In a major win for clean air activists in general and the natural gas industry in particular, the Department of Justice (DOJ) Tuesday removed the roadblock it had placed in the path of the Environmental Protection Agency’s (EPA) enforcement of “new source review” (NSR) actions against a large number of dirty coal and oil-burning power plants and oil refineries. DOJ said the EPA enforcement actions are consistent with the Clean Air Act, and ongoing prosecutions should proceed.

The enforcement actions were initiated during the Clinton administration against companies that EPA claimed had made major modifications to their plants without complying with the NSR, which requires that modifications be accompanied by installation of pollution control equipment on the existing plant. The provision was originally written into the Clean Air Act to encourage either abandonment of older inefficient and heavily polluting coal and oil-fired plants or major renovations to install pollution controls.

Since pollution controls on older plants can be prohibitively expensive, there is an incentive to build new, cleaner plants fired, or at least co-fired, with natural gas. More than 40 plants had been cited by EPA, including ones operated by American Electric Power, FirstEnergy’s Ohio Edison, Southern Company, and Duke Energy.

After President Bush took office the Justice Department’s Office of Legal Policy halted the enforcement actions while it conducted the review following a directive by the vice president’s National Energy Policy Development Group last May. The administration also has rattled the cage of the natural gas industry — and environmentalists — by setting up a study group to make recommendations as to whether the NSR should be changed, a move some in the industry see as potentially forcing the delay or cancellation of a significant amount of new gas-fired power generation (see Daily GPI, Jan. 11).

Others point out that a study is just that — a study, and extensive procedures including a rulemaking would be required to make changes. The environmental groups could be expected to fight any attempt to weaken the Clean Air Act down to their last breath — polluted or unpolluted.

Meanwhile, in the EPA’s current enforcement actions, controversy surrounds the interpretation of the word “modification.” For its report, the DOJ asked two questions: Is EPA’s interpretation of “modification” reasonable in light of the Clean Air Act? And second, should EPA have initiated a public rulemaking before it brought the enforcement actions?

The DOJ concluded that EPA has a reasonable basis for arguing that the enforcement actions are consistent with both the Clean Air Act and the Administrative Procedure Act. First, the EPA’s belief that the defendants have “modified” their facilities, and thus are subject to NSR is reasonable. This is so because the courts generally defer to agency interpretations of ambiguous statutory terms, such as “modification.” The plant owners said the work done on the plants was only maintenance.

Second, the DOJ concluded that the EPA’s alleged failure to enforce the Clean Air Act in the past may not reflect a binding interpretation of that statute, and therefore the enforcement actions do not violate the Administrative Procedure Act.

“The effect of the department’s conclusion is retrospective. It examines only currently pending enforcement actions to determine their lawfulness, and expresses no opinion on how the Clean Air Act should be enforced in the future. Those policy determinations rest with the EPA,” said Viet Dinh, assistant attorney general for the Office of Legal Policy.

The full DOJ NSR report and the attorney general’s letter adopting the report were set to be posted Tuesday afternoon at

The attorneys general of nine northeastern states recently warned the Bush Administration not to attempt to weaken the Clean Air Act, thereby subjecting the citizens of their states to continued acid rain and snow, smog that triggers respiratory diseases such as asthma, and particulates that contribute to premature death (see Power Market Today, Jan. 9).

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