Lignite Energy Council v.U.S. Envt'l Protection Agency

Decision Date21 December 1999
Docket NumberNo. 98-1525,98-1525
Parties(D.C. Cir. 1999) Lignite Energy Council, et al.,Petitioners v. U.S. Environmental Protection Agency, Respondent Natural Gas Supply Association, et al., Intervenors Consolidated with98-1529, 98-1533, 98-1541, 98-1543
CourtU.S. Court of Appeals — District of Columbia Circuit

[Copyrighted Material Omitted]

On Petitions for Review of an Order of the Environmental Protection Agency

F. Willam Brownell and William F. Pedersen argued the cause for petitioners. With them on the briefs were Craig S. Harrison, Jeffrey A. Knight, Harold P. Quinn, Jr., Gene E. Godley, Scott H. Segal, Brian R. Bjella, and Charles S. Miller, Jr.

Heidi Heitkamp, Attorney General, State of North Dakota, and Carmen Miller, Assistant Attorney General, were on the brief for amicus curiae the State of North Dakota.

Wendy L. Blake, Attorney, U.S. Department of Justice, argued the cause for respondent. With her on the brief was Lois J. Schiffer, Assistant Attorney General.

Armond M. Cohen was on the brief for amicus curiae Conservation Law Foundation, et al.

John H. Sharp, Michael R. Barr and Michael A. Conley were on the brief for intervenors.

Before: Edwards, Chief Judge, Silberman and Henderson, Circuit Judges.

Opinion for the Court filed Per Curiam.

Per Curiam:

Petitioners challenge EPA's new source performance standards for nitrogen oxides emissions from utility and industrial boilers. We conclude that EPA did not exceed its discretion under section 111 of the Clean Air Act in promulgating these standards, and therefore deny the petitions.

* * * *

Fossil-fuel fired steam generating units ("boilers") emit nitrogen oxides (NOx), air pollutants that can cause deleterious health effects and contribute to the formation of acid rain. Section 111 of the Clean Air Act requires EPA to establish performance standards for the emission of NOx from newly constructed boilers; these "new source performance standards" are to be set at a level that

reflects the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any non air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.

42 U.S.C. § 7411(a)(1). In its 1990 Clean Air Act Amendments Congress specifically directed EPA to exercise its section 111 authority and establish new NOx standards that incorporate "improvements in methods for the reduction of emissions of oxides of nitrogen." 42 U.S.C. § 7651f(c)(1).

In response to these statutory mandates, EPA promulgated a rule lowering its NOx new source performance standards to .15 lb/MMBtu (pounds of NOx emitted per million BTU burned) for utility boilers1 and .20 lb/MMBtu for industrial boilers. See 63 Fed. Reg. 49,442, 49,443 (1998) (to be codified at 40 C.F.R. pt. 60). These standards reflect the level of NOx emissions achievable by what EPA considers to be the "best demonstrated system" of emissions reduction: the use of selective catalytic reduction (SCR) in combination with combustion control technologies.2 Petitioners' central claim is that EPA selected SCR as the basis for its NOx standards without properly balancing the factors that section 111 requires it to "take into account." Because section 111 does not set forth the weight that be should assigned to each of these factors, we have granted the agency a great degree of discretion in balancing them, see, e.g., New York v. Reilly, 969 F.2d 1147, 1150 (D.C. Cir. 1992); EPA's choice will be sustained unless the environmental or economic costs of using the technology are exorbitant. See National Asphalt Pavement Ass'n v. Train, 539 F.2d 775, 786 (D.C. Cir. 1976).

Petitioners argue that SCR is not the "best demonstrated system" under section 111 because the incremental cost of reducing NOx emissions is considerably higher with SCR than with combustion controls. Recent improvements in combustion controls will enable many boilers to attain emissions levels close to EPA's SCR-based standards; accordingly, petitioners assert that EPA should have based its standards on these less expensive technologies. However, in light of EPA's unchallenged findings showing that the new standards will only modestly increase the cost of producing electricity in newly constructed boilers, see 62 Fed. Reg. 36,948, 36,958 (1997) (proposed NOx revisions), we do not think that EPA exceeded its considerable discretion under section 111.Moreover, petitioners' argument stressing the comparable environmental merits of advanced combustion controls is to a certain extent self-defeating, since the new source performance standards set by EPA are not technology-forcing, and continuing advances in combustion control technologies will reduce the amount of NOx reduction that must be captured by the more expensive SCR technology.

It was also within EPA's discretion to issue uniform standards for all utility boilers, rather than adhering to its past practice of setting a range of standards based on boiler and fuel type. See, e.g., 44 Fed. Reg. 33,580 (1979) (establishing varying NOx emissions standards for utility boilers). Petitioners recognize that EPA is not required by law to subcategorize--section 111 merely states that "the Administrator may distinguish among classes, types, and sizes within categories of new sources," 42 U.S.C. § 7411(b)(2) (emphasis added)--but argue that it was arbitrary and capricious for EPA to decline to do so. EPA explains that its change to uniform standards is justified by SCR's performance characteristics: Unlike the technologies on which past new source performance standards were based, flue gas treatment technologies like SCR limit NOx emissions after combustion, and the effectiveness of SCR is thus far less dependent upon boiler design or fuel type. Petitioners respond that there are reasons to expect SCR to perform less adequately on boilers burning high-sulfur coals, but EPA collected continuous emissions monitoring data on two high-sulfur coal-fired utility boilers that showed that the .15 lb/MMBtu standard was achievable, and supplemented this study with similar evidence from foreign utility boilers. EPA also considered petitioners' concerns about the impact of alkaline metals on the performance of the catalyst used in the SCR process, and concluded that such "catalyst poisoning" is not a significant problem in coal-fired boilers. See 63 Fed. Reg. at 49,445. Mindful of the high degree of deference we must show to EPA's scientific judgment, see, e.g., Appalachian Power Co. v. EPA, 135 F.3d 791, 801-02 (D.C. Cir. 1998), we accept these determinations and sustain EPA's uniform standard for utility boilers.

Petitioners offer a broader challenge to EPA's .20 lb/ MMBtu standard for industrial boilers, claiming that SCR is not "adequately demonstrated" for any coal-fired industrial boilers. EPA was unable to...

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