Center for Energy and Economic Dev. V. E.P.A.

• Citation: 398 F.3d 653
• Decision Date: 18 February 2005
• Docket Number: No. 03-1222.,03-1222.
• Parties: CENTER FOR ENERGY AND ECONOMIC DEVELOPMENT, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent Phelps Dodge Corporation, et al., Intervenors
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

Page 653

398 F.3d 653

CENTER FOR ENERGY AND ECONOMIC DEVELOPMENT, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent

Phelps Dodge Corporation, et al., Intervenors

No. 03-1222.

United States Court of Appeals, District of Columbia Circuit.

Argued November 8, 2004.

Decided February 18, 2005.

On Petition for Review of an Order of the Environmental Protection Agency.

Paul M. Seby argued the cause for petitioner. With him on the briefs was Peter S. Glaser. Adam T. DeVoe and Sean M. Sullivan entered appearances.

Kenneth C. Amaditz, Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were John C. Cruden, Deputy Assistant Attorney General, and Jan M. Tierney, Attorney, U.S. Environmental Protection Agency.

Joseph P. Mikitish, Assistant Attorney General, Attorney General's Office of State of Arizona, argued the cause for amici curiae State of Arizona, et al. in support of respondent. With him on the brief were Terry Goddard, Attorney General, Bill Lockyer, Attorney General, Attorney General's Office of State of California, Manel M. Medeiros, Solicitor General, Lisa Madigan, Attorney General, Attorney General's Office of State of Illinois, Gary Feinerman, Solicitor General, Patricia Madrid, Attorney General, Attorney General, Attorney General's Office of State of New Mexico, Tracy M. Hughes, Special Assistant Attorney General, Mark Shurtleff, Attorney General, Attorney General's Office of State of Utah, Fred Nelson, Assistant Attorney General, Patrick J. Crank, Attorney General, Attorney General's Office of State of Wyoming, and Jay Jerde, Senior Assistant Attorney General. Charles F. Noble, Attorney, New Mexico Environment Department, entered an appearance.

Chris S. Leason, Vickie L. Patton, and Thomas A. Bloomfield were on the brief for intervenors Phelps Dodge Corporation, et al.

Before: EDWARDS and HENDERSON, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

STEPHEN F. WILLIAMS, Senior Circuit Judge.

Haze obscuring the Grand Canyon and various other national parks and wilderness areas in the west is a multi-state problem. In the interests of developing a solution, the Environmental Protection Agency in 1999 adopted a Regional Haze Rule ("Haze Rule"), 40 C.F.R. §§ 51.308-309. Section 308 required states to impose best available retrofit technology ("BART") on so-called "BART-eligible sources," a specified class of large stationary pollution sources that had been in operation since August 7, 1977. In American Corn Growers Ass'n v. EPA, 291 F.3d 1 (D.C.Cir.2002), we vacated parts of § 308 because we found EPA's methods for determining BART inconsistent with the Clean Air Act. Those aspects of the Haze Rule remain pending before EPA on remand.

Section 309 of the Haze Rule, however, permitted states to reduce haze by alternative means, including a regional approach, so long as the alternative would be "better than BART" — i.e., improve visibility more rapidly than under BART. In the rule before us, which implements the Haze Rule, EPA approved a regional alternative. To determine whether the rule was better than BART, EPA used a BART methodology quite similar to the one American Corn Growers condemned. On a challenge by the Center for Energy and Economic Development, representing a group of pollution sources in the region, we find that the similarity fatally taints EPA's rule.

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The disputed regulations in this case arise from two amendments to the Clean Air Act. Section 169A, adopted in 1977, "declare[d] as a national goal the prevention of any future, and the remedying of any existing, impairment of visibility in mandatory class I Federal areas which impairment results from manmade air pollution." 42 U.S.C. § 7491(a)(1). It instructed EPA to require covered states to submit state implementation plans ("SIPs") that "contain such ... measures as may be necessary to make reasonable progress toward meeting the national goal." 42 U.S.C. § 7491(b)(2). In determining reasonable progress, EPA was to consider four factors — "the costs of compliance, the time necessary for compliance, ... the energy and nonair quality environmental impacts of compliance, and the remaining useful life of any existing [regulated] source." 42 U.S.C. § 7491(g)(1). In imposing BART requirements on the states, EPA was to consider those four factors, plus "the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology." 42 U.S.C. § 7491(g)(2).

On July 1, 1999 EPA promulgated the Haze Rule — essentially 40 C.F.R §§ 51.308-309. Section 308 sets out requirements for SIPs to achieve natural visibility conditions by 2064. 40 C.F.R. § 51.308(d). In American Corn Growers we addressed § 308(e)(1), which had instructed states to measure the first four BART factors by source, but to measure the degree of anticipated visibility improvement by area affected — in effect, by groups of sources defined by area of impact. 40 C.F.R. §§ 51.308(e)(1)(ii)(A)-(B). "To treat one of the five statutory factors in such a dramatically different fashion distorts the judgment Congress directed the states to make for each BART-eligible source." American Corn Growers, 291 F.3d at 6. As a result, we found, a state could be compelled to impose BART on a source even if the imposition would have "no appreciable effect on the haze in any class I area." Id. at 7. We reversed and remanded, and the remand is now pending before EPA.

Section 169B, adopted in 1990, expressed a broadened congressional concern, instructing EPA to research visibility impairment in national parks and wilderness ("Class I") areas. 42 U.S.C. § 7492(a)(1). It also directed EPA to "establish a visibility transport commission for the region affecting the visibility of the Grand Canyon National Park." 42 U.S.C. § 7492(f). One year later, EPA created the Grand Canyon Visibility Transport Commission (the "Commission") to conduct research and recommend remedial measures. The Commission submitted recommendations to EPA in a 1996 report, covering the Grand Canyon and fifteen other Class I areas on the Colorado Plateau.

EPA pursued the implications of § 169B by incorporating in the Haze Rule not only a BART mandate but a regional alternative. It allowed states "to implement an emissions trading program or other alternative measure" so long as the alternative would achieve "better than BART" results. 40 C.F.R. §§ 51.308(e)(2), 51.309(a). Under § 309, the Commission, or a regional body formed to implement a prior Commission report, may opt for a regional alternative by submitting an "annex" to that report. If EPA approved the program described in the annex, then any state among the nine covered by the Commission could adopt the program in lieu of the state-by-state requirements. See 40 C.F.R. § 51.309(f). EPA approval would turn largely on whether the regional alternative provides "greater reasonable progress [toward natural visibility levels] than would be achieved by [BART]." 40 C.F.R. § 51.309(f)(1)(i).

The Western Regional Air Partnership ("WRAP"), a regional body formed to implement the 1996 Commission report, submitted an annex in September 2000. The resulting plan has a number of important similarities to and differences from the program before us in American Corn Growers. First, to develop "milestones" that would meet the Haze Rule's better-than-BART standard, WRAP estimated BART's likely achievements with a methodology similar to what we rejected in American Corn Growers. It applied the four factors other than visibility improvement by source category rather than individually, but, just as had the approach rejected in American Corn Growers, it measured visibility improvement in terms of the cumulative effect on particular Class I areas of changes in emissions from all covered sources in the "transport region." See Annex, Attachment C at C-4, C-11-12. Ultimately, "the milestones were negotiated numbers," see Annex Rule, 68 Fed.Reg. 33,764, 33,769/1 (June 5, 2003), but these estimations were evidently a core basis for the negotiations.

Second, the Annex doesn't directly impose restrictions on any sources. Rather, it sets various emission limitation "milestones" that steadily decline over time. If sources in the aggregate fail to meet these milestones "voluntarily," a backstop emissions trading program will come into force. Under it, sources may not emit the relevant pollutants in amounts exceeding their entitlements — which they will have received either via allotment from the state or via trading. It was plausible that the trading program would meet the better-than-BART benchmark because it covers many sources besides ones that are BART-eligible under the statutes and § 308. And the provision for trading presumably would reduce the cost for any given level of emissions reduction. See generally Acid Rain Program: General Provisions and Permits, Allowance System, Continuous Emissions Monitoring, Excess Emissions and Administrative Appeals, 58 Fed.Reg. 3590 (Jan. 11, 1993).

EPA approved and promulgated the substantially similar Annex Rule. 68 Fed.Reg. 33,764 (June 5, 2003).

The Center for Energy and Economic Development, representing a group of pollution sources in the region, petitions for review. It argues that the EPA's BART benchmark is unlawful under our analysis in American Corn Growers. After addressing various preliminary issues, we grant the petition.

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EPA raises two jurisdictional objections to the petition — that the petitioner lacks standing and that our judgment in American Corn Growers precludes review. We reject both.

Standing of course comprises the familiar elements of injury in fact, causation, and redressability, Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). EPA has posed several objections to standing, some in its original brief and another in a round of briefing that we requested after oral argument....