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Climate Change Blog

Ninth Circuit lends biomass a Helping Hand

On September 2, 2015, the Court of Appeals for the Ninth Circuit handed down its opinion in a consolidated case - Helping Hand Tools v. U.S. Environmental Protection Agency (available here). In it, the court held that EPA did not act arbitrarily or capriciously in granting a Prevention of Significant Deterioration ("PSD") permit under the Clean Air Act to Sierra Pacific Industries, Inc. Both Helping Hand Tools and the Center for Biological Diversity had petitioned the court to review the permit and the court consolidated their petitions. The decision is clearly a win for EPA and Sierra Pacific. Since EPA’s exemption for biomass PSD permitting expired in 2014, biomass facilities have been subject to PSD permitting for greenhouse gases, but the manner in which they would be treated has remained an open question. The Ninth Circuit’s opinion applies established precedent regarding the PSD permitting program to a biomass facility, establishing that biomass facilities cannot be compelled to consider other forms of generation in the best available control technology analysis. The opinion is also noteworthy because the court granted deference to EPA’s Bioenergy BACT Guidance.

Background

In 2010, Sierra Pacific applied for a PSD permit for the construction of a new cogeneration unit at its mill in the Central Valley of California. Sierra Pacific owns a lumber manufacturing plant in Anderson, California. The cogeneration unit was designed to burn biomass in a boiler that would produce steam, which would then be used to turn a turbine and generate 31 megawatts of electricity. The electricity would then be used to power kilns to dry lumber. The fuel would come from wood wastes generated at Sierra Pacific’s mills and other available sources of agricultural and urban wood wastes. In addition, Sierra Pacific proposed to use a small amount of natural gas during startup, shutdown, and for flame stabilization.

After soliciting public comment, EPA issued a PSD permit, accepting Sierra Pacific’s 10% cap on natural gas use for limited purposes. Helping Hand appealed that decision to the Environmental Appeals Board ("EAB"). The EAB remanded the matter to EPA, finding that EPA abused its discretion by failing to hold a public hearing.

In the meantime, however, the D.C. Circuit vacated EPA’s rule deferring best available control analysis (“BACT”) determinations for greenhouse gases (“GHG”) emitted from facilities like the cogeneration unit. As a result, EPA conducted a supplemental BACT analysis on the unit and accepted comments. The Center for Biological Diversity ("CBD") submitted comments challenging the supplemental analysis, but EPA issued the final PSD Permit on April 25, 2014. CBD appealed to the EAB, but the EAB dismissed the appeal.

The Ninth Circuit’s Opinion

The Ninth Circuit addressed claims from both Helping Hand and CBD. Helping Hand argued that EPA was required to consider alternatives to biomass and a greater natural gas mix in its BACT analysis. The court determined that EPA "properly took the requisite hard look at Sierra Pacific’s proposed design and the key purpose of burning its own biomass waste." As such, the court held that EPA "reasonably concluded that consideration of solar or increased natural gas would disrupt that purpose and redefine the source." Relying on precedent, the court observed that "[d]rawing the line between control technology and redefining the source is a technical determination to which a court should defer to EPA." Therefore, it held that "EPA did not act arbitrarily or capriciously" and denied Helping Hand’s petition.

CBD argued that EPA did not follow its framework for considering Bioenergy BACT when it failed to consider other control options in addition to the burning of biomass fuel in its analysis. The court concluded that this was essentially an "attack [on] the Bioenergy BACT Guidance" and held that "[b]ecause EPA was largely relying on its own guidance, acting at the frontiers of science, [the court] defer[red] to the agency’s determination."

The Court's Treatment of Biomass

In reaching its opinion, the panel relied on the reasoning of the Seventh Circuit in Sierra Club v. U.S. Environmental Protection Agency, which was a petition arising from an EAB opinion regarding a PSD permit application from Prairie State Generating Company. Prairie State planned to build a coal-burning electrical plant in Southern Illinois, at the mouth of the mine that would supply the fuel for the plant (a so-called "mine-mouth" operation). In considering the permit application, EPA concluded that it was not required to consider other fuel-types because doing so would be inconsistent with the scope of the project and would require redesign. This is referred to as "redefining the source," and is not required by the Clean Air Act.

Outside of the context of this opinion, the treatment of stationary source emissions from biomass facilities remains uncertain: in March, EPA’s Science Advisory Board ("SAB") remanded a draft report from its Biogenic Carbon Emissions Panel for further work. Until this work is completed, EPA appears reluctant to adopt an accounting approach that recognizes that the growth of biomass feedstocks can lead to significant sequestration of atmospheric carbon—meaning that it has the potential to have significant GHG benefits when compared to fossil fuels. However, while the SAB continues its work, developers of biomass facilities can look to the Helping Hand opinion for assurance that biomass will be on equal footing with other stationary sources under the PSD program.

1 No. 14-72553 (9th Cir. Sept. 2, 2016). 2 499 F.3d 653, 655 (7th Cir. 2007).

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Authors

Margaret E. Peloso

Margaret E. Peloso Counsel

Theresa Romanosky

Theresa Romanosky Associate