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U.S. EPA Upholds State’s Decision Not to Include Compliance Schedule in Title V Permit

06.01.2009

By Jennifer Thompson, Attorney, Bingham Greenebaum Doll LLP

Over the past few years, activists have been objecting to the issuance of certain Title V permits on the grounds that the permits do not include compliance schedules to address outstanding notices of violation (“NOV”) that have been issued to the permittee. In 2005 the U.S. Court of Appeals for the Second Circuit ruled in the environmentalists’ favor. New York Public Interest Research Group v. Johnson, 427 F.3d 172 (2nd Cir. 2005). However, courts in other circuits have not ruled directly on this issue, and environmentalists continue to raise objections.

Pursuant to Section 505 of the Clean Air Act (“CAA”), the United States Environmental Protection Agency (“U.S. EPA”) is to object to an operating permit that does not comply with the CAA requirements. If U.S. EPA does not object to a permit, any person may petition the U.S. EPA Administrator within sixty (60) days of expiration of U.S. EPA’s forty-five (45) day review period, to object to the permit. Environmentalists have been filing such petitions arguing that the issuance of an NOV (for example, alleging various Prevention of Significant Deterioration (“PSD”) and/or New Source Review (”NSR”) violations) is clear evidence that a Title V Permit is not in compliance with all of the CAA requirements.

Recently U.S. EPA Administrator Lisa Jackson upheld the Bush Administration’s position that the mere issuance of an NOV and referenced information contained therein are not sufficient to demonstrate that a permit is not in compliance with the requirements of the CAA. See U.S. EPA’s Order Partially Denying and Partially Granting Petition for Objection to Permit in the Matter of Cemex, Inc., Permit No. 95OPBO082. Administrator Jackson’s order, which responds to a petition to object to a Title V Permit, explains that the existence of an NOV is a relevant factor to consider when determining whether all of the information presented by a petitioner demonstrates the applicability of a Title V requirement. However, other factors also must be considered, including “the quality of information, whether the underlying facts are disputable, the types of defenses available to the source, and the nature of any disputed legal questions.” Using these factors, Administrator Jackson denied the petition with respect to the allegations contained in the NOV (which was issued after the public notice of the draft Title V Permit), but clarified that the Title V permit shield does not alter or affect the liability of an owner or operator of a source for violations of applicable requirements prior to or at the time of permit issuance.

Additionally, the Administrator denied other objections raised by the petitioners on the grounds that said objections were not raised with reasonable specificity by the petitioners during the public comment period for the draft Title V permit. However, the Administrator granted the petition on two separate issues which were raised during the public comment period because the reviewing state agency (the Colorado Department of Public Health and Environment) failed to adequately respond to the allegations. The reviewing agency’s response to petitioner’s allegations regarding two prior modifications simply stated:

The modifications you cite were evaluated under the rules that existed at the time of each modification, and determined to not trigger, or to net out of PSD review. The emissions increases were determined to meet regulatory requirements at the time of application, and are not part of the operating permit review.

Because the state agency’s response contained no citations or summary of the basis for its past decisions, the Administrator directed the agency to address the comments on the two modification projects and make any necessary changes to the permit. Administrator Jackson clarified that she was not concluding that either project triggered PSD and/or NSR, rather she held that the permit record does not provide a meaningful response and therefore lacked an adequate basis for the reviewing agency’s determination.

Notice of U.S. EPA’s final action on the petition was included in the May 11, 2009 Federal Register (74 Fed. Reg. 21803). U.S. EPA’s Order Partially Denying and Partially Granting Petition for Objection to Permit in the Matter of Cemex, Inc., Permit No. 95OPBO082.

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