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Sierra Club v. Wyoming Department of Environmental Quality

March 9, 2011

SIERRA CLUB, APPELLANT (PETITIONER),
v.
WYOMING DEPARTMENT OF ENVIRONMENTAL QUALITY, AND MEDICINE BOW FUEL & POWER, LLC, APPELLEES (RESPONDENTS).



W.R.A.P. 12.09(b) Certification from the District Court of Laramie County The Honorable Peter G. Arnold, Judge

The opinion of the court was delivered by: Burke, Justice.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.

[¶1] The Wyoming Department of Environmental Quality (DEQ) issued an air quality permit to Medicine Bow Fuel and Power LLC (Medicine Bow), authorizing the construction of a facility that will gasify and liquefy coal, and of an associated underground coal mine. The Sierra Club appealed the issuance of that permit to the Wyoming Environmental Quality Council (Council), which upheld the DEQ's decision. The Sierra Club appealed the Council's decision to the district court, which certified the appeal directly to this Court pursuant to W.R.A.P. 12.09(b). We will affirm the Council's decision.

ISSUES

[¶2] The Sierra Club states the issues for review as follows:

1. Whether the air permit for the Medicine Bow coal to liquids plant fails to consider significant sulfur dioxide emissions from flares in determining the Potential to Emit and fails to apply the Best Available Control Technology (BACT) to limit the flare emissions.

2. Whether the Medicine Bow permit fails to consider fine particulate matter (PM2.5) emissions.

3. Whether the Department of Environmental Quality failed to include fugitive particulate emissions in its model to demonstrate compliance with 24-hour air quality standards.

FACTS

[¶3] On December 31, 2007, Medicine Bow applied for a permit to construct an industrial coal gasification and liquefaction plant to produce transportation fuels and other products, along with an underground mine that will supply the coal, all to be located approximately eleven miles southwest of Medicine Bow, Wyoming. DEQ completed its analysis of the permit application on June 19, 2008, and concluded that the Medicine Bow facility would comply with all requirements of the Wyoming Environmental Quality Act and of its implementing regulations, the Wyoming Air Quality Standards and Regulations (WAQSR). DEQ published a public notice of its proposed decision to issue the permit. During the public comment period that followed, DEQ received comments from many interested parties, including the Sierra Club. DEQ reviewed and analyzed the comments, along with additional information submitted by Medicine Bow, and issued the permit on March 4, 2009.

[¶4] The Sierra Club filed a petition for review with the Council, challenging DEQ's decision to issue the air quality permit to Medicine Bow. After discovery was completed, cross-motions for summary judgment were filed by the Sierra Club, DEQ, and Medicine Bow. The Council conducted a hearing on the motions on December 7, 2009. It denied the Sierra Club's motion, and granted summary judgment in favor of DEQ and Medicine Bow. The Sierra Club filed a timely Petition for Review with the district court, followed by an unopposed motion to certify the appeal directly to this Court. The district court granted the motion, and we accepted the certification.

STANDARD OF REVIEW

[¶5] We review the decisions of administrative agencies pursuant to Wyo. Stat. Ann. § 16-3-114 (LexisNexis 2009). The specific decision under review in this case is the Council's grant of summary judgment in favor of DEQ and Medicine Bow and against the Sierra Club. "[W]e review an agency's order granting a summary judgment in the same manner as in the civil context by employing our de novo standard of review and utilizing the same standards and reviewing the same materials as the agency." Powder River Basin Resource Council v. Wyoming Dept. of Envtl. Quality, 2010 WY 25, ¶ 33, 226 P.3d 809, 819 (Wyo. 2010), quoting Rollins v. Wyoming Tribune-Eagle, 2007 WY 28, ¶ 7, 152 P.3d 367, 370 (Wyo. 2007).

DISCUSSION

1. Sulfur Dioxide Emissions

[¶6] An application for an air quality permit must provide information on the proposed source's Potential to Emit, or PTE, which is defined by regulation as:

the maximum capacity of a stationary source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the source to emit a pollutant, including air pollution control equipment and restrictions on hours of operations or the type or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation or the [e]ffect it would have on emissions is enforceable.

WAQSR ch. 6, § 4(a).

[¶7] Based on information provided by Medicine Bow during the permitting process, DEQ determined that the proposed facility's PTE for sulfur dioxide is approximately 37 tons per year. The Sierra Club claims that the facility's PTE should be much larger, arguing that the DEQ improperly excluded from Medicine Bow's PTE emissions that will occur during malfunctions of the facility, and emissions resulting from "cold starts."*fn1

Cold starts are necessary after the facility has been shut down long enough that the equipment has cooled to ambient air temperature.

[¶8] The facts underlying this issue are not in dispute. Medicine Bow will perform a cold start when the facility first begins operations. Additional cold starts will be necessary to restart operations if the facility is shut down for major maintenance or repairs. Cold starts are estimated to occur once every three or four years. Medicine Bow also acknowledges that malfunctions will occur on occasion. The parties do not dispute the estimated emissions rates associated with cold starts and malfunctions. They disagree over whether, as a matter of law, these emissions must be included in Medicine Bow's PTE.

[¶9] When it issued the permit, DEQ explained that it has been the agency's "consistent practice" to make PTE determinations "based on consideration of a facility's routine operations." DEQ determined that emissions from malfunctions and cold starts did not result from the facility's routine operations, and so excluded them from Medicine Bow's PTE. This appears consistent with the regulatory definition of PTE. As explained in United States v. Louisiana-Pacific Corp., 682 F. Supp. 1141, 1158 (D. Colo. 1988), PTE is meant to represent "the maximum emissions that can be generated while operating the source as it is intended to be operated and as it is normally operated." Malfunctions and cold starts do not represent the way the Medicine Bow facility is intended to be operated, or the way it will normally be operated.

[¶10] Significantly, DEQ drew a distinction between "cold starts" and "warm starts." Warm starts occur after planned regular maintenance activities, and will take place approximately once every 60 days. Because warm starts are planned and relatively frequent, DEQ considered them to be part of the facility's normal operations, and included those emissions in the facility's PTE. Cold starts, in contrast, are unplanned and irregular, and are estimated to occur only once every three to four years. DEQ did not consider cold starts to be part of the facility's normal operations, and excluded those emissions from Medicine Bow's PTE. Medicine Bow agrees with DEQ's position, emphasizing that the exclusion of emissions from cold starts and malfunctions is consistent with DEQ's long-standing interpretation of the PTE regulation.

[¶11] The Sierra Club's argument that DEQ failed to consider the emissions from cold starts and malfunctions suggests that DEQ ignored these emissions. The record demonstrates otherwise. The permit limits Medicine Bow's sulfur dioxide emissions to the 37 tons per year, the same as its PTE. If emissions from malfunctions and cold starts exceed the limit of 37 tons per year, DEQ and Medicine Bow have recognized that these emissions will be considered excess emissions, and could subject Medicine Bow to enforcement action. See Wyo. Stat. Ann. §§ 35-11-201, -701, -801. As will be discussed in detail below, the permit issued by DEQ included several conditions intended to control and limit emissions from cold starts and malfunctions. As a practical matter, the Sierra Club has not pointed out any way in which emissions from cold starts and malfunctions would be regulated differently if they had been included in Medicine Bow's PTE.

[¶12] In addition, we note that the emissions from cold starts and malfunctions were included in computer models used to predict the air quality impacts of Medicine Bow's facility. DEQ reported that "[r]esults of the modeling were below the 3-hour and 24-hour WAAQS and NAAQS."*fn2 DEQ's inclusion of sulfur dioxide emissions in modeling is not determinative of whether such emissions must also be included in the facility's PTE. However, DEQ's inclusion of these emissions in the modeling demonstrates that DEQ did not overlook these emissions.

[¶13] The Sierra Club maintains that there is "a mountain of authorities" demonstrating that DEQ's interpretation is inconsistent with that of the federal Environmental Protection Agency (EPA). We have previously recognized that Wyoming's air quality regulatory program "is intended to be compatible with, and at least as stringent as, the federal Clean Air Act," and accordingly, "federal precedent and regulatory guidance is persuasive authority in Wyoming air quality cases." Powder River Basin Resource Council, ¶ 7, 226 P.3d at 813. Having reviewed the federal authorities cited by the Sierra Club, however, we find little support for its position.

[¶14] The Sierra Club quotes from Louisiana-Pacific, 682 F. Supp. at 1157, for "the concept [that] potential to emit refers to the maximum emissions a source can generate when being operated within the constraints of its design." But as we have already discussed, Louisiana-Pacific establishes that PTE includes only emissions that occur during normal operations:

Any analysis of the definition of "potential to emit" must include a reference to the case of Alabama Power Co. v. Costle, 204 U.S. App. D.C. 51, 636 F.2d 323 (D.C.Cir. 1979) because the current definition above was promulgated in ...


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