Energy Industry Air Regulation

Perhaps no industry source category implicates more air quality regulatory issues than the energy sector. The conversion of most fuel types for electricity generation results in potentially significant air emissions, is the subject of numerous complex regulations, and has attracted scrutiny from state and federal enforcement authorities. Similarly, the production, refining, distribution, storage, and even sale of petroleum products result in emissions to varying degrees, triggering permitting requirements, regulatory standards, and emission control obligations.

We have represented numerous companies in the energy industry sector. Our air quality professionals have provided regulatory counseling on air quality compliance requirements, assisted companies in securing relevant permits while maximizing operational flexibility and minimizing regulatory burden, and responded to state and federal enforcement activity for facilities in each of the following categories:

coal and waste-coal-fired electric generating units;
independent power producers, including cogeneration units;
petroleum refineries;
petroleum storage terminals and distribution facilities;
natural gas compressor stations and distribution operations;
marine loading operations, barge and tanker transfer activities;
landfill gas recovery and electricity generation;
ethanol production and refining; and
alternative energy generation facilities.

MGKF's air practice for energy sector clients encompasses a variety of issues, such as the following:

Compliance Counseling and Permitting: In order to provide effective counsel in this area, the professionals in our air practice have become well versed in applicable federal and state regulations, including relevant New Source Performance Standards ("NSPS") and National Emission Standards for Hazardous Air Pollutants ("NESHAP"). Further, we advise clients on obligations and compliance options under the federal acid rain regulations, federal and state mercury regulations, and interstate trading programs, including those under the Clean Air Interstate Rule ("CAIR"), the nitrous oxide ("NOx") emission trading requirements under the Ozone Transport Region Memorandum of Understanding, and the NOx budget program implemented under the Section 110 SIP Call.

We also advise clients concerning the generation, preservation, and trading of emission credits, including emission reduction credits, acid rain allowances, and NOx allowances. In this context, we have negotiated numerous agreements for the sale and purchase of such emission credits. Similarly, we have worked with many companies to generate, preserve, and maximize such credits and allowances for future regulatory compliance or simply to maximize value.

The construction or modification of energy facilities may implicate the complex Nonattainment New Source Review ("NNSR") and Prevention of Significant Deterioration ("PSD") programs. We have extensive experience in evaluating NNSR/PSD applicability, performing complex netting analyses, and advising clients concerning compliance options under NNSR/PSD.

Enforcement: The U.S. Environmental Protection Agency ("EPA"), through the U.S. Department of Justice ("DOJ"), and state authorities have initiated enforcement actions against many companies in the industry sector for alleged noncompliance with air quality requirements. We have represented such companies in addressing these enforcement actions, including responding to information requests, administrative enforcement orders, and federal complaints. In this context, we have defended companies from such allegations and negotiated many consent orders and consent decrees to resolve such claims.

Regulatory Challenges: MGKF has represented companies and trade associations to challenge regulations or regulatory applicability determinations in the federal appellate courts. These actions have included challenges to the NOx SIP Call rule, federal CAIR and Clean Air Mercury Rule regulations, and facility-specific regulatory applicability determinations.

Climate Change Developments: We closely track all climate change legislative and regulatory developments at both the state and federal levels concerning greenhouse gas monitoring, quantification, and possible control. MGKF advises clients concerning such developments and have assisted clients in participating in the legislative and regulatory development processes. We also work with clients in evaluating strategic opportunities for enhancing their position with respect to probable regulation in this area. Among other programs, we have worked with the Regional Greenhouse Gas Initiative ("RGGI") in the Northeastern states and tracked state-specific regulatory development under this program in order to advise and assist clients concerning obligations and opportunities for compliance.

The following list summarizes a few of our representative air matters in the energy sector:

MGKF represented several independent power producers with respect to siting and permitting requirements for electric generating unit projects, secured all necessary permits, and undertook the defense of certain permits in response to third-party appeals.
We represented a trade association in litigation before the D.C. Circuit Court concerning significant federal regulatory programs for electric generating units, including the Clean Air Mercury Rule ("CAMR") and the Clean Air Interstate Rule ("CAIR").
The firm advised a national refining company on regulatory and legislative developments associated with greenhouse gas control, as well as specific requirements under the Regional Greenhouse Gas Initiative.
MGKF assisted refiners with specific regulatory and permitting requirements associated with renewable/clean fuels, including securing permits for an ethanol production plant and providing regulatory counseling regarding compliance with the Renewable Identification Number ("RIN") program.
We assisted clients addressing siting and regulatory issues associated with alternative energy generation, including through wind power, solid fuel gasification, landfill gas-to-energy projects, and waste coal fuel sources.
The firm counseled clients in the preservation and trading of emissions reduction credits ("ERCs") and emission allowances and in negotiating agreements governing the purchase and sale of ERCs and allowances.
We provided regulatory counseling and permit analysis under EPA's acid rain program.