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EPA’s Mercury Pollution Rule: What’s at Stake in the Courtroom

Aug. 19, 2020, 10:01 AM

The nation’s first-ever power plant limits on releasing mercury and other toxic air pollutants may be on shaky ground after an EPA move in late spring.

The Environmental Protection Agency’s final rule (RIN: 2060-AT99) in May removed the legal underpinning for the Obama-era mercury limits: a determination that regulating the pollutants is “appropriate and necessary.”

But the agency chose to retain the 2012 mercury and air toxic standards, or MATS, without tightening them. It determined that any residual toxic air pollutants, which remain in the air after the imposition of controls, adequately protect public health and the environment.

The EPA’s decision has given rise to a multi-pronged attack from various, often unlikely, coalitions of states, electric utilities, mercury control manufacturers, and environmental groups that want to protect the 2012 limits—and a lone coal mining company that wants them tossed out.

While the lawsuits play out in the U.S. Court of Appeals for the District of Columbia Circuit, the EPA has maintained that coal- and oil-fired power plants “remain subject to and must comply with the mercury emissions standards of the MATS rule, which remains fully in effect notwithstanding the revised cost-benefit analysis.”

Years of Litigation

Thorny litigation has shadowed the EPA’s efforts to regulate power plant releases of the neurotoxin mercury for more than a decade.

Spanning four administrations and two distinct regulatory approaches, the regulatory efforts have faced a steady onslaught of litigation due in part to the heavy compliance costs for power plant operators, and in part to the severe health effects of unchecked pollution.

The D.C. Circuit in 2008 scrapped an industry-favored approach from the George W. Bush administration. The Obama administration issued new standards in 2012. Though the D.C. Circuit upheld the regulation, the U.S. Supreme Court in 2015 stepped in and ordered the EPA to analyze the regulation’s costs.

The Obama administration’s resulting reaffirmation that the standards were “appropriate and necessary” prompted a new set of legal challenges. Utilities, coal companies, and a coalition of mostly conservatives states said the EPA justified the standards by relying almost entirely on the ancillary benefits of capturing fine airborne particle pollution, rather than from regulating mercury itself.

The new round of litigation stalled when the Trump administration announced plans to revisit the issue. Using the same data as the Obama study, the EPA concluded earlier this year that the direct costs of meeting the mercury standards greatly outweighed the environmental and public health benefits of reducing emissions.

The move prompted yet another rush to the courtroom, with the first lawsuit filed the day the EPA finalized its conclusion in the Federal Register.

Challenging the 2012 Standards

To date, Colorado-based Westmoreland Mining Holdings LLC is the only coal producer, and company, to ask the D.C. Circuit to review the legality of the 2012 standards because the EPA has scrapped the legal basis for them.

Coal companies have blamed the Obama-era EPA’s 2012 standards for driving electric utilities to switch to cheaper, cleaner-burning natural gas to generate power, instead of installing costly controls to burn coal.

Murray Energy, which spearheaded the challenge against the 2012 standards, registered its objections to the Trump EPA’s proposal at a public hearing to maintain the limits. But it’s been silent since the rule was finalized and hasn’t responded to requests for comment.

Defending the 2012 Standards

In contrast, the EPA’s existing mercury standards have gotten backing not only from its traditional supporters—Democratic states and environmental groups—but also from industry players.

Mercury control manufacturers, such as ADA-ES Inc., as well as mostly natural gas-fueled electric utilities, such as Exelon Corp., Calpine Corp., and Public Service Enterprise Group Inc., have also moved to intervene in the Westmoreland dispute to defend the 2012 standards.

The power companies told the court they are intervening to protect the capital investments made in lower-emitting and non-emitting resources, “and to compete with coal- and oil-fired power plants under predictable conditions and with the certainty of uniform national standards.”

Taking on the Administration

These unlikely coalitions made it clear they are defending the Obama-era mercury standards against Westmoreland’s challenge, but they also are separately challenging the Trump EPA’s reworked “appropriate and necessary” finding.

Meanwhile, a coalition of 23 national, regional, and state environmental, public health and civil rights groups, including the NAACP, is challenging the EPA’s decision to undo the “appropriate and necessary” finding.

They said the EPA’s action has placed the lives of vulnerable populations at risk by threatening the basis of the 2012 standards. This is despite the EPA acknowledging that the 2012 standards have resulted in eliminating 96% of toxic air emissions, including mercury, arsenic, cadmium, and other metals and acid gases.

Massachusetts Attorney General Maura Healey (D) is also leading a coalition of 20 states, four cities, and one county against the recent EPA move. Healey accused the EPA of attacking critical regulations that “protect our most vulnerable residents—who are already dying from COVID-19 at disproportionate rates—from toxic substances and harmful air pollutants.”

Power Companies and Manufacturers

Exelon, Calpine, National Grid Generation LLC, and PSEG—utilities that rely mostly on natural gas to generate electricity—have also sued to preserve the Obama-era standards, as has Puget Sound Energy Inc., a Washington State-based utility that generates power by burning a mix of natural gas, coal, and renewables.

Mercury control manufacturer Advanced Emissions Solutions Inc. filed its own challenge, alongside subsidiaries ADA-ES Inc. and ADA Carbon Solutions LLC. The company’s attorneys at Ballard Spahr LLP declined to comment on the lawsuit, but pointed to the objections the company raised against the Trump administration’s 2018 proposal to undo the legal rationale.

The company said the EPA’s rejection of actual cost information in favor of using stale projections is arbitrary and capricious, and contrary to law. And the agency failed to consider the more than $750 million in investments made by Advanced Emissions Solutions and others in the emissions control industry to facilitate pollution cuts, the company argued.

Not Protective Enough

In yet another mercury-related legal challenge, a coalition of environmental groups decided to take on the EPA’s recent risk and technology review, included in its May action, that said the 2012 standards adequately protect public health.

The groups say the EPA used “unreliable data” that omitted the emissions of some dangerous pollutants, and understated others, in reaching the conclusion.

The U.S. Court of Appeals for the District of Columbia Circuit has wrapped all the varying challenges involving the 2012 mercury standards into one docket, with initial legal filings due later this month.

The case is Westmoreland Mining Holdings LLC v. EPA, D.C. Cir., No. 20-01160.

To contact the reporters on this story: Amena H. Saiyid in Washington at asaiyid@bloombergindustry.com; Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com

To contact the editor responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com

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