? ELL-.1 HI lli' FELT ?llnitt? ?l?tt? ?tnatt WASHINGTON, DC 20510? 3905 April 25, 2018 The Honorable Scott Pruitt Administrator U.S. Environmental Protection Agency 1200 Avenue NW Washington, D.C. 20460 Dear Administrator Pruitt, I write to inquire about unexplained delays in the disclosure of a recusal statement for William Wehrum, Associate Administrator for the Of?ce of Air and Radiation at the Environmental Protection Agency Based on my review of Of?ce of Government Ethics regulations and public records, Mr. Wehrum should have, by now, come into full compliance with his August 23, 2017, ethics agreement with EPA. If that is not yet the case, it would suggest a breakdown in the ethics compliance process at EPA and could mean Mr. Wehrum has been working on matters from which he should be recused. The Associate Administrator for OAR is a Senate?confinned position. Accordingly, prior to his nomination hearing before the Senate Environment and Public Works Committee, Mr. Wehrum entered into an agreement with EPA to recuse himself from participating in particular matters in which he may have a con?ict of interest due to his ?nancial holdings, or matters involving his former law ?rm or clients. He promised to document his compliance with his ethics agreement within 90 days of his con?rmation. Mr. Wehrum was con?rmed by the United States Senate on November 9, 2017 and according to OGE, Mr. Wehrum was due to come into compliance with his ethics obligations by February 14, 2018. Mr. Wehrum?s ?Certi?cation of Ethics Agreement Compliance? is available on website.I It is signed by him and dated December 7, 2017. On that form, Mr. Wehrum represented the following: In With respect to whether he had recused himself from particular matters in which he would have a personal or imputed ?nancial interest, Mr. Wehrum originally indicated then revised his form on December 19, 2017, creating by hand a new option??nfa??that is not available on of?cial form. 0 With respect to whether he had recused himself from particular matters related to former employers or clients, Mr. Wehrum indicated ?yes." It is my understanding that the recusals are memorialized in ?recusal statements? negotiated between career ethics of?cials and nominees once they are con?rmed. Presumably, Mr. Mr. Wehrum?s certi?cation form can be retrieved at 20! +Request10penForm, :_lN IIYCI Wehrurn?s recusal statement was complete when he signed his ?Certi?cation of Ethics Agreement Compliance? on December 7, 2017. My of?ce ?rst requested Mr. Wehrum?s recusal statement on February 21, 2018 ethics officials in your Of?ce of General Counsel. That request was transferred to the Of?ce of Congressional and Intergovernmental Relations. My staff repeated its request for this document on March 16, 2013, March 22, 2018, and April 23, 2018. To date, that document still has not been produced. Recusal statements are important documents because they memorialize, after a particularized analysis by agency ethics of?cials, which matters EPA staff cannot participate in to remain in compliance with federal ethics laws and regulations. They also memorialize whether any waivers have been granted to these rules, and if so, why. Mr. Wehrurn was an attorney with the law ?rm of Hunton Williams prior to his appointment, at which he and his law partners represented utilities and others with business before, and in litigation against, EPA, particularly on matters related to the Clean Air Act. Mr. Wehrum now interprets and enforces that Act. This litigation has obviously continued during Mr. Wehrum?s tenure, and the agency has issued guidance and policies, like its December 7, 2017 memo on New Source Review Preconstruction Permitting Requirements,2 closely related to matters Mr. Wehrum handled in private practice. The public does not know whether the agency has concluded that Mr. Wehrum has con?icts of interest in these matters and if so, what steps have been taken to address them. I request that you provide my of?ce with a copy of Mr. Wehrum?s recusal statement by May 2, 2018. If you cannot, or if the statement is dated after December 7, 2017, I request you explain how Mr. Wehrum?s ethical obligations have been policed since that date. Finally, I request an explanation of why Mr. Wehrum was authorized to assert that recusals related to his personal or imputed ?nancial interests did not apply to him, and how that has affected the agency?s ethics analysis. Please contact Joe Gaeta ioc gaetafi?whitehousescnatc.gov) of my staff with any inquiries you have about this request. Sincerely, Sheldon Whitehouse United States Senator cc: Kevin Minoli, Designated Agency Ethics Of?cial, U.S. Environmental Protection Agency Troy Lyons, Associate Administrator, Of?ce of Congressional and Intergovernmental Relations, US. Environmental Protection Agency 2 Memorandum ?om E. Scott Pruitt, Administrator, to EPA Regional Administrators, dated Dec. 7, 2017, available at actual UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHI NGTON, DC 20460 April 30. 20 18 Office Of AIR ANO RADIATION The I lonorable Patrick McDonnell ccretary of the Pennsylvania Department of Environmental Protection Rachel Carson Office Building Post Box 2063 I larrisburg, Pennsylvania 171 05 Dear Mr. McDonnell: On February 14. 20 18. the Pennsylvania Department of Environmental Protection (PADE P) requested that the U.. Environmental Protection Agency review a document submitted on behalf of Meadowbrook Energy LLC (Meadowbrook) concerni ng whether emissions from a biogas processing facility under development by Meadowbrook should be aggregated with an existing landlil l owned by Keystone ani tary Landfill. Inc. (K L) for Clean Air Act (CAA) permitting purposes. EPA under lands this request to relate to the question of whether these two enti ties should be considered part of the same ··major source·· under the operating permit program under title V of the CAA. and/or part of the same ··stationary source·· for the ew Source Review (NSR) pre­ construction permit programs under title I of the CAA. 1 EPA commonly refers to these types of questions as "source determinations:· Under the federal rules governing these permi tting programs. enti ties may be considered pan of the same ··stationary source" or ··major sourcc" 2 if they ( I) belong to the same industrial grouping: (2) arc located on one or more contiguous or adjacent properties: and (3) arc under the control of the same person (or persons under common control).3 Meadowbrook 's analysis. as supplemented by additional analysis dated March 16, 20 18. primaril y asserts that the Meadowbrook and K L facilities arc not under ··common control.·· 1 Although it appears that Meadowbrook's analysis only direc1ly implica1es ti1le V pcrmi11ing. 1hc discussion in this le11er and the A11achment is relcvan110 SR pcrmiuing actions as well. In 1hc R regulations. 1hc defini1ions of "stationary source·· use the term ··building. struclure. facility or inslallation:· which is separa1ely defined. 1 References 10 "major source·· in 1his leuer or A11achmcn1 are intended 10 refer only 10 the ponions of the 1i1lc V defini1ions of "major source" 1ha1 rela1e to w hich ac1ivi1ies should be considered pan of the same ··major source." 3See 42 U.S.C. § 766 1(2)(1i1le V statutory defini1ion): 40 C. F.R. §§ 70.2 & 71.2 (1i1le V regulations): 40 C.F. R. §§ 52.21 (b)(5) & (6). 5 I. I65(a)( I)(i) & (ii). and 5 I. I66(b)(5) & (6) ( SR regulations). PADEP·s perrni11ing regulations either incorporate EPA 's preven1ion of significant deterioration (P D) regulations or contain s imilar provisions. See e.g.,25 Pa. Code 127.83 (PSD regulations incorporating EPA 's regulations in 40 C.F.R. § 52.2 1): Internet Address (URL} · http //www epa gov Recycled/Recyclable • Pr nted with Vegetable e O Based Inks on 100 Postconcumer Process Ch o ne Free Reeve ed Paper As described more fully in the Attachment below, EPA has long recognized that common control determinations s hould be made on a case-by-case basis. In making such determinations, and in offering its views to other permitting authorities, EPA has previously interpreted the term "common control" in a manner that may support viewing the Meadowbrook and KSL facilities as a s ing le ·'stationary source" or "major source" by virtue of the support or dependency re lationships between the two entities that might be viewed as providing each entity with some degree of influence over the operations of the other. However, the potential for that interpretation to produce inconsistent and impractical outcomes in this and other cases has caused EPA to re-evaluate and revise its interpretation of the term "common control" in the title V and NSR regulations. For the reasons discussed further in the Attachment, the agency believes clarity and consistency can be restored to source determinations if the assessment of "control" for title V and NSR permitting purposes focuses on the power or authority of one entity to dictate decisions of the other that could affect the applicability of, or compliance with, re levant air pollution regulatory requirements. Under this revised interpretation, EPA agrees with Meadowbrook that PADEP may conclude that the Meadowbrook and KSL facilities are not under common control and thus not a single "stationary source'· or "major source'' for title V or NSR purposes. However, given that Pennsylvania' s title V and NSR programs have been approved by EPA, PADEP has primary responsibility to make source determinations involving the Meadowbrook and/or KSL fac ilities based on its EPA­ approved rules. EPA believes that the following Attachment, in explaining EPA' s revised interpretation and other factors that EPA recommends considering when determining if there is "common control," should be he lpful to PADEP as it makes its final pennitting decision with respect to Meadowbrook. If you have any additional questions, please contact Anna Marie Wood in the Office of Air Quality Planning and Standards at (9 19) 541-3604 or wood.anna@epa.gov. William L. W William L. Wehrum Assistant Administrator Attachment cc: Krishnan Ramamurthy, Director of Air Quality, PADEP Mark Wejkszner, Air Quality Program Manager, PADEP, Region 2 see also 25 Pa. Code 121.1 (general air quality definition of "facility"); 25 Pa. Code l 27.204(a) (nonattainment NSR regulations discussing aggregation). Letter: William L. Wehrum, Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency, to the Honorable Patrick McDonnell, Secretary, Pennsylvania Department of Environmental Protection (April 30, 2018) Attachment I. Meadowbrook and KSL Background Meadowbrook Energy LLC (Meadowbrook) has indicated that it plans to construct a biogas processing facility that will convert landfill gas (LFG) and other potential biogas feedstocks into pipeline-quality natural gas for injection into the interstate natural gas pipeline system, to be used as a transportation fuel. Meadowbrook has entered into an agreement with Keystone Sanitary Landfill, Inc. (KSL), 4 whereby KSL will deliver LFG to Meadowbrook via a pipeline running between the two facilities. This pipeline will be owned by KSL up to a demarcation point, at which point the remainder of the pipeline will be separately owned by Meadowbrook. Meadowbrook explains that KSL controls its own landfill gas collection activities and delivers untreated landfill gas to the demarcation point. After the demarcation point, Meadowbrook conducts all processing of the gas necessary to create the renewable natural gas product that it injects into the pipeline for market sale. Meadowbrook represents that the two entities have no cross-ownership or direct control over operations at the other facility. In other words, each entity has no ability to control, operate, close, or restrict the use of the other’s facility. 5 Meadowbrook characterizes the relationship between the two facilities as arms-length arrangements between independent commercial entities. Meadowbrook therefore believes that Meadowbrook and KSL should not be considered under “common control,” and thus their facilities should not be considered a single source. More specifically, Meadowbrook maintains that KSL is not dependent on Meadowbrook for compliance with any portion of the requirements associated with the control of the emission of KSL’s LFG. Meadowbrook indicates that KSL will retain full responsibility for compliance with all air pollutant control obligations (e.g., New Source Performance Standards (NSPS) Subpart WWW requirements for LFG) until the LFG is delivered to the demarcation point (i.e., until the gas is delivered to Meadowbrook). If Meadowbrook cannot accept LFG, shutoff valves in the pipeline between LFG and Meadowbrook will redirect all of the LFG to KSL’s flares for 4 Meadowbrook indicates that this agreement is subject to future revisions. The information provided to PADEP by Meadowbrook in its initial draft analysis and its updated March 16, 2018, analysis apparently reflects the mutual understandings of Meadowbrook and KSL as of the date of these analyses. 5 Meadowbrook acknowledges that Meadowbrook will provide either labor (likely through a third-party) or financing associated with modifying or optimizing KSL’s landfill gas collection system in order to set up the pipeline between Meadowbrook and KSL. However, Meadowbrook claims that KSL would direct any Meadowbrook personnel, or third-party personnel provided by Meadowbrook, in these efforts, and that Meadowbrook would not have any rights to direct or control the operation of the LFG collection system. Additionally, Meadowbrook indicates that it is currently considering the possibility of interconnecting with KSL’s leachate, condensate, and wastewater treatment systems to dispose of certain Meadowbrook products at market prices. 1 destruction. KSL is required to construct and maintain sufficient flare capacity to destroy 100% of KSL’s LFG, and Meadowbrook states this flare capacity exists and is currently permitted. 6 Thus, Meadowbrook concludes that even the closure of the Meadowbrook facility would not have environmental consequences to KSL’s operations, nor would it affect the ability of KSL to comply with environmental regulatory requirements related to its LFG. Meadowbrook also maintains that it is not dependent on KSL for its supply of LFG. Meadowbrook acknowledges that it has the right to purchase, and expects to purchase, all of the LFG produced by KSL to serve as a feedstock, and that Meadowbrook will rely on KSL for its first supply of LFG to produce a natural gas product for commerce. However, Meadowbrook represents that it is only required to accept as much LFG as Meadowbrook can process. Meadowbrook also indicates that its processing capacity exceeds KSL’s LFG production, and that Meadowbrook is actively seeking additional suppliers of LFG and other types of biogas in order to serve as a regional refining and processing facility. Moreover, Meadowbrook claims that even if KSL were to shut down, and even if this resulted in the eventual shutdown of Meadowbrook itself, this shutdown would have no environmental consequences. Based on this, Meadowbrook asserts that it retains sole responsibility for environmental regulatory requirements (related to LFG, or otherwise) arising after the demarcation point, and that its air emissions are in no way influenced by KSL’s landfill operations. Meadowbrook emphasizes the separate compliance responsibilities of each entity, and the fact that neither entity would be able to operate the other’s facility to ensure that the other’s facility complies with relevant environmental requirements. First, Meadowbrook briefly discusses its own practical difficulties in having to assure its customers or potential suppliers that it is not liable for KSL’s operations. Additionally, Meadowbrook highlights practical difficulties with aggregating the two entities for permitting purposes: specifically, difficulties with including Meadowbrook’s operations within KSL’s existing title V permit for title V compliance certification purposes. Meadowbrook notes that, if Meadowbrook’s operations were incorporated into KSL’s existing title V permit, KSL’s responsible official would be required to certify the accuracy of such a permit modification application with respect to Meadowbrook’s operations, as well as certify Meadowbrook’s compliance with relevant requirements. See 25 Pa. Code §§ 127.402(d), 127.205(2). 7 Meadowbrook argues that the responsible official at KSL would have no way to accurately certify permit applications pertaining to Meadowbrook’s facility, nor could KSL’s responsible official certify Meadowbrook’s compliance, because KSL has no information about or access to proprietary equipment or operations at the Meadowbrook facility. Thus, Meadowbrook argues that it would be unrealistic to expect that KSL could effectively discharge KSL’s title V compliance certification requirements (with the potential for criminal liability) if the two sources were aggregated. 6 Meadowbrook acknowledges that KSL’s title V permit will likely be modified to add an option to divert LFG to Meadowbrook, but claims that this will not affect KSL’s ability to maintain title V compliance (presumably, compliance with subpart WWW requirements) through use of its existing LFG collection system and flares. 7 Meadowbrook also references KSL’s obligation to certify ongoing compliance and suggests that KSL could be held liable for Meadowbrook’s operations. See 25 Pa. Code §§ 127.511(c)(1), 127.411(a)(1). 2 II. Background on EPA Interpretations of Common Control When determining which pollutant-emitting activities should be considered part of the same “major source” under the title V operating permit program, and/or part of the same “stationary source” under the New Source Review (NSR) program, permitting authorities should assess the three factors contained in EPA’s title V and NSR regulations—same industrial grouping, location on contiguous or adjacent property, and common control—on a case-by-case basis. In the title V regulations, these criteria are reflected in the definition of “major source.” 40 C.F.R. §§ 70.2 & 71.2. The NSR regulations define a “stationary source” as a “building, structure, facility, or installation” and then provide a separate definition for that phrase which reflects these three criteria. 40 C.F.R. §§ 52.21(b)(5) & (6), 51.165(a)(1)(i) & (ii), and 51.166(b)(5) & (6). In the original promulgation of these three factors in the NSR program regulations, EPA was mindful of a decision from the U.S. Court of Appeals for the District of Columbia Circuit holding that the “source” for NSR permitting purposes should comport with the “common sense notion of a plant.” 45 Fed. Reg. 52676, 52694 (Aug. 7, 1980) (citing Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979)). When EPA first established the current three-part test in the Prevention of Significant Deterioration (PSD) NSR rules adopted in 1980, the agency explained that this test would comply with Alabama Power by reasonably carrying out the purposes of the PSD program, approximating a “common sense notion of a plant,” and avoiding the aggregation of pollutant-emitting activities that would not fit within the ordinary meaning of “building,” “structure,” “facility,” or “installation.” 45 Fed. Reg. at 52694–95. When EPA subsequently promulgated the title V definitions for Part 71 using the same three criteria, the agency said that it intended these provisions to be consistent with the language and application of the PSD definitions. 61 Fed. Reg. 34202, 34210 (July 1, 1996). Neither the Clean Air Act (CAA), EPA’s regulations, nor Pennsylvania Department of Environmental Protection’s (PADEP’s) regulations define “common control.” Acknowledging that “[c]ontrol can be a difficult factual determination, involving the power of one business entity to affect the construction decisions or pollution control decisions of another business entity,” EPA has long recognized that common control determinations should be made on a case-by-case basis. 45 Fed. Reg. 59874, 59878 (September 11, 1980). In an early action implementing the Nonattainment NSR program, EPA explained that it would be guided by a definition of control established by the Securities and Exchange Commission (SEC), which states the following: “the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person (or organization or association) whether through the ownership of voting shares, contract, or otherwise.” 45 Fed. Reg. at 59878 (quoting 17 C.F.R. § 210.1-02(g)). 8 In a 1996 memorandum concerning source determinations on Federal military installations, EPA further explained: 8 EPA has also pointed to a definition of “control” found in Webster’s Dictionary, including “to exercise restraining or directing influence over,” “to have power over,” “power or authority to guide or manage,” and “the regulation of economic activity.” Letter from William A. Spratlin, Director, Air, RCRA, and Toxics Division, EPA Region 7, to Peter R. Hamlin, Chief, Air Quality Bureau, Iowa Department of Natural Resources (September 18, 1995) (the Spratlin Letter). 3 In general, the controlling entity is the highest authority that exercises restraining or directing influence over a source’s economic or other relevant, pollutantemitting activities. In considering interactions among facilities, what must be determined is who has the power of authority to guide, manage, or regulate the pollutant-emitting activities of those facilities, including “the power to make or veto decisions to implement major emission-control measures” or to influence production levels or compliance with environmental regulations. 9 In other guidance documents and letters, EPA has identified a number of factors that should be considered when assessing whether two entities are under common control, including but not limited to shared workforces, shared management, shared administrative functions, shared equipment, shared intermediates or byproducts, shared pollution control responsibilities, and support/dependency relationships. 10 In the discussion that follows, we will refer to this as the “multi-factor” approach of evaluating common control. Regarding the support/dependency relationship factor, in several case-specific source determinations, EPA relied upon the presence of support or dependency relationships between two or more entities that resulted in one entity either directing or influencing the operations of another entity. 11 These situations often involved a primary facility that was wholly or partially dependent on a supporting facility for a critical aspect of its operations, such as the supply of raw materials. These relationships were often characterized by mutually beneficial contractual arrangements, including output contracts (where one entity was obligated to purchase all, or a portion, of another entity’s output) and requirement contracts (where one entity was obligated to produce all, or a portion, of a product that another entity requires). As a result of these relationships, in certain cases EPA has found common control due to only the influence that these economically or operationally interconnected entities exert (or have the ability to exert) on one another (e.g., the ability to influence production levels). 9 Memorandum from John S. Seitz, Director, OAQPS, to EPA Regional Offices, Major Source Determinations for Military Installations under the Air Toxics, New Source Review, and Title V Operating Permit Programs of the Clean Air Act, 9–10 (August 2, 1996) (the Seitz Memorandum) (citation omitted). Although this memorandum specifically concerned military installations, many of the statements contained therein are illustrative of EPA’s past common control interpretations and policies more broadly. 10 See, e.g., Spratlin Letter at 1–2. Other EPA guidance and correspondence regarding common control can be found at: https://www.epa.gov/title-v-operating-permits/title-v-operating-permit-policy-and-guidance-document-index and https://www.epa.gov/nsr/new-source-review-policy-and-guidance-document-index. 11 See, e.g., Letter from Kathleen Cox, Associate Director, Office of Permits & Air Toxics, EPA Region 3 to Troy D. Breathwaite, Air Permits Manager, Virginia Department of Environmental Quality, Re: GPC/SPSASuffolk/BASF (January 10, 2012); Letter from Gregg M. Worley, Chief, Air Permits Section, EPA Region 4, to James Capp, Chief, Air Protection Branch, Georgia Department of Natural Resources, Re: PowerSecure/FEMC/Houston County Landfill (December 16, 2011); Letter from Richard R. Long, Director, Air Program, EPA Region 8, to Julie Wrend, Legal Administrator, Air Pollution Control Division, Colorado Department of Public Health and Environment, Re: TriGen/Coors (November 12, 1998); see also Seitz Memorandum at 10–13 (discussing control via leases and contract-for-service relationships where a supporting entity is integral to or contributes to the operations of another entity). 4 III. Need for Revision to EPA’s Approach to Common Control Assessments These latter precedents might be construed to suggest that EPA and PADEP should consider Meadowbrook and KSL to be under common control because of two elements of the relationship between these entities, both related to the support/dependency concept. First, the fact that KSL plans to dispose of its LFG by sending it to Meadowbrook via pipeline indicates that KSL will, in most circumstances, effectively rely on Meadowbrook as the mechanism by which it controls its LFG emissions in order to comply with Subpart WWW NSPS requirements applicable to the landfill. Second, the fact that KSL is expected to supply Meadowbrook with a potentially large proportion of the LFG that Meadowbrook processes implies that KSL could influence production levels at Meadowbrook, and thus, to some extent, Meadowbrook’s emissions resulting from processing KSL’s LFG. If Meadowbrook and KSL were determined to be under common control based on these facts, they would then be treated as a single source for title V and NSR purposes. 12 On the other hand, the reasoning of other EPA source determinations involving similar facts could be followed to support the contrary conclusion that Meadowbrook and KSL are not under common control. Using the multi-factor approach to evaluating common control, one could weigh more heavily the fact that neither facility is entirely dependent on the other for operation. 13 KSL can control its LFG emissions via flaring without Meadowbrook, and Meadowbrook plans to receive gas from other entities. Additionally, Meadowbrook and KSL do not share workforces, management, administrative functions, equipment, or pollution control responsibilities. Under the multi-factor approach, these considerations suggest a lack of control. Thus, during EPA’s review of Meadowbrook’s request, it became clear that the large number of different factual considerations implicated by prior EPA common control determinations, in addition to the agency’s historically broad view of the types of relationships that can establish control (e.g., support/dependency), has resulted in the potential for inconsistent outcomes in source determinations and an overall lack of clarity and certainty for sources and permitting authorities. Additionally, this particular scenario demonstrates practical difficulties that could result from considering these operations to be a single source, including the potential for inequitable outcomes. 14 Moreover, it was not obvious that treating Meadowbrook and KSL as a single source would reflect a “common sense notion of a plant.” The potential for inconsistent outcomes under EPA’s broad-ranging prior interpretations, as well as these other concerns regarding the facts at hand, have prompted EPA to reevaluate and narrow the agency’s interpretation of “common control.” The next section explains EPA’s narrowed interpretation 12 In its March 16, 2018, submission, Meadowbrook states that its facility will be located on a property contiguous to the KSL landfill, and that the two operations will share the same two-digit SIC code. Although Meadowbrook suggests that “shared two-digit SIC codes are unlikely to contribute any meaningful information to any aggregation analysis,” this is nonetheless a criterion currently included in EPA’s source determination rules. 13 See Letter from Judith M. Katz, Director, Air Protection Division, EPA Region 3, to Gary E. Graham, Environmental Engineer, Commonwealth of Virginia Department of Environmental Quality, Re: Maplewood/INGENCO (May 1, 2002) (Maplewood/INGENCO letter). 14 In particular, the agency’s prior approach could lead to the impractical and potentially inequitable result of holding otherwise separate business entities responsible for each other’s actions, even if they do not have the power or authority to dictate such actions. 5 and other considerations EPA currently views as most relevant to determining common control. The last section applies these principles in an examination of whether the Meadowbrook and KSL facilities are under common control. IV. Refining EPA’s Interpretation and Policy Concerning “Common Control” Consistent with EPA’s longstanding practice and view, determinations of common control are fact-specific and should continue to be made by permitting authorities on a case-by-case basis. However, after re-evaluating the concept of common control, EPA believes it should realign its approach to common control determinations in order to better reflect a “common sense notion of a plant,” and to minimize the potential for entities to be held responsible for decisions of other entities over which they have no power or authority. For the reasons discussed further below, the agency believes clarity and consistency can be restored to source determinations if the assessment of “control” for title V and NSR permitting purposes focuses on the power or authority of one entity to dictate decisions of the other that could affect the applicability of, or compliance with, relevant air pollution regulatory requirements. This document reflects EPA’s interpretation of “control” in the context of EPA’s title V and NSR regulations and EPA’s policy regarding how to best apply this interpretation in source determinations. However, states with EPA-approved title V and NSR permitting programs retain the discretion to determine whether specific entities are under common control. 15 A. Control means the power or authority to dictate decisions. For purposes of source determinations, EPA considers “control” to be best understood to encompass the power or authority to dictate the outcome of decisions of another entity. This concept includes only the power to dictate a particular outcome and does not include the mere ability to influence. Thus, control exists when one entity has the power or authority to restrict another entity’s choices and effectively dictate a specific outcome, such that the controlled entity lacks autonomy to choose a different course of action. This power and authority could be exercised through various mechanisms, including common ownership or managerial authority (the chain of command within a corporate structure, including parent/subsidiary relationships), contractual obligations (e.g., where a contract gives one entity the authority to direct specific activities of another entity), and other forms of control where, although not specifically delineated by corporate structure or contract, one entity nonetheless has the ability to effectively direct the specific actions of another entity. Thus, control can be established: (1) when one entity has the power to command the actions of another entity (e.g., Entity A expressly directs Entity B to “do X”); or (2) when one entity’s actions effectively dictate the actions of another entity (e.g., Entity A’s actions force Entity B to do X, and Entity B cannot do anything other than X). The 15 What follows is a discussion of those factors that EPA advises states to consider (and not to consider) when determining whether two entities are under common control. The general direction provided here by EPA should not be understood as controlling the outcome of any particular situation, which must be judged based on its individual facts and circumstances. This document is not a rule or regulation, and the statements herein are not binding on state or local permitting authorities. This discussion reflects a change in how EPA interprets the term “common control” in it regulations but does not change or substitute for any law, regulation, or other legally binding requirement. 6 second scenario that can establish control should not be confused with the broader concept, as historically articulated, embracing the “ability to influence.” While distinguishing control from the ability to merely influence will necessarily be a fact-specific inquiry, the key difference is that EPA interprets “control” to exist at the point where one entity’s influence over another entity effectively removes the autonomy of the controlled entity to decide whether or how to pursue a particular course of action. 16 Ultimately, the focus is not on how control is established (through ownership, contract, or otherwise), but on whether control is established—that is, whether one entity can expressly or effectively force another entity to take a specific course of action, which the other entity cannot avoid through its own independent decision-making. This narrower interpretation of the meaning of “control” in most respects traces back to, and is consistent with, definitions of “control” on which EPA previously relied that emphasized the “power to direct,” 17 as well as a common sense understanding of “control.” However, this interpretation differs from definitions that EPA has cited more recently, as well as EPA’s prior interpretation of those definitions, which extended “control” to include the ability to influence. 18 For the following reasons, EPA is no longer following these broader definitions and interpretations. Certainly, business relationships and external market forces can constrain the ability of an entity to make decisions with complete autonomy, and it is indeed rare that an entity is fully insulated from such external influences. However, the fact that an entity is influenced, affected, or somewhat constrained by contractual relationships that it negotiated at arm’s length, or by external market forces, does not necessarily mean that one entity is actually controlled or governed by these influences in making a given decision. After consideration of the inconsistent, impractical, and inequitable outcomes that could have resulted in this case under the previous interpretation that extended control to include the ability to influence, EPA has concluded that a narrower interpretation is better. A narrower interpretation avoids the potential for entities to be held responsible for actions over which they have no power or authority, but which instead they could merely have some influence over due to of market conditions or a business relationship that was negotiated on the open market or otherwise at arm’s length. Thus, EPA will from this point forward interpret the term “control” in its title V and NSR regulations to require more than the ability to merely influence. 16 For example, where Entity A is required to accept and process 100% of a raw material or intermediate produced by Entity B, decisions that Entity B makes with respect to the amount of raw material produced will likely affect Entity A’s production levels, which could affect Entity A’s emissions. However, provided that Entity A has the ability to independently decide how it operates its pollution-generating and pollution-controlling equipment, and to independently decide whether it expands its operations or not, this level of influence would not amount to “control.” 17 The common thread between definitions of “control” that EPA has relied upon is the “power to direct.” See, e.g., 17 C.F.R. § 210.1-02(g) (SEC definition of control, “power to direct or cause the direction of the management and policies of a person”) (emphasis added); Spratlin Letter (citing Webster’s definition of control, including “to have power over”) (emphasis added). 18 See, e.g., Spratlin Letter (Webster’s definition of control, including “power or authority to guide or manage,” “restraining or directing influence over”); Seitz Memorandum at 9 (“restraining or directing influence”); see also id. at 10–13. 7 B. Focus should be on control over decisions that affect the applicability of, or compliance with, relevant air pollution regulatory requirements. To promote clarity, consistency, and more practical outcomes in source determinations, EPA intends to focus on control (power or authority) over operations relevant to air pollution, and specifically control over such operations that could affect the applicability of, or compliance with, permitting requirements. EPA intends to examine whether the control exerted by one entity would determine whether a permitting requirement applies or does not apply to the other entity, or whether the control exerted by one entity would determine whether the other entity complies or does not comply with an existing permitting requirement. Thus, if “control” represents the power or authority of one entity to dictate a specific outcome at another entity (as described above), EPA considers the most relevant outcome to be the applicability of, or compliance with, air permitting requirements. EPA considers this to be a reasonable policy, and a better approach, when determining common control in light of the applicable regulatory context. To start with, EPA’s regulations reference air pollution-emitting activities when defining what constitutes a single source. 19 Definitions should not be read in isolation, however. Source determinations are made in the context of the NSR and title V permitting programs and their respective requirements pertaining to the control and monitoring of air pollution emissions. It logically follows, therefore, that the type of “control” most relevant to this inquiry is control over air pollution-emitting activities that trigger permitting requirements and affect compliance with those requirements. EPA therefore considers it appropriate to focus this inquiry on control over air pollution-emitting activities that could affect the applicability of, or compliance with, title V and NSR requirements. 20 If the authority one entity has over another cannot actually affect the applicability of, or compliance with, relevant permitting requirements, then the entities cannot control what permit requirements are applicable to each other, or whether another entity complies with its respective requirements. Effectively, this means that each entity has autonomy with respect to its own permitting obligations. It is more logical for such entities to be treated as separate sources, rather than being artificially grouped together for permitting purposes. EPA expects that any benefit that might be thought to be gained from the aggregation of entities that are effectively autonomous for permitting purposes would not “carry out reasonably the purposes” of the title V or NSR program. See 45 Fed. Reg. at 525694–95. 21 19 See, e.g., 40 C.F.R. § 52.21(b)(6) (defining “building, structure, facility, or installation” as “all of the pollutantemitting activities” that are under common control, among other criteria (emphasis added)); 40 C.F.R. § 70.2 (clarifying that for the definition of “major source,” considerations of major industrial group (SIC code) should focus on “all of the pollutant emitting activities at such source or group of sources” (emphasis added)); id. (defining “stationary source” as “any building, structure, facility, or installation that emits or may emit any regulated air pollutant or any pollutant listed under section 112(b) of the [CAA]”) (emphasis added); 40 C.F.R. 52.21(b)(5) (similar definition of “stationary source” for NSR). 20 EPA has previously articulated the importance of similar considerations, including “the power to make or veto decisions to implement major emission-control measures,” and the power to influence “compliance with environmental regulations.” Seitz Memorandum at 10 (citations omitted). 21 First, although a more expansive reading of control could result in more sources being subject to title V, the purpose of the title V program is not to indiscriminately maximize the number of sources required to obtain operating permits—such as by requiring small sources that would otherwise not be subject to title V to obtain a 8 Moreover, aggregating entities that cannot control decisions affecting applicability or compliance with permitting and other requirements would create practical difficulties and inequities. For title V purposes, it may be impossible for the responsible official of one entity to accurately certify the completeness of a permit application for a permit modification (e.g., to incorporate requirements that are applicable to a new unit) that is entirely within the control of another entity, or to certify that the other entity has complied with existing permit requirements, as required by title V. See 40 C.F.R. § 70.5(a)(2), (c)(9)(i), (d). Similar problematic scenarios can arise under the NSR program as well. For instance, in order to determine whether a proposed physical or operational change would result in a “significant net emissions increase” and thus constitute a “major modification” at the source, an entity is required to identify and take account of all creditable emissions increases and decreases that had occurred source-wide during the relevant 5-year “contemporaneous” period. See, e.g., 40 C.F.R. § 52.21(b)(3)(i)(b). It is not clear how it would even be possible for one entity to identify the creditable emissions increases and decreases that had occurred at that portion of the source under the control of another entity, much less determine whether NSR would be triggered by the proposed change. More broadly, for both title V and NSR, an entity could face liability for the actions of another entity that were entirely outside the first entity’s control if both entities were treated as part of the same source. This result would clearly be inequitable. Put simply, an entity that cannot “direct” or “cause the direction of” a specific decision or action by another entity does not have “control” and should not be subject to the consequences of that decision. 22 Focusing on control over decisions that could affect applicability or compliance with air quality permitting obligations avoids this potentially impractical and inequitable result while reasonably carrying out the purposes of the title V and NSR permitting programs. In practice, evaluating common control will necessarily be a fact-specific inquiry. However, EPA believes the most relevant considerations should be whether entities have the power to direct the actions of other entities to the extent that they affect the applicability of and compliance with permitting requirements: e.g., the power to direct the construction or modification of equipment that will result in emissions of air pollution; the manner in which such emission units operate; the installation or operation of pollution control equipment; and permit simply because of their business relationships with a title V source. Second, the purpose of the NSR program is not to maximize the number of sources subject to PSD requirements (e.g., BACT) by aggregating multiple entities until their combined emissions exceed major source thresholds. That said, it would also not be appropriate to rely on EPA’s current approach to artificially separate a source into multiple sources in order to evade major source status or otherwise circumvent title V or NSR requirements. Third, the purposes of the NSR program would not be fulfilled by allowing entities to intentionally (or unintentionally) over-aggregate, in order to share the benefits of emissions reductions (e.g., accounting for emission reductions in determining a significant net emissions increase) at sources that do not have any control over each other’s permitting obligations. EPA’s current approach is intended to avoid these outcomes that are incongruent with the purposes of the title V and NSR programs by aggregating only those activities that accurately reflect a “common sense notion of a plant” from a permitting standpoint. 22 For example, if Entity A has no ability to dictate the relevant decisions of Entity B that would subject Entity B to new regulatory requirements or that would affect Entity B’s compliance with existing requirements, it would be inequitable to subject Entity A to such new requirements or hold Entity A responsible for Entity B’s compliance with existing requirements. Only if Entity A has the ability to dictate an action by Entity B that could result in permitting-related liability for either entity, should Entity A be held responsible for Entity B’s action (by virtue of being considered the same source). 9 monitoring, testing, recordkeeping, and reporting obligations. On the other hand, common control considerations should not focus on the power to direct aspects of an entity’s operations that are wholly unrelated to air pollution permitting requirements. If one entity has power or authority over some aspect of another entity’s operations that would have no impact on pollutantemitting activities of the stationary source subject to permitting requirements, EPA does not consider that fact to be relevant to determining whether the two entities should be considered a single source for air quality permitting purposes (e.g., one entity providing security for both its facility and for an adjacent facility belonging to another entity). Overall, focusing on the power to direct decisions over air pollution-related activities that could affect permitting obligations (i.e., applicability or compliance) is reasonable, and a better approach to determining whether there is common control in the context of title V and NSR permitting. EPA expects that this approach will produce more consistent and sensible outcomes. Accordingly, EPA will generally view common control to exist in situations where entities lack the power or authority to make independent decisions that could affect the applicability of, or compliance with, relevant regulatory requirements concerning air pollution. C. Dependency relationships should not be presumed to result in common control. It is important, in evaluating whether common control might be said to exist due to the existence of a dependency relationship between entities, not to confuse this evaluation with the altogether separate issue of whether one entity is a “support facility” for another entity. Questions arising out of the consideration of the latter issue are directly accommodated within a distinct element of the source determination framework: the industrial grouping (2-digit SIC code) prong. 23 EPA has previously stated that “a support facility analysis is only relevant under the SIC-code determination.” In the Matter of Anadarko Petroleum Corp., Frederic Compressor Station, Order on Petition no. VIII-2010-4 at 16 (February 2, 2011). This important distinction aside, a dependency relationship should not be presumed to result in common control. While mutually beneficial arrangements that give rise to dependency relationships could give one facility influence over the operations of another, entities can be economically or operationally interconnected or mutually dependent through contracts or other business arrangements without having the power or authority to direct the relevant activities of each other. To the extent that the same underlying facts should be weighed in evaluating common control, these considerations should generally be evaluated as outlined above to determine whether one entity has the power or authority to dictate the decisions of another entity (and not simply to determine whether a dependency relationship exists). 23 As EPA has explained, both primary and support facilities are to be assigned the same 2-digit SIC code. 45 Fed. Reg. at 52695; see also 1987 SIC Code Manual at 16–17 (“Each operating establishment is assigned an industry code on the basis of its primary activity . . . . Auxiliary establishments are assigned four-digit industry codes on the basis of the primary activity of the operating establishments they serve.”). In the PSD rulemaking process conducted from 1979 to 1980, EPA decided to accommodate considerations of support or functional interrelatedness as part of the major industrial grouping (2-digit SIC code) prong, as opposed to establishing this as an independent component of the source determination analysis. See 45 Fed. Reg. 52676, 52695 (August 7, 1980). In so doing, EPA did not indicate that support or functional interrelatedness considerations should be made in the context of other discrete elements of the source determination framework (i.e., the common control or adjacency prongs). 10 A number of practical considerations support this separation. First, the fact that economic conditions are such that one entity depends on another facility does not necessarily mean that it has the power or authority to direct the decisions of, or that its decisions are directed by, that other facility on which it depends. Second, the fact that one facility would not profitably exist but for the existence of another entity does not necessarily mean that, at some point after beginning operation, the entities will have the power or authority to dictate the outcome of decisions regarding relevant air-pollution related aspects of each other’s operations. These situations should be evaluated in light of the principles discussed above, and inquiries concerning common control should not be sidestepped by presuming control based on the presence of a dependency relationship. V. Evaluation of Meadowbrook and KSL Under Revised Interpretation and Policy for Common Control Applying the interpretation of “common control” and the policy of focusing on air permitting requirements described above, based on the information provided by Meadowbrook, 24 EPA would not view the Meadowbrook and KSL facilities to be under common control. First, regarding control over KSL’s landfill, it does not appear that Meadowbrook has power or authority to dictate decisions over any aspect of KSL’s operations that could affect the applicability of, or compliance with, permitting requirements. Specifically, Meadowbrook does not have the power or authority to determine whether KSL complies with regulatory requirements associated with its LFG (i.e., the Subpart WWW NSPS) that are applicable requirements within KSL’s title V permit. Of course, Meadowbrook can indirectly affect KSL’s operations by declining to take delivery of all of KSL’s LFG at the demarcation point (or by ceasing operations). This means that Meadowbrook’s actions (accepting or not accepting the LFG) would effectively dictate whether KSL does or does not destroy its LFG via its flares. Because Meadowbrook can effectively dictate this outcome at KSL, this could arguably be considered a form of control over this aspect of KSL’s operations. However, this limited amount of control would not be over operations that EPA finds most relevant. Importantly, Meadowbrook will not affect KSL’s ability to comply with its regulatory obligations since KSL retains the ability to redirect its LFG to flares operated exclusively by KSL and Meadowbrook has no power or authority over how KSL operates such flares. 25 Because Meadowbrook therefore has no power or authority over KSL’s operations of the sort that EPA deems most relevant, i.e., KSL’s ability to comply with relevant permitting requirements, EPA’s view is that 24 EPA notes that some of the analysis initially provided by Meadowbrook and supplemented in its March 16, 2018, analysis is based on an agreement between Meadowbrook and KSL that is subject to revision. EPA’s analysis below is based on the representations provided by Meadowbrook, and should not be interpreted as a complete evaluation of all facts that may be relevant to the question of common control. PADEP, as the permitting authority, is responsible for making a source determination based on all relevant facts, which may extend to current factual considerations that were not included in Meadowbrook’s analysis, or to facts that eventually differ from those that Meadowbrook predicted at the time of its March 16, 2018, submittal. 25 This situation is no different from a landfill that utilizes flares as a control device and naturally has no other options to dispose of its LFG (e.g., no ability to send the LFG to a treatment facility or energy generating facility). In either case, even if the landfill has only one general option to dispose of its gas (flaring), it would nonetheless likely retain complete control over whether and how it does so (including whether it complies with relevant regulatory requirements when doing so). 11 Meadowbrook does not control KSL simply because KSL will ordinarily rely on Meadowbrook as a means of disposing of its LFG. 26 There is no indication that Meadowbrook has any power or authority over other activities occurring at KSL. 27 Second, regarding control over Meadowbrook’s operations, although KSL supplies Meadowbrook with a potentially large percentage of the feedstock (LFG) that Meadowbrook processes into a product for market (pipeline-quality renewable natural gas), it does not appear that this arrangement gives KSL power or authority over Meadowbrook’s operations. Operations at KSL could ultimately affect the amount of LFG available to Meadowbrook, and thus, could indirectly affect the air emissions that ultimately occur at Meadowbrook in the course of processing the LFG. But it does not appear that Meadowbrook is contractually obligated to purchase the full output of KSL (although this may typically be the case). 28 Moreover, Meadowbrook indicated that it is actively pursuing other suppliers of feedstock, such that KSL will likely not be the only supplier of LFG (or other gas feedstock) to KSL. Thus, KSL does not have the power or authority to determine the amount of gas received (and therefore processed) by Meadowbrook. To the extent that decisions by KSL could indirectly impact air emissions at Meadowbrook, there is no indication that this would give KSL power or authority over any of Meadowbrook’s air pollution-related operations, much less affect any permitting obligations applicable to Meadowbrook. At most, this amounts to influence, not control. Therefore, it would be appropriate to conclude that KSL does not control Meadowbrook in the sense relevant for determining whether the two entities’ facilities constitute a single source. KSL simply supplies a feedstock product to Meadowbrook through an arm’s length contract. KSL has no power or authority to direct other aspects of Meadowbrook’s operations, including the means by which Meadowbrook generates and controls emissions. Although Meadowbrook and KSL have at least influence over each other’s operations, neither has “control” (as this term is interpreted above) over decisions that could affect air permitting obligations of the other. Rather, this appears to be, as Meadowbrook claimed, a mutually beneficial arms-length arrangement between two wholly-separate business entities. Therefore, EPA does not recommend that Meadowbrook and KSL be considered to be part of the same stationary source or major source on the basis of common control. However, as the permitting authority, PADEP retains the ultimate discretion to make source determinations based on its EPA-approved title V and NSR rules. 26 This conclusion is premised on Meadowbrook’s representation that KSL’s permit would not be modified in such a manner that Meadowbrook would have the power or authority to dictate whether KSL complies with its permit terms. 27 Although Meadowbrook may supply funding or other resources to KSL for purposes of optimizing KSL’s landfill gas recovery system, Meadowbrook’s representations suggest that KSL would nonetheless retain complete control over this optimization process, and that Meadowbrook would not control any aspect of the LFG collection process. Additionally, the limited information presented by Meadowbrook regarding its potential future use of KSL’s leachate, condensate, and wastewater treatment systems at market prices does not indicate that this would result in Meadowbrook’s control over this aspect of KSL’s operations. However, this arrangement may warrant further evaluation as Meadowbrook and KSL finalize their plans. 28 As noted above, Meadowbrook indicated that it is only required to accept as much LFG as Meadowbrook can process. 12 Opening Statement of William L. Wehrum Assistant Administrator Office of Air and Radiation U.S. Environmental Protection Agency (EPA) EPA’s New Source Review Program May 16, 2018 Chairman Shimkus, Ranking Member Tonko, and Members of the Subcommittee: thank you for the opportunity to testify today on the New Source Review (NSR) permitting program discussion draft. Although the Administration does not have an official position on this draft, I am very supportive of the Committee’s efforts to improve the NSR permitting program. I have long believed that the NSR permitting program stands as a significant barrier to the implementation of many projects that would improve facility performance, enhance efficiency, and protect the environment. In addition, the program is unnecessarily complicated and confusing. The program can and should be improved. Toward that end, and consistent with the Administration’s efforts on regulatory reform and permit streamlining, as well as Administrator Pruitt’s back-to-basics agenda for the Agency, EPA is pursuing a series of targeted changes to the NSR program. In my testimony, I provide a brief background on the NSR program, discuss a few of our NSR improvement efforts, and provide some thoughts on the Subcommittee’s discussion draft. The NSR permitting program is designed to protect air quality when large-emitting facilities like factories, industrial boilers, and power plants are newly built or undergo changes that result in significant emissions increases. NSR permitting assures that new or modified facilities employ state-of-the-art air pollution controls. The program is based on the sensible notion that significant investments in air pollution controls are most appropriately made when new, large-emitting facilities are built and when existing facilities are significantly modified. EPA established a framework for the NSR program in its federal regulations. States are required to implement an NSR program as part of their Clean Air Act “State Implementation Plan” (SIP). As with most SIP requirements, States have flexibility in how they design and implement their NSR programs. But, all state programs must be at least as environmentally effective as the base federal program. EPA implements the NSR program in states that do not have approved programs and in other areas of federal jurisdiction. In its current form, the NSR program is very complex and can be time consuming to implement. In the absence of additional statutory clarity, EPA is working on two separate but related tracks. First, we are looking at ways to simplify and improve the NSR permitting program. Second, we are looking at ways to expedite the federal permitting process. In accordance with Administration-wide priorities for streamlining permitting requirements for manufacturing, EPA undertook an assessment of the Agency's implementation of the NSR permitting program. We quickly (and predictably) identified several areas that are ripe for improvement. In December 2017 and in March 2018, Administrator Pruitt issued memoranda to EPA’s regional offices to provide greater clarity as to how certain NSR rules should be interpreted. The December memorandum focused on the NSR permitting applicability provisions. That memorandum set forth EPA’s interpretation of the procedures contained in the NSR Rules for sources that intend to use “projected actual emissions” in determining NSR applicability and the associated pre- and postproject source obligations. One key aspect of this memorandum is that it clarifies that so long as a company complies with the requirements of the required preconstruction projected future emissions analysis, EPA will not "second-guess" a company’s reasonable analysis. The March memorandum set forth EPA’s interpretation that, in determining whether a proposed project will itself result in a “significant emissions increase” (which is the initial step that a source must take in ascertaining whether its proposed project will result in an overall significant emission increase at the source) any emissions decreases that are projected to occur as a result of the project can also be taken into account in this first step of the NSR applicability analysis. This common sense reading of the plain language of our NSR rules will pay big dividends in simplifying the NSR permitting analysis while at the same time having no adverse environmental effects. These memoranda represent EPA’s interpretation of existing regulatory language and reflect topics that could be further clarified for state and local permitting authorities and affected sources. While each state and local program is different, states generally should be able to implement the recently issued guidances without the need for changes to their state implementation plans. In addition to the memoranda, EPA has also developed policies on several related issues which may be of interest to the Subcommittee. • In April 2018, EPA’s Office of Air and Radiation issued final guidance recommending “Significant Impact Levels” for ozone and fine particle pollution that may be used in the Prevention of Significant Deterioration (PSD) permitting program. These levels will reduce the cost and time for manufacturers to obtain this type of air pollution permit. • In January 2018, based on a plain language reading of the Clean Air Act, EPA issued a guidance memorandum withdrawing the 1995 “Once In, Always In” policy for the classification of major sources of hazardous air pollutants (HAPs) under section 112 of the Clean Air Act. With the new guidance, sources of hazardous air pollutants previously classified as “major sources” (the source emissions threshold is 10 tons per year of any one HAP or 25 tons per year of any combination of HAPs) may be reclassified as “area” sources (simply put, any source of HAP emission that isn’t a “major source”) when the facility limits its potential to emit below major source thresholds. EPA’s old approach discouraged sources from taking enforceable measures to reduce their HAP emissions below the major source threshold. This new approach provides them an incentive to do so. EPA will be following up this memorandum with rulemaking. • While most NSR permits are issued by state or local air pollution agencies, EPA does issue permits in some cases. To expedite issuance of these federal permits, EPA is looking for ways to increase the efficiency of the permitting process and shorten the amount of time it takes to get an EPA issued permit under both Title V and NSR. Regarding the subcommittee’s discussion draft, the Administration does not have an official position on the bill. Having said that, I strongly support the overall goals of the discussion draft. The principal focus of the discussion draft on refining the definition of “modification” in the Clean Air Act would go a long way towards simplifying application of the NSR program. It makes clear that a project undertaken at an existing stationary source will trigger NSR only when that project would result in an increase in the source’s maximum design capacity to emit – that is, result in an increase in the source’s hourly emission rate, which is how emissions increases have always been determined under EPA’s New Source Performance Standards Program (NSPS) program. The bill also would resolve a long-standing and unfortunate anomaly in the NSR program, which is that the installation of pollution control equipment at existing sources can itself trigger NSR. This is because, sometimes, the operation of such equipment, while it results in tremendous emissions reductions for some pollutants, may in some instances actually lead to increases in the emissions of other pollutants. EPA has in the past attempted to incorporate into its NSR rules an exclusion for the installation and operation of pollution control projects, where the overall effect of such controls would be environmentally beneficial. But this prior regulatory effort was held to be unlawful by the D.C. Circuit, on the grounds that it would be inconsistent with the statutory language defining “modification.” The proposed bill would fix this problem. I appreciate the opportunity to testify today. I support the Committee’s effort to provide clarity for the regulated community that can finally allow the private sector to invest in more efficient manufacturing in the US. I welcome any questions you may have regarding the discussion draft or on the Agency’s efforts to improve the NSR program. Thank you. Gwen Sharps UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 5 A Washington, 20450 am a 4; mmge?d OFFICE oF ADMINISTRATOR MEMORANDUM SUBJECT: Recusal Statement FROM: AndrewR. Wheeler W6 Deputy Administrator 3L1 lg, TO: E. Scott Pruitt Administrator 1 have previously consulted with the Of?ce of General Counsel/Ethics (OGCfEthics) and been advised about my ethics obligations. This memorandum formally noti?es you of my continuing obligation to recuse myself from participating personally and substantially in certain matters in which 1 have a financial interest, or a personal or business relationship. I also understand that 1 have obligations pursuant to Executive Order 13770 and the Trump Ethics Pledge that I signed, as well as my own bar obligations. INA NCIA CONFLICTS OF IN TE REST As required by 18 U.S.C. 208(a). 1 will not participate personally and substantially in any particular matter in which I know that 1 have a financial interest directly and predictably affected by the matter, or in which I know that a person whose interests are imputed to me has a ?nancial interest directly and predictably affected by the matter, unless I ?rst obtain a written waiver, pursuant to 18 U.S.C. 208(b)(1), or qualify for a regulatory exemption, pursuant to 18 U.S.C. 208(b)(2). I understand that the interests of the following persons are imputed to me: any spouse or minor child of mine; any general partner of a partnership in which I am a limited or general partner; any organization in which I serve as of?cer, director. trustee, general partner or employee; and any person or organization with which I am negotiating or have an arrangement concerning prospective employment. 1 have consulted with OGCI?Ethics and been advised that I do not currently have any ?nancial con?icts of interest but will remain vigilant and notify OGC/Ethics immediately should my ?nancial situation change. OBLIGATIONS UNDER EXECUTIVE ORDER Pursuant to Section 1, Paragraph 6 of the Executive Order, I understand that 1 ant prohibited from participating in any particular matter involving speci?c parties in which my former employer, aegre Baker Daniels LLP, or any former client to whom I provided legal or consultative services during the past two years is a party or represents a party. I understand that my recusal lasts for two years from the date that I joined federal service. I have been advised by OGCIEthics that, for the purposes of this pledge obligation, the term "particular matters involving speci?c parties? is broadened to include any meetings or other communication relating to the performance of my of?cial duties, unless the communication applies to a particular matter of general applicability and participation in the meeting or other event is open to all interested parties. I am further advised that the term ?open to all interested parties" means that the meeting should include a multiplicity of parties representing a diversity of viewpoints. If my former employer or a former client is present, then I understand that, generally speaking, at least four other parties should be present to ensure that a diversity of viewpoints is represented and not the same united perspective. Because I was formerly afederally registered lobbyist. I understand that I am also subject to the provisions of Section 1, paragraph 7 of the Executive Order. For a period of two years, I will not participate in any particular matter on which I lobbied in the preceding two years, nor will I participate in the speci?c issue area in which that particular matter falls. This recusal encompasses issues that I lobbied on before EPA as well as before other federal agencies during the preceding two years including, for example, Section 202(c) of the Federal Power Act. Set forth below are my former clients identified in consultation with that have or may have environmental interests that could potentially arise with respect to my duties here at as well as the specific issues areas from which I am recused: RECUSAL LIST 7111e?ectcuntil?prifizs, 2020 - . FORMER EMPLOYER: Faegre Baker Daniels FORMER CLIENTS: Murray Energy Growth Energy Sargento Food Inc. Intemational Paper Underwriters Laboratories Martin Farms Energy Fuels Resources Inc. Xcel Energy FORMER LOBBYING ISSUES: Energy Star For any former client that is not listed. I understand that am personally obliged not to participate in speci?c parry matters for the duration of my ethics obligations. OBLIGATIONS UNDER THE IMPARTIA LITY PROVISIONS Pursuant to federal ethics rules, I understand that have a one-year cooling off period with any organization in which I was an active participant. For one year a?er my resignation from the National Energy Resources Organization (NERO), I am prohibited from participating personally and substantially in any particular matter involving speci?c parties in which NERO is a party or represents a party, unless I am ?rst authorized by OGCIEthics to participate, pursuant to 5 C.F.R. That said, I acknowledge that NERO does not itself lobby or represents parties other than itself. A TTORNEY BAR OBLIGA TIONS Pursuant to my obligations under my bar rules, I recognize that I am obliged to protect the con?dences of my former clients. I also understand that I cannot participate in any matter that is the same as or substantially related to the same speci?c party matter that I participated in personally and substantially while in private practice, unless my bar provides for and I ?rst obtain informed consent and notify OGCr?Ethics. SCREENING ARRANGEMENT In order to ensure that I do not participate in matters relating to any of the entities listed above, I will instruct Michael Molina, Senior Advisor to the Deputy Administrator, to assist in screening EPA matters directed to my attention that involve those entities. All inquiries and comments involving the entities on my reeusal list should be directed to Mr. Molina without my knowledge or involvement until after my reeusal period ends. If Mr. Molina determines that a particular matter will directly involve any of the entities or matters listed on my ?specific party? recusal list, then he will refer it for action or assignment to another. without my knowledge or involvement. In the event that he is unsure whether an issue is a particular matter from which I am recused, then he will consult with OGCi?Ethics for a determination. I will provide a copy of this memorandum to my principal subordinates with a copy to Kevin Minoli, Designated Agency Ethics Of?cial, and Justina Fugh, Senior Counsel for Ethics. UPDA TE AS NECESSARY In consultation with OGC/Ethics, I will revise and update my recusal statement whenever warranted by changed circumstances, including changes in my ?nancial interests, changes in my personal or business relationships, or any changes to my EPA duties. In the event of any changes to my screening arrangement, I will provide a copy of the revised reeusal statement to you and OGCIEthics. cc: Ryan Jackson, Chief of Staff Michael Molina, Senior Advisor to the Deputy Administrator Kevin Minoli, Designated Agency Ethics Of?cial Justina Fugh, Senior Counsel for Ethics OMB Control NO. 2090-0029 Approval Expires 02/28/2018 Confidential Financial Disclosure Form for Environmental Protection Agency Special Government Employees (EPA Form 3110-48) A. Why You Must File Public service is a public trust. In order to uphold that trust, the Government must obtain certain confidential financial information to ensure that there are no conflicts between your public service and your private interests. B. Who Must File This form is used by the Agency for Special Government Employees (SGEs) as defined under 18 U.S.C. 202 and candidates to be SGEs. C. Privacy Act Statement Title I of the Ethics in Government Act of 1978 (5 U.S.C. App.), Executive Order 12674 (as modified by Executive Order 12731), and 5 CFR Part 2634, Subpart I, of the Office of Government Ethics regulations require the reporting of this information. The primary use of the information on this form is for review by Government officials of your agency, to determine compliance with applicable Federal conflict of interest laws and regulations. Additional disclosures of the information on this report may be made: (1) to a Federal, State, or local law enforcement agency if the disclosing agency becomes aware of a violation or potential violation of law or regulation; (2) to a court or party in a court or Federal administrative proceeding if the Government is a party or in order to comply with a judge-issued subpoena; (3) to a source when necessary to obtain information relevant to a conflict of interest investigation or decision; (4) to the National Archives and Records Administration or the General Services Administration in records management inspections; (5) to the Office of Management and Budget during legislative coordination on private relief legislation; (6) to the Department of Justice or in certain legal proceedings when the disclosing agency, and employee of the disclosing agency, or the United States is a party to litigation or has an interest in the litigation and the use of such records is deemed relevant and necessary to the litigation; (7) to reviewing officials in a new office, department or agency when an employee transfers from one covered position to another, (8) to a Member of Congress or a congressional office in response to an inquiry made on behalf of an individual who is the subject of the record, and (9) to contractors and other non-Government employees working for the Federal Government to accomplish a function related to an OGE Government-wide system of records. This confidential report will not be disclosed to any requesting person unless authorized by law. D. Paperwork Burden Disclosure Notice The public reporting and recordkeeping burden for this collection of information is estimated to average one hour per response. Send comments on the Agency’s need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the Director, Collection Strategies Division, U.S. Environmental Protection Agency (Mail Code 2822T), 1200 Pennsylvania Ave., NW, Washington, D.C. 20460. Include the OMB control number in any correspondence. Do not send the completed form to that address; instead, send your completed form as directed by the Agency official who sent it to you. E. When to file Candidates and newly-appointed special Government employees must fully complete this form before performing any work for EPA. Subsequently, you must file a new form annually or as instructed by your agency ethics official. PLEASE NOTE: It is your responsibility to notify the appropriate EPA ethics official of any changes to the information you provide in this form. F. Where to file Send your report to the address specified by the Agency or by the Agency ethics official. You may use additional blank pages in any section if needed. Please note your name and supplemental page number on the continuation pages. Penalties Falsification of information or failure to file or report information required to be reported may subject you to disciplinary action by your employing agency or other authority. Knowing and willful falsification of information required to be reported may also subject you to criminal prosecution. EPA Form 3110-48 ) 1 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 G. What is a Special Government Employee (SGE)? The SGE category was created by Congress to employ individuals who provide important, but limited, service to the Government. These employees are subject to a limited set of conflict of interest requirements. SGEs provide temporary service to the Government (not to exceed 130 days during any period of 365 consecutive days with or without compensation). SGEs are often recruited because they provide outside expertise or perspectives that might be unavailable among an agency's regular employees. SGEs are generally used as advisory committee members, individual experts or consultants. However, some SGEs serve on Boards or Commissions and are brought on pursuant to applicable statute. (See 18 U.S.C. §202(a) for more information.) H. What is a conflict of interest? 18 U.S.C. §208 prohibits all employees (including SGEs) from participating in any particular Government matter that will have a direct and predictable effect on their financial interests. It also prohibits employees from acting in Government matters that will affect the financial interests of others with whom they have certain relationships. These relationships are: • Spouse • Minor child • General partner • Organization in which the individual serves as officer, director, trustee, general partner or employee • Person or organization with which the employee is negotiating or has an arrangement concerning prospective employment. I. What is a particular matter? The term "particular matter" includes deliberations, decisions, or actions that are focused upon the interests of specific persons or entities or an identifiable class of persons or entities. A particular matter does not extend to broad policy options or considerations directed toward the interest of a large and diverse group of people. A particular matter may involve specific parties (e.g., a contract, grant or case in litigation) or it may be a particular matter of general applicability that is focused on the interests of a discrete and identifiable class of persons (such as an industry). J. What is a direct and predictable effect? A particular matter will have a direct effect on a financial interest if there is a close causal link between any decision or action to be taken in the matter and any expected effect of the matter on the financial interest. However, a particular matter will not have a direct effect on a financial interest if the link is attenuated, or is contingent upon the occurrence of events that are speculative, or that are independent of, and unrelated to, the matter. Furthermore, a particular matter that has an effect on a financial interest only as a consequence of its effects on the general economy is also not considered to have a direct effect on a financial interest. A particular matter will have a "predictable" effect if there is a real (as opposed to speculative) possibility that the matter will affect a financial interest. It is not necessary to know the magnitude of the loss/gain, and the dollar amount is immaterial. K. What is an appearance of a loss of impartiality? 5 C.F.R. Part 2635, Subpart E contains provisions intended to ensure that an employee takes appropriate steps to avoid an appearance of a loss of impartiality in the performance of his/her official duties. Where an employee knows that a particular matter involving specific parties is likely to have a direct and predictable effect on the financial interest of a member of his/her household, or knows that a person with whom he/she has a covered relationship is or represents a party to such a matter, and where the person determines that the circumstances would cause a reasonable person with knowledge of the relevant facts to question his/her impartiality in the matter, the employee should not participate in the matter unless he/she has informed the agency designee of the appearance of a problem and received authorization from the agency designee. EPA Form 3110-48 2 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 SECTION 1: Identifying Information and Record of Agency Review Your Name: Last Name: First Name: Middle Initial: Your Certification: I certify that information I have provided on this form and all attachments is true, complete and correct to the best of my knowledge. Signature of Reporting Individual Date: Date Received by the Agency (for Agency use only): Agency Review (for Agency use only): Panel Name/Employing Office Intermediate Reviewer Signature, Date Final Reviewing Official Signature, Date Comments: Panel Name/Employing Office: Intermediate Reviewer Signature, Date Final Reviewing Official Signature, Date Comments: Panel Name/Employing Office: Intermediate Reviewer Signature, Date Final Reviewing Official Signature, Date Comments: Panel Name/Employing Office: Intermediate Reviewer Signature, Date Final Reviewing Official Signature, Date Comments: EPA Form 3110-48 3 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 SECTION 2: Your Employment/Consulting/Volunteer Work Report any employment or consulting, whether or not for compensation, for you and/or your spouse for the last two years preceding the date of filing. Do not include any compensated expert testimony as these are reported in another part of this form. Don’t forget to include your current employer as well as your spouse’s employer. You may indicate (S) for employment of your spouse. You should report any of the following positions that you hold, whether or not for compensation: employee, officer, director, trustee, general partner, proprietor, representative/executor of any business, consulting firm, non-profit, labor organization, or educational institution. Also include any organization or person with whom you are negotiating or have an arrangement concerning prospective employment. You may exclude unpaid positions with any religious, social, fraternal or political entities, or those solely of an honorary nature, but you have to include any positions held with professional societies. You may add additional pages as necessary. If you have NO employment at all, enter NONE below. Organization (Name, City, State). If reporting consulting, Name of Project and Client. Example: East-West University, Anywhere, KS Name of position and description of work. If you are employed by a consulting firm, indicate the firm’s major practice areas, categories of principal clients, and the clients you or your spouse have dealt with directly or derived compensation from. If reporting independent consulting, provide a description and date(s) of the project. Example: Dean, School of Environmental Studies. Example: ABC Corporation, Smallville, VA Example: Consultant on toxicological effects of heavy metals in wastewater from company facilities. July 2007-July 2011. EPA Form 3110-48 4 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 Continuation of Section 2 (if needed). Otherwise, continue to Section 3 Organization (Name, City, State). If reporting consulting, Name of Project and Client. EPA Form 3110-48 Name of position and description of work. If you are employed by a consulting firm, indicate the firm’s major practice areas, categories of principal clients, and the clients you or your spouse have dealt with directly or derived compensation from. If reporting independent consulting, provide a description and date(s) of the project. 5 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 SECTION 3: Compensated Expert Testimony Report any expert testimony for you or your spouse for the last two years preceding the date of filing. You may indicate (S) for spouse. If you have NO compensated expert testimony, enter “NONE” below. Client Name, City, State Description & Date of Testimony. Include citation if available. Example: XYZ law firm, Anytown, CA Example: Provided expert testimony for ABC corporation (plaintiff) on effects of heavy metals in wastewater from company facilities. ABC Corporation v. XYZ, Civil Action No. 07-1234, Superior Court of Anywhere, July, 2007. EPA Form 3110-48 6 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 SECTION 4: Research Support/Project Funding Report any source of research or project funding (e.g., grants, contracts, or other mechanism) that you or your spouse have received in the last two years preceding the date of filing from any source (including state, federal or local government, private sector companies, or non-profit organizations). You may indicate (S) for research support or project funding received for your spouse. Add any additional pages as necessary. If you have NO research support or project funding, enter “NONE” below. Funding Organization (Name, City, State) If EPA, include Office Exact Title of Project. Include start and completion dates. Please also indicate whether funded through grant, cooperative agreement, or contract. If a grant, include whether awarded competitively or not. If an EPA grant include Project Officer and grant number. Example: Foundation for a Cleaner Tomorrow, Washington, DC Example: Competitive Grant: “Mitigation Technologies for Volatile Organic Compounds” July 2007-July 2011. Example: EPA, Office of Research and Development, Cincinnati, OH Example: Competitive Grant: “Health Effects of Long-Term Exposure to Air Pollutants in Nonsmoking Virginia Residents” Project Officer: Jane Doe. EPA Grant Number R123456. March 2000 – Feb. 2003 EPA Form 3110-48 (8-11) 7 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 SECTION 5: Assets Report for yourself, spouse, and dependent children any assets currently held for investment that are valued at more than $1,000 or that generate more than $200 per year in income. You may distinguish any entry for a family member by preceding it with (S) for spouse, (DC) for dependent child, or (J) for jointly held. You may also add additional pages if needed. If you have NO reportable assets, enter “NONE” below. Types of assets to report include (but are not limited to): • Stocks, bonds, annuities, trust holdings, partnership interests, life insurance, investment real estate or a privately-held trade or business. For real estate or a privately held business, report the type and city/state of the entity. • Sector mutual funds, which are funds invested in a particular industry, business, or location such as ABC Electronics Fund or XYZ Canada Fund. Please report the full name of the fund, not just the general family fund name. • Individual holdings of retirement plans like 401(k)s or IRAs. List each holding except diversified mutual funds (see below) • Holdings of investment life insurance or variable annuities • Defined benefit pension plans (include name of employer) Do NOT report: • Certificates of deposit, savings accounts or checking accounts or any deposit in a bank, credit union or similar financial institution • Term life insurance • Money market mutual funds or money market accounts • Your personal residence (unless you rent it out) • Diversified mutual funds, such as ABC Equity Value Fund or XYZ Large Capital Fund • U.S. Government securities (e.g., treasury bonds, treasury bills, treasury notes, U.S. savings bonds or any securities issued by U.S. Government agencies or Government sponsored corporations such as the Tennessee Valley Authority) • Money owed to you, your spouse, or dependent child by a spouse, parent, sibling, or child • Social Security Benefits • Federal Government salary or retirement benefits • Veterans’ benefits • Alimony • Child Support • Underlying holdings of a trust that was not created by you, your spouse or dependent children and for which you, your spouse and dependent children have no past or present knowledge of the holdings or sources of income Definitions: Dependent Child: A son, daughter, stepson or stepdaughter who is either: (1) unmarried and under age 21 and living in the filer’s house, or (2) considered dependent under the U.S. tax code. Diversified Mutual Fund: A mutual fund that does not have a policy of concentrating its investments in an industry, business, single country other than the United States or single state within the United States. Full Name of Asset. Include stock ticker symbol or other identifying information as appropriate. Example: DEF Corporation (DEFC) Example: JKL Energy Fund (JKLE) EPA Form 3110-48 8 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 Continuation of Section 5 (if needed). Otherwise, continue to Section 6. Full Name of Asset. Include stock ticker symbol or other identifying information as appropriate. EPA Form 3110-48 9 OMB Control NO. 2090-0029 Approval Expires 02/28/2018 SECTION 6: Supplemental Ethics Questions for Special Government Employees Serving on Advisory Panel/Committees/Subcommittees If you are serving or are a candidate to serve on an advisory panel/committee/subcommittee, please answer the following questions: Do you know of any reason that you might be unable to provide impartial advice on the matter to come before the panel/committee/subcommittee or any reason that your impartiality in the matter might be questioned? Have you had any previous involvement with the review document(s) under consideration including authorship, collaboration with the authors, or previous peer review functions? If so, please identify and describe that involvement. Have you served on previous advisory panels, committees or subcommittees that have addressed the topic under consideration? If so, please identify those activities. Have you made any public statements (written or oral) on the issue that would indicate to an observer that you have taken a position on the issue under consideration? If so, please identify those statements. You may attach extra sheets if needed. EPA Form 3110-48 10 March 20, 2017 LA-17-03 LEGAL ADVISORY TO: Designated Agency Ethics Officials FROM: David J. Apol General Counsel SUBJECT: Guidance on Executive Order 13770 Executive Order 13770 rescinds Executive Order 13490 and requires "appointees" to sign a new ethics pledge comprising several commitments. See E.O. 13770, sec. 1 (Jan. 28, 2017). Last month, the U.S. Office of Government Ethics (OGE) issued Legal Advisory LA-17-02 (Feb. 6, 2017) to provide initial guidance on Executive Order 13770. Subsequently, OGE discussed with the Counsel to the President's office OGE's prior guidance on Executive Order 13490 and the meaning of several paragraphs of Executive Order 13770. Based on these discussions, this Legal Advisory identifies the parts of OGE's issuances on Executive Order 13490 that are applicable to Executive Order 13770 and provides additional guidance. I. Applicability of Prior Guidance to Executive Order 13770 As previously indicated, OGE's prior guidance on Executive Order 13490 is applicable to Executive Order 13770 to the extent that it addresses language common to both executive orders. Therefore, all substantive legal interpretations in the following Legal Advisories are applicable to Executive Order 13770: DO-09-005, DO-09-007, DO-09-010, DO-09-014, DO-09-020, DO-10-003, and LA-12-10. The following Legal Advisories remain valid in part, as specified in annotations that now appear in the versions posted on OGE's website: DO-09-003, DO-09-011, DO-10-004, and LA-16-08. For the convenience of ethics officials and employees, an enclosed table highlights certain language common to both executive orders and references prior guidance that is applicable to Executive Order 13770. II. Paragraph 7: "Specific Issue Area" Executive Order 13770 prohibits an appointee from participating in any particular matter on which the appointee lobbied during the two-year period before being appointed or in the "specific issue area" in which that particular matter falls. See E.O. 13770, sec. 1, par. 7; E.O. 13490, sec. 1, par. 3. The Counsel to the President's office has advised OGE that, as used in Executive Order 13770, the term "specific issue area" means a "particular matter of general applicability," and OGE has accepted the Administration's interpretation of this term. Although "specific issue" and "general issue area" are used in the context of the Lobbying Disclosure Act (LDA), the term "specific issue area" is not used in that context. See E.O. 13770, sec. 2; see also 2 U.S.C. ?? 1602, 1603(b)(5), 1604(b)(2). Although the term "specific issue area" appeared in Executive Order 13490, it was not defined in any guidance issued during the eight years in which that executive order remained in effect. OGE has issued guidance distinguishing two types of particular matters: "particular matters involving specific parties" and "particular matters of general applicability." See 5 C.F.R. ? 2640.102(l)-(m); see also OGE Inf. Adv. Op. 06 x 9 (2006). The latter is broader than the former. Id. This difference in breadth is relevant in determining the scope of the recusal, as illustrated in the following example: An appointee was a registered lobbyist during the two-year period before she entered government. In that capacity, she lobbied her agency against a proposed regulation focused on a specific industry. Her lobbying was limited to a specific section of the regulation affecting her client. Her recusal obligation as an appointee is not limited to the section of the regulation on which she lobbied, nor is it limited to the application of the regulation to her former client. Instead, she must recuse for two years from development and implementation of the entire regulation, subsequent interpretation of the regulation, and application of the regulation in individual cases. III. Paragraphs 1 and 3: Post-Government Employment Lobbying Restrictions The ethics pledge under Executive Order 13770 establishes two post-Government employment lobbying restrictions. The restriction in paragraph 1 of the ethics pledge prohibits a former appointee, for five years after terminating employment with an executive agency, from engaging in lobbying activities "with respect to" that agency. See E.O. 13770, sec. 1, par. 1. The restriction in paragraph 3 of the ethics pledge establishes the same restriction "with respect to" any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration. See id.; E.O. 13770 sec. 1, par. 3; sec. 2(c). Executive Order 13770 relies partly on the definition of "lobbying activities" in the Lobbying Disclosure Act (LDA). See E.O. 13770, sec. 2(n). The LDA defines that term to include both "lobbying contacts" and behind-the-scenes efforts in support of such contacts. 2 U.S.C. ? 1602(7). The LDA's definition of "lobbying contacts" is limited to certain types of communications and excludes 19 types of communications. 2 U.S.C. ? 1602(8). Executive Order 13770 specifically excludes additional types of communications. See E.O. 13770, sec. 2(n). For purposes of paragraph 1, lobbying activities are deemed to be carried out "with respect to" an agency only to the extent that they involve the following: (a) Any oral or written communication to a covered executive branch official of that agency; or 2 (b) Efforts that are intended, at the time of performance, to support a covered lobbying contact to a covered executive branch official of that agency. For purposes of paragraph 3, the prohibition on lobbying activities "with respect to" a covered executive branch official or non-career Senior Executive Service appointee extends to non-career Senior Executive Service appointees. Therefore, lobbying activities in paragraph 3 involve the following: (a) Any oral or written communication to a covered executive branch official or non-career Senior Executive Service appointee; or (b) Efforts that are intended, at the time of performance, to support a covered lobbying contact to a covered executive branch official or non-career Senior Executive Service appointee of that agency. For the convenience of ethics officials and employees, an enclosed table compares the post-Government employment lobbying restrictions in paragraphs 1 and 3. Attachments 3 Applicability of Prior Guidance to Executive Order 13770 Attachment to LA-17-03 E.O. 13770 Provision Section 1. Ethics Pledge. Every appointee in every executive agency appointed on or after January 20, 2017, shall sign, and upon signing shall be contractually committed to, the following pledge upon becoming an appointee: As a condition, and in consideration, of my employment in the United States Government in an appointee position invested with the public trust, I commit myself to the following obligations, which I understand are binding on me and are enforceable under law: Language Common to Both Signing requirement ("appointee"): E.O. 13770, sec. 1 E.O. 13490, sec. 1 Definition of appointee: E.O. 13770, sec. 2(b) E.O. 13490, sec. 2(b) Prior Guidance Applicable to Executive Order 13770 Whether the following categories of employees are considered "appointees" for the purpose of signing the ethics pledge: o Acting officials and detailees: DO-09-010 o Appointees, generally: DO-09-003, DO-09-010 o Career officials appointed to confidential positions: DO-09-010 o Career Senior Executive Service (SES) members given Presidential appointments: DO-09-010 o Excepted service, generally: DO-09-010 o Foreign Service, similar positions: DO-09-010 o Holdover appointees: DO-09-010 o Individuals appointed to career positions: DO-09-003 o IPA detailees: DO-09-020 o Schedule C employees with no policymaking role: DO-09-010 o Special Government Employees (SGEs): DO-09-005, DO-09-010 o Temporary advisors/counselors pending confirmation to Presidentially appointed, Senate-confirmed (PAS) positions: DO-09-005 o Term appointees: DO-09-010 Signing requirement ("shall sign"): E.O. 13770, sec. 1 E.O. 13490, sec. 1 When the ethics pledge must be signed: o Holdover appointees: DO-09-010, DO-09-014 o Nominees to PAS positions: DO-09-005 o Non-PAS who have already been appointed: DO-09-005 o Non-PAS who may be appointed in the future: DO-09-005 o Temporary advisors/counselors pending Senate confirmation to PAS positions: DO-09-005 Sec. 1, par. 2: If, upon my departure from the Government, I am covered by the post-employment restrictions on communicating with employees of my former executive agency set forth in section 207(c) of title 18, United States Code, I agree that I will abide by those restrictions. Restriction on communicating with employees of former agency: E.O. 13770, sec. 1, par. 2 E.O. 13490, sec. 1, par. 4 Guidance on the restriction: DO-10-004, LA-16-08 Sec. 1, par. 5: I will not accept gifts from registered lobbyists or lobbying organizations for the duration of my service as an appointee. Prohibition on accepting gifts from registered lobbyists, lobbying orgs: E.O. 13770, sec. 1, par. 5 E.O. 13490, sec. 1, par. 1 Guidance on the lobbyist gift ban: DO-09-007, DO-10-003, LA-12-10 Definition of "gift": E.O. 13770, sec. 2(k) E.O. 13490, sec. 2(c) Guidance on the following terms: o "Gift": DO-09-007 o "Solicited or accepted indirectly:" DO-09-007 Note: Ethics officials and employees may continue to rely on DO-10-004 regarding the substance of the restriction. Note, however, that the duration of this restriction in E.O. 13770 is one year and commences when the individual ceases to be a senior employee, whereas the duration of the corresponding restriction in E.O.13490 was two years, commencing when the appointee moves to a position that is not subject to the Pledge. Relationship to 5 C.F.R. 2635, subpart B (Gifts from Outside Sources): DO-09-007, DO-10-003 Treatment of official speeches, accompanying staff: DO-10-003 Definition of "registered lobbyist or lobbying organization": E.O. 13770, sec. 2(w) E.O. 13490, sec. 2(e) Guidance on the term, "registered lobbyist or lobbying organization": DO-09-007 Treatment of the following: o 501(c)(3) organizations: DO-09-007, LA-12-10 o Clients of lobbyists/lobbying firms: DO-09-007 o Institutions of higher education: LA-12-10 o Media organizations: DO-09-007, LA-12-10 E.O. 13770 Provision Sec. 1, par. 6: I will not for a period of 2 years from the date of my appointment participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts. Language Common to Both Prior Guidance Applicable to Executive Order 13770 Revolving door ban (incoming appointees): E.O. 13770, sec. 1, par. 6 E.O. 13490, sec. 1, par. 2 Guidance on the revolving door ban (incoming appointees): DO-09-011, DO-09-020 Definition of "directly and substantially related to my former employer or former clients": E.O. 13770, sec. 2(d) E.O. 13490, sec. 2(k) Guidance on the term, "directly and substantially related to": DO-09-011 Definition of "former client": E.O. 13770, sec. 2(i) E.O. 13490, sec. 2(j) Guidance on the term, "former client": DO-09-011 Definition of "former employer": E.O. 13770, sec. 2(j) E.O. 13490, sec. 2(i) Guidance on the term, "former employer": DO-09-011 Definition of "particular matter involving specific parties": E.O. 13770, sec. 2(s) E.O. 13490, sec. 2(h) Guidance on the term, "particular matter involving specific parties": DO-09-011, DO-09-020 Relationship to impartiality regulations: DO-09-011 Treatment of the following: o Discrete, short-term engagements/de minimis: DO-09-011 o Federally funded research and development centers: DO-09-011 o Government entities: DO-09-011 o Nonprofit organizations: DO-09-011 o Service as a consultant: DO-09-011 o State or local colleges and universities: DO-09-011 Treatment of the following: o Federally funded research and development centers: DO-09-011 o Government entities: DO-09-011 o State or local colleges and universities: DO-09-011 o Nonprofit organizations: DO-09-011 Treatment of the following: o Consultation with experts: DO-09-011 o Meetings, other communications: DO-09-011 o Official speeches: DO-09-020 o Open to all interested parties/multiplicity of parties: DO-09-011 o Rulemakings/regulations: DO-09-011 Paragraphs 1 and 3 in Executive Order 13770 Attachment to LA-17-03 Paragraph 1 Paragraph 3 Basic Prohibition I will not, within 5 years after the termination of my employment as an appointee in any executive agency in which I am appointed to serve, engage in lobbying activities with respect to that agency. E.O. 13770, sec. 1, par. 1. In addition to abiding by the limitations of paragraphs 1 and 2, I also agree, upon leaving Government service, not to engage in lobbying activities with respect to any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration. E.O. 13770, sec. 1, par. 3. Length of Restriction 5 years. E.O. 13770, sec. 1, par. 1. Remainder of the Administration. E.O. 13770, sec. 1, par. 3 Termination of employment as an appointee. E.O. 13770, sec. 1, par. 1. Termination of government service. E.O. 13770, sec. 1, par. 3 Commencement of Restriction Restricted Activity With Whom Appointees are Restricted From Engaging in Lobbying Activities Lobbying activities, as defined in the Lobbying Disclosure Act, but excluding certain types of communications. E.O. 13770, sec. 2(n). The term "lobbying activities" includes "lobbying contacts" and behind-the-scenes efforts in support of such contacts. 2 U.S.C. ? 1602(7). o "Lobbying contacts" are limited to written or oral communications with covered officials that are made on behalf of a client. 2 U.S.C. ? 1602(8)(A). o The term "lobbying activities" as defined in E.O. 13770 does not include communications and appearances with regard to: a judicial proceeding; a criminal or civil law enforcement inquiry, investigation, or proceeding; or any agency process for rulemaking, adjudication, or licensing, as defined in and governed by the Administrative Procedure Act, as amended, 5 U.S.C. 551 et seq. o The definition of "lobbying contact" includes 19 exceptions listed at 2 U.S.C. ? 1602(8)(B). 2 U.S.C. ? 1602(8)(B)(i)-(xix) ? For example, the definition excludes "a request for a meeting, a request for the status of an action, or any other similar administrative request, if the request does not include an attempt to influence a covered executive branch official." 2 U.S.C. ? 1602(8)(B)(v). o The term "client" means any person or entity that employs or retains another person for financial or other compensation to conduct lobbying activities on behalf of that person or entity. 2 U.S.C. ? 1602(2). o An activity is considered a "lobbying activity" whether or not a former appointee is required to register as a lobbyist. Therefore, there is no minimum requirement to engage in lobbying activities before the restrictions apply (i.e., no 20% service threshold). See E.O. 13770, sec. 2(n). Covered executive branch officials at the former appointee's former agency. E.O. 13770, sec. 1, par. 1 ("with respect to that agency"). o A communication to or appearance solely before a covered legislative branch official is not a lobbying activity "with respect to" the former appointee's former agency. Id. o With respect to those appointees to whom component designations are applicable, "agency" means the separate and distinct component agencies designated in accordance with 18 U.S.C. ? 207(h). E.O. 13770, sec. 2(e). Covered executive branch officials throughout the executive branch. E.O. 13770, sec. 1, par. 3. Non-career senior executive service appointees throughout the executive branch. E.O. 13770, sec. 1, par. 3. Covered executive branch officials are: o The President; o The Vice President; o Any officer or employee, or any other individual functioning in the capacity of such an officer or employee, in the Executive Office of the President; o Any officer or employee serving in a position in level I, II, III, IV, or V of the Executive Schedule, as designated by statute or Executive order; o Any member of the uniformed services whose pay grade is at or above O-7 under section 201 of title 37; and o Any officer or employee serving in a position of a confidential, policy-determining, policy-making, or policyadvocating character described in section 7511(b)(2)(B) of title 5. See E.O. 13770, sec. 2(c); 2 U.S.C. ? 1602(3). May 29, 2019 Acting Inspector General Charles J. Sheehan U.S. Environmental Protection Agency 1200 Pennsylvania Avenue, NW (2410T) Washington, DC 20460 Re: Request for Investigation of EPA Assistant Administrator William Wehrum's Apparent Violation of His Ethics Agreement and Ethics Pledge Dear Acting Inspector General Sheehan: Citizens for Responsibility and Ethics in Washington ("CREW") respectfully requests that the Environmental Protection Agency ("EPA") Office of Inspector General ("OIG") investigate whether EPA's Assistant Administrator for the Office of Air and Radiation ("OAR"), William Wehrum, violated his ethics agreement and the Ethics Pledge he signed as a condition of his appointment through his contacts with his former employer and former legal clients. Mr. Wehrum signed an ethics agreement and an Ethics Pledge requiring him to recuse from party matters in which any of several former clients or his former law firm was a party or represented a party. The Ethics Pledge also required recusal from any communication or meeting with these entities. Mr. Wehrum appears to have violated these recusal obligations in December 2017 by: (1) granting his former law firm's request that he deliver a presentation in its Washington, D.C., office; (2) meeting with the law firm and three former clients to deliver the presentation; and (3) participating in the preparation of a memorandum used in litigation in which the firm represented a party. Factual Background On November 9, 2017, the Senate confirmed Mr. Wehrum to serve as President Trump's Assistant Administrator leading OAR, 1 which "develops national programs, policies, and regulations for controlling air pollution and radiation exposure." 2 This work includes addressing pollution prevention and energy efficiency, industrial air pollution, acid rain, climate change, and indoor and outdoor air quality, among other issues. 3 Prior to joining the Trump administration, Mr. Wehrum was a partner and head of the Administrative Law Group at the law firm of Hunton & Williams LLP ("Hunton"), 4 "where his practice focused on air quality issues." 5 U.S. Senate, Roll Call Vote 115th Congress - 1st Session, Vote No. 268, Nov. 9, 2017, https://bit.ly/2IyFkOg. EPA, About the Office of Air and Radiation (OAR), https://bit.ly/2Gt1fkp (last viewed May 7, 2019). 3 Id. 4 The firm later changed its name to Hunton Andrews Kurth, LLP. We refer to it as "Hunton" to avoid confusion. 5 EPA, About the Assistant Administrator of EPA's Office of Air and Radiation, https://bit.ly/2viYLlz (last viewed May 7, 2019). 1 2 CREW | 1101 K Street NW, Suite 201 | Washington, DC 20005 | (202) 408-5565 | info@citizensforethics.org Acting Inspector General Charles J. Sheehan May 29, 2019 Page 2 A. The Hunton Presentation Less than a month after his appointment to serve as an EPA Assistant Administrator, Mr. Wehrum granted a request from his former law firm to deliver a presentation at a meeting in its Washington, D.C., office on December 7, 2017. 6 The request form indicated he was invited to speak about "regulatory developments" for approximately one hour including "rules affecting electric generating companies and other stationary sources." 7 In addition to Hunton, the meeting included American Electric Power, Dominion Energy, Duke Energy, Southern Company, and Utility Air Regulatory Group ("UARG"). 8 Duke Energy and UARG are both former clients of Mr. Wehrum. 9 For purposes of the ethics rules, Dominion Energy is also deemed a former client of Mr. Wehrum because one of its subsidiaries was his client. 10 All meeting participants were tied to UARG. Hunton was UARG's legal counsel, and the other participants were UARG members. 11 UARG is a membership association that describes itself as an unincorporated, not-for-profit association of individual electric generating companies and national trade associations. 12 Though UARG reportedly has no staff or physical location, 13 Mr. Wehrum explained to Politico that UARG is a legal entity: "'UARG is an entity. It's a legal entity,' he said, explaining that his clients were 'not the individual members' of UARG." 14 This December 7, 2017, meeting was similar to an earlier meeting between UARG and EPA in June 2017, with the primary difference being that Mr. Wehrum switched sides. For the June 2017 meeting, Mr. Wehrum had represented UARG in asking an EPA official to make a presentation on regulatory issues: "Topics of interest include the Clean Power Plan, the Mercury and Air Toxics Standard, regional transport, regional haze, and NAAQS/NAAQS Juliet Eilperin, EPA regulator skirts the line between former clients and current job, Washington Post, Feb. 25, 2019, https://wapo.st/2P3f8M9. 7 See Invite form for William Wehrum, from his former law firm, Washington Post, published Jan. 29, 2019 (document titled "Event Information Form") ("Invite Form"), https://wapo.st/2T7zkC4. 8 See EPA's William Wehrum and the Effort to Move Industry's Agenda, New York Times ("New York Times Documents"), at 183, 187-201 (documents showing Mr. Wehrum's calendar for Dec. 7, 2017 and his Hunton presentation), https://bit.ly/2BV3spp. 9 Memorandum from William Wehrum, Assistant Administrator, to Andrew R. Wheeler, Acting Administrator, Recusal Statement, Sept. 17, 2018, https://bit.ly/2HyxNPf ("Wehrum Recusal Statement"). 10 The ethics rules treat a corporation and the subsidiaries it controls as the same legal person. 5 C.F.R. ? 2635.102(k). Mr. Wehrum's former client was Dominion Resources Services, Inc., which is now called Dominion Energy Services, Inc., and is a subsidiary of Dominion Energy. Wehrum Recusal Statement, at 2; Company Overview of Dominion Energy Services, Inc., Bloomberg, https://bloom.bg/2vZsgcs (last viewed May 14, 2019). 11 Dave Anderson, EPA's Clean Power Plan Opponents Led By Just A Few Power Companies, Energy & Policy Institute, Sept. 27, 2016, https://bit.ly/2U2IY8E; Regulations.gov, Comment submitted by Lucinda Minton Langworthy, Hunton for UARG, https://www.regulations.gov/document?D=EPA-HQ-OAR-2001-0017-1629; 2017 Utility Air Regulatory Participation, Summary of Receipts, As of June 20, 2017, UARG organizational documents published by Politico, at 6, https://bit.ly/2IE5JeC (last viewed May 13, 2019). 12 Opening Brief of Petitioners on Core Legal Issues, State of West Va., et al., v. Env. Prot. Agency, et al., D.C. Cir. No. 15-1363, at xxviii (Oct. 23, 2015), https://bit.ly/2H69rej ("Petitioners' Brief"). 13 Letter from Sen. Sheldon Whitehouse, et al. to Charles J. Sheehan, Acting Inspector General, Environmental Protection Agency, at 4 n.6, Feb. 21, 2019, https://bit.ly/2Wuw55b ("Senators' OIG Letter"). 14 Zack Colman and Alex Guillen, Documents detail multimillion-dollar ties involving EPA official, secretive industry group, Politico, Feb. 20, 2019, https://politi.co/2GBPJrx. 6 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 3 implementation. . . . We are interested in discussing only possible future regulatory action." 15 The New York Times indicated that, in the December 2017 meeting, Mr. Wehrum covered the same subject: "The topic was an overview of efforts at the E.P.A. to roll back some of the rules Mr. Wehrum and his former law firm had helped [UARG] fight, including the Clean Power Plan, the email records show." 16 The location of the two meetings, the subject and the parties remained substantially the same - the difference was that Mr. Wehrum represented UARG to EPA in June and EPA to UARG in December. 17 Politico recently reported that UARG, which it described as a "secretive utility industry coalition," is dissolving "amid investigations into whether its members received special treatment from the Trump administration." 18 UARG, which has operated on behalf of its members for four decades, announced its dissolution just one month after the House Energy and Commerce Committee requested documents from Hunton regarding UARG's legal structure and interactions with EPA. 19 Referencing litigation involving DTE Energy, the committee's letter to Hunton explained, "We are concerned that two former employees of your firm -- William Wehrum and David Harlow -- may have violated federal ethics rules by helping reverse EPA's position in ongoing litigation against DTE Energy, a Hunton client." 20 B. The EPA Memorandum Supporting Hunton's Litigation According to the Washington Post, shortly after his confirmation, Mr. Wehrum "weighed in on a policy shift that could have influenced litigation" in which Hunton was representing DTE Energy ("DTE"). 21 This "policy shift" was announced in a memorandum that EPA issued on the same day as Mr. Wehrum's presentation, just before a Supreme Court litigation deadline in the DTE case. 22 The memorandum addressed the Clean Air Act's New Source Review ("NSR") program at issue in that lawsuit. 23 EPA officials moved quickly to ensure that the memorandum ("NSR memorandum") was finished before the litigation deadline. As one official stated in an email circulating the 15 Id. Eric Lipton, As Trump Dismantles Clean Air Rules, an Industry Lawyer Delivers for Ex-Clients, New York Times Aug. 19, 2019, https://nyti.ms/2PpNFnR; see also New York Times Documents, at 182-87 (documents related to the Dec. 7, 2017 meeting). 17 Mr. Wehrum also represented UARG at a similar meeting with EPA in July 2017. Email from William Wehrum to Mandy Gunasekara, July 20, 2017 (New York Times Documents, at 74). 18 Zack Colman, Industry group tied to EPA air chief dissolves, Politico, May 10, 2019, https://politi.co/2HsZwhJ. 19 Sean Reilly, Embattled trade group tied to EPA air chief to dissolve, E&E News, May 13, 2019, https://bit.ly/2JjJZnR. A Hunton attorney speaking anonymously denied that the investigation caused UARG's dissolution. Id. 20 Letter to Wendell L. Taylor, Managing Partner, Hunton Andrews Kurth LLP, from House Energy and Commerce Committee Chairman Frank Pallone, Jr., et al., at 1, Apr. 11, 2019, https://bit.ly/2Jj4hh7. 21 Eilperin, Washington Post, Feb. 25, 2019. 22 Id. 23 Memorandum from E. Scott Pruitt, Administrator, Environmental Protection Agency, to Regional Administrators, New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to-ProjectedActual Applicability Test in Determining Major Modification Applicability, at 1-2, Dec. 7, 2017 ("NSR Memo"), https://bit.ly/2jUCLIF. 16 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 4 memorandum: "Attached is the latest version of the NSR Memo pertaining to the issues at issue in the DTE case. I thought we may have more time, but know now that the cert hearing is planned for Wednesday [December 6, 2017]. This memo needs to go out before." 24 While the official was wrong about the deadline - the Supreme Court held its certiorari conference for the DTE case on December 8, 2017 - EPA succeeded in issuing the NSR memorandum before the certiorari conference, late on December 7, 2017. 25 Notably, though the Justice Department represented EPA in the DTE case, it was Hunton, EPA's putative opposing counsel, that filed the memorandum with the court. 26 As the Washington Post reported: "Hours before the justices conferred on the case, Hunton hand-delivered [EPA Administrator Scott] Pruitt's memo to the Supreme Court." 27 After the conference, the Supreme Court denied certiorari. 28 One of the other parties to the litigation described this denial as a positive outcome undermined by an EPA memorandum that "tries to adopt DTE's rejected litigation position as the agency's new approach to NSR nationwide." 29 The Washington Post reported that, "[a]fter the high court declined to take up the case, the matter entered settlement talks, and DTE's hand has been strengthened." 30 Mr. Wehrum's Recusal Obligations Mr. Wehrum is subject to related but distinct recusal obligations arising separately from his ethics agreement and his Ethics Pledge, which "both overlap and diverge." 31 A. The Ethics Agreement Mr. Wehrum signed an ethics agreement on August 28, 2017 that bars him from participating personally and substantially in any particular matter involving specific parties ("party matter") in which Hunton is a party or represents a party for one year after his resignation from the firm. 32 It also bars him from any party matter in which a former client of his is a party or represents a party for one year from the date of his last service to the client. 33 The language of Mr. Wehrum's ethics agreement as to these recusal obligations generally tracks OGE's impartiality regulation but differs from the regulation in one important respect. Under the regulation, recusal is necessary only if the employee or an ethics official determines Email from Mandy Gunasekara to Susan Bodine, Dec. 4, 2017 (Senators' OIG Letter, at 93). Id. at 1. 26 Letter from Hunton & Williams to Clerk of the Supreme Court, Dec. 8, 2017 (transmitting NSR Memo) (New York Times Documents, at 212). 27 Eilperin, Washington Post, Feb. 25, 2019. 28 DTE Energy Co. v. United States, 138 S. Ct. 555 (2017) (denying petition for writ of certiorari). 29 Sierra Club, Press Release, U.S. Supreme Court Declines Review of DTE Energy Air Pollution Case, Dec. 11, 2017, https://bit.ly/2JEyGrg. 30 Eilperin, Washington Post, Feb. 25, 2019. 31 Office of Gov't Ethics, DO-09-11, at 6, Mar. 26, 2009 (discussing the ethics pledge and the impartiality regulation on which ethics agreements are based), https://bit.ly/2LpJoyZ ("OGE DO-09-11"). 32 Ethics Agreement of William Wehrum, Aug. 28, 2017, https://bit.ly/2BW9SVw ("Ethics Agreement"). 33 Id. at 1; see also 5 C.F.R. ? 2635.502(b)(iv). 24 25 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 5 that a "reasonable person" would question the employee's impartiality in a party matter involving a former employer or client. 34 Mr. Wehrum's ethics agreement omits this "reasonable person" standard. 35 OGE's ethics agreement guide explains that this omission was the result of a decision to make recusal mandatory in all such party matters for top officials, rather than letting them decide for themselves what a reasonable person might think. 36 Mr. Wehrum's ethics agreement permits him to participate in a party matter from which he would otherwise be barred if ethics officials review the circumstances in advance and authorize him to participate, using a procedure prescribed under OGE's impartiality regulation. 37 On December 7, 2017, he filed a form attesting that he had not received such an authorization. 38 On September 29, 2018, EPA notified a Senator that Mr. Wehrum still had not received an authorization. 39 B. The Ethics Pledge Mr. Wehrum also signed President Trump's Ethics Pledge for political appointees pursuant to Executive Order No. 13770. 40 The Ethics Pledge bars him from participating personally and substantially, for two years from the date of his appointment, in any party matter in which either his former law firm or any client he served in the two-year period preceding his appointment is a party or represents a party. 41 Mr. Wehrum's Ethics Pledge also bars him, for two years from the date of his appointment, from any communication or meeting with either the law firm or a client he served in the two-year period preceding his appointment. 42 This obligation applies whether or not the meeting or communication focuses on a party matter. A limited exception permits delivery of a speech unless the speech would have a financial effect on a former employer or client. 43Another 5 C.F.R. ? 2635.502(a), (c). Compare Ethics Agreement at 1 with 5 C.F.R. ? 2635.502(a). 36 Office of Gov't Ethics, Guide to Drafting Ethics Agreements for PAS Nominees, 2014 version, at 33 ("Most of these samples do not incorporate the 'reasonable person' standard contained in 5 C.F.R. ? 2635.502. . . . Inasmuch as [nominees will be] the most senior leaders in the Federal executive branch, their ethics agreements often prospectively address the potential for appearance issues. This approach protects a [nominee] from the types of questions that would arise if the [nominee] were to self-regulate on a case-by-case basis."), https://bit.ly/2EneGTX. 37 Ethics Agreement at 1; see also 5 C.F.R. ? 2635.502(d). 38 William Wehrum, Certification of Ethics Agreement Compliance, Item 9, Dec. 7, 2017, https://bit.ly/2T2wgXP ("Compliance Certification"). 39 Letter from Kevin Minoli to Sen. Sheldon Whitehouse, Sept. 29, 2018, (attached to Senators' OIG Letter, at 85). 40 William Wehrum, Ethics Pledge, Nov. 14, 2017 (New York Times Documents, at 159) ("Wehrum Ethics Pledge"); Executive Order No. 13770, Ethics Commitments by Executive Branch Appointees, ? 1(6) Jan. 28, 2017, https://bit.ly/2QaZzSk. 41 Id. 42 Id., ? 2(s). 43 Office of Gov't Ethics, DO-09-020, at 2, May 26, 2009, https://bit.ly/2Suybzf ("OGE DO-09-020"); Office of Gov't Ethics, OGE LA-17-03, Mar. 20, 2017, (applying DO-09-020 to Executive Order No. 13770), https://bit.ly/2FZRhv0. 34 35 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 6 exception permits participation in a meeting or communication that does not involve a party matter and is "open to all interested parties." 44 As with the recusals under the ethics agreement, these recusals are not subject to a "reasonable person" standard. Mr. Wehrum must recuse from any covered party matter, communication or meeting unless he first receives an Ethics Pledge waiver. 45 On December 7, 2017, he indicated he had not received such a waiver. 46 A review of the Ethics Pledge waivers listed on OGE's website confirms that he has not received a waiver since then. 47 Potential Violations Mr. Wehrum's ethics agreement and Ethics Pledge required him to recuse from party matters in which any of several former clients or his former law firm was a party or represented a party, and his Ethics Pledge further required him to recuse from any communication or meeting with these entities. He appears to have violated these recusal obligations in December 2017 by: (1) granting the law firm's request that he deliver a presentation in its Washington, D.C., office; (2) meeting with the law firm and three former clients to deliver the presentation; and (3) participating in the preparation of a memorandum for the litigation in which Hunton was representing DTE. A seasoned attorney, Mr. Wehrum seems to have attempted to articulate defenses to these suspected violations. Regarding the presentation, Mr. Wehrum appears to rely on exceptions to the Ethics Pledge for speeches and meetings "open to all interested parties." As explained below, however, his defense misconstrues the Ethics Pledge exceptions and partly fails to address the possible violation of his ethics agreement. Regarding EPA's issuance of a litigation memorandum, he appears to suggest that he did not participate "personally and substantially" in that effort, but his participation in EPA's development of the NSR memorandum was, in fact, personal and substantial. Mr. Wehrum also appears to suggest that development of the memorandum was not a party matter, but EPA developed the memorandum primarily for a court case, which is the quintessential example of a party matter. A. The Decision to Grant Hunton's Request Hunton's request that Mr. Wehrum give a presentation to its clients was a party matter in which Hunton, as the presentation's sponsor, was a party. OGE has explained that it "generally has viewed the decision to give an official speech as a particular matter involving the event sponsor as a specific party" triggering recusal obligations. 48 Therefore, by granting Hunton's Id.; OGE Inv. Adv. Op. 06 x 09 (2006) (differentiating party matters from other matters), https://bit.ly/2ASzf9k. Executive Order No. 13770, ?? 1(6), 2(s). 46 Compliance Certification. 47 Office of Gov't Ethics, Agency Ethics Pledge Waivers, https://bit.ly/2VFJnuO (last viewed May 14, 2019). 48 OGE DO-09-020, at 2. 44 45 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 7 request, Mr. Wehrum violated his ethics agreement and Ethics Pledge because he participated personally and substantially in a party matter in which Hunton was a party. 49 OGE has established an interpretive exception to the Ethics Pledge permitting an appointee to give a speech to a former employer. 50 This exception, however, is not absolute. The exception does not apply if the speech would have a demonstrable financial effect on the former employer. 51 In fleshing out this concept of a "financial effect," OGE has explained that the exception is unavailable when a former employer organizes an event as "some kind of business development activity (such as a seminar for current or prospective clients)." 52 A "seminar for current or prospective clients" aptly describes Mr. Wehrum's presentation. Hunton invited him to deliver a presentation in the firm's conference room exclusively for members of UARG, a firm client Mr. Werhum had represented before entering government. 53 It is not known if Hunton billed for its time, but the presentation's subject-- EPA's regulatory activity--appears to be a central focus of Hunton's representation of UARG. 54 In short, the presentation was unmistakably a business development activity that could not qualify for the speech exception. Even if the speech exception had applied to the presentation, it would have covered only the Ethics Pledge recusal and not the ethics agreement recusal. Mr. Wehrum had not received an authorization excusing him from compliance with the ethics agreement recusal. 55 In fact, he admits that he did not consult EPA's ethics officials in advance of this decision. 56 Therefore, he likely also violated his ethics agreement when he granted Hunton's request. B. Mr. Wehrum's Presentation to Hunton and his Former Clients In addition to Mr. Wehrum's consideration and granting of Hunton's request for a presentation, his delivery of the presentation itself was problematic. The presentation was a prohibited communication or meeting with Hunton and three of his former clients - UARG, Duke Energy, and Dominion Energy. As discussed in the preceding section, the exception for speeches sponsored by a former employer was unavailable. By delivering this presentation Hunton identifies the clients as the sponsors in the invitation form, but Hunton was the sponsor because it extended the invitation and hosted the event in its offices. Invite Form, at 1. In any event, the analysis would be the same if the clients had sponsored the event because UARG, Duke Energy and Dominion Energy were Mr. Wehrum's former clients. 50 OGE DO-09-020, at 1. 51 Id., at 2-3. The same analysis would apply to a speech that had a demonstrable financial effect on a client. 52 Id., at 2 (emphasis added). 53 Invite Form. 54 Technical Consultant and Legal Support Funding Requests for the Period June 23 to Early September 2017, Politico (UARG organizational documents), https://bit.ly/2IE5JeC; Colman and Guillen, Politico, Feb. 20, 2019 ("The nation's biggest coal-burning power companies paid a top lobbying firm millions of dollars to fight a wide range of Obama-era environmental rules... shortly before one of the firm's partners became President Donald Trump's top air pollution regulator."). 55 Compliance Certification, Item 7. 56 Eilperin, Washington Post, Feb. 25, 2019. 49 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 8 without first obtaining a waiver, Mr. Wehrum violated his Ethics Pledge. 57 Depending on whether the discussion during or after the presentation addressed a party matter in which Hunton, UARG, or Duke Energy was a party or represented a party, he may also have violated his ethics agreement. In an interview with the Washington Post, Mr. Wehrum offered a defense as to the Ethics Pledge violation but does not appear to have addressed the possible ethics agreement violation: Wehrum said he is still unclear about exactly what sort of meetings are permissible under the Trump pledge. However, he said he has concluded that his meetings comply as long as five entities participate. And, he said, it does not matter how many of those entities are former clients. 58 Mr. Wehrum seems to be arguing that, under the Ethics Pledge, he cannot meet with any former client but can meet with any five of them. If that were true, the rule would serve no purpose. His mention of "five entities" likely was a reference to the Ethics Pledge exception for meetings that do not focus on party matters and are "open to all interested parties." 59 OGE has articulated a rule of thumb that five parties can satisfy the multiplicity requirement, but this interpretive gloss on the "open to all interested parties" requirement does not apply if the circumstances raise concerns about special access. OGE's guidance states: Because meeting spaces are typically limited, and time and other practical considerations also may constrain the size of meetings, common sense demands that reasonable limits be placed on what it means to be "open to all interested parties." Such meetings do not have to be open to every comer, but should include a multiplicity of parties. For example, if an agency is holding a meeting with five or more stakeholders regarding a given policy or piece of legislation, an appointee could attend such a meeting even if one of the stakeholders is a former employer or former client; such circumstances do not raise the concerns about special access at which the Executive Order is directed. . . . In any event, agency ethics officials will have to exercise judgment in determining whether a specific forum qualifies as a meeting or other event that is "open to all interested parties," and OGE is prepared to assist with this analysis. 60 There is a threshold problem to Mr. Wehrum relying on the five-party rule of thumb: only one party attended the meeting. As discussed above, UARG is an "ad hoc unincorporated association" of members acting "collectively." 61 The available evidence suggests that member Wehrum Ethics Pledge, ? 6. Eilperin, Washington Post, Feb. 25, 2019. 59 Executive Order No. 13770, ?? 1(6), 2(s). 60 OGE DO-09-11, at 2 (emphasis added). 61 Brief for Intervenor-Petitioners National Federation of Independent Business and Utility Air Regulatory Group, Murray Energy Corporation, v. Env. Prot. Agency, et al., D.C. Cir. No. 14-1112 and 14-1151, at v (Dec. 30, 2015), https://bit.ly/2YmvliQ. 57 58 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 9 companies participated in this meeting collectively as representatives of UARG. For example, when Mr. Wehrum arranged a similar meeting with EPA in July 2017 while serving as counsel for UARG, he explained that UARG would be represented by its counsel and members. In an email sent before that meeting, Mr. Wehrum, as UARG counsel, wrote: UARG will be represented by Makram Jabar ([Hunton]), Andrew Knudsen ([Hunton]), Mikes [sic] Gears (Duke Energy) and Justin Walters (Southern Co.). Makram and Andrew are counsel to the UARG HAPs committee. Mike and Justin are co-chairs of the UARG HAPs Committee." 62 He also characterized an earlier June 2017 meeting with EPA as a UARG meeting: "UARG is holding a meeting here at Hunton's offices in DC on the afternoon of June 22 and the morning of June 23." 63 In this context, his December 2017 presentation is best characterized as having been attended by only UARG and its counsel. The meeting, thus, fails the multiplicity requirement. There is an even more fundamental problem with Mr. Wehrum relying on the five-party rule of thumb. Underlying the rule of thumb is the legal standard that a meeting must be "open to all interested parties" to alleviate concerns about special access. 64 OGE has explained that the purpose of the Ethics Pledge is "to address concerns that former employers and clients may appear to have privileged access, which they may exploit to influence an appointee out of the public view." 65 Consistent with this purpose, EPA has acknowledged that "the term 'open to all interested parties' means that the meeting should include a multiplicity of parties representing a diversity of viewpoints." 66 Rather than being open to a diversity of viewpoints, the audience in this instance was an exclusive group of similarly-situated energy companies that had hired Hunton to advocate against EPA's attempts to regulate their industry. It appears Hunton acted as a gatekeeper, excluding everyone but its own clients from the meeting. In fact, Hunton admitted Email from William Wehrum to Mandy Gunasekara, July 20, 2017 (New York Times Documents, at 74). Email from William Wehrum to Mandy Gunasekara, May 23, 2017 (New York Times Documents, at 31). 64 Executive Order No. 13770, ? 2(s). 65 OGE DO-09-11, at 2. 66 The quoted language comes from the recusal statement EPA's Administrator Andrew Wheeler signed when he was Deputy Administrator. Recusal Statement of Andrew R. Wheeler, May 24, 2018, https://bit.ly/2KTqyng. Mr. Wehrum, however, omitted this requirement from his recusal statement, which he refused to sign until September 2018. Wehrum Recusal Statement. Some recusal statements filed by EPA officials in 2017, like Mr. Wehrum's recusal statement, did not mention the "diversity of viewpoints" requirement. American Oversight, EPA Political Appointee Ethics Records, Resumes, and SF-50s, at 101, 114, Oct. 30, 2018 (Recusal Statement of Tate Bennett, Nov. 1, 2017; Recusal Statement of Erik Baptist, Oct. 12, 2017), https://bit.ly/2DtWSHp. But by 2018, when Mr. Wehrum filed his recusal statement, EPA had expanded its discussion of the Ethics Pledge in recusal statements to elaborate on that requirement. There are numerous examples of senior EPA officials discussing the "diversity of viewpoints" or "diversity of interests" requirement in recusal statements they filed in 2018 before and after Mr. Wehrum filed his. See, e.g., Recusal Statement of Steven Cook, Apr. 20, 2018, https://bit.ly/2W3XTNl; Recusal Statement of Michael Stoker, June 4, 2018, https://bit.ly/2DtWSHp; Recusal Statement of Peter Wright, July 24, 2018, http://src.bna.com/ABQ; Recusal Statement of Anne Idsal, July 24, 2018, https://bit.ly/2UUzRbl; Recusal Statement of David Dunlop, Dec. 19, 2019, https://bit.ly/2GHLJ6H. Therefore, by the time Mr. Wehrum had signed his recusal statement, EPA's ethics office had firmly established that the five-party rule of thumb only applies when the parties represent a diversity of viewpoints. Mr. Wehrum cannot simply point to the language in his recusal statement to avoid that limitation. If he attempts to do so, OIG should ascertain what advice EPA's ethics officials would have given Mr. Wehrum had he consulted them before agreeing to deliver the Hunton presentation. 62 63 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 10 only a select group of clients who were dues-paying members of UARG, Mr. Wehrum's former client. It would be impossible to argue that this closed-door UARG meeting met the standard of being "open to all interested parties." To the contrary, this meeting delivered precisely the sort of special access for UARG that the Ethics Pledge is designed to prevent. Therefore, the exception was inapplicable, and Mr. Wehrum violated his Ethics Pledge. In addition to violating his Ethics Pledge, Mr. Wehrum may have violated his ethics agreement. A violation occurred if he discussed any party matter, such as litigation, involving Hunton, UARG, or Duke Energy as a party or a representative. Meeting materials show that Mr. Wehrum discussed "NSR" (new source review) in his presentation. 67 Notably, late on the same day as his presentation, EPA issued a memorandum on NSR in connection with a case involving Hunton as a representative. 68 As discussed in more detail in the next section, Mr. Wehrum participated in development of that NSR memorandum, and it was Hunton's attorneys who delivered it to the Supreme Court one day after his presentation. Under these circumstances, an investigation is warranted to ascertain whether Mr. Wehrum discussed the NSR memorandum with Hunton or any other party matter involving a meeting participant. C. Mr. Wehrum's Involvement in Developing the EPA Memorandum Used by Hunton Mr. Wehrum also apparently violated his recusal obligations under his ethics agreement and Ethics Pledge by assisting in the development of the NSR memorandum, which was tied to litigation in which his former employer, Hunton, was representing DTE Energy ("DTE"). EPA recognized the need for his recusal from the NSR memorandum due to its connection to the DTE litigation. On December 7, 2017, Mr. Wehrum's deputy, Mandy Gunasekara, emailed the final NSR memorandum to EPA's Chief of Staff, Ryan Jackson, explaining that "Bill [Wehrum] is recused." 69 Similarly, when Ms. Gunasekara sent Mr. Wehrum a redacted draft on December 5, 2017, she wrote: "I have redacted the potentially offending language given your recusal issues." 70 Later that week, The Hill reported on December 8, 2017, that EPA "said Wehrum was not involved in Thursday's memo, having recused himself because his former law firm, Hunton & Williams, represents DTE in the litigation." 71 EPA's claim that Mr. Wehrum "was not involved" was later revealed to be untrue. As the Washington Post reported, Mr. Wehrum participated personally and substantially in EPA's development of the NSR memorandum: William Wehrum, Clean Air Act: Update on Stationary Source Regulations, Dec. 7, 2017, (presentation at meeting) (New York Times Documents, at 200). 68 Eilperin, Washington Post, Feb. 25, 2019. 69 Email from Mandy Gunasekara to Ryan Jackson, Dec. 7, 2017 (Senators' OIG Letter, at 115). 70 Email from Mandy Gunasekara to William Wehrum and David Harlow, Dec. 5, 2017 (Senators' OIG Letter, at 103). It is not clear why Ms. Gunasekara would have thought redaction of only part of the NSR memorandum was sufficient. 71 Timothy Cama, EPA works to ease air pollution permitting process, The Hill, Dec. 8, 2017, https://bit.ly/2VwgoK8. 67 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 11 "I looked at that [redacted] document, and then I sat in one meeting where we talked about the meaning of the 2002 rules," Wehrum said. "That was it. That was my involvement." However, two people familiar with the meeting, speaking on the condition of anonymity to discuss internal deliberations, said the discussion ranged beyond the 2002 rules, covering topics such as the memo's potential impact on future EPA enforcement activities and the need to issue it before the Supreme Court [certiorari] conference on the DTE case. 72 Mr. Wehrum's acknowledgment that he reviewed the redacted document and sat in on a meeting establishes that he participated personally and substantially in development of the NSR memorandum, as does the account of the two sources who indicate that his participation was greater than he has acknowledged. This information is corroborated by other reporting and a documentary record of his personal and substantial participation in the NSR memorandum's development in early December 2017. The New York Times reported that "[d]uring a morning meeting on Dec. 5th, according to E.P.A. officials interviewed by The New York Times, the DTE/New Source Review memo was discussed, even though Mr. Wehrum had at times asserted he was recusing himself from this topic." 73 A heavily redacted email from an attorney in EPA's Office of General Counsel on December 5, 2017 also announced a "late-breaking meeting today with Bill Wehrum at 1 p.m. on New Source Review," 74 and an entry in Mr. Wehrum's calendar for 1:00 p.m. that day is titled "NSR Discussion." 75 At 1:06 p.m. on December 5, Ms. Gunasekara sent the previously discussed draft of the NSR memorandum to Mr. Wehrum, which was attached to an email in which she indicated she was sending the draft in preparation for "tomorrow's NSR discussion," suggesting that Mr. Wehrum may have participated in another meeting on December 6, 2017. 76 Mr. Wehrum also received two more emails regarding the NSR memorandum on December 7, 2017, and one on December 8, 2017. 77 In addition, Mr. Wehrum was listed as a required participant in a calendar entry for a scheduled conference call regarding the memorandum on December 11, 2017. 78 Regardless of whether Mr. Wehrum's views were incorporated in the final NSR memorandum, his participation in deliberations regarding its development constituted personal Eilperin, Washington Post, Feb. 25, 2019 (the insertion of "[redacted]" appears in the original text of the article). Annotation to Wehrum calendar for Dec. 5, 2017 added by the New York Times (New York Times Documents, at 178). 74 Email from Brian Doster to Justin Schwab and Marcella Burke, Dec. 5, 2017 (Senators' OIG Letter, at 105). 75 Wehrum calendar for Dec. 5, 2017 (New York Times Documents, at 179). 76 Email from Mandy Gunasekara to William Wehrum and David Harlow, Dec. 5, 207 (Senators' OIG Letter, at 103). 77 Email chain between Susan Bodine and Mandy Gunasekara, Dec. 7, 2017 (cc:ing Mr. Wehrum) (New York Times Documents, at 202); Email from Susan Bodine to William Wehrum, Dec. 8, 2017 (New York Times Documents, at 228). 78 Wehrum calendar for Dec. 11, 2017 (Senators' OIG Letter, at 113). 72 73 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 12 and substantial participation. 79 OGE's regulations explain that participation "may be substantial even though it is not determinative of the outcome of a particular matter." 80 Moreover, redaction of some language in a draft did not negate his participation in the NSR memorandum's development, for both his Ethics Pledge and his ethics agreement establish the duty to recuse from a "particular matter involving specific parties" and not merely parts of the matter. 81 The focus on the "2002 rules" in Mr. Wehrum's above-quoted explanation seems, at least implicitly, to challenge the notion that development of the NSR memorandum was part of a party matter--a necessary predicate to finding a violation of his recusal obligations. The record makes clear, however, that EPA drafted and timed the memorandum for the DTE litigation, which was undeniably a party matter. 82 In an email transmitting a draft of the memorandum to colleagues, one EPA official wrote: "Attached is the latest version of the NSR Memo pertaining to the issues at issue in the DTE case. I thought we may have more time, but know now that the [Supreme Court's] cert hearing is planned for Wednesday." 83 A second official wrote: "Attached for review are the current drafts of two memos regarding the issues in the DTE NSR litigation." 84 A third emailed a copy of the memorandum to colleagues along with a second attachment that he described as "an analysis of options for addressing NSR issues raised by DTE." 85 A fourth referred to the memorandum as the "NSR DTE memo." 86 A fifth even discussed distributing the memorandum to the media only after the Supreme Court's certiorari hearing concluded. 87 The content of the NSR memorandum itself resolves any doubt about its function. Its first paragraph alluded to the pending litigation involving Mr. Wehrum's former law firm. 88 EPA declared that the memorandum "is not final agency action" and has no legally operative effect: "This memorandum does not change or substitute for any law, regulation or other legally binding requirement and is not legally enforceable." 89 Instead, it claimed to seek only to address "uncertainty" arising directly from the DTE litigation--one day before the Supreme Court was scheduled to decide whether to address that uncertainty by granting certiorari. 90 See, e.g., Office of Gov't Ethics, DO-04-12, June 1, 2004 ("Involvement in preliminary discussions, in interim evaluations, in review or approval at intermediate levels, or in supervision of subordinates working on a matter also amounts to personal and substantial participation."), https://bit.ly/2T3IH5D. 80 5 C.F.R. ? 2635.401(b)(4). 81 Ethics Agreement at 1; Wehrum Ethics Pledge. 82 5 C.F.R. ? 2641.201(h)(1) (establishing that a "court case" is a particular matter involving specific parties). 83 Email from Mandy Gunasekara to Susan Bodine and Patrick Taylor, Dec. 4, 2017 (Senators' OIG Letter, at 93). 84 Email from Brian Doster to Justin Schwab, et al., Oct. 4, 2017 (Senators' OIG Letter, at 131). 85 Email from Josh Lewis to Mandy Gunasekara (Senators' OIG Letter, at 117). 86 Attachment to email from Peter South to Mike Koerber, Oct. 3, 2017 (Senators' OIG Letter, at 128-29). 87 Email from Liz Bowman to Jahan Wilcox, Dec. 7, 2017 ("Can you please help us get this to a few people who might be interested, after the Hearing concludes?") (Senators' OIG Letter, at 155). 88 NSR Memo, at 1. 89 Id. at 2 (emphasis added). 90 Id. at 1 ("I understand that two recent appellate court decisions in the pending enforcement proceeding against DTE Energy have created uncertainty..."). 79 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 13 The NSR memorandum recounts in detail the history and effect of the DTE litigation. 91 It even acknowledges its specific connection to the upcoming certiorari hearing the next day, stating: The matters at issue in the DTE litigation are complex, and the appellate court decisions have left ambiguity regarding the scope of the applicable regulations and what sources must do to comply. Further, the Supreme Court has been asked to review the second appellate court opinion. Considering this uncertainty, the EPA believes it would be helpful to explain to stakeholders how the EPA plans to proceed in implementing and exercising its authority under those regulations pending further review of these issues by the EPA. 92 EPA issued the NSR memorandum late on December 7, 2017, and Hunton delivered it to the Supreme Court the next morning in time for the certiorari conference. 93 Hunton explained in a cover letter that the NSR memorandum was a product of a review that EPA had advised the Court it was undertaking in a pleading filed by the Justice Department on its behalf. 94 In this context, it seems unusual that Hunton delivered the NSR memorandum to the Supreme Court instead of the Justice Department. These circumstances further highlight that the NSR memorandum was a document that EPA created for the benefit of Hunton's client in a specific litigation. In other words, the NSR memorandum was part of a party matter. Investigation by OIG could reveal whether or not EPA officials improperly coordinated with Hunton regarding the creation and delivery of this document. For these reasons, it seems clear that the NSR memorandum was a litigation document prepared for a case in which Hunton was representing a party. Mr. Wehrum's personal and substantial participation in the development of that memorandum violated the recusal obligations in both his ethics agreement and his Ethics Pledge. Conclusion When William Wehrum joined EPA after years fighting on behalf of industry clients, he promised to distance himself from both his law firm and his former clients. He signed an ethics agreement and a separate Ethics Pledge that created related but distinct recusal obligations not to participate personally and substantially in any party matter, communication, or meeting involving either the firm or a recent former client as a party or representative. After less than a month as an EPA Assistant Administrator, Mr. Wehrum broke this promise. He accepted an invitation to present on EPA's regulatory activity in a December 2017 meeting at the firm's office with a coalition of energy companies that he had represented before entering government. Earlier that same year, while working for the firm, he had represented the NSR Memo, at 5-6, 8. Id. at 6 (emphasis added). 93 Letter from Hunton & Williams to Clerk of the Supreme Court, Dec. 8, 2017 (New York Times Documents, at 212). 94 Id. 91 92 Acting Inspector General Charles J. Sheehan May 29, 2019 Page 14 same coalition in two meetings in the same office with an EPA official who discussed the same subject. Contemporaneously with his December 2017 presentation, Mr. Wehrum also helped develop a memorandum for a case involving his former law firm as a representative. To allay concerns that he may have violated his recusal obligations, Mr. Wehrum has offered a legalistic explanation that misconstrues the requirements of the Ethics Pledge and fails to address the distinct recusal obligations under his ethics agreement. He also admits that he did not consult EPA's ethics officials prior to engaging in the conduct at issue here. Mr. Wehrum seems not to appreciate that his recusal is intended to protect against representatives of special interests trading on their relationships with him to gain special access to the levers of power that affect all Americans. As such, despite his explanations, his conduct appears to violate the recusal requirements in his ethics agreement and Ethics Pledge. Therefore, we respectfully request that OIG investigate this matter and take appropriate action. Sincerely, Noah Bookbinder Executive Director cc: Director Emory A. Rounds, U.S. Office of Government Ethics