Respectfully Rebutting Professor Revesz on EPA’s Clean Power Plan

In a word, New York University School of Law Professor Richard Revesz is brilliant.

Indeed, this blog is a big fan of the Professor’s seminal 1992 law review, “Rehabilitating Interstate Competition,” which persuasively puts the lie to the theoretical foundations of the “Race to the Bottom” thesis of environmental regulation.

Nonetheless, no jurist–no matter how brilliant–can cure EPA’s Clean Power Plan of its legal infirmities. So when Professor Revesz testified in support of the rule a week ago before the House Energy and Commerce Committee, he was necessarily in a bind because he had to try to defend the indefensible.

In this post, my purpose is to respectfully rebut one of Professor Revesz’s most consequential claims made during his testimony. The claim at issue regards the ongoing debate over whether the plain terms of the Clean Air Act forbids EPA from promulgating the Clean Power Plan.

Background: The Clean Power Plan is authorized by Clean Air Act Section 111(d). Section 111(d) is unusual because the House and the Senate passed arguably different versions of the provision in 1990 Amendments to the Clean Air Act. Both versions are variations of what is referred to as the “Section 112 Exclusion.” According to the House’s version, EPA is prohibited from promulgating Section 111(d) regulations for source categories already subject to regulations pursuant to Section 112 (which establishes a program to reduce emissions of hazardous air pollutants). By contrast, the Senate version arguably prohibits EPA from issuing Section 111(d) standards for pollutants already subject to regulation pursuant to Section 112.

The difference between the two versions is crucial for the fate of EPA’s Clean Power Plan. Under the House version, EPA would be prohibited from promulgating the Clean Power Plan, because the agency already has subjected power plants to Section 112 standards. However, under the Senate version, EPA would be permitted to issue 111(d) standards for power plants (i.e., the Clean Power Plan), because greenhouse gas emissions from power plants are not subject to Section 112.

Of course, opponents of the Clean Power Plan argue that the House version of the “Section 112 exclusion” is correct; proponents of the regulation argue that the Senate version is correct. (N.B. There is a convincing case, made by the West Virginia Attorney General’s office, that the Senate version of the “Section 112” exclusion is in fact a clerical error that carries no legal weight. Even were the Senate version deemed to be viable, there is another persuasive argument asserting that both the House and Senate versions may be read harmoniously so as to give them both meaning, in which case EPA would not have the authority to issue the Clean Power Plan (id.))

Professor Revesz’s Claim: In written testimony, Professor Revesz states that “EPA has consistently construed this Section 112 exclusion in Section 111(d) to pertain to air pollutants, not entire source categories.” That is, he claims that EPA for more than two decades has consistently interpreted the Clean Air Act in order to give effect to the Senate version of the “Section 112 exclusion” (i.e., the version that would allow EPA to issue the Clean Power Plan). If true, this would be a powerful argument in support of the Clean Power Plan.

Respectfully, I maintain that Professor Revesz’s claim in unfounded and indeed contrary to the historical record. To support his claim, Professor Revesz provides a host of examples (see footnote 12), which are rebutted in turn below.

Professor Revesz’s Example #1: “See 56 Fed. Reg. 24,468, 24,469 (proposed May 30, 1991) (determining that the Section 112 Exclusion applies to particular pollutants—namely those deemed “hazardous” under Section 112—rather than entire source categories);”

CEI Rebuttal #1: Here, Professor Revesz cites EPA’s 1991 Proposed Standards of Performance for New Stationary Sources and Guidelines for Control of Existing Sources: Municipal Solid Waste Landfill (56 FR 24468). However, the page cited by the Professor fails to mention in any fashion the “Section 112 Exclusion,” much less does it render a statutory interpretation of Section 111(d). Here’s what the citation actually says:

The EPA develops emission guidelines under section 111(d) of the CAA for certain sources covered by NSPS. When an NSPS has been promulgated under section 111(b) for a category of sources, section 111(d) of the CAA requires that States submit plans which establish emission standards for existing sources and provide for implementation and enforcement of emission standards for the designated pollutant. In general, a designated pollutant is one that may cause or contribute to endangerment of public health or welfare but is not “hazardous” within the meaning of section 112 of the CAA and is not controlled under sections 108 through 110 of the CAA. For ease of discussion, existing facilities which emit designated pollutants are considered to be “designated facilities.”

Contrary to what Professor Revesz suggests, there is no language that explicitly backs his claim in the “1991 Proposed Standards of Performance for New Stationary Sources and Guidelines for Control of Existing Sources: Municipal Solid Waste Landfill.” Nonetheless, EPA did directly address the “Section 112 Exclusion” later in the same rulemaking. In a 1995 technical support document attendant to the final rule, EPA gave an interpretation to 111(d) in light of the conflicting House and Senate versions of the provision. And, in this technical support document, EPA arrived at the opposite interpretation as is now maintained by Professor Revesz! Here’s what agency stated:

Section 111(d)(1)(A) was twice amended by the 1990 Clean Air Act Amendments. Pub. L. 101-549, section 302(a), directed the substitution of “7412(b)” for “7412(b)(1)(A),” and Pub. L. 101-549, section 108(g), substituted “or emitted from a source category which is regulated under section 7412 of this title” for “or 7412(b)(1)(A).” Title 42 of the U.S. Code adopts the amendment of section 108(g) with the explanation that section 302(a) could not be executed because of the prior amendment by section 108(g). 42 U.S.C. section 7411 (Supp.IV 1993). The EPA also believes that section 108(g) is the correct amendment because the Clean Air Act Amendments revised section 112 to include regulation of source categories in addition to regulation of listed hazardous air pollutants, and section 108(g) thus conforms to other amendments of section 112. The section not adopted by title 42, 302(a), on the other hand, is a simple substitution of one subsection citation for another, without consideration of other amendments of the section in which it resides, section 112. Thus EPA agrees that CAA section 111(d)(1)(A) should read “[t]he Administrator shall prescribe regulations which . . . establish[] standards of performance for any existing source for any air pollutant . . . which is not . . . emitted from a source category which is regulated under section 112. (EPA, Air Emissions from Municipal Solid Waste Landfills – Background Information for Final Standards and Guidelines, Pub. No. EPA-453/R-94-021, at 1-5 (1995))

Therefore, Professor Revesz’s first example actually works against him. Within the very rulemaking he cited, EPA construed the “Section 112 exclusion” to pertain to entire source categories. As such, it is demonstrably untrue that “EPA has consistently construed this Section 112 exclusion in Section 111(d) to pertain to air pollutants, not source categories,” as is maintained by Professor Revesz.

Professor Revesz’s Example #2: 63 Fed. Reg. 18,504 (Apr. 15, 1998) (issuing hazardous air pollutant standards under Section 112 for pulp and paper producers, including Kraft pulp mills)

CEI Rebuttal #2: With this example, Professor Revesz highlights EPA’s promulgation of Section 112 standards for pulp and paper producers (63 FR 18504), even though this source category is already subject to Section 111 standards. Seemingly, the Professor is suggesting that the coexistence of section 112 and section 111(d) standards for the same category disproves the argument that the Section 112 exclusion in Section 111(d) pertains to source categories.

However, Professor Revesz ignores the temporal sequence contemplated by the 112 exclusion. In short, order matters: There’s no prohibition on having a Section 112 regime for a category that is already subject to Section 111(d). Rather, the opposite is true: EPA is prohibited from promulgating a Section 111(d) regime for a category subject to 112.

Therefore, there is no illegality when EPA issues Section 112 regulations for a source that is already subject to Section 111(d) standards. And, in this case, Section 111(d) standards for Kraft pulp mills were promulgated in March, 1979 (EPA, Kraft Pulping: Control of TRS Emissions from Existing Mills, Pub. No. EPA-450/2-78-003b (March 1979)) – 19 years before EPA adopted the HAP rules for Kraft pulp mills.

Indeed, the context of the 1990 Clean Air Act Amendments lends logic to the fact that sequence matters. The 1990 Amendments grossly expanded Section 112, which applies ultra-stringent controls to existing sources. Being wary of duplicative regulation, Members of Congress softened the Clean Air Act pre-existing regulatory program for existing sources—i.e., 111(d)—such that it no longer authorized new regulations for categories subject to Section 112.

Professor Revesz’s Example #3: “64 Fed. Reg. 59,718 (Nov. 3, 1999) (approving Maryland’s 111(d) state air quality plan for total reduced sulfur emissions from existing Kraft pulp mills, even though Section 112 standards already applied to Kraft pulp mills);”

CEI Rebuttal #3: For starters, Professor Revesz here is citing a revision to Maryland’s existing 111(d) state air quality plan for total reduced sulfur emissions from existing Kraft pulp mills (64 FR 59718). Maryland’s original plan was approved by EPA on March 8, 1984 (47 FR 8612). Moreover, the regulation cited by professor Revesz doesn’t even mention Section 112.

So, the Professor Revesz’s third example contains no language that supports his contention that “EPA has repeatedly interpreted Section 111(d) in ways that are consistent with its authority to promulgate the Clean Power Plan” (Revesz testimony, p 8).”  Instead, Professor Revesz’s third example seems to suggest (again) that the simultaneous coexistence of section 112 and section 111(d) standards for the same category precludes the possibility that the 112 exclusion in Section 111(d) pertains to entire source categories, and not individual pollutants.

However, Professor Revesz’s reasoning falters for the same reasons we discussed above in “CEI Rebuttal 2.” EPA promulgated 111(d) Guidelines for total reduced sulfur emissions from existing Kraft pulp mills in March 1979. Maryland submitted its compliance plan in March, 1984 (47 FR 8612). And EPA promulgated Section 112 standards for Kraft pulp mills in April 1998 (63 FR 18504). As this timeline makes clear, the 111(d) standards for Kraft pulp mills came almost two decades before the Section 112 standards. Because the Section 112 standards did not precede the Section 111 standards, EPA’s actions are not prohibited by the plain terms of the Clean Air Act.

Professor Revsez’s Example #4: 65 Fed. Reg. 66,672, 66,674-¬‐75 (proposed Nov. 7, 2000) (indicating that EPA would be permitted to simultaneously regulate landfill gas under both Section 111(d) and Section 112);

CEI Rebuttal #4: Again, the regulatory sequence thwarts Professor Revsez’s thesis. Here, Professor Revesz cites proposed Section 112 standards for municipal solid waste landfills (65 FR 6672) to support his contention that, “EPA has consistently construed this Section 112 exclusion in Section 111(d) to pertain to air pollutants, not entire source categories.” Yet EPA promulgated Section 111(d) standards for existing landfills in March, 1996 (61 FR 9905); the agency ultimately promulgated Section 112 standards for existing landfills in January, 2003 (68 FR 2207). Because the Section 112 standards did not precede the Section 111 standards, EPA’s actions are not prohibited by the plain terms of the Clean Air Act.

Professor Revesz’s Example #5: “68 Fed. Reg. 23,209 (May 1, 2003)(approving Maine’s 111(d) state air quality plan for total reduced sulfur emissions from existing Kraft pulp mills, even though Section 112 standards already applied to Kraft pulp mills)”

CEI Rebuttal #5: Professor Revesz here again is citing a revision to Maine’s existing 111(d) state air quality plan for total reduced sulfur emissions from existing Kraft pulp mills (68 FR 23209). Maine’s original plan was approved by EPA in September 1990 (55 FR 38545).

More to the point, Professor Revesz’s reasoning falters for the same reasons we’ve previously discussed—i.e., order matters. EPA promulgated 111(d) Guidelines for total reduced sulfur emissions from existing Kraft pulp mills in March 1979. Maine submitted its compliance plan in February, 1990 (see 55 FR 38545 at 38546); it was approved by EPA on September 19, 1990 (id.). EPA then promulgated Section 112 standards for Kraft pulp mills on April 15, 1998 (63 FR 18504). Because the Section 112 standards did not precede the Section 111 standards, EPA’s actions are not prohibited by the plain terms of the Clean Air Act.

Professor Revesz’s Example #6: “68 Fed. Reg. 2227, 2229 (Jan. 16, 2003) (indicating that Section 111(d) emissions guidelines would continue operating for landfill gases despite Section 112 standards being enacted);”

CEI Rebuttal #6: Again, the regulatory sequence undercuts another of Professor Revesz’s examples supposedly supporting his claim that, “EPA has consistently construed this Section 112 exclusion in Section 111(d) to pertain to air pollutants, not entire source categories.” EPA promulgated Section 111(d) standards for existing landfills in March, 1996 (61 FR 9905); the agency ultimately promulgated Section 112 standards for existing landfills in January, 2003 (68 FR 2207). Because the Section 112 standards did not precede the Section 111 standards, EPA’s actions are not prohibited by the plain terms of the Clean Air Act.

Professor Revesz’s Example #7: “68 Fed. Reg. 74,868, 74,868 (Dec. 29, 2003) (approving Pennsylvania’s 111(d) state air quality plan for total reduced sulfur emissions from existing municipal solid waste landfills, even though Section 112 standards already applied to municipal solid waste landfills);”

CEI Rebuttal #7: Professor Revesz’s reasoning again falters for the same sequencing reasons we’ve already discussed. Here, he cites EPA’s approval of a submission from Pennsylvania pursuant to 1996 Section 111(d) regulations for solid waste municipal landfills (68 FR 74868)

EPA promulgated Section 111(d) standards for existing landfills in March, 1996; the agency ultimately promulgated Section 112 standards for existing landfills in January, 2003. Because the Section 112 standards did not precede the Section 111 standards, EPA’s actions are not prohibited by the plain terms of the Clean Air Act.

Professor Revesz’s Example #8: “77 Fed. Reg. 9304, 9447 (Feb. 16, 2012) (“Designated pollutant means any air pollutant, the emissions of which are subject to a standard of performance for new stationary sources, but for which air quality criteria have not been issued and that is not included on a list” published under Section 108 or Section 112.)”

CEI Rebuttal #8: Of all 8 examples cited by professor Revesz to support his thesis that, “EPA has consistently construed this Section 112 exclusion in Section 111(d) to pertain to air pollutants, not entire source categories,” this is the only one that actually works. However, it is an interpretation rendered by the very administration that proposed the Clean Power Plan!