Settling lawsuits filed by certain States (located in the Northeast and West), environmental groups, New York City and the District of Columbia, on December 23, 2010, U.S. EPA announced that it will set New Source Performance Standards ("NSPS") for greenhouse gas ("GHG") emissions from fossil fuel-fired electric power plants and petroleum refineries. NSPS are required under Section 111 of the Clean Air Act ("CAA"). EPA agrees that it will issue proposed standards by July 26, 2011, for power plants, and by December 10, 2011, for refineries. EPA also agrees that it will issue the standards as final rules for power plants and refineries by December 10, 2011, and November 10, 2012, respectively. EPA's settlement agreements are subject to a 30-day public comment period before they are final.
Unlike the CAA's Prevention of Significant Deterioration ("PSD") permit program, which applies to all new and modified sources emitting a regulated air pollutant above a certain amount, the NSPS program requires emissions standards for significant amounts of pollutants by industry sector. The PSD program allows permits to be issued for new and modified construction only after analyzing for application of the Best Available Control Technology for the emission source. In contrast, the NSPS program: (1) sets maximum levels of pollutants, in this case GHGs, through application of Best Demonstrated Technology, which new and modified facilities in specific industry sectors can emit (CAA Section 111(b)); and (2) sets emission guidelines that States will use to develop plans for GHG emission reductions from existing sources within that industry sector. The States' emission targets for existing sources can be more or less stringent than those imposed for new/modified sources within the industry sector.
EPA's agreement to issue NSPS standards for electric power plants settles legal proceedings brought by the government entities and environmental groups in the U.S. Court of Appeals for the District of Columbia Circuit, New York, et al. v. EPA, No. 06-1322, wherein plaintiffs objected to EPA's 2006 NSPS final rule for power plants because it did not address GHG emissions. Similarly, the agreement for petroleum refineries settles a petition for judicial review brought in the same court, American Petroleum Institute, et al. v. EPA, No. 08-1277, in which certain parties had contested EPA's decision not to address GHG emissions in its 2008 NSPS final rule for that industry sector.