EPA Holds the Line on BACT and CO2

Agency makes clear that it does not view CAA BACT provisions as applicable to GHGs

On Monday, the EPA's Environmental Appeals Board (EAB) issued an order to the Indiana Department of Environmental Management to reconsider a permit it granted for BP to expand its Whiting (Indiana) refining facility to refine oil shale. NRDC, Sierra Club, the Environmental Law & Policy Institute and others filed a petition in August 2008 for the federal EPA to reconsider IDEM's decision to grant the permit. In the petition, environmentalists alleged that IDEM had let BP get away with incomplete calculations of its emissions, and that it had failed to regulate carbon dioxide (CO2). CO2, petitioners urged, should be subject to the CAA's best-available-control-technology (BACT) requirements, CAA § 165(a), following the Supreme Court's 2007 Massachusetts v. EPA decision.

In its ruling, EAB threw petitioners a bone by conceding that the emissions calculations were incomplete, and remanding the permit for reevaluation of the aspects that incompleteness affected. (This allowed environmentalists to claim victory.) But it stonewalled on the critical CO2 point.

Petitioners urged that the BACT requirements applied to CO2 under Mass v. EPA, in which the Court held that CO2 was a "pollutant" under the CAA. This, they said, means that CO2 is a pollutant that is "subject to regulation" under the CAA and therefore subject to the BACT requirements. (See CAA § 165(a) (requiring BACT be installed preconstruction for all pollutants "subject to regulation under this chapter.")

Rather than concede that CO2 was "subject to regulation," something that Lisa Jackson's EPA has been flirting with but avoiding, the EAB held that "at this time EPA continues to construe" BACT to cover only those pollutants "subject to either a provision in the Clean Air Act or a regulation adopted by EPA under the Clean Air Act that requires actual control of emissions of that pollutant." The phrasing opens the door to the possibility that EPA may change its interpretation in the future--important to keeping the pressure on Congress to pass GHG-specific legislation--but maintains the status quo for now.