On December 3, 2010, the NAM and others filed a joint brief arguing that states have substantial discretion under federal law to adopt flexible requirements the apply to minor changes in plant operations as long as air quality is protected. We also argued that the Texas program meets all the federal Clean Air Act (CAA) standards, is in some cases years ahead of schedule, and the EPA’s action more than 15 years after the adoption of the Texas program has no legal support. EPA has also failed to defer to Texas’ interpretation of its own regulatory laws, as required by federal law. This litigation is intended to eliminate the ambiguity of EPA’s latest actions and to restore predictable air pollution control regulation in Texas.
On Aug. 13, 2012, the Fifth Circuit agreed, throwing out EPA's action. The court found that EPA's demands for language and program features in the state's implementation plan had no basis in the Clean Air Act or its implementing regulations. Instead, the Act sets goals and basic requirements, and gives the states broad authority to determine the methods and particular control strategies they will use to achieve the statutory goals. Environmental regulation is a shared responsibility of the federal and state governments, and EPA must approve state plans that meet the requirements of the Clean Air Act within 18 months of a state's submitting them for approval.
The Court rejected an EPA effort to require the state to adopt express language prohibiting major sources from evading statutory major new source review regulations. It found no requirement in the statute compelling such a statement, and even EPA's prior views accepted wide variations in state enforcement program language. Thus, EPA's attempt to require specific language in a state's implementation plan violated principles of federalism embodied in the Clean Air Act, as well as the Administrative Procedure Act.
The Court also rejected EPA's criticism of the flexible permit program's monitoring, recordkeeping and recording provisions. Texas allows its enforcement director discretion to write monitoring and recordkeeping requirements into each permit, based on the size, needs, and type of facility applying for a permit. The Court found that there was no authority in the law to allow EPA to limit the director's discretion, and EPA provided no evidence that the Texas program interferes with attaining Clean Air Act requirements. In fact, EPA approved similar director discretion in previous state plan amendments.
Finally, the Court rejected similar EPA arguments about the methodology allowed for calculating each emissions cap at a permitted facility. The agency's objections "rely on standards not found in the CAA or its implementing regulations."