Introduction

On October 1 2015 the Environmental Protection Agency (EPA) released a final rule to reduce the level of the national ambient air quality standard (NAAQS) for ozone. Ozone is formed through chemical reactions involving a range of ozone precursors, including volatile organic compounds, nitrogen oxides, methane and carbon monoxide. At sufficiently high concentrations, ozone can contribute to a number of human health concerns, including respiratory and cardiovascular effects. NAAQSs must be established at levels that can protect public health and welfare with an adequate margin of safety. The Clean Air Act requires the EPA to review – and if necessary revise – NAAQSs every five years. The EPA last revised the ozone NAAQS in 2008 when it lowered the primary standard to 75 parts per billion (ppb). The EPA had proposed to revise the standard in late 2014 and was operating under a court order that required it to finalise this rulemaking by October 1 2015.

Highlights

Reduction in primary and secondary ozone standards

The EPA's final rule reduced the primary (health-based) ozone NAAQS from its current level of 75ppb as an eight-hour average to a level of 70ppb. This is at the upper end of the 65ppb to 70ppb range that the EPA proposed in 2014 (the EPA had also solicited comment on a level as low as 60ppb, as well as maintaining the existing 75ppb standard). In the preamble to the final rule, the EPA explained that the 70ppb level was well below ozone concentrations shown to cause the widest range of respiratory effects (80ppb and above) and below the lowest ozone concentration shown to cause both decreased lung function and increased respiratory symptoms (72ppb). The EPA expressed less confidence in studies showing adverse effects at ozone concentrations below 70ppb.

The EPA's final rule also reduced the secondary ozone standard, which is intended to protect public welfare, to 70ppb (also as an eight-hour average). In the proposed rule the EPA solicited comment on adopting an alternative standard based on cumulative seasonal exposure based on a W126 index. In the preamble to the final rule, the EPA explained that control of cumulative seasonal exposure can be achieved using the existing indicator, standard and form. This decision is significant because a uniform standard for the primary and secondary ozone NAAQSs avoids the need to adopt a separate monitoring and reporting system for the secondary ozone standard.

Although the EPA cannot consider costs when setting the NAAQS, it conducted a cost-benefit analysis of the revised standard, concluding that the total health benefits of the standard would outweigh its total costs. However, other analyses of the proposed rule concluded that the EPA significantly underestimated the cost of reducing the ozone NAAQS.

Effect on other Clean Air Act requirements

The proposed revisions to the ozone NAAQS will have significant effects on the Clean Air Act New Source Review programme. Reducing the primary standard from 75ppb to 70ppb is expected to increase significantly the number of areas designated as non-attainment for ozone. If an area is in attainment for a given NAAQS, a major source that commences construction or undergoes a major modification must obtain a prevention of significant deterioration permit based on best-available control technology and must demonstrate that its emissions will not cause any area to exceed the NAAQS. In contrast, if an area is in non-attainment, a major source must obtain a non-attainment new source review permit based on a more stringent lowest achievable emission rate. In addition, a source in a non-attainment area must obtain emissions reductions from other sources to offset its own emissions.

Prevention of significant deterioration permit grandfathering

In an effort to ease the transition to the new standard, the EPA included in the final rule a grandfathering provision that will allow sources to rely on the 75ppb standard under limited circumstances. Under the grandfathering provision, pending prevention of significant deterioration permit applications are eligible for grandfathering if:

  • the application was determined by the permitting agency to be complete before the signature date of the revised NAAQS; or
  • the permitting agency published notice of a draft permit before the effective date of the revised NAAQS.

Despite multiple comments urging the EPA to broaden the scope of the grandfathering provisions, no changes were made to the proposal.

Risk of non-attainment due to background ozone

By lowering the ozone NAAQS to 70ppb, the EPA has increased the risk that an area may exceed the NAAQS as a result of background ozone concentrations – that is, those resulting from naturally occurring stratospheric ozone, forest fires and other natural events and international sources. The EPA explained in the final rule that "there can be infrequent events where daily maximum 8-hour [ozone] concentrations approach or exceed 70 ppm due to the influence of [background] sources". However, it concluded that "[u]ncontrollable background concentrations of [ozone] are not expected to preclude attainment of a revised [ozone] standard with a level of 70 ppb". The EPA also offered a number of options that it claims will minimise the adverse effects associated with background ozone. First, the EPA permits a state to exclude monitoring data if it can establish that the data exceeded 70ppb as a result of an "exceptional event" caused by background ozone. In a change from the proposed rule, the EPA extended the deadline for asserting exceptional events to ensure that states can exclude exceptional events from all data used to make attainment designations. Second, under the rural transport provisions, certain rural areas can obtain reduced obligations under Section 182(h) of the Clean Air Act if they do not contain emissions sources that contribute significantly to ozone non-attainment. Third, under international transport provisions, states that cannot attain the NAAQS due to international transport of ozone can avoid potential penalties and the imposition of a federal implementation plan, which will otherwise occur when a state fails to attain the NAAQS within an allotted time period. However, these provisions have rarely been invoked in the past and their ability to address concerns over background ozone remains uncertain.

Next steps for implementing the revised NAAQS

The EPA's revision to the ozone NAAQS sets into motion a number of important deadlines that states and the federal government must meet to implement the revised standard:

  • States must submit proposed attainment designations based on the revised standard by October 1 2016 – one year after issuance of the revised ozone NAAQS.
  • The EPA must make final designations one year later, by October 1 2017.
  • All states must review and, if necessary, submit revised infrastructure state implementation plans to the EPA by October 1 2018. These must describe how each state will implement, maintain and enforce the revised NAAQS.
  • Upwind states that contribute significantly to downwind non-attainment areas in other states must also submit transport state implementation plans by October 2018 under the Clean Air Act's good neighbour provisions.
  • States with non-attainment areas must submit non-attainment state implementation plans within three to four years of the non-attainment designations taking effect.

In the final rule the EPA committed to issuing additional rules and guidance that will aid states in the implementation process.

Comment

The final rule will be published shortly in the Federal Register. Lawsuits challenging the final rule are expected and must be filed within 60 days of publication.

For further information on this topic please contact Roger R Martella Jr, James R Bieke, Timothy K Webster or Joel Visser at Sidley Austin LLP by telephone (+1 202 736 8000) or email (rmartella@sidley.com, jbieke@sidley.com, twebster@sidley.com or jvisser@sidley.com). The Sidley Austin LLP website can be accessed at www.sidley.com.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.