USA v. Questar Gas Management

Filing 391

MEMORANDUM DECISION AND ORDER denying 288 Motion for Partial Summary Judgment. Signed by Judge Ted Stewart on 5/11/2011. (las)

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

UNITED STATES OF AMERICA,
Plaintiff,

MEMORANDUM DECISION AND
ORDER DENYING DEFENDANT’S
MOTION FOR PARTIAL
SUMMARY JUDGMENT

UTE INDIAN TRIBE OF THE UINTAH
AND OURAY RESERVATION,
Plaintiff-Intervenor,
FRANCES M. POOWEGUP, IRENE C.
CUCH AND PHILLIP CHIMBURAS,
Plaintiff-Intervenor,
vs.

QUESTAR GAS MANAGEMENT
COMPANY,

Case No. 2:08-CV-167 TS

Defendant.

This matter is before the Court on Defendant Questar Exploration and Production Field
Services’ (“QEPFS”) Motion for Partial Summary Judgment. QEPFS seeks summary judgment
in its favor on: (1) Plaintiff’s claims for Prevention of Significant Deterioration (“PSD”)
violations at its Wonsits Valley and River Bend facilities; (2) Plaintiff’s PSD claims for volatile
organic compounds (“VOCs”) related to the JT-Skid projects at the Island and River Bend
facilities; (3) Plaintiff’s claims that Best Available Control Technology (“BACT”) and associated
1

costs should have been imposed due to JT-Skid additions at the Island, River Bend, and Coyote
Wash facilities; and (4) Plaintiff’s claims that QEPFS is in violation of the National Emissions
Standard for Hazardous Air Pollutants (“NESHAP”) for Oil and Gas Production Facilities
(“Subpart HH”) at the Coyote Wash, Chapita, and River Bend facilities. For the reasons
discussed below, the Court will deny the Motion.
I. BACKGROUND
Plaintiff brought this action against QEPFS in 2008 alleging violations of the Clean Air
Act (“CAA”) at five natural gas compressor stations QEPFS owns and operates in the Uintah
basin. The compressor station facilities are known as Coyote Wash, Chapita, Island, Wonsits
Valley, and River Bend (collectively, the “Facilities”). Plaintiff’s Complaint alleges violations of
the CAA’s PSD, NESHAP, and Title V programs.
A.

PSD PROGRAM
The PSD program is designed to prevent the deterioration of air quality by requiring

authorization for the construction of any new or modified source of air pollution. The PSD
program provides that “[n]o major emitting facility . . . may be constructed in any area to which
this part applies” unless certain conditions are met.1 Construction includes the modification of
any source or facility.2 The conditions require that the facility obtain a permit setting forth
applicable emission limitations and be subject to BACT.3 BACT is defined as “an emission

1

42 U.S.C. § 7475(a).

2

Id. § 7479(2)(C).

3

Id. §§ 7475(a)(1), (a)(4).
2

limitation based on the maximum degree of reduction of each pollutant subject to regulation . . .
which the permitting authority, on a case-by-case basis, taking into account energy,
environmental, and economic impacts and other costs, determines is achievable for such
facility.”4
B.

NESHAP PROGRAM
NESHAP is a program established for controlling emissions of hazardous air pollutants

(“HAPs”) through the use of maximum achievable control technology (“MACT”) to minimize
HAP emissions.5 HAPs are listed in 42 U.S.C. § 7412(b). A “major source” of HAPs is “any
stationary source or group of stationary sources located within a contiguous area and under
common control that emits or has the potential to emit considering controls, in the aggregate, 10
tons per year or more of any hazardous air pollutant or 25 tons per year or more of any
combination of hazardous air pollutants.”6
Plaintiff alleges that two NESHAP standards apply to the compressor stations. The
standard at issue in this Motion is titled National Emission Standards for Hazardous Air
Pollutants from Oil and Natural Gas Production Facilities, the Subpart HH regulations.7 The
Subpart HH regulations, among other things, limit emissions from glycol dehydration units that

4

Id. § 7479(3).

5

Id. § U.S.C. § 7412.

6

Id. § 7412(a)(1); 40 C.F.R. § 63.2.

7

Id. § 63.760–63.779.
3

are major sources of HAPs.8 A facility that is a major source of HAPs is required to, among
other things: install MCAT level controls on certain sources of pollution;9 demonstrate the
effectiveness of such controls;10 continuously monitor the controls;11 record applicable
monitoring data;12 and submit various notifications and reports regarding the source to assure
compliance with applicable pollution control requirements.13
II. SUMMARY JUDGMENT STANDARD
Summary judgment is proper if the moving party can demonstrate that there is no genuine
issue of material fact and it is entitled to judgment as a matter of law.14 In considering whether a
genuine issue of material fact exists, the Court determines whether a reasonable jury could return
a verdict for the nonmoving party in the face of all the evidence presented.15 The Court is

8

Id. § 63.760(b).

9

Id. § 63.771.

10

Id. § 63.772.

11

Id. § 63.773.

12

Id. § 63.774.

13

Id. § 63.775.

14

FED .R.CIV .P. 56(a).

15

See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Clifton v. Craig, 924
F.2d 182, 183 (10th Cir. 1991).
4

required to construe all facts and reasonable inferences in the light most favorable to the
nonmoving party.16
III. DISCUSSION
A.

PSD STATUTE OF LIMITATIONS
QEPFS first argues that Plaintiff’s causes of action for civil remedies for alleged

violations of the PSD program at the Wonsits Valley and River Bend facilities are barred by the
statute of limitations. Plaintiff has now withdrawn its PSD claim with respect to the initial
construction of the River Bend facility. Therefore, the only statute of limitations issue before the
Court relates to the Wonsits Valley facility.
1.

Wonsits Valley

When viewed in the light most favorable to Plaintiff as the non-moving party, the facts
concerning the construction of the Wonsits Valley facility are as follows. Construction at the
Wonsits Valley facility began in October 2000 and was completed in either June or July of 2001.
The parties entered into a series of tolling agreements, agreeing that the period from March 1,
2006, to February 29, 2008, would not be included in the computation of the statute of
limitations.
The CAA contains no statue of limitations. As a result, courts apply the general five-year
statute of limitations found in 28 U.S.C. § 2462 to claims under the CAA, including PSD

16

See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Wright v. Sw. Bell Tel. Co., 925 F.2d 1288, 1292 (10th Cir. 1991).
5

claims.17 The PSD program states that “[n]o major emitting facility . . . may be constructed in
any area to which this part applies unless” certain conditions are met, including the requirement
that a permit be obtained.18
The issue presented by this Motion is whether the statute of limitations begins to run at
the time the initial construction begins, as argued by Defendant, or whether the limitations period
does not begin until construction is completed, as advocated by Plaintiff. If the relevant date is
the beginning of construction, October 2000, then the five-year statute of limitations will have
run in October 2005, prior to the tolling agreements and the filing of this action. If, however, the
relevant date is the completion of construction, June or July 2001, then not all claims would be
barred by the statute of limitations.
Though a number of courts have addressed the issue of whether PSD violations are onetime events or continuing violations,19 no court appears to have addressed the precise issue before
the Court. Certain courts have stated, however, that violations do not continue past the
completion of construction.20 Other cases implicitly recognize that the statute of limitations
17

See Nat’l Parks & Conservation Assoc., Inc. v. Tenn. Valley Auth., 502 F.3d 1316, 1322
(11th Cir. 2007).
18

42 U.S.C. § 7475(a).

19

For a discussion of the cases on this issue see Ivan Lieben, Catch Me if You Can—The
Misapplication of the Federal Statue of Limitations to Clean Air Act PSD Permit Program
Violations, 28 ENVT . L. 667 (2008).
20

United States v. Cinergy Corp., 397 F.Supp. 2d 1025, 1030 (S.D. Ind. 2005) (“a
violation of the Act’s preconstruction permit regulations is complete at the time the construction
project is completed”); New York v. Niagra Mohawk Power Corp., 263 F.Supp. 2d 650, 661
(W.D.N.Y. 2003) (“[T]he requirement to secure a preconstruction permit applies prior to
construction or modification. Once the construction or modification is complete, the window in
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begins to run when construction is completed.21 Still others have stated that a preconstruction
violation occurs when construction is commenced.22 All of these cases, however, addressed
situations where the construction had commenced and been completed long before the suit was
brought. No case appears to have addressed the situation where certain activities may fall within
the limitations period and some activities fall outside that period.
The Court finds that the relevant date for consideration of the statute of limitations is the
completion of construction. While the statute of limitations begins to run at the time
construction begins, the limitations period is tolled until construction is completed. This
conclusion only makes sense. An example clearly illustrates this point. If the Court were to
conclude that the only date that matters is the initial date of construction, an owner or operator of
a major emitting facility might purposely draw out the construction period in an effort to avoid
the PSD requirements. Under Defendant’s proposed construction, a major emitting facility built

which to apply for and obtain a preconstruction permit is gone. Thus, a violation of the Clean Air
Act’s preconstruction permit requirement is singular in nature, and does not constitute an
ongoing violation.”); United States v. Ill. Power Co., 245 F.Supp. 2d 951, 956 (S.D. Ill. 2003)
(stating that courts have “concluded that preconstruction permit violations do not constitute
violations that continue past the completion of construction”); United States v. Westvaco Corp.,
144 F.Supp. 2d 439, 444 (D. Md. 2001) (“a violation for failure to obtain a construction permit
does not continue once the unpermitted construction is completed”).
21

United States v. Cemex, Inc., 2010 WL 1348769, at *3 (D. Colo. Mar. 31, 2010) (noting
that any violation for modifications taking place between 1997 and 1999 accrued no later than
1999 and became untimely in 2004); United States v. Campbell Soup Co., 1997 WL 258894, at
*1-3 (E.D. Cal. Mar. 11, 1997) (finding that complaint filed seven years after completion of
modifications was untimely).
22

Ill. Power Co., 245 F.Supp. 2d at 957 (“[T]he plain language of the provisions
demonstrates that any preconstruction violation occurs when the actual construction is
commenced, and not at some later point in time.”).
7

over a longer period of time would not be subject to PSD requirements so long as the first day of
construction occurred more than five years earlier. Such a result is absurd. The Court believes
that the better approach is to toll the limitations period until construction is completed. This
approach would allow for compliance if, during construction, it becomes evident that the facility
will become a major emitting facility upon start-up. As one court stated: “Once the construction
or modification is complete, the window in which to apply for and obtain a preconstruction
permit is gone.”23 Further, the Court’s conclusion would allow an owner or operator of a facility
the ability to avoid PSD requirements by avoiding construction of a major emitting facility before
construction on that facility is complete.
Therefore, the Court finds that not all of Plaintiff’s PSD claims in relation to the Wonsits
Valley facility are barred by the statute of limitations. Those claims from March 1, 2001, to the
completion of the construction at the Wonsits Valley facility in June or July of 2001 remain. As
a result, the Court need not resolve the parties’ dispute as to whether PSD violations constitute
one-time or continuing violations.
2.

Injunctive Relief

Plaintiff urges the Court to rule that its claim for injunctive relief is not time-barred. In
its Motion for Partial Summary Judgment, Defendant briefly mentions that Plaintiff’s claims for
injunctive relief may also be time-barred. Defendant did not, however, request summary
judgment on Plaintiff’s claim for injunctive relief. Because neither party has actually moved for
summary judgment on the claim for injunctive relief, the Court declines to rule on it.

23

Niagra Mohawk Power Corp., 263 F.Supp. 2d at 661.
8

B.

PSD CLAIMS FOR JT-SKID PROJECTS
PSD is triggered for a “major modification.”24 Major modification “means any physical

change in or change in the method of operation of a major stationary source that would result in:
a significant emissions increase . . . of a regulated NSR pollutant . . . ; and a significant net
emissions increase of that pollutant from the major stationary source.”25 A significant net
emissions increase for Nox and VOCs is 40 tons per year (“tpy”) and for CO is 100 tpy.26
Defendant installed JT-Skid units at the Island, River Bend, and Coyote Wash facilities
between 2005 and 2007. Defendant argues that it should be granted summary judgment on
Plaintiff’s PSD claims related to volatile organic compound (“VOC”) emissions allegedly
resulting from the JT-Skid projects at the River Bend and Island Facilities. Defendant argues
that there were no significant net emissions increase for VOCs as a result of the JT-Skid
additions, which would trigger PSD.
1.

Island

Defendant argues that the installation of the JT-Skid units at Island did not trigger PSD.
In response, the government argues that the Island facility was subject to PSD requirements at the
time of its initial construction in 2004 and, therefore, the issue of whether the JT-Skid project
resulted in significant net VOC emissions is irrelevant. In reply, Defendant clarifies that it is

24

40 C.F.R. § 52.21(a)(2)(iv)(a).

25

Id. § 52.21(b)(2)(i).

26

Id. § 52.21(b)(23)(i).
9

only moving for summary judgment on the issue that the JT-Skid installation did not result in a
significant net increase of VOC emissions.
The problem with Defendant’s Motion for Partial Summary Judgment on this ground is
that it is requesting summary judgment on a non-existent claim. The Complaint makes clear that
Plaintiff’s argument is that “[t]he Island facility became a major emitting facility/major stationary
source when it started up in or around September 2004.”27 Plaintiff’s Amended and
Supplemental Response to Second Set of Interrogatories makes no claim that the J-T Skid Project
at the Island facility resulted in a significant increase of VOCs.28 Thus, Defendant’s argument
that there were no significant net emissions increase for VOCs as a result of the JT-Skid project
at the Island facility is irrelevant to any issue before the Court. Therefore, Defendant’s Motion
seeks judgment on a claim that simply does not exist and will be denied.
2.

River Bend

Defendant argues that there was no significant net emissions increase for VOCs as a
result of the JT-Skid project. Plaintiff, however, has presented evidence that the JT-Skid project
did result in significant increases of Nox, CO, and VOCs.29 This is sufficient to overcome
summary judgment.

27

Docket No. 1, ¶ 146.

28

Docket No. 289, Ex. 1 at 16-17. Plaintiff does, however, assert that the JT-Skid Project
at the Island Facility did result in a significant increase of NOx emissions. Id. Defendant has not
moved for summary judgment on this issue.
29

Docket No. 289, Ex. 8 at 34; Docket No. 316, Ex. 8.
10

Defendant argues that the Court should disregard the Revised Table 13 provided by
Plaintiff’s expert Heather Brown, which provides the basis of Plaintiff’s claim that PSD was
triggered at the River Bend facility as a result of the JT-Skid project. Defendant’s arguments
concerning Ms. Brown’s opinion and allegedly faulty calculations are matters better left for
cross-examination, not summary judgment. As Plaintiff has provided some evidence from which
a fact finder could find in its favor on this claim, summary judgment is inappropriate.
C.

BACT CLAIMS
Defendant also argues that summary judgment should be granted as to the BACT element

of Plaintiff’s PSD claims at the Coyote Wash, Island, and River Bend facilities. Defendant only
seeks summary judgment on the issue of whether the addition of the JT-Skid units at these
facilities requires the use of BACT.30
As set forth above, PSD is triggered for a “major modification.”31 Major modification
“means any physical change in or change in the method of operation of a major stationary source
that would result in: a significant emissions increase . . . of a regulated NSR pollutant . . . ; and a
significant net emissions increase of that pollutant from the major stationary source.”32 The
regulations provide: “A major modification shall apply best available control technology for each
regulated NSR pollutant for which it would result in a significant net emissions increase at the

30

Plaintiff claims that both the Island and Coyote Wash facilities were major sources at
initial construction, therefore BACT was already required. See 40 C.F.R. § 52.21(j)(2).
Defendant has not moved for summary judgment on this claim.
31

Id. § 52.21(a)(2)(iv)(a).

32

Id. § 52.21(b)(2)(i).
11

source. This requirement applies to each proposed emissions unit at which a net emissions
increase in the pollutant would occur as a result of a physical change or change in the method of
operation in the unit.”33 Emissions unit “means any part of a stationary source that emits or
would have the potential to emit any regulated NSR pollutant and includes an electric utility
steam generating unit as defined in paragraph (b)(31) of this section.”34
Defendant argues that the JT-Skids do not emit any pollutants. Rather, it is the
condensate storage tanks which are the actual emitting units. Defendant goes on to argue that the
tanks did not undergo any physical change or change in the method of operation associated with
the installation of the JT-Skids. Therefore, no emissions unit was changed or modified and
BACT was not required as a result of the JT-Skid projects.
The Court finds that there are genuine issues of material fact as to whether the JT-Skid
units can be considered part of the “emissions unit” which underwent a physical change or
change in the method of operation in the unit. Therefore, the Court will deny summary judgment
on this ground.
D.

NESHAP SUBPART HH
Defendant’s final argument is that the River Bend, Coyote Wash, and Chapita facilities

are not subject to NESHAP Subpart HH because they contain no affected sources. Defendant
argues that the only potential affected sources—glycol dehydration units—have been removed
from each of these facilities. Plaintiff responds that the fact that the glycol dehydration units

33

Id. § 52.21(j)(3).

34

Id. § 52.21(b)(7).
12

have been removed does not alter the fact that there may have been past violations. In its Reply,
Defendant appears to abandon its argument that it is entitled to summary judgment on this
ground. Because QEPFS may have violated NESHAP Subpart HH before removing the glycol
dehydration units, the Motion for Partial Summary Judgment will be denied on this ground.
While removal of the glycol dehydration units may render future compliance issues moot,
removal does not terminate Plaintiff’s penalty claims based on past violations of Subpart HH.
IV. CONCLUSION
It is therefore
ORDERED that Defendant’s Motion for Partial Summary Judgment (Docket No. 288) is
DENIED.
DATED May 11, 2011.
BY THE COURT:

_____________________________________
TED STEWART
United States District Judge

13