Ted Simons: Good evening, and welcome to "Horizon," I'm Ted Simons. The start of the new year finds the Environmental Protection Agency taking over regulation of greenhouse gas emissions in parts of Arizona. The Feds made the move after the state refused to provide a program of its own to deal with the gases. That refusal was based on the hope that the current federal rules would be overturned by the courts or changed by Congress. The EPA’s authority will mostly apply to rural areas of the state, as both Maricopa and Pima County have worked out separate deals with the agency. If the state had refused to allow the EPA to take over regulation, future air quality permits could have been blocked. 2 Here now to talk about the situation is Henry Darwin, acting director of the Arizona Department of Environmental Quality.
Ted Simons: Good to see you here, thanks for joining us.
Henry Darwin: Thanks Ted.
Ted Simons: Let’s get into more detail here as to why the EPA is directly enforcing greenhouse gases?
Henry Darwin: It really is a pretty drawn-out process, the gist of it is that EPA has asked the states whether or not they had authority to adopt greenhouse gas regulations on their own. They asked all the states whether or not they had this authority and Arizona was one of 13 states that told EPA that we did not have the authority to adopt greenhouse gases and that not only that, but we we couldn't adopt greenhouse gas regulations in the six months that EPA had given us to do so.
Ted Simons: Why can't Arizona adopt these regulations?
Henry Darwin: The short story is that we would require legislative authority to do so. EPA asked us this question when the legislature was not in session So without express authority from the legislature to adopt these requirements, we couldn't do so.
Ted Simons: Was it a question though that was unforeseen? If they asked it at one point, could you see the question coming?
Henry Darwin: Not really. The question -- there's questionable legal authority to whether or not they can do this in the first place. We were somewhat surprised, not completely surprised but somewhat surprised that they had gone this route. Basically what they’ve said is because they regulate, they have the authority to and have started regulating greenhouse gases from auto emissions, that they can also regulate greenhouse gas emissions from all sources. We didn't necessarily agree with 3 that conclusion and we were hoping that EPA would reach the same conclusion that we had, that that was not available to them under the law. They decided that was available to them under the law, and they gave us this opportunity to adopt our own requirements before they adopted their federal requirements.
Ted Simons: So basically it doesn't sound like it's necessarily an oversight or necessarily a refusal by Arizona, it's just a way of saying we can't do it?
Henry Darwin: I kind of characterize it as that we have relented. They asked us a question of whether or not we could adopt requirements by January 2nd of this year, this was in June of last year. We told them we did not have the authority to do so and that we couldn't get the authority to do so before their deadline. What they said is well, if there isn't a state plan or a federal plan by January 2nd they would ban construction of major sources of greenhouse gases in Arizona because there is a requirement to be a federal plan or state plan in place. Following their logic that because of regulating car emissions that you also have to regulate all emissions of greenhouse gas.
Ted Simons: So we stand right now with the EPA enforcing the greenhouse gases. Is that where we stand right now?
Henry Darwin: Not exactly, what EPA has done is they have established the permitting authority to regulate greenhouse gases. They have really put the structure in place to regulate greenhouse gases through their permitting program. They are still in the process of adopting those regulations. We haven't seen them yet. 4 But what they have said is there will be permits available through the federal government to regulate greenhouse gases. But what were going to do in Arizona is we're going to do what we’ve done with a lot of other programs and that is that we’re going to seek delegation, seek the authority from EPA to issue those permits by Arizona, through ADEQ.
Ted Simons: And that was the compromise, if you will, or at least the agreement. Without the agreement, if you just say no, no to the Feds, the permits don't happen, correct?
Henry Darwin: That's right. So we relented. We allowed the federal government to adopt their own program in Arizona to be in effect on January 2nd, their deadline. We are also working with them -- what they intended all along -- working with them to give us the authority to give the state of Arizona the authority to issue permits through delegation.
Ted Simons: Interesting. These new rules -- correct me if I'm wrong – this would apply to the largest polluters in the state?
Henry Darwin: That's correct. Because it only regulates greenhouse gases of what they call major sources. Power plants, cement manufacturing and the largest of industrial boilers. It really only applies to a small percentage of the facilities that exist within Arizona.
Ted Simons: What kind of impact on those facilities?
Henry Darwin: That's yet to be seen. They haven't adopted the regulations yet. But from what we’ve heard, they are really talking about energy efficiency standards. The industry has been following these issues very closely, and by and large we think they are prepared for these regulations 5 once they come into play.
Ted Simons: When people hear about new rules and regulations, something's going to change here. What changes?
Henry Darwin: The biggest change is that there’s going to be permits required for the emissions of greenhouse gases. This is the first time EPA has made an attempt to regulate greenhouse gases through the regulatory structure that exists in the Clean Air Act. That's where Arizona and EPA differ. We believe Congress should have given EPA clear authority to regulate greenhouse gases under the Clean Air Act. We don't think that authority exists. As a matter of fact, EPA has written these rules to modify the Clean Air Act, which we think is not allowed under the law. They have said that because of the way the thresholds are set under the clean air act, they have to write these rules to set limits that are different that are in the Clean Air Act so they can regulate greenhouse gases.
Ted Simons: Didn't the Supreme Court say that the Clean Air Act does cover greenhouse gases?
Henry Darwin: It did. In 2007, the Supreme Court did say that the EPA could regulate greenhouse gases as pollutants. It didn't say how they could do it. And that’s where we differ with EPA. We don't differ that they can be regulated, we just differ with them in how they can be regulated. The clean air act does not contemplate regulating greenhouse gases in the way they are attempting to do. We think that there are other means at which they should be doing it, and that is through an act of Congress.
Ted Simons: The idea that Arizona is alone on this is not necessarily correct. There are some other states. 6 How many other states in a similar situation?
Henry Darwin: There’s about 13 other states in a similar situation as ADEQ. There's one state in particular that has decided to take a completely different route and to fight EPA on the issue. The reason we did not fight EPA on this issue was because of the threat of a construction ban in Arizona. We were fearful that EPA might follow through with that threat, and decided it was in the best interests of the facilities and the regulated community that we would allow EPA to adopt these regulations, and that we would continue to have discussions with the EPA about whether or not this was the right way to do it and then follow the litigation. There's a lot of litigation going on right now about whether EPA have followed the correct legal course in establishing these requirements.
Ted Simons: And that one state I believe is Texas.
Ted Simons: Again, it sounds as if EPA is dealing directly with affected industries in Texas, as opposed to Texas dealing with it… How is that working?
Henry Darwin: That is somewhat true. They have made an attempt to deal directly with Texas permit tees, but the fact of the matter is that Texas has filed a legal challenge in the fifth circuit court of appeals and asked for a stay of EPA's action. The Fifth Circuit Court of Appeals denied that stay. So Texas turned around and filed an action with the D.C. Circuit Court of Appeals, who did give them a stay last week. As it stands right now, the federal government is not 7 directly permitting sources in Texas. But the court has established a very aggressive schedule for Texas and EPA to inform the court about the merits of Texas’s allegations and EPA’s action.
Ted Simons: So in Arizona we've got Maricopa County, we got Pima county, both seemingly in line or close to being in line. Why are those two counties there and the rest of Arizona not?
Henry Darwin: That's a good question. The reason that Arizona DEQ is different than Pima County and Maricopa County is because of the relationship with EPA. What ADEQ has done for the remainder of the state, is to adopt a state implementation plan. We have mimicked EPA's requirements in our own state regulations. Maricopa County and Pima County on the other hand, have just relied upon the federal requirements and the federal regulations and implementing them in Maricopa county and Pima County. They’ve received what I was referring to earlier a delegation from EPA to implement the greenhouse gas permitting requirements. We’re going to be in the same boat as Pima County and Maricopa County for the rest of Arizona by seeking the same delegation from EPA for these federal requirements.
Ted Simons: Why would that be a bad thing? Or would it be a bad thing?
Henry Darwin: I don't think it's a bad thing, I think it's a good thing. I think it saves the state of Arizona from adopting requirements that may be ultimately overturned by the courts. That's the reason the state didn't take quick action on EPA's request, well at least one of the reasons why. We didn't think it was prudent for us to spend limited resources on developing requirements that may ultimately be overturned by a federal court, given the litigation that’s going on between EPA and the State of Texas and other states.
Ted Simons: Where do we stand from here? What gives?
Henry Darwin: The current status is that the federal government has announced that they are adopting this federal program in Arizona. We have been talking with EPA about receiving the authority from them to issue the permits under this program and we will continue to do so.
Ted Simons: All right, Henry, it’s a complicated topic but thanks for helping map it out for us. We appreciate it.
Henry Darwin: Thank you.