358 F.3d 174 (2nd Cir. 2004), 02-4005, Riverkeeper, Inc. v. United States E.P.A.

Docket Nº:02-4005, 02-4047, 02-4057, 02-4093, 02-4153, 02-4163, 03-40213.
Citation:358 F.3d 174
Party Name:RIVERKEEPER, INC., Natural Resources Defense Council, Waterkeeper Alliance, Soundkeeper, Inc., Scenic Hudson, Inc., Utility Water Act Group, Save the Bay: People for Narragansett Bay, Friends of Casco Bay, American Littoral Society, Delaware Riverkeeper, Hackensack Riverkeeper, Inc., New York/New Jersey Baykeeper, Exelon Generation Company, LLC, In
Case Date:February 03, 2004
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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358 F.3d 174 (2nd Cir. 2004)

RIVERKEEPER, INC., Natural Resources Defense Council, Waterkeeper Alliance, Soundkeeper, Inc., Scenic Hudson, Inc., Utility Water Act Group, Save the Bay: People for Narragansett Bay, Friends of Casco Bay, American Littoral Society, Delaware Riverkeeper, Hackensack Riverkeeper, Inc., New York/New Jersey Baykeeper, Exelon Generation Company, LLC, Indiana Michigan Power Company, Santa Monica Baykeeper, San Diego Baykeeper, Cook Inlet Keeper, California Coastkeeper, Columbia Riverkeeper, Manufacturers Intake Structure Coalition, Ocean Conservancy, Inc., Petitioners,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

Nos. 02-4005, 02-4047, 02-4057, 02-4093, 02-4153, 02-4163, 03-40213.

United States Court of Appeals, Second Circuit

February 3, 2004

Argued: Dec. 12, 2003.

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Reed W. Super, Riverkeeper, Inc., Garrison, New York (Karl S. Coplan, Pace Environmental Litigation Clinic, Inc., White Plains, New York, of counsel), for Riverkeeper, Inc., Karl S. Coplan, Pace Environmental Litigation Clinic, Inc., White Plains, New York, for Natural Resources Defense Counsel, Waterkeeper Alliance, Soundkeeper, Inc., Scenic Hudson, Inc., Save the Bay: People for Narragansett Bay, Friends of Casco Bay, American Littoral Society, Delaware Riverkeeper, Hackensack Riverkeeper, Inc., New York/New Jersey Baykeeper, Ocean Conservancy, Inc., Michael R. Lozeau & Deborah A. Sivas, Earthjustice Legal Defense Fund, Stanford, California, for Santa Monica Baykeeper, San Diego Baykeeper, Cook Inlet Keeper, California Coastkeeper, Columbia Riverkeeper, Petitioners.

Kristy A.N. Bulleit, Hunton & Williams, Washington, D.C., for Utility Water Act Group, Petitioner.

Russell S. Frye, Collier Shannon Scott, PLLC, Washington, D.C. (Mark L. Austrian, on the brief), for Manufacturers Intake Structure Coalition, Petitioner.

Scott J. Jordan & Cynthia J. Morris, U.S. Department of Justice, Washington, D.C., for Respondent.

David R. Wooley, Clean Air Task Force, Albany, New York (David W. Marshall, Jonathan F. Lewis, on the brief), for Healthlink, Hoosier Environmental Council, Michigan Environmental Council, New England Clean Water Action, Ohio Environmental Council, Southern Alliance for Clean Energy, Sustainable Energy and Economic Development Coalition, and Western Organization of Resource Councils, Amici Curiae.

Before: WALKER, Chief Judge, OAKES and KATZMANN, Circuit Judges.

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KATZMANN, Circuit Judge:

We here review an environmental regulation designed to protect fish and other wildlife from harm by structures that withdraw cooling water from the nation's waterbodies. For the most part, we find that the regulation promulgated by the Environmental Protection Agency (the "EPA" or "Agency") is based on a reasonable interpretation of the applicable statute and sufficiently supported by a factual record, but we must remand one aspect of the regulation that contradicts Congress's clearly expressed intent.

BACKGROUND

Every day, power plants and factories around the nation withdraw more than 279 billion gallons of water to cool their industrial facilities. The pressure from the flow of large volumes of water into these cooling systems traps ("impinges") larger organisms, like fish, against intake points, or draws ("entrains") smaller ones, like plankton, eggs, and larvae, into the cooling mechanism, killing or injuring them. The environmental impact of these systems is staggering: A single power plant might impinge a million adult fish in just a three-week period, or entrain some 3 to 4 billion smaller fish and shellfish in a year, destabilizing wildlife populations in the surrounding ecosystem. Cognizant of this, when Congress amended the Clean Water Act in 1972,1 it directed the EPA to regulate such "cooling water intake structures" so as to "minimiz[e] adverse environmental impact." See Clean Water Act § 316(b), 33 U.S.C. § 1326(b) (2000) [hereinafter "CWA"].2

The Fourth Circuit remanded the EPA's first attempt at a regulation under section 316(b) on procedural grounds. See Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). After years passed and the Agency had not promulgated a new rule, environmental groups sued and won a consent decree, pursuant to which the EPA agreed to promulgate regulations under section 316(b) by specified deadlines. See Cronin v. Browner, 898 F.Supp. 1052, 1064 (S.D.N.Y.1995). On December 18, 2001, the EPA issued the first phase of regulations pursuant to section 316(b).3 See National Pollutant Discharge Elimination System: Regulations Addressing Cooling Water Intake Structures for New Facilities; Final Rule, 66 Fed.Reg. 65,255 (Dec. 18, 2001) (codified at 40 C.F.R. pts. 9, 122-25) [hereinafter the "Rule" or "Final Rule"]. The Rule applies to all new facilities4 (those constructed after promulgation of the Rule) that withdraw more than 2 million gallons of water per day and use at least 25 percent of that water for cooling. 40 C.F.R. § 125.81(a) (2003). Those facilities whose cooling water consumption falls below either of those thresholds will continue to be subject to regulation on the same case-by-case, "best professional judgment" basis that has governed

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in the Rule's absence. 40 C.F.R. § 125.80(c).

A new facility may comply with the Rule in one of two ways. Under "Track I," (1) the intake system must either withdraw fewer than 10 million gallons each day or reduce its intake to a level commensurate with a particular technology known as "closed-cycle" cooling,5 (2) the velocity of water moving through the intake point must be less than or equal to .5 feet per second, (3) the facility cannot withdraw a volume of water that is disproportionate to the size of the waterbody,6 and (4) the facility must "select and implement [additional] design and construction technologies or operational measures" to minimize impingement mortality and entrainment if the capacity, velocity, and proportionality standards are insufficient.7

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Under Track II, a facility is not bound by the capacity, velocity, or "additional" requirements of Track I (although it must comply with identical proportional flow requirements, see 40 C.F.R. § 125.84(d)(2)). Instead, a facility may take any steps provided it can show, in a demonstration study, "that the technologies employed will reduce the level of adverse environmental impact ... to a comparable level to that which" would be achieved applying Track I's capacity and velocity requirements. 40 C.F.R. § 125.84(d)(1). The reduction is "comparable" if the facility can show either that its method will yield at least 90 percent of the reduction in impingement mortality and entrainment that Track I would yield or, when considering environmental impacts other than impingement and entrainment, that its method will maintain a level of fish and shellfish in the waterbody that is "substantially similar" to the level that would be achieved under Track I. 40 C.F.R. § 125.86(c)(2)(i)-(ii). Suggested "restoration measures" available under this second approach include restocking killed fish with those bred at a fish hatchery and creating alternative habitats to compensate for organism losses. See Final Rule, 66 Fed.Reg. at 65,280-81.

In addition to these requirements, a facility "must comply with any more stringent requirements relating to the location, design, construction, and capacity of a cooling water intake structure or monitoring requirements ... that ... are reasonably necessary to comply with any provision of state law ...." 40 C.F.R. § 125.84(e); see also id. § 125.89(b)(1)(i).

The Rule also contains a variance provision. Where "compliance with [a] requirement ... would result in compliance costs wholly out of proportion to the costs the EPA considered in establishing the requirement at issue or would result in significant adverse impacts on" air quality, water resources, or local energy markets, the facility may comply with "less stringent" requirements than either Track I or II's. 40 C.F.R. § 125.85.

DISCUSSION

Three petitions are before us. The first, by the self-named Environmental Petitioners,8 asserts that the Rule conflicts with the Clean Water Act in three ways: (1) Track II sets a lower standard than Track I (and therefore does not reflect the "best technology available") and otherwise conflicts with the Clean Water Act, (2) the variance provision is precluded by statute, and (3) dry cooling is the best technology available. On behalf of industry, the Utility Water Act Group ("UWAG") and the Manufacturers Intake Structure Coalition ("MISC") advance eight challenges that have four themes: the Rule is insufficiently flexible, the Rule is too vague and malleable, the Rule contradicts the statute, and the Rule is unsupported by the record.

The Rule is an "other limitation" that we have jurisdiction to review pursuant to CWA § 509(b)(1), 33 U.S.C. § 1369(b)(1). See Va. Elec. & Power Co. v. Costle,

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566 F.2d 446 (4th Cir. 1977). Our analysis proceeds in two steps. First, we examine the regulation against the statute that contains the EPA's charge. If we conclude, after employing standard tools of statutory interpretation, that Congress has "unambiguously expressed" its meaning, that meaning controls. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). "[I]f," on the other hand, "the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction...

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