IDEM Letter Explains State’s Approach to the Tailoring Rule
By Jennifer Thompson, Attorney, Bingham Greenebaum Doll LLP
On July 23, 2010 the Indiana Department of Environmental Management (“IDEM”) submitted its response to the United States Environmental Protection Agency (“U.S. EPA”) regarding how it will implement the Prevention of Significant Deterioration (“PSD”) and Title V Greenhouse Gas (“GHG”) Tailoring Rule (the “Tailoring Rule”). IDEM’s letter states that the State of Indiana intends to apply the meaning of the term “subject to regulation” as established by U.S. EPA in the Tailoring Rule when IDEM implements its PSD and Part 70 permitting programs.
U.S. EPA had asked states to submit a letter on or before August 2, 2010 explaining how the state will implement the Tailoring Rule. U.S. EPA has advised that it will move forward with finalizing a proposal to limit its approval of existing State Implementation Plans for any state that is unable or unwilling to adopt the federal tailoring approach.
IDEM’s response letter explains that Indiana will need to undertake rulemaking to implement the changes included in the Tailoring Rule. IDEM plans to initiate rulemaking to incorporate the Tailoring Rule in mid-August 2010 and hopes to complete same in March of 2011. However, IDEM points out that an additional emergency rulemaking will be necessary to make GHG regulatory threshold changes effective on January 2, 2011.
In addition to being the deadline to respond to U.S. EPA, August 2, 2010, is also the appeal deadline for states to challenge the legality of the Tailoring Rule with the D.C. Circuit Court of Appeals. It is unclear at this time whether IDEM will appeal the Tailoring Rule; however, the State of Indiana has joined the Endangerment Finding litigation currently before the D.C. Circuit Court of Appeals as an intervenor in support of three petitioners, Virginia, Alabama, and Texas. Indiana has submitted to the court the following preliminary nonbinding issues:
With respect to its Endangerment Finding, the U.S. EPA exceeded its statutory authority, abused its discretion, and acted arbitrarily and capriciously by violating the Clean Air Act section 307(d), the Administrative Procedures Act, the “Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information Disseminated by the EPA,” and other applicable law.
With respect to its Endangerment Finding, the U.S. EPA exceeded its statutory authority, abused its discretion, and acted arbitrarily and capriciously in violation of Clean Air Act section 307(d) by re-delegating its statutory responsibilities to perform an endangerment analysis to a foreign entity, the Intergovernmental Panel on Climate Change (IPCC), and other organizations, and relying upon “assessments” from this foreign entity and other organizations.
U.S. EPA’s Endangerment Finding, together with the text of 42 U.S.C. § 7521, demonstrate that the outer limits of the non-delegation precedents of the Supreme Court have been exceeded, violating the Separation of Powers principle under the U.S. Constitution, rendering the Endangerment Finding unlawful.
Based on the issues raised by Indiana in its Endangerment Finding intervention, it is possible that an appeal of the Tailoring Rule could be pursued.