I depart from intellectual property issues today to report on a significant environmental law decision out of Georgia that could have major implicationsÂ for the carbon capture and sequestration market.Â
On June 30th, the Fulton County Superior Court overturned a decision of theÂ Georgia Environmental Protection Division (EPD) issuing a permit to Longleaf Energy Associates, LLC (Longleaf), a shell companyÂ owned by LS Power,Â to build a 1200 megawatt coal-fired power plant in Early County, Georgia.Â (see the Rethink Georgia press release here and the greentech media story here)
The key to Judge Thelma Wyatt Cummings Moore’s decision (longleaf-decision.pdf) was the Supreme Court’s ruling last year in Massachusetts v. EPA that carbon dioxide is an “air pollutant” subject to regulation under the federal Clean Air Act (Act).
Under the Act and the EPA’s regulations, certain areas of the country designated “attainment areas” must keep pollution levels within prescribed air quality limits (Early County isÂ once suchÂ attainment area).Â This includes the requirement that any new “major emitting facility” (a term that includes fossil fuel-fired electric plants such as the Longleaf facility)Â obtain a permit and abide by the emissions limitations outlined in the permit.
Major emitting facilities like the Longleaf facility must incorporate the “best available control technology” (BACT) to limit pollution.Â This BACT analysis entails a determination by the permitting authorityÂ ofÂ the maximum reduction of each regulated pollutant for the particular project.Â The emissions limitations in the facility’s permit must be set based on that “best available control technology.”
The Sierra Club and the Friends of the ChattahoocheeÂ (Petitioners) challenged the Georgia EPD’s decision to issue a permit for construction of the Longleaf plant.Â Â After anÂ EPD administrative law judge (ALJ) dismissed the challenge andÂ upheld the permit, the Petitioners appealed to the Fulton County Superior Court alleging that the ALJ erred by making no findings on, among other things,Â carbon dioxide emissions, including failing toÂ require that the EPD do a BACT analysis.
The court agreed with Petitioners and found the ALJ’s decision erroneous for deferring to the EPD’s inadequate permitting process.Â In particular, the court found that, becauseÂ carbon dioxide is an air pollutant under the Act,Â a BACT analysis should have beenÂ conducted by the EPDÂ to set a carbon dioxide emissions target for the Longleaf project.
The immediate result is that the Georgia EPD will have to conduct a carbon dioxide emissions analysis, and Longleaf and its developers, LS Power and Dynegy Inc., will have to comply with the resulting emissions target to build the power plant.Â
If other states follow the Georgia ruling, future coal-fired power plants will have to be designed to reduce carbon dioxide emissions if they are to gain regulatory approval.Â One way to do that is to equip new plantsÂ with carbon capture and sequestration technology.Â Thus, the decisionÂ could increase the demand for the technology and be a welcome boost to the carbon capture industry.