DC Circuit rejects Utah effort to block ‘good neighbor’ emissions rule

WASHINGTON (CN) — A D.C. Circuit panel ruled on Monday against an effort by Utah and industry groups to block an Environmental Protection Agency rule that seeks to limit emissions across state lines, also known as the “good neighbor rule.” 

The challenge, brought by Utah Governor Spencer Cox and state Attorney General Sean Reyes, with support from the Energy Infrastructure Council and the Chamber of Commerce of the United States of America, argues that the rule wrongly intrudes on the state’s sovereignty. 

A three-judge panel made up of U.S. Circuit Judges Cornelia Pillard, Justin Walker and J. Michelle Childs ruled 2-1 to block the challenge, finding that Utah did not satisfy the “stringent requirements for a stay pending court review.” Walker, a Donald Trump appointee, was the sole dissenter. 

The rule, also known as the Ozone Transfer Rule, was established in 2015 to target “ozone-forming emissions of nitrogen oxides” from power plants and industrial facilities that travel downwind into neighboring states and affect those states’ air quality standards.

According to the EPA’s findings, nitrogen oxide from coal-fired power plants in northeast Utah has drifted into the state’s eastern neighbor, Colorado, and has partially caused the Denver metro area to not meet federal ozone standards. 

Utah has disputed those findings, leading the EPA to reject Utah’s State Implementation Plan for cutting ozone in February, instructing the state to prepare for more cuts. The state began its preparations at the statehouse, setting aside $2 million for legal fees to sue the EPA.  

In its petition for review, the state argued that when the EPA decided to expand the rule from 12 Eastern states to 23, adding Utah along with states in the South and the Southwest, the agency wrongly applied a four-step test that was still geared toward Eastern states and did “not properly account for conditions in the West.” 

The state went further in its statement of issues, claiming the rule wrongfully singled out certain industries that emit above the agency’s standards while excluding other similar industries and that the agency did the same for states, forcing some states to follow “draconian reductions” while going easier on other states that pollute at the same levels. 

Eastern states were the first required to follow the rule for both power plants and other polluting industries in 2015, based on a four-step test used to determine which states should be regulated under the rule. 

Included under the initial rule were Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia.

The test requires the EPA to determine which downwind states are being affected by outside emissions, where the emissions are coming from and if they can be linked, the specific source of the emissions and what measures can be taken to reduce those emissions. 

The agency announced an expansion of applicable states in March 2022, raising the total number included to 23. Southern states like Arkansas, Mississippi, Missouri, Oklahoma and Texas were added as states required to follow the rule for both power plants and other industries, while Utah, Minnesota and Nevada were the three newly added states. Minnesota, Wisconsin and Alabama are the only three states where the rule applies to just power plants. 

California was also added in the 2022 expansion, but only for non-power plant emissions. The agency is also considering whether to add states like Arizona, Iowa, Kansas, New Mexico, Tennessee and Wyoming.

When Utah filed its challenge in June, Governor Cox, Attorney General Reyes, the state’s congressional delegation and legislative leadership all filed a joint statement framing the challenge as a fight against government overreach. 

“As Utah’s elected state leaders, we stand united in pushing back against the administration’s egregious power grab that harms Utahns,” the officials said in the statement. “We will fight for a responsible energy policy that embraces efficiency and is based in reality because keeping the lights on is the only option.” 

The Attorney General’s office did not reply to a request for comment. 

A coalition of environmental groups filed amicus briefs in support of the rule, including the Environmental Defense Fund, Clean Air Council, the Center for Biological Diversity, Downwinders at Risk, the Sierra Club and more. 

Following the panel’s decision, the coalition applauded the decision in a statement.

“The court’s refusal to block this protective air rule serves as a critical step towards holding upwind polluters accountable for their contribution to cross-state smog,” the coalition said on Monday.

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