On December 18, 2012, the United States Environmental Protection Agency (EPA) issued a proposed decision that would disapprove the Wisconsin Department of Natural Resources (WDNR) rules for implementing permitting requirements associated with the National Ambient Air Quality Standard (NAAQS) for fine particulate matter (PM_2.5)¹. EPA identified possible deficiencies related to WDNR’s authority to regulate condensable gases and potential PM_2.5 precursors (such as SO₂ and NO_x). Most interesting and potentially significant to Wisconsin stationary sources is EPA’s rationale for concluding that Wisconsin rules are deficient.

Asserted Deficiencies in WDNR Rules Concerning Condensable Gases

EPA requires that each state create rules containing "explicit language" documenting that particulate matter (PM) emissions, PM_2.5 emissions and PM₁₀ emissions "include gaseous emissions from a source or activity which condense to form particulate matter in ambient temperatures." To this end, EPA required states to account for these so-called condensable particulate matter emissions in their state PSD permitting programs starting on January 1, 2011.

In May 2011, WDNR submitted to EPA a rule package related to the PSD permitting of condensable particulate matter. WDNR asked that EPA approve these rules for inclusion in the Wisconsin state implementation plan (SIP). In the preamble to EPA’s December 18, 2012 proposed disapproval of these rules, EPA concluded that Wisconsin’s SIP rules do not contain "explicit" language to account for PM_2.5 and PM₁₀ condensable emissions in permitting decisions.² EPA acknowledged that Wis. Admin. Code Chapter NR 439 does include reporting, record keeping, testing, inspection and compliance determination requirements for condensable particulate matter. However, EPA concluded that NR 439 was only approved for inclusion in the Wisconsin SIP for purposes of implementing NR 419 through 425, not Wisconsin’s permitting requirements in NR 405 through 408.

Asserted Deficiencies in WDNR Rules Concerning PM2.5 Precursor Emissions

EPA requires each state to promulgate rules "explicitly" identifying the precursors of PM_2.5 as being within the definition of "regulated NSR air contaminant" and thereby subject to PSD permitting obligations. In May 2011, WDNR submitted to EPA a rule package which included a definition of "regulated NSR air contaminant" and asked that EPA approve the rules for inclusion in the Wisconsin SIP. In the preamble to EPA’s December 18, 2012 proposed disapproval of these rules, EPA asserts that WDNR’s definitions do not "explicitly" identify SO₂and NO_x as precursors to PM_2.5 that are regulated by the Wisconsin PSD program.

Possible Impact of EPA’s Decision

WDNR will undoubtedly work with EPA to address these deficiencies. This might require new rulemaking which could take several years to complete. As such, EPA may express a willingness to be more flexible in its interpretation of Wisconsin’s rules or to revise its proposed conclusion that the Wisconsin SIP is, in fact, deficient.

A more interesting issue is how EPA’s wording in the proposed SIP disapproval might affect WDNR’s air permitting authority as it relates to PM_2.5 pollution.

Recent Wisconsin legislation [Wis. Stat. § 227.10(2m)] prohibits WDNR from implementing or enforcing any standard, requirement or threshold in a permit unless it is "explicitly required or explicitly permitted by statute or by rule." As quoted above, EPA’s proposed disapproval of the Wisconsin PM_2.5 SIP is premised on an EPA conclusion that WDNR’s current SIP rules fail to "explicitly" grant WDNR authority to regulate the condensable component of PM₁₀ and PM_2.5 emissions. Similarly, EPA concluded that WDNR’s current SIP rules do not "explicitly" identify SO₂ and NO_x as precursors to PM_2.5 for purposes of defining pollutants that are regulated by the PSD program. EPA’s statements directly raise the question of whether WDNR has explicit authority to regulate condensable particulate matter and precursors emissions of PM_2.5.

The regulation of condensable particulate matter and PM_2.5 precursor emissions has been the subject of permit challenges and enforcement activity against stationary sources in Wisconsin in recent years. EPA’s proposed disapproval rationale, coupled with the language of Wis. Stat. § 227.10(2m), puts the spotlight on a key question: what is the extent of WDNR’s authority to regulate these pollutants?

Sierra Club Lawsuit Seeks EPA Action on Wisconsin Particulate Matter SIP

On December 21, 2012, Sierra Club filed a lawsuit asking the United States District Court for the Northern District of California to force EPA to determine whether many states, including Wisconsin, have met their obligations for submitting SIPs implementing the 2006 particulate matter NAAQS.

In this lawsuit, Sierra Club asserts that when EPA issued its PM NAAQS in 2006, the Clean Air Act triggered a three year deadline for all states to submit SIPs to implement these standards. Many states, including Wisconsin, provided EPA with proposed PM SIPs which relied, in part, on emission reductions that would be achieved from the Cross States Air Pollution Rule (CSAPR). EPA approved most aspects of these SIP plans. However, CSAPR has since been vacated by the United States Court of Appeals for the District of Columbia. As a consequence, the Sierra Club argues that those aspects of SIPs that rely on CSAPR are per se deficient and EPA is now obligated to promulgate federal implementation plans in those states that relied on CSAPR. There are 20 states and the District of Columbia, targeted by the lawsuit, including Wisconsin, Illinois, Iowa, Michigan and Minnesota.

_{1 77 Fed. Reg. 74,817 (Dec. 18, 2012).}

_{2 EPA reached a similar conclusion in a final rule disapproving of the Wisconsin PM SIP. 77 Fed. Reg. 65,478 (Oct. 29, 2012).}