Am Petroleum Institute v. US. Envt'l Protection Agency

• Citation: 216 F.3d 50
• Decision Date: 27 June 2000
• Docket Number: 98-1507,94-1684,98-1506,Nos. 94-1683,94-1686,98-1514,98-1494,s. 94-1683
• Parties: (D.C. Cir. 2000) American Petroleum Institute, et al.,Petitioners v. United States Environmental Protection Agency, Respondent Chemical Manufacturers Association, Intervenor
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

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216 F.3d 50 (D.C. Cir. 2000) American Petroleum Institute, et al.,Petitioners
v.
United States Environmental Protection Agency, Respondent Chemical Manufacturers Association, Intervenor Nos. 94-1683, 94-1684, 94-1686, 98-1494, 98-1506, 98-1507, 98-1514 United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT Argued March 30, 2000
Decided June 27, 2000

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On Petitions for Review of Orders of the Environmental Protection Agency

Michael W. Steinberg and Thomas Sayre Llewellyn argued the causes for petitioners American Petroleum Institute, et al.

With them on the briefs were G. William Frick, Ralph J. Colleli, Jr., Joshua D. Sarnoff, David F. Zoll, Ronald A. Shipley, Christopher H. Marraro and John W. Kampman. Hunter L. Prillaman, David B. Graham and Judith A. Wenker entered appearances.

David Frederick and David R. Case argued the causes and filed the briefs for petitioners Louisiana Environmental Action Network, et al. Richard W. Lowerre entered an appearance.

Steven E. Silverman, Attorney, Environmental Protection Agency, Patricia R. McCubbin, Attorney, and Martin F. McDermott, Attorneys, U.S. Department of Justice, argued the causes for respondent. With them on the brief were Lois J. Schiffer, Assistant Attorney General, David J. Kaplan and Alan Birnbaum, Attorneys, and Alan H. Carpien, Attorney, Environmental Protection Agency. Christopher S. Vaden, Attorney, U.S. Department of Justice, entered an appearance.

Ralph J. Colleli, Jr. argued the cause for Intervenor American Petroleum Institute. With him on the brief were G. William Frick and Thomas S. Llewellyn. David F. Zoll and Ronald A. Shipley entered appearances.

Before: Williams, Sentelle and Rogers, Circuit Judges.

Opinion for the Court filed PER CURIAM.^*

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PER CURIAM:

Two sets of petitioners challenge regulations of the United States Environmental Protection Agency ("EPA") promulgated under the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq. (1994). The EPA rulemaking at issue concerned regulating several secondary materials generated by the petroleum refining and petrochemical industries as "solid waste" and "hazardous waste."

Industry petitioners, American Petroleum Institute ("API"), the Chemical Manufacturers Association ("CMA"), and Texaco, Inc. (collectively, "industry petitioners"), assert two main categories of challenges. The first category challenges EPA's regulation under RCRA of two materials as solid waste. The second challenges EPA's listing of certain refinery wastes as hazardous waste. Environmental petitioners, Louisiana Environmental Action Network ("LEAN"), Communities for a Better Environment of California ("CBE"), the Sierra Club, and the Environmental Technology Council ("ETC") (collectively, "environmental petitioners"), challenge EPA's failure to list certain items and further allege an Administrative Procedure Act ("APA"), 5 U.S.C. 551 et seq. (1994), notice and comment claim.

We deny the petition of the industry petitioners on all counts but one, on which we vacate and remand to EPA for further proceedings. Finding that we lack jurisdiction to consider the claims of environmental petitioners, we dismiss their petition.

I. Industry Petitioners' Challenges to EPA's Regulation of Recovered Oil and Wastewaters as Solid Waste

A. Statutory Framework

RCRA is a comprehensive environmental statute granting EPA authority to regulate solid and hazardous wastes. "Solid wastes" are governed by Subtitle D of RCRA, and are generally subject to less stringent management standards than "hazardous wastes" which are regulated under Subtitle C. For purposes of RCRA, Congress defined solid waste as follows:

The term "solid waste" means any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, orcontained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities....

42 U.S.C. 6903(27).

In pursuit of its congressionally conferred duty and authority to regulate solid waste under RCRA, the EPA has adopted regulations defining solid waste for purposes of its hazardous waste regulations: "A solid waste is any discarded material," 40 C.F.R. 261.2(a)(1) (1999), subject to a number of exclusions enumerated in 261.4(a) and case-by-case variances under §§ 260.30 and 260.31. The term "discarded material" for purposes of the regulation means any material which is abandoned, recycled, or considered inherently wastelike. 40 C.F.R. 261.2(a)(2).

In 1994 and 1998 rulemakings in pursuit of its RCRA obligations, the EPA examined the production processes of the petroleum refining industry. As pertinent to the issue before us, EPA considered whether to exclude from the definition of solid waste two secondary materials: oil-bearing wastewaters generated by the petroleum refining industry and recovered oil produced by the petrochemical manufacturing industry. See Hazardous Waste Management System, Identification and Listing of Hazardous Waste; Petroleum Refining Process Wastes; Land Disposal Restrictions for Newly Identified Wastes; and CERCLA Hazardous Substance Designation and Reportable Quantities, 63

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Fed. Reg. 42,110 (1998) ("Final Rule"); Hazardous Waste Management System, Identification and Listing of Hazardous Waste; Petroleum Refining Process Wastes; Land Disposal Restrictions for Newly Identified Wastes; and CERCLA Hazardous Substance Designation and Reportable Quantities, 60 Fed. Reg. 57,747 (1995) ("Proposed Rule"); Identification and Listing of Hazardous Waste; Amendments to Definition of Solid Waste, 59 Fed. Reg. 38,536 (1994) ("1994 Rule"). EPA determined that oil-bearing wastewaters are solid waste for purposes of RCRA regulation, and that recovered oil from petrochemical facilities is excluded from the definition of solid waste only when specified conditions are met. See Proposed Rule, 60 Fed. Reg. at 57,755/3-57,756/1; Final Rule, 63 Fed. Reg. at 42,128-30; 40 C.F.R. 261.4(a)(12), (18). Industry petitioners challenge these conclusions.

B. Oil-Bearing Wastewaters

In petroleum refining, impurities are removed and usable hydrocarbon fractions are isolated from crude oil feed stock. See Final Rule, 63 Fed. Reg. at 42,113/3-42,115/1, 42,121/2.Large quantities of water are used, and the resulting wastewaters contain a small percentage of residual oil. These "oil bearing wastewaters" are destined for ultimate discharge, but only after a three-step treatment process is first applied. The first phase of treatment, known as "primary treatment," removes certain materials including the oil. This phase has at least two beneficial consequences: (1) it meets a Clean Water Act requirement that refineries remove oil from their wastewater, and (2) it allows refineries to recover a not insignificant quantity of oil (up to 1,000 barrels a day across the industry) which is cycled back into the refinery production process.

Industry petitioners and EPA disagree over when these wastewaters become discarded for purposes of the solid waste definition. While no one disputes that discard has certainly occurred by the time the wastewaters move into the later phases of treatment, the question is whether discard happens before primary treatment, allowing regulation of wastewater as solid waste at that point, or not until primary treatment is complete and oil has been recovered for further processing.

EPA's initial proposal excluded oil-bearing wastewaters. See 1994 Rule, 59 Fed. Reg. at 38,540/3 (citing Identification and Listing of Hazardous Waste; Amendments to Definition of Solid Waste, 53 Fed. Reg. 519, 525-26 (1988)). However, it changed its mind in 1994 and concluded that even before the oil is recovered in primary treatment, "the wastewaters are discarded materials and hence solid wastes subject to regulation under RCRA." 59 Fed. Reg. 38,540/1. EPA stated:"Primary wastewater treatment operations exist to treat plant wastewaters." Id. at 38,539/3. It noted that the percentage of oil in the wastewater is very small and "not significant in the context of a refinery's overall production activities," and that the Clean Water Act mandates such treatment. Id.; see also 40 C.F.R. Part 419; API v. EPA, 540 F.2d 1023 (10th Cir. 1976) (discussing water discharge regulations). For these stated reasons, EPA concluded that "[c]learly, wastewater treatment is the main purpose of the systems in question, and any oil recovery is of secondary import." 59 Fed Reg. at 38,539/3.

EPA restated its conclusion in its subsequent 1995 Proposed Rule, 60 Fed. Reg. at 57,755/3, and retained it in the Final Rule. See 63 Fed. Reg. at 42,184 (codified at 40 C.F.R. 261.4(a)(12)(ii)). The actual regulation does not mention wastewaters. But by not being excluded, all wastewaters including oil-bearing wastewaters are considered to fall under EPA's general regulatory definition of solid waste.

Whether a material has been "discarded," subjecting it to RCRA regulation, is a question we have considered in four prior cases. First, in American Mining Congress v. EPA, 824 F.2d 1177 (D.C. Cir. 1987) ("AMC I"), we held that the term "discarded"

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conforms to its plain meaning. Id. at 1193.Thus, items that are "disposed of, abandoned, or thrown away" are discarded. Id. AMC I concluded that "in-process secondary materials," that is, materials "destined for immediate reuse in another phase of [an] industry's ongoing production process," are not discarded under RCRA. Id. at 1185, 1193. We recently reaffirmed that holding in Association of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047 (D.C. Cir. 2000), where we reiterated that EPA cannot regulate as solid waste secondary materials "destined for reuse as part of a continuous industrial process" that is...