Pub. 6 2016 Issue 3

16 AT THE CENTER OF UTAH INDUSTRY By Denise Dragoo, Snell & Wilmer On October 17, 2016, the U.S. District Court for the Northern District of West Virginia granted summary judgment to Murray Energy Corporation and its subsidiary coal companies, including UtahAmerican Energy, Inc. The deci- sion requires the United States Envi- ronmental Protection Agency (EPA) to follow the mandate of Section 321(a) of the Clean Air Act, 42 U.S.C. Section 7621(a). This provision requires EPA to evaluate plant closures or reduc- tions in employment that may result from its administration or enforcement of the federal Clean Air Act. Murray Energy Corporation alleged that EPA failed to consider the impacts of the Clean Power Plan and implementing regulations contributing to the shut- down of coal-fired power plants and reduction of employment in the utility and coal mining industries. As set forth in the complaint, Murray Energy, its subsidiaries and co-plain- tiffs comprise the largest underground coal mining operations in the United States and collectively employ more than 7,200 workers. The company al- leged injury resulting from the actions of EPA causing a reduced market for coal which threatens its economic vi- ability. The Court agreed that the in- juries alleged by Murray Energy were related to EPA’s actions and the agen- cy’s failure to evaluate losses or shifts of employment related to its actions as required by CAA Section 321. EPA was required to file a schedule of com - pliance with Section 321 (a) within two weeks of the Court’s memorandum opinion. On October 31, 2016, EPA filed a qualified response to the Court which reserves the right to appeal. Citing the short time frame for compliance, EPA proposes a process rather than a compliance schedule. As a first step, EPA proposes to seek the scientific and technical advice of the EPA Sci- ence Advisory Board (the Board) as to the analytic tools and methodologies appropriate to undertaking the Sec- tion 321(a) economic analysis. EPA agreed to draft preliminary requests to the Board relating to the required em- ployment evaluations, provide public notice of these requests and solicit public comment. These procedures are needed in EPA’s view to comply with the Federal Advisory Committee Act, 5 U.S.C. app Section 3(2)(1972). The estimated timing for this proce- dure set forth in the EPA’s response is more than two years. Clearly, given the current impact on the coal industry of EPA’s proposed Clean Power Plan and other CAA regulations, a two-year delay in the economic analysis is not acceptable. Murray Energy Corpora- tion Chairman, President and CEO Robert E. Murray, found the EPA’s response to be a clear admission of EPA’s failure to comply with the CAA or the court order stating, “Indeed, the Obama EPA has plainly admit - ted in their filing that they have never counted the job losses required under Section 321(a) of the Clean Air Act of 1971 and will require up to two years to do so. They have totally flouted and ignored the law and the court.” 1 Commentators have suggested that the economic analysis required by Section 321 is informational only and will have no substantive impact on EPA’s regulations. 2 In fact, this ruling and EPA’s two-year compliance plan comes too late for at least one power plant in Utah. The Carbon Plant locat- ed near Helper, Utah was forced into early retirement last year due to the cost of retrofits needed to meet EPA’s mercury emission standards. 3 Closure resulted in the loss of 74 jobs in Car- bon County and was only one of an estimated 150 coal-fired power plants shuttered since 2010. The decline of the coal market was also a factor in EPA Must Consider Regulatory Impacts on Coal/Utility Industry Jobs and Plant Closure