It was the proverbial shot heard around the world in the escalating war of words regarding coal-fired power plants and climate change: On October 18, 2007, the Secretary of the Kansas Department of Health and Environment denied an air permit to two proposed coal-fired generating units, citing only potential carbon dioxide emissions and concerns about climate change as the reasons. It was the first time a government agency in the United States had relied on carbon dioxide emissions to deny such a permit. This article examines that decision, the ensuing legal and legislative maneuverings, and the next steps.The Secretary’s RulingFor such a ground-breaking decision, the Secretary’s ruling was surprisingly brief–slightly more than one page, single-spaced, on letterhead.Sunflower Electric Power Corporation, an electric cooperative power supplier, had sought Prevention of Significant Deterioration (PSD) air permits under Kansas and federal law to build two additional 750-megawatt coal-fired steam generating units at its Holcomb generating station in southwestern Kansas. KDHE held three public hearings on the permit application and received numerous comments during the public comment period. Environmental groups and eight attorneys general from other states opposed the permit on grounds of carbon emissions and their effect on climate change. KDHE’s Bureau of Air and Remediation recommended approval of Sunflower’s application, finding Sunflower had demonstrated it would meet Best Available Control Technology standards imposed by PSD permitting requirements. Along with recommending approval, KDHE staff issued a 109-page response to comments received during the permitting and hearing process. Among those comments were demands by the Sierra Club and others that KDHE deny the permit on the basis of carbon emissions. In response the Bureau of Air and Remediation said, “There are no provisions to regulate carbon dioxide emissions in PSD permits. These comments were referred to Secretary Bremby for further policy considerations.” (Responsiveness Summary, at 9).One day later, KDHE Secretary Roderick L. Bremby issued his five-paragraph ruling denying the PSD permit request. In the fourth paragraph Secretary Bremby wrote,
I have given due consideration to the scientific and technical information related to carbon dioxide including but not limited to many oral and written comments submitted in the public hearing and comment period. The information provides support for the position that emission of air pollution from the proposed coal fired plant, specifically carbon dioxide emissions, presents a substantial endangerment to the health of persons or to the environment.Letter, Roderick Bremby, KDHE, to Wayne Penrod, Sunflower Electric Power Corporation, October 18, 2007 (“Bremby Letter”), at 1-2. The Secretary made no other factual findings about carbon dioxide emissions from the proposed generating units, nor about evidence linking such emissions to global climate change.Although the Secretary’s ruling did not say so, given the approval recommendation of the KDHE Bureau of Air and Remediation and the Responsiveness Summary dated just one day earlier, the Secretary’s ruling presumes the Sunflower application met applicable PSD and other air emission requirements. The Secretary’s permit denial set off a storm of comments and reactions. Environmental groups were ecstatic; industry groups were aghast.The Decision’s UnderpinningsThe linchpin of Secretary Bremby’s decision was Kansas Statutes Annotated 65-3012(a):Notwithstanding any other provision of this act, the secretary may take such actions as may be necessary to protect the health of persons or the environment: (1) Upon receipt of information that the emission of air pollution presents a substantial endangerment to the health of persons or to the environment . . .According to the Secretary, K.S.A. 65-3012 gives the Secretary authority. . . to take such action as is necessary to protect the health of persons or the environment, notwithstanding compliance with all other existing provisions of the Kansas air quality act, upon the receipt of information that the emission of air pollution presents a substantial endangerment to health of persons or the environment. The endangerment may be a threatened or potential harm as well as an actual harm.
Bremby Letter at 1.The Secretary’s decision cited and heavily relied on a September 24, 2007 opinion of the Kansas Attorney General responding to the Secretary’s question whether he could deny an air quality permit absent state or federal regulations setting limitations for a specific pollutant. In that opinion the Attorney General stated,
Based upon the plain language of K.S.A. 65-3012, it appears that the statute contemplates preventive as well as remedial actions on the part of the secretary in order to protect persons and the environment in situations where the secretary receives information that emission of air pollution presents substantial endangerment to either . . . [A]s K.S.A. 65-3012 does not condition the secretary’s action upon pollutant levels, the secretary is not obligated to wait until there are federal or state regulations establishing limitations on a particular pollutant before taking action to prevent air pollution provided he makes the findings required in subsection (a).Kan. Atty. Gen. Op. No. 2007-31, September 24, 2007 at 2.The Secretary’s decision denying Sunflower’s permit cited Massachusetts v. Environmental Protection Agency, __ U.S. __, 127 S.Ct. 1438 (2007), for the proposition that carbon dioxide meets the broad definition of an air pollutant under the Clean Air Act and its Kansas counterpart. Neither the Secretary’s ruling nor the Attorney General’s opinion, however, cited any circumstance in which an agency had denied an air permit based on carbon dioxide emissions or after the applicant demonstrated compliance with Clean Air Act emissions limitations.Reaction and ResponseAs noted, the Secretary’s ruling set off a firestorm of comments and response. Environmental groups hailed the ruling as a watershed event in opposing coal-fired power plants as agents of global warming. Industry groups and many in the Kansas legislature criticized the decision as contrary to the rule of law and beyond the Secretary’s authority. Almost immediately opponents of the decision attacked it in the legislature, courts, and public pronouncements.On the legislative front, the 2008 session of the Kansas legislature was dominated by efforts to pass a bill that would clear the way for the Sunflower expansion. Democratic Governor Kathleen Sebelius and her staff proposed a compromise under which Kansas would allow Sunflower to build one, but not both, of the new generating units. Sunflower refused, contending that both units were required to support the expansion’s financing. The Republican-dominated legislature approved a bill that would limit the KDHE secretary’s power under K.S.A. 65-3012 and would allow Sunflower to seek another permit. Governor Sebelius vetoed the bill, and her veto survived an override effort. As this paper was being prepared, other efforts to find a legislative fix were under way.In the courts, Sunflower filed a petition with the Kansas Court of Appeals seeking review of Secretary Bremby’s decision to deny the permit. Sunflower argued the Secretary’s decision was unlawful. Sunflower argued K.S.A. §65-3012, upon which both the Secretary and Attorney General relied for their decisions, previously had been applied only to existing pollution presenting an air pollution emergency but never to deny a PSD permit for a new source. Sunflower asserted the Secretary’s decision violated Sunflower’s due process rights. As with most states, Kansas law requires that actions to deny a permit trigger due process protections, including hearings on issues of adjudicative facts. Rydd v. State Board of Health, 202 Kan. 712, 726 (1969). In Hallmark Cards, Inc. v. Kansas Dept. of Commerce and Housing, 32 Kan.App.2d 715 (2004), the court held that due process and equal protection concerns require an agency to demonstrate internal and written standards of eligibility for statutory benefits that are objective, ascertainable, and applied consistently and uniformly. Sunflower complained that these requirements had been violated.AnalysisNow that it appears a legislative solution and a political compromise are out of the question, attention turns to how the Kansas courts will review Secretary Bremby’s decision. The courts’ consideration of his decision becomes important for two reasons, even if some resolution of the Sunflower dispute eventually develops. Other states’ environmental regulators are being urged to follow Secretary Bremby’s lead, and other PSD permitting projects are being proposed in Kansas itself. Indeed, some have argued that if allowed to stand, the Secretary’s denial of Sunflower’s PSD permit for a facility that meets established PSD emissions limits will be used in Kansas and elsewhere as a precedent to deny permits for other types of industrial facilities, not just coal-fired power plants.In denying the Sunflower permit on the basis of carbon dioxide emissions, the Kansas Secretary unquestionably departed from settled expectations (notwithstanding the fact that he was urged to do so by numerous commenters). Now the question is whether Kansas courts will uphold it. Supporters of the decision will have two significant advantages. First, K.S.A. §65-3012(a) does contain broad language. Secondly, courts often try to defer to decisions by regulators–especially environmental regulators–when they can.The question is whether this decision strays so far from the norm and administrative law principles of notice, due process, and fair play that it will be stripped of a favorable presumption. On this point opponents of the decision have several strong arguments. They begin with the assertion that the power plant expansion meets all applicable PSD and Kansas air quality act standards. On what principled basis, they ask, can a regulatory agency turn down an application by an industrial facility on the basis of emissions of a pollutant that is not even regulated? And furthermore, what are the rules going forward in doing so? How are participants to discern the standards for granting or denying such request? Opponents further argue that carbon dioxide emissions are not regulated under state or federal law. The Supreme Court in Massachusetts v. EPA held that carbon dioxide emissions are a “pollutant” under the Clean Air Act, but EPA has not yet made the determinations under Clean Air Act §112 that would begin the process of regulating carbon dioxide under that statute. Likewise, Kansas itself has passed no limits on carbon dioxide emissions, and carbon dioxide is not specified in Kansas’ state implementation plan approved by EPA.To opponents, Secretary Bremby’s ruling denying the permit was remarkably thin and lacking in analysis, especially considering its impact, precedential value, and departure from settled expectations. For starters, it went against the recommendation of KDHE staff, although staff did not purport to address the question of carbon emissions that formed the basis for the Secretary’s ruling. As noted in the quotes above in this paper, the Secretary in his ruling said he had determined carbon emissions presented a “substantial endangerment to the health of persons or the environment” (Bremby Letter at 2), but his ruling specifies no such findings or the factual, scientific, technical, or environmental basis therefor other than a passing reference to information submitted during the public comment period. Without detailed factual and legal findings in this regard, the Kansas courts may be less inclined than otherwise to grant deference to the Secretary’s determination.Opponents further argue that at no time during the permit approval process were they notified that unregulated carbon emissions might form the basis for a permit denial. This violates administrative procedure and due process, they contend.Kansas courts will be called on shortly to sort through these arguments.ConclusionThe debate over carbon and climate change emissions will continue, long after circumstances regarding the Sunflower expansion have been finally determined. Most observers concede that in time regulators will establish limits on carbon emissions. The Sunflower case presents the questions and struggles surrounding whether and how regulators can address such emissions in the meantime and whether and how regulators can regulate emissions when no limits have been set. Until these questions are resolved in Kansas and elsewhere, those seeking permits will experience substantial uncertainty and will feel they are caught in the crossfire.