1. EPA Misses Green House Gas Reporting Rule Deadline. Congress Punts.

The United States Environmental Protection Agency was required by congressional mandate to issue a draft Green House Gas (GHG) reporting rule by September 30. The deadline has passed without EPA action and without any indication of when EPA will issue its draft rule. Congress failed to consider a bill that would have required EPA to not only develop a GHG registry but called for “strict” verification rules. The bill could be revived in a “lame duck” session after the election.

2. IDEM Proposes Its Own Solution to the Clean Air Interstate Rule (CAIR) Vacatur

In July, the Washington, D.C. Circuit Court vacated the federal CAIR rule. CAIR, which covered 28 eastern states and the District of Columbia, provided a federal framework for states to reduce emissions of SO2 and NOx which EPA claimed contributed to unhealthy levels of ozone and fine particles in down wind states. The target sources for control under CAIR are in the power generating sector.

Indiana adopted the failed federal CAIR and now IDEM is proposing to take "immediate action" to establish and implement a new control program for utilities that will achieve the emission reductions comparable to those that were to be achieved through the implementation of the federal CAIR rule. IDEM is seeking input from affected electric utilities for its proposal to enact an emergency rule to reinstate the NOx SIP Call program and a combined emergency and regular rulemaking to establish NOx and SO2 annual allowance budgets at levels based on what would have been the units share under the federal vacated rule. IDEM claims both rules are needed to achieve the new ozone and PM 2.5 standards in non-attainment areas. One major issue that is not addressed in the Indiana CAIR proposal is how to achieve these reductions without a Cap and Trade Program — a cornerstone of the federal rule.

3. U.S. Court of Appeals for the District of Columbia Continues to Vacate EPA Rules

In August, the Washington, D.C. Circuit Court vacated yet another EPA rule. This one prohibited state and local air permitting authorities from imposing additional monitoring requirements in Title V permits. The EPA took the view that Title V permits are a compilation of existing requirements, not an opportunity to create new requirements not found in state or federal law. The Court disagreed, holding that the Clean Air Act mandates that each permit must contain adequate monitoring requirements to assess compliance. If the federal or state rules are not “adequate” then state and local authorities must supplement the inadequate requirements. It is unclear at this time whether Indiana's Title V permits will be impacted by the Court's decision, as IDEM has previously claimed that it has sufficient authority under its own regulations to require additional monitoring.