Congratulations to the Sierra Club and Joro Walker and John Pace for their hard work on this case. Ban Law Office was happy to assist amicus, Utah Physicians for a Healthy Environment, in this case. Some analysis of the decision below. Also a favorable decision in the companion case Kennon v. Air Quality Board. James Kennon should receive massive credit as well since he handled a very complicated case pro se!! This was not an easy case for a lawyer and he presented his argument admirably in front of the justices.

Critical to the maintenance of National Air Quality Standards or NAAQS is the prevention of significant deterioration (PSD). In order to prevent PSD new sources are required to go through new source review. An application for a new source permit must show that the owner will construct the facility that utilizes the best available control technology (BACT). The applicant must undergo best available control technology review, and must utilize BACT unless its not achievable due to energy, envtl. or fiscal impacts. Also the applicant must perform a BACT analysis that analyzes pollution from the proposed facility and other pollution sources in the area to ensure they won’t cumulatively violate air qulaity standards or NAAQS. There is a ceiling on the total concentration of certain pollutants in the atmosphere. PSD increments allow or set a limitation on the amount of deterioration over time depending on what class the area is in…..basically class I areas allow the smallest amount of deterioration and includes National Park or wilderness areas.

Sierra Club challenged the Approval Order by DAQ through a Request for Agency Action alleging violation of the Federal Clean Air Act CAA, Utah Air Conservation Act, and portions of the Utah Administrative Code. Sierra Club’s issues were that the division failed to evaluate the emission of CO2 and other greenhouse gases in its Best Available Control Technology (BACT) analysis that the Division improperly excluded integrated gasification combined cycle technology as an available control technology, that the emission limits set as part of the BACT review were in error, that the Division wrongfully adopted significant impact levels policy for determining the cumulative impact of a new source on Class I areas, and the Division failed to adequately complete a Class I increment analysis for SO2.

A series of Summary Judgment motions were filed with the Board and Sierra Club lost several of these motions, but an evidentiary hearing was held on whether the BACT analysis was flawed based on consideration of the Integrated Gas Combined Cycle technology. After this hearing Sierra Club lost on all the issues. The standard of review was relatively favorable to Sierra Club, the S. Ct. holding they were reviewing the Division’s decision for “correctness” and granted little to no deference to the agency’s determination. The first issue addressed was whether the PSD federal rule, located in the C.F.R., was incorporated into the State Rule. Here the Court held the rule had not been incorporated since the rule appears to only apply in Utah to tribal lands. They also failed to hold that the state rule was not as stringent as the federal rule as the CAA requires.

There were 2 regulations that related to BACT including a 2005 and 2006 rule where the latter required analysis of all “air contaminants” and the former analysis was required for all “pollutants subject to regulation”. The Court held that the Division did not commit an error through application of the 2005 rule. The next issue carries great importance due to the U.S. Supreme Court’s ruling in Mass v. EPA since they held recently in 2007 that greenhouse gases such as CO2 could be regulated under the CAA. Raising the issue in this case whether the BACT analysis should include consideration of CO2. This Court pounced on the fact that although CO2 could be regulated currently there are no National Ambient Air Quality Standards (NAAQS) for it. Its unclear in other words what it means to be “regulated” under the CAA. The Court in this case adopted an interpretation of the Wyoming DEQ where a state agency would need to “regulate greenhouse gases…without the scientific and policy resources available to EPA and the US Congress”. In the end the Utah Supreme Court seemed concerned about the problems presented by CO2, but they did not want to “preempt ongoing Congressional and EPA efforts to formulate a CO2 emissions policy” by instituting an emission limitation as part of BACT review was reasonable. Longleaf Energy Assocs., LLC v. Friends of the Chattahoochee, Inc. 681 S.E. 2d 203, 207 (GA. Ct. App. 2009).

Turning to the issue where Sierra Club succeeded was whether consideration of Integrated Gasification Combined Cycle (IGCC) was required the Court held that it was based on the plain language of the Utah Administrative Code. Power Plant proponents pointed out that IGCC is a power generation technology as opposed to a emission control technology, however this fact did not exclude consideration of this technology from BACT review, IGCC can still act as an emission control technology, and can reduce the emission of criteria pollutants. The Court was attempting to balance the goal of BACT, which is to encourage use of new technologies without overburdening applicants through a complete redesign of proposed power plants that rely on advanced technologies that were never considered. In this case, since IGCC is a coal technology as opposed to say a wind generation technology it was required to consider this technology. They also rejected the proponents claims that IGCC is not an “available” technology since even though its relatively rare there are still 2 IGCC plants in the U.S., 14 worldwide, and more IGCC plants are being proposed in the U.S.

The next issue surrounding the nitrogen oxide pollutant where Sierra Club argued that the emission standard was not sufficiently stringent since other plants have achieved lower NO emission limitations. The Court agreed that there was insufficient evidence that the limitation in this case was the maximum reduction possible. In the end the Court upheld the Board’s decision in some parts but REVERSED AND REMANDED and ordered a new review so that the AO must encompass the most current control technology and must assign a reasonable deadline for the construction of the Company’s facility. The company must also conduct a new BACT analysis that considers IGCC.