Utility Air Regulatory Group v. E.P.A., 05-1353.

• Decision Date: 12 December 2006
• Docket Number: No. 05-1357.,No. 05-1353.,No. 05-1354.,05-1353.,05-1354.,05-1357.
• Citation: 471 F.3d 1333
• Parties: UTILITY AIR REGULATORY GROUP, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

471 F.3d 1333

UTILITY AIR REGULATORY GROUP, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.

No. 05-1353.

No. 05-1354.

No. 05-1357.

United States Court of Appeals, District of Columbia Circuit.

Argued November 7, 2006.

Decided December 12, 2006.

On Petitions for Review of a Final Action of the United States Environmental Protection Agency.

Peter S. Glaser argued the cause for industry petitioners Utility Air Regulatory Group in Case No. 05-1353 and Center for Energy and Economic Development in Case No. 05-1357. With him on the briefs were Paul M. Seby, Norman W. Fichthorn, Allison D. Wood, and Mel S. Schulze.

Ann Brewster Weeks argued the cause for environmental petitioner National Parks Conservation Association in Case No. 05-1354. With her on the briefs were Jonathan F. Lewis and David W. Marshall.

Pamela S. Tonglao and Ammie Roseman-Orr, Attorneys, U.S. Department of Justice, argued the cause for respondent. With them on the brief were John C. Cruden, Deputy Assistant Attorney General, and M. Lea Anderson, Attorney, U.S. Environmental Protection Agency.

Peter S. Glaser, Paul M. Seby, Norman W. Fichthorn, Allison D. Wood, and Mel S. Schulze were on the brief for industry intervenors Utility Air Regulatory Group and Center for Energy and Economic Development in support of respondent in Case No. 05-1354.

Before: GARLAND and BROWN, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge WILLIAMS.

WILLIAMS, Senior Circuit Judge.

In the eastern United States, the average visual range in most national parks and wilderness areas designated as Class I Federal areas, see 42 U.S.C. § 7472(a), is less than 30 kilometers, about 20 percent of what it would be under natural conditions. See National Research Council, Protecting Visibility in National Parks and Wilderness Areas 1 (1993). In order to address this problem, the Environmental Protection Agency promulgated a Regional Haze Rule, 40 C.F.R. § 51.308, pursuant to Section 169A of the Clean Air Act ("CAA"), 42 U.S.C. § 7491. See Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations, 70 Fed.Reg. 39,104 (July 6, 2005) (the "Haze Rule"). The Haze Rule requires that under specified circumstances states impose best available retrofit technology ("BART") on any BART-eligible sources. The latter are a specific class of large stationary pollution sources that "were put in place between August 7, 1962 and August 7, 1977, and whose operations fall within one or more of 26 specifically listed source categories." 70 Fed. Reg. at 39,105/1; see also 40 C.F.R. § 51.301. The regulation calls for imposition of BART if the source "may reasonably be anticipated to cause or contribute to any impairment of visibility in any mandatory Class I Federal area." 40 C.F.R. § 51.308(e)(1)(ii). The Haze Rule also permits states to reduce haze by alternate means, including a regional approach, so long as the alternative would be "better-than-BART"—i.e., would improve visibility more rapidly than under BART. 40 C.F.R. § 51.308(e)(2). Aspects of the Haze Rule have been before this court twice before, Center for Energy and Economic Development v. E.P.A., 398 F.3d 653 (D.C.Cir. 2005) ("CEED"); American Corn Growers Ass'n v. E.P.A., 291 F.3d 1 (D.C.Cir.2002) ("Corn Growers"), and those opinions contain extensive discussions of the rule's statutory framework and regulatory history.

This case involves challenges from multiple groups, including the Center for Energy and Economic Development and the Utility Air Regulatory Group ("industry petitioners"), and the National Parks Conservation Association ("environmental petitioner"). In its brief, EPA succinctly summarizes the challenges: "Industry Petitioners generally challenge the rule as inappropriately requiring States to apply BART to too many sources, while the Environmental Petitioner argues that the rule improperly allows States to exempt too many sources from BART." Because we believe the Haze Rule is a reasonable interpretation of CAA § 169A, we affirm the rule against both sets of challenges.

As we explained in Corn Growers, § 169A(a)(1) of the Clean Air Act established a national goal of preventing and remedying existing visibility impairment at Class I areas, and CAA § 169A(b)(2) directs EPA to issue regulations requiring that states adopt measures—including BART—to make "reasonable progress" towards meeting this national goal. See Corn Growers, 291 F.3d at 5-6.

As outlined in § 169A(b)(2)(A) and implemented by the Haze Rule, the BART process consists of two steps. First, in the "Attribution Step" ("Step I"), states must review each "BART-eligible source" within the state to determine whether any such source emits "any air pollutant which may reasonably be anticipated to cause or contribute to any impairment of visibility in any mandatory Class I Federal area;" sources that do so are "subject to BART." See 40 C.F.R. § 51.308(e)(1)(ii). An earlier preamble to the Haze Rule required states to "find that a BART-eligible source is `reasonably anticipated to cause or contribute' to regional haze if it can be shown that the source emits pollutants within a geographic area from which pollutants can be emitted and transported downwind to a Class I area," an approach known as "collective contribution." Regional Haze Regulations, 64 Fed.Reg. 35,714, 35,740/1 (July 1, 1999). In Corn Growers we struck down such guidance as "inconsistent with the Act's provisions giving the states broad authority over BART determinations." 291 F.3d at 8 (emphasis added). In doing so, however, we did not foreclose the states themselves from deciding to take a collective approach in the Attribution Step, see id. at 18 (Garland, J., dissenting on other grounds), and the current rule identifies "collective contribution" as only one of at least three different approaches that a state may take in meeting its obligations under CAA § 169A(b)(2)(A). See 70 Fed. Reg. at 39,117/2. Under the current Haze Rule, a state can complete the Attribution Step by using collective attribution, by demonstrating that, cumulatively, none of its BART-eligible sources contributes to visibility impairment, or by analyzing each source's individual contribution. Id. States "may also use other reasonable approaches for analyzing the visibility impacts of an individual source or group of sources." 70 Fed.Reg. at 39,162/1.

The second step outlined in § 169A(b)(2)(A), the "Determination Step" ("Step II"), requires states to determine the particular technology that an individual source "subject to BART" must install. That determination requires consideration of five factors: "the cost of compliance, the energy and nonair quality environmental impacts of compliance, any existing pollution control technology in use at the source, the remaining useful life of the source, and 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); see also 40 C.F.R. § 51.308(e)(1)(ii); 70 Fed.Reg. at 39,163/3. In Corn Growers, we held that these five factors "were meant to be considered together by the states," 291 F.3d at 6, but that EPA could not require the states to evaluate the improvement factor collectively while mandating that the other four factors be evaluated separately for each individual source. Compare id. at 8 with id. at 8-9.

BART is not, however, the sole means by which states can meet their obligations under the Clean Air Act. The Haze Rule also permits states

to implement or require participation in an emissions trading program or other alternative measure rather than to require sources subject to BART to install, operate, and maintain BART. Such an emissions trading program or other alternative measure must achieve greater reasonable progress than would be achieved through the installation and operation of BART.

40 C.F.R. § 51.308(e)(2). We affirmed the use of such "better than BART" approaches in CEED, though we objected to the particular program under review there. See CEED, 398 F.3d at 660. We said nothing about how better-than-BART might be measured.

After our CEED decision, EPA introduced the following test to evaluate whether a BART-alternative achieves "greater reasonable progress" than BART:

If the distribution of emissions is not substantially different than under BART, and the alternative measure results in greater emission reductions, then the alternative measure may be deemed to achieve greater reasonable progress. If the distribution of emissions is significantly different, the State must conduct dispersion modeling. . . . The modeling would demonstrate "greater reasonable progress" if both of the following two criteria are met:

(i) Visibility does not decline in any Class I area, and

(ii) There is an overall improvement in visibility, determined by comparing the average differences between BART and the alternative over all affected Class I areas.

40 C.F.R. § 51.308(e)(3).

On March 10, 2005, EPA issued the Clean Air Interstate Rule ("CAIR"), requiring reductions in emissions of sulfur dioxide and nitrogen oxides in 28 eastern states and the District of Columbia. 70 Fed.Reg. 25,162 (May 12, 2005); see also 70 Fed.Reg. at 39,106/3. CAIR imposes specified emissions reduction requirements on each affected state, and enables states to meet the requirements by means of cap-and-trade programs. 70 Fed.Reg. at 39,106/3. In conjunction with the introduction of CAIR, EPA amended the Haze Rule to add a new regulation—contested here—providing that "[a] State that opts to participate in the Clean Air Interstate Rule cap-and trade . . . program . . . need not require affected BART-eligible EGUs [electric generating units] to install, operate, and maintain BART." 40 C.F.R. § 51.308(e)(4); [70 Fed.Reg. 39,156/3]; see also 70 Fed.Reg. 39,138-39 (noting that the CAIR-for-BART comparison is to be...