A California federal court recently approved an agreement between the United States Environmental Protection Agency (“EPA”) and the Center for Biological Diversity (the “Center”) that requires EPA to take affirmative steps to ensure that eight states have plans in place to reduce emissions from their oil and gas extraction areas as mandated by the Clean Air Act (“CAA” or “Act”).[i]

Emphasizing health hazards like asthma and reduced lung function that can develop in people who endure prolonged exposure to ground-level ozone (i.e., smog), the Center noted that the agreement will likely improve the health of residents who live closest to the extraction areas.[ii] The Center estimates that as many as 70 million people live in these areas and are at the greatest risk of exposure to harmful asthma-causing smog from oil and gas extraction operations.[iii]

The oil and gas industry is the largest industrial emitter of volatile organic compounds (“VOCs”) which contribute to the formation of ground-level ozone.[iv] VOCs are emitted by the vehicles and equipment used in oil and gas operations as well as directly from the oil and gas being extracted, stored, and transported around the oil field.[v] Ground-level ozone results from the chemical reaction between VOCs and sunlight and is one of the six air pollutants covered under the CAA.[vi]

The CAA, first signed into law in 1970, regulates air emissions from stationary and mobile sources.[vii] Under the Act, EPA must establish National Ambient Air Quality Standards (“NAAQS”) to protect the public from harmful emissions, like ground-level ozone.[viii] To ensure comprehensive compliance, the CAA directs EPA to determine which states are meeting the NAAQS, and to designate those states that fall short as “nonattainment areas.”[ix] States designated as a nonattainment area must work with EPA to develop a state implementation plan that details how the state will reduce pollutants.[x] EPA revises the goal NAAQS every five years—usually setting stricter standards—and the most recent revisions took effect in 2015.[xi]

Following the 2015 NAAQS revisions, states designated as a nonattainment area had to submit a revised plan to EPA demonstrating how they planned to use reasonably available control technology (“RACT”) to reduce emissions of VOCs.[xii] EPA provided a two-year window, from October 2016 to October 2018, for the states to submit their revised implementation plan.[xiii]

Nonattainment areas are not the only actors obliged to take certain actions under the CAA. The Act also sets out a series of non-discretionary duties for EPA, including the obligation to review the revised plans within six months of their submissions, determine whether those plans meet the minimum air quality standards, and, if not, to issue a “finding of failure to submit.”[xiv] If EPA does not affirmatively review the revised plan, the plan is deemed “complete by operation of law” after six months.[xv]

These are the precise actions the Center alleged EPA failed to take.[xvi] The Center filed its complaint in January, claiming EPA never issued a finding of failure to submit to those states that did not present revised plans implementing RACT to reduce oil and gas emissions.[xvii]

Rather than engage in protracted litigation, EPA and the Center reached an agreement pursuant to which EPA is required perform its mandatory obligations under the CAA review process.[xviii] The agreement applies to nonattainment areas in parts of Arizona, California, Colorado, Connecticut, New York, Pennsylvania, Texas, and Virginia.[xix]

But while the agreement between EPA and the Center should result in beneficial emission reductions, it will do so only at the threshold ozone NAAQS levels set in 2015. Following the five-year review of the NAAQS in July, EPA announced that it would retain, without changes, the existing ozone NAAQS set in 2015.[xx]

The notice and comment period for the proposed rule ended on October 1, and a final rule is forthcoming; the rule will take effect thirty days after publication in the Federal Register.[xxi]

[i] Consent Decree, Ctr. for Biological Diversity v. Wheeler, Case No. 3:20-cv-00448-VC, at 2 (filed Oct. 21, 2020).

[ii] See Katie Buehler, EPA Will Crack Down On Oil, Fracked Gas Smog In 8 States, Law360 (Oct. 22, 2020), https://www.law360.com/articles/1322196/epa-will-crack-down-on-oil-fracked-gas-smog-in-8-states.

[iii] Id.; Press Release, Center for Biological Diversity, EPA Agrees to Crack Down on Smog From Oil, Fracked Gas in Eight States (Oct. 22, 2020), https://biologicaldiversity.org/w/news/press-releases/epa-agrees-crack-down-smog-oil-fracked-gas-eight-states-2020-10-22/.

[iv] EPA, Basic Information about Oil and Natural Gas Air Pollution Standards, https://www.epa.gov/controlling-air-pollution-oil-and-natural-gas-industry/basic-information-about-oil-and-natural-gas (last visited Oct. 28, 2020).

[v] E. Allison and B. Mandler, Air Quality Impacts of Oil and Gas, American Geosciences Institute (June 1, 2018), https://www.americangeosciences.org/geoscience-currents/air-quality-impacts-oil-and-gas.

[vi] EPA, Ground-level Ozone Basics, https://www.epa.gov/ground-level-ozone-pollution/ground-level-ozone-basics (last visited Oct. 28, 2020).

[vii] EPA, Laws and Regulations: Summary of the Clean Air Act, https://www.epa.gov/laws-regulations/summary-clean-air-act (last visited Oct. 26, 2020).

[viii] Id.

[ix] 42 U.S.C. § 7404(d)(1)(A)(i) (2020).

[x] Id.; EPA, NAAQS Designation Process, https://www.epa.gov/criteria-air-pollutants/naaqs-designations-process (last visited Oct. 27, 2020).

[xi] Consent Decree, supra note 1, at 2.

[xii] Id.

[xiii] Id. at 3.

[xiv] Id.; § 7410(k)(1)(B).

[xv] Id.

[xvi] Consent Decree, supra note 1, at 2.

[xvii] Id. at 2, 4.

[xviii] Id. at 5–7.

[xix] Buehler, supra note 2.

[xx] Press Release, EPA, Ozone Pollution Continues to Decline Under President Trump, EPA Proposes to Retain Existing NAAQS for Ozone (July 13, 2020), https://www.epa.gov/newsreleases/ozone-pollution-continues-decline-under-president-trump-epa-proposes-retain-existing; Environmental Defense Fund, Trump EPA Proposal to Keep Weak Smog Standard in Place Will Put Americans’ Health at Risk (July 13, 2020), https://www.edf.org/media/trump-epa-proposal-keep-weak-smog-standard-place-will-put-americans-health-risk.

[xxi] See Review of the Ozone National Ambient Air Quality Standards, 85 Fed. Reg. 49830 (Aug. 14, 2020) (to be codified at 40 C.F.R. 50).