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Coal producer 1st to challenge US EPA's shedding of mercury control foundation

A coal producer has launched the first of what is expected to be a slew of lawsuits targeting the U.S. Environmental Protection Agency's move to rescind the legal basis for the Obama-era Mercury and Air Toxics Standards, or MATS, rule.

Westmoreland Mining Holdings LLC on May 22 filed a petition for review of the regulation in the U.S. Court of Appeals for the District of Columbia Circuit, the same day the rule was published in the Federal Register.

Released in April, the rule withdrew the legal justification for the MATS rule by finding that regulating coal- and oil-fired power plants for toxic mercury pollution is not appropriate and necessary. The Trump administration based that determination on a 2011 regulatory impact analysis the EPA later used to support a supplemental "appropriate and necessary" finding issued under Section 112 of the Clean Air Act in response to a partial remand by the U.S. Supreme Court.

When it finalized the MATS rule, the EPA estimated it would produce between $37 billion and $90 billion in annual public health benefits compared to $9.6 billion in yearly compliance costs. However, virtually all of the public health benefits flowed from associated reductions in fine particulate matter, with just $4 million to $6 million in direct benefits related to reduced mercury exposure.

Under a revised supplemental finding, however, the EPA has now found that regulating power plants for mercury is not appropriate and necessary due to the discrepancy between direct health benefits and compliance costs in its 2011 analysis. The finding was issued despite more recent research estimating the direct annual health benefits of reductions in mercury emissions are actually about $4.8 billion.

In its final rule, the EPA left the actual MATS standards in place.

While environmental groups such as the Natural Resources Defense Council have vowed to defend MATS, legal experts have predicted that coal companies will ask a reviewing court to vacate the MATS rule itself by arguing it has no legal basis. Moreover, the National Bituminous Coal Group, an ad hoc association that does not disclose its membership, asserted in public comments during the rulemaking that the MATS rule is illegal under what is known as the 111(d)/112 exclusion theory.

Westmoreland's May 22 petition for review did not outline specific legal claims. However, the company has adopted that same argument in a separate lawsuit arguing that the EPA's replacement for the Obama-era Clean Power Plan, which targeted coal plants under Section 111(d) of the Clean Air, is legally flawed because the EPA is already regulating existing coal-fired for mercury under Section 112.

A February analysis by S&P Global Market Intelligence found that all of the coal delivered from the mines owned by Westmoreland over the first three quarters of 2019 went to plants set to retire before 2025.

The last day for parties to file legal challenges to the EPA's revised supplemental finding is July 21. The D.C. Circuit case is Westmoreland Mining v. EPA (No. 20-1160).