Originally published as a Schiff Hardin Environmental Update newsletter

On Monday, January 9, 2012, a Washington, D.C. federal district court kept the United States Environmental Protection Agency (USEPA) in check on how it stays its own rules. The judge vacated and remanded USEPA’s decision to delay two long-awaited emissions rules, a rule regulating hazardous air pollutants (“HAP”) from industrial, commercial and institutional boilers and process heaters located at major sources of HAP (the Boiler Maximum Achievable Control Technology or “Boiler MACT” rule), and a related rule regulating emissions of certain air pollutants from commercial and industrial solid waste incineration units (the Commercial/Industrial Solid Waste Incinerators or “CISWI” rule).

As a result of Monday’s decision, the Boiler MACT and CISWI rules are again in effect. However, the rules are expected to have little impact because existing facilities do not have to comply with the rules until 2014 or 2015 at the earliest and USEPA has announced that in 2012 it will further delay compliance dates until 2015 or 2016 by again amending the rules.

USEPA issued the final Major Source Boiler MACT and CISWI rules in March 2011, and at the same time, announced it would reconsider the rules to address industry concerns that they are unachievable. Prior to the rules becoming effective, USEPA received petitions for judicial review of both rules. USEPA then issued a Federal Register notice staying the rules in May 2011, two days before they were to go into effect, pending the outcome of either the proceedings for judicial review or USEPA’s own reconsideration of the rules, whichever occurred first.

The Sierra Club sued over the stay in the district court alleging that USEPA lacked authority under the Administrative Procedure Act to issue the stay. According to the Sierra Club, USEPA failed to seek public comment or adequately justify the delay notice, and a stay pending reconsideration is limited to three months under the Clean Air Act. The court ruled that USEPA had authority to issue the stay pending judicial review and that the delay notice was not subject to notice and comment requirements, but that USEPA’s delay notice was arbitrary and capricious. The court explained that USEPA did not support its argument that the delay was necessary pending the legal challenges and did not follow precedent requiring application of a four-part test to justify stay decisions.

Meanwhile, USEPA has proceeded with its own reconsideration of the rules. USEPA proposed revised versions of the boiler and incineration MACT rules in December 2011 and has said that it plans to issue final versions by April 2012, at which time USEPA will extend compliance dates until 2015 or 2016. Therefore, anticipating USEPA’s amendments to the existing rules this April, the existing rules have little impact, and the court’s reinstatement does nothing to change that status other than exacerbate uncertainties regarding the timing of investments in any control measures necessary to achieve compliance.