In re: Petroplex International, LLC, 2010-1194, (La. App. 1 Cir. 3/25/11), 2011 WL 1225871
The First Circuit upheld LDEQ’s issuance of a minor source air permit to a petroleum liquid storage facility.
Petroplex sought to construct and operate a new, full service marine and land terminal along the Mississippi River in St. James Parish, an attainment area. Petroleum liquids, such as gasoline, crude oil, and ethanol, would be stored and blended in land-based tanks. Based on the emission calculations included in the air permit application, the facility was a minor source of air emissions. However, it was just barely a minor source as the facility was projected to emit, among other things, 93.83 tons per year of volatile organic compounds, 76.86 tons per year of carbon monoxide, and 55.52 tons per year of nitrogen oxides.
LDEQ requested an environmental impact statement (EAS) from Petroplex. The Court notes that, as an applicant for a minor source permit, Petroplex was not required to submit an EAS nor was a public hearing required under the provisions of La. R.S. 30:2018(E)(2). After receiving and reviewing the EAS, holding a public hearing, and responding to public comments, LDEQ issued a minor source permit for the facility. An environmental group, Community Strength, filed a petition for judicial review seeking to vacate the permit. Community Strength made several arguments to the First Circuit, all of which were ultimately rejected.
- Community Strength’s first argument was that LDEQ should have mandated the use of Best Available Control Technology (BACT) and Lowest Achievable Emission Rate (LAER) in Petroplex’s air permit so that “full minimization of air emissions” could be achieved. Petroplex International, at p. 3. The rationale for this argument was that air emissions from the proposed facility were very close to major source levels. The First Circuit characterized this argument as “flawed from the outset in that the proposed Petroplex facility is, in fact, a minor source of air emissions, and as such the requirements of BACT and LAER are simply inapplicable.” Id. The First Circuit discusses the regulatory distinction between minor and major sources and concludes that, as a minor source, the facility “is not subject to the enhanced requirements necessary for obtaining a minor source permit.” Id.
Community Strength also argued that LDEQ did not properly evaluate Petroplex’s air emissions, which could have resulted in reclassification of the facility as a major source. Merely making the argument was not enough. The First Circuit noted that Community Strength offered no evidence to demonstrate that the calculations were flawed or that LDEQ did not perform an independent review. In dismissing the argument, the court notes that Community Strength “simply relies on its allegations, with no foundation.” Petroplex International, at p. 5.
Community Strength also suggested that Petroplex could have been designed as a facility with a larger capacity, which would have required it to operate as a major source employing BACT and LAER and which would result in lower emissions. Community Strength did not raise this issue in the public comment period. As a result, it was precluded from raising it for the first time on appeal pursuant to La. R.S. 30:2014.
- During the public hearing, one person noted that the Petroplex EAS was similar, if not identical, to an EAS submitted for a similar type of facility, called the Safeland Storage facility, that was permitted in a separate permit proceeding. In the Petroplex public comment process, the commenter submitted a set of comments criticizing the Safeland Storage EAS which had been submitted in connection with the permitting of the Safeland Storage facility. The commenter requested that LDEQ review, evaluate, and use those comments as a basis for denying Petroplex’s application. LDEQ responded that it was seeking comments on the Petroplex application and would not consider, compare, or review comments submitted on a separate application for a different facility because LDEQ evaluates each application individually.
Community Strength argued that LDEQ erred in granting the permit when the Petroplex EAS was nearly identical to the Safeland Storage EAS. This, according to Community Strength, demonstrated a lack of rigorous review of the environmental risks. The First Circuit concluded that there is no basis in law to require LDEQ to consider comments made on an entirely different facility and Community Strength provided no authority for such a proposition.
- Community Strength next attacked LDEQ’s evaluation of the Petroplex EAS, claiming that LDEQ failed to evaluate deficiencies in the EAS and relied on flawed statements and reasoning in the EAS. Community Strength raised concerns regarding emission reductions, the cumulative effects of the facility, the need for the facility, and the site selection process. The First Circuit rejected each of these arguments
- Community Strength raised the point that Petroplex’s plan to reduce environmental impacts from air emissions is to comply with an air permit “that has no hard conditions.” Petroplex International, at p. 7. The district court and the First Circuit both called this assertion a “misstatement of the record.” The EAS provided a detailed description of how Petroplex intended to handle the emissions it generated, stated that the facility would follow the permit as well as state and federal laws and regulations, and that Petroplex intended to employ technology that was “above and beyond that required by law, which would have a greater effect on reducing emissions.” Id.
- Community Strength next attacked the cumulative effects of air emissions from the facility and other facilities in the area. However, Petroplex had performed air modeling, showing that its emission amounted to only 7.5% of the ambient air standard for each emitted pollutant. As a result, further modeling including the cumulative impacts was not required. Community Strength also claimed that LDEQ did not respond to its comment on this point, but the record established otherwise.
- Community Strength also argued that Petroplex did not properly document a need for the facility. However, there were several letters of support in the record. One, from Commissioner of Agriculture Mike Strain, supported the facility but did not mention the Safeland Storage facility. Community Strength seized on that point, noting the existence of the Safeland Storage facility and Commissioner Strain’s failure to mention it, suggesting that it somehow demonstrated LDEQ did not fully evaluate the need for the facility. The First Circuit completely rejected the argument, calling it speculation and saying that Community Strength offered no evidence to establish that Commissioner Strain was unaware of the Safeland Storage facility when he wrote the letter supporting Petroplex or that he would not have supported the Petroplex facility had he, in fact, been aware of the Safeland Storage facility.
- Finally, Community Strength argues that the site selection process was flawed. It noted that the Petroplex and Safeland Storage EAS used identical language in the site selection process but that Petroplex added criteria to manipulate the process in favor of the chosen site. The First Circuit noted that each application is reviewed independently and that because the two facilities were similar types of facilities, “it is not surprising that their site selection criteria would be similar or even identical in many ways.” Petroplex International, at p. 8.
Overall, LDEQ’s basis of decision met the requirements of Save Ourselves. On the other hand, “Community Strength has offered nothing but allegations, with no factual basis, in opposition to DEQ’s decision.” Id. LDEQ “performed its duty as protector of the environment.” Id. The First Circuit affirmed the issuance of the minor source air permit to Petroplex. All costs of the appeal were assessed to Community Strength.
- Community Strength had no facts to rebut the accuracy of the air emission calculations, the modeling that was done, the propriety of the facility’s design, or any of its other assertions. Instead, Community Strength simply provided arguments to the court. Further, it seems to have made statements in support of its arguments that were contradicted by the record itself. This proved fatal to its case and, it seems, its credibility with the court.
- The court made the point, correctly, that the regulations do not require BACT or LAER for a minor source. However, a major tenant of the Save Ourselves/IT Questions inquiry is that potential adverse impacts are minimized to the maximum extent possible (i.e., the ‘full minimization’ requested by Community Strength). While Petroplex agreed to abide by its permit and all regulatory requirements, the only suggestion that Petroplex was minimizing emissions to the maximum extent was that the EAS provided a detailed description of how Petroplex intended to handle the emissions it generated and that Petroplex intended to employ technology that was above and beyond that required by law. For a minor source in an attainment area, this seems to be sufficient to fulfill this portion of Save Ourselves/IT Questions inquiry under the Petroplex decision.
John B. King's principal areas of practice include environmental and oil and gas regulatory permitting and defense, compliance assistance, toxic tort defense, and litigation.