The GOP and other critics take latest shots at EPA’s air initiatives

As has become usual since Republicans took control of the U.S. House in 2010, the Obama Administration’s U.S. Environmental Protection Agency was again the punching bag at a June 6 hearing of the House Subcommittee on Energy and Power devoted to what the GOP majority calls regulatory overreach.

At the last minute, Alfredo Armendariz, the controversial former administrator of EPA Region 6, dropped out of the hearing. Said subcommittee Chairman Ed Whitfield, R-Ky., in his opening statement: “I would note that we had expected Dr. Armendariz to testify here today and we are disappointed he chose to cancel yesterday afternoon. We do plan to get to the bottom of the reasons for his failure to appear.”

The subcommittee is part of the House Energy and Commerce Committee.

Whitfield cited in his opening statement several examples of his concerns about EPA, including:

  • In a case concerning natural gas producer Range Resources, EPA issued an emergency compliance order against a drilling company based on false accusations, even though Texas regulators warned EPA it was premature and the facts weren’t known, Whitfield said. In the end, EPA withdrew the order, but not until after the company was forced to spend millions of dollars to defend against EPA’s “false claims,” he added.
  • EPA’s efforts relating to the Texas Flexible Air Permits is an example of “aggressive and unprecedented regulatory actions,” he said. This permitting program had been in effect since the Clinton Administration and was working very well to improve the state’s air quality. EPA decided to ‘federalize’ this program and compel more than 100 major facilities to go through a process EPA called “deflexing,” Whitfield noted. “Those EPA actions do not appear to have the effect of furthering the environmental and public health goals of the Clean Air Act, and the agency’s actions strongly do conflict with the state-federal partnership that is at the core of this statute. EPA’s unprecedented takeover of greenhouse gas permitting in Texas to promote its climate change agency agenda is another such example as well.”
  • In the recent Luminant case relating to EPA’s efforts to disapprove Texas’s standardized pollution control permit, the Fifth Circuit Court of Appeals rejected EPA’s attempts and said that EPA’s disapproval was based on “purported nonconformity with three extra-statutory standards that the EPA had created out of whole cloth,” Whitfield wrote.
  • In a recent decision related to Arch Coal’s (NYSE: ACI) Spruce No. 1 strip mine in West Virginia, a federal judge appointed by President Obama rejected EPA’s unprecedented attempt to invalidate a Section 404 Clean Water Act permit, Whitfield said. The court called EPA’s rationale “magical thinking” and “a stunning power for an agency to arrogate to itself.”

Upton takes shots at Armendariz, White House

Rep. Fred Upton, R-Mich., chair of the full committee, lambasted Armendariz and the White House in his opening statement: “Let’s be honest – under the Obama EPA, the extreme has become routine. That’s why, when video surfaced of Dr. Al Armendariz talking about his ‘crucify’ enforcement strategy, it really rang a bell with those of us in Congress who oversee the agency, not to mention those who have to deal with the economic consequences back home. His words provided a window into a pervasive mindset driving a long list of problematic enforcement and regulatory actions by the agency.”

Upton added: “Unfortunately, late yesterday afternoon, an attorney representing Dr. Armendariz contacted the committee staff to notify us that – despite his earlier agreement to appear – Dr. Armendariz was no longer willing to testify. Well, I’d like to know why not. Why, several weeks after he had agreed to testify, did he retain counsel and withdraw? The EPA did not make a witness available to appear alongside Dr. Armendariz today. Did the Obama administration urge him not to appear?”

Rep. Henry Waxman, D-Calif., defended Armendariz and EPA in his prepared opening statement. “In May 2010, then-EPA Regional Administrator Al Armendariz was in Dish, Texas, talking to citizens concerned about oil and gas pollution,” he wrote. “When he started describing his philosophy of enforcement, he used a poor analogy involving Romans and crucifixion. Everyone agrees that it was an inappropriate comment. But those who oppose strong enforcement of the nation’s environmental laws have exaggerated what was said in order to make absurd attacks on EPA and the Obama Administration. … Dr. Armendariz has apologized for his controversial comments, and he has resigned.”

Waxman, in defending EPA’s overall enforcement approach, said: “It is EPA’s job to ensure that the states implement nationally consistent programs that meet federal standards. The states do not always meet these expectations. In fact, the EPA [inspector general] recently found that ‘state enforcement programs frequently do not meet national goals and states do not always take necessary enforcement actions. State enforcement programs are underperforming…noncompliance is high and the level of enforcement is low.’ And in these situations, EPA has the authority to step in to take the action needed to enforce the law.”

Texas regulator says EPA ‘deflexing’ a waste of time

Bryan Shaw, Chairman of the Texas Commission on Environmental Quality (TCEQ), testified about the “deflexing” program mentioned by Whitfield. He noted that in June 2010, the TCEQ proposed draft rules that amended the Flexible Permits Program in an effort to resolve EPA’s concerns. But, he said the EPA summarily disapproved the Texas program just one month after the state’s new proposed rules were published. Even after the TCEQ proposed revisions to the rules to address EPA concerns, the EPA sent letters to every flexible permit holder requiring submittal of a plan to transition to what EPA refers to as a “SIP-approved” permit.

“As of May 2012, the TCEQ has ‘de-flexed’ 65 flexible permits and 36 permit applications are pending in-house,” Shaw wrote in his prepared statement. “EPA received commitments from the remaining 19 flexible permit holders to de-flex, but application submittals are still pending. The ‘de-flex’ process has resulted in an incredible waste of time and monetary resources for both permit holders and the TCEQ for no environmental benefit. To date, not one of the ‘de-flexing’ permitting actions has revealed the circumvention and emissions violations that EPA claimed were being hidden by flexible permits. In addition, there have not been any reductions in emission limitations, additional controls required, or additional conditions added to the permits as a result of the process. The TCEQ, through the State Attorney General’s Office, challenged EPA’s disapproval in the United States Court of Appeals for the Fifth Circuit. Briefing has been completed and oral argument was held on October 4, 2011. A decision by the court is currently pending.”

Another area of complaint by Shaw was EPA’s decision at the last-minute to include Texas in some aspects of the new Cross-State Air Pollution Rule, which mostly affects coal-fired power plants. “Despite the EPA’s claims that the CSAPR will not impact electric reliability, this rule puts at risk the economic future of power generation; those dependent on affordable electricity in Texas; and places vulnerable citizens at a significant health and safety risk,” he said.

The EPA’s analysis of electric reliability for the CSAPR was not available at the time of proposal and includes significant errors regarding generation capacity within ERCOT – the largest grid operator within Texas, Shaw added. “The EPA overestimates ERCOT’s generation capacity by nearly 20,000 megawatts. The EPA estimates a base generation capacity for ERCOT power plants of around 90,400 MW. This estimate includes 100% of Texas’ installed wind generation. ERCOT only plans on 8.7% of installed wind generation due to its unpredictability and unreliability. EPA’s estimate of ERCOT’s capacity also includes units currently retired and mothballed. More recent information from the EPA associated with the Mercury Air Toxics Standards (MATS) rule indicates that the EPA is also underestimating future demand while overestimating future capacity.”

Litigation about the CSAPR is ongoing. The Texas Attorney General filed a petition for review with the U.S. Court of Appeals for the District of Columbia Circuit in September 2011. The rule is also being challenged by Texas electric generating utilities, including Luminant and San Miguel Electric Cooperative, and multiple other parties. Fourteen states, including Texas, filed administrative and legal challenges to the rule. A December 2011 appeals court stay put the rule on hold until the courts could make their final decision on the merits of the case. Shaw wrote: “The court’s willingness to put the rule on hold acknowledges two key elements: 1.) That the court agrees the rule would do harm if it were in place, and 2.) That Texas may prevail once all the evidence is considered by the court. Oral arguments were heard on April 13, 2012.”

Navajo official says San Juan coal plant case goes too far

Stephen Etsitty, Executive Director of the Navajo Nation EPA, had a long list of concerns about EPA to air at the hearing. The Navajo Nation is a primarily coal-based resource tribe that is the landlord for two large coal-fired plants and associated mines located directly on its tribal lands and close neighbor to one large coal fired power plant and associated mine located near the Nation. The EPA’s Regional Haze Rule directly affects the Nation’s existing natural resource economy and its government revenue sources, Etsitty noted.

The San Juan Generating Station (SJGS), a coal-fired power plant adjacent to the Navajo Nation, is of critical economic importance to the Navajo Nation and the Navajo people. A recent rulemaking under the Regional Haze Rule by the EPA imposes excessively stringent and expensive Best Available Retrofit Technology (BART) on the SJGS and jeopardizes the continued viability of the power plant, Etsitty said. Accordingly, the Navajo Nation filed an amicus curiae brief in federal court in support of the Public Service Co. of New Mexico (PNM) and the state of New Mexico in their petitions for review of the BART rulemaking for the SJGS.

The SJGS, located in Waterflow, N.M., has a capacity of 1,800 MW. Coal for the SJGS is mined at the nearby San Juan mining operations of BHP Billiton. While both the SJGS and the San Juan mining operations are located outside the jurisdiction of the Navajo Nation, they have a significant positive economic impact on the Nation and on the regional economy, Etsitty noted.

Etsitty said EPA has failed lately to engage in “meaningful” consultation with the tribe as it relates to the SJGS. “EPA has a trust responsibility to the Navajo Nation in this circumstance,” he said. “Nonetheless, despite the unique impact that this [Federal Implementation Plan] and other impending BART rulemaking in Navajo Indian Country will have on the Navajo Nation, the EPA failed to conduct requisite ‘outreach’ to the Nation and consultation prior to publishing the proposed FIP for SJGS.”

Navajo Nation President Ben Shelly sent a letter in May 2011 to Armendariz, then Regional Administrator, EPA Region 6, requesting formal consultation on the FIP for SJGS. As a result, EPA staff met with Shelly and other Navajo Nation officials and counsel in May 2011. However, the approximately two-hour consultation, only provided at the eleventh hour of the FIP rulemaking, was neither meaningful nor adequate, Etsitty wrote.

“In fact, contrary to its Tribal Consultation Policy, EPA never provided feedback to the Nation regarding its comments at the May 20, 2011 meeting, and the Nation is therefore unaware how its concerns were weighed or considered by the agency, if at all,” he added. “The EPA can and must do better to engage with the Nation in meaningful government-to-government consultation in this and other rulemakings, which have the potential to so catastrophically impact the Nation through EPA regulation. Indeed, EPA made only one change in the final FIP for SJGS that was positive for the Nation compared with the proposed rule.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.