499 F.2d 289 (5th Cir. 1974), 73-3540, State of Tex. v. E.P.A.

Docket Nº:73-3540.
Citation:499 F.2d 289
Party Name:STATE OF TEXAS et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
Case Date:August 05, 1974
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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499 F.2d 289 (5th Cir. 1974)

STATE OF TEXAS et al., Petitioners,

v.

ENVIRONMENTAL PROTECTION AGENCY, Respondent.

No. 73-3540.

United States Court of Appeals, Fifth Circuit.

August 5, 1974

Page 290

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John L. Hill, Atty. Gen., Larry F. York, First Asst. Atty. Gen., Mike Willatt, Philip K. Maxwell, Asst. Attys. Gen., Austin, Tex., for State of Tex.

Joe Resweber, County Atty., Charles J. Wilson, Asst. County Atty., Houston, Tex., for County of Harris, Tex.

William E. Schweinle, Jr., Jessie P. Luton, Jr., W. B. Edwards, Houston, Tex., for gulf Oil Corp.

Thomas M. Phillips, Larry B. Feldcamp, James A. Evans, Houston, Tex., for Shell Oil Co.

George W. Rice, Houston, Tex., for Armco Steel Corp.

Melvin A. Dow, Brian C. Rider, Houston, Tex., for International Council of shopping Centers, Texas/Oklahoma Environmental Action Committee; and Southway shopping Center.

Thomas M. Phillips, Larry B. Feldcamp, Dillard W. Baker, Jess W. Van Ert, Exxon Corp., Houston, Tex., for Exxon Corp.

Benjamin H. Powell, Jr., Wayne R. Rodgers, Houston, Tex., for Brown and Root, Inc.

Thomas M. Phillips, Larry B. Feldcamp, Houston, Tex., for Petro-Tex Chemical Corp., Amoco Oil Co., William Marsh Rice University and Champion International Corp.

Edward J. Landry, Senior Asst. County Atty., Oliver J. Guiberteau, Charles J. Wilson, Asst. County Attys., Houston, Tex., for Harris County Hospital Dist.

J. F. Hulse, W. A. Thurmond, El Paso, Tex., for Chevron Oil Co., dba Standard Oil Co. of Texas et al.

Thomas M. Phillips, Larry B. Feldcamp, Houston, Tex., Alan Griswood, George W. Gray, III, Dallas, Tex., for Sears, Roebuck & Co.

Thomas M. Phillips, Larry B. Feldcamp, William G. Christian, Jr., Houston, Tex., for the Prudential Ins. co. of America.

Thomas M. Phillips, Larry B. Feldcamp, Houston, Tex., James R. Coffee, Legal Div., Dallas, Tex., for Atlantic Richfield Co.

William S. Clarke, Houston, Tex., for Texaco, Inc.

Hugh C. Wilfong, II, Norman D. Radford, Jr., Samuel P. Jordan, Houston, Tex., for the Dow Chemical co. James W. McCartney, Norman D. Radford, Houston, Tex., for Houston Center Corp.

Hugh C. Wilfong, II, Norman D. Radford, Jr., Harry M. Reasoner, David R. Knoll, Houston, Tex., for American General Ins. Co.

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Hugh M. Patterson, Thomas M. Phillips, Larry B. Feldcamp, Robert E. Morse, Jr., Hugh C. Wilfong, II, Norman D. Radford, Jr., Houston, Tex., for Texas Chemical Council.

F. William Colburn, Houston, Tex., for Port of Houston Authority of Harris County, Tex.

Edward P. Lobman, Curtis R. Boisfontaine, Owen A. Neff, Burt K. Carnahan, New Orleans, La., Walter A. Bossert, Jr., William J. O'Brien, II, Pennie & Edmonds, New York City, for Associated Dry Goods Corp.

David J. Toomey, John H. Andrew, Allan D. Shafter, Pennie & Edmonds, New York City, for J. C. Penney Co., Inc.

Karl J. Bemesderfer, Chicago, Ill., for Montgomery Ward & Co., Inc.

Russell E. Train, Administrator, E.P.A., Wallace H. Johnson, Asst. Atty. Gen., Edmund B. Clark, George R. Hyde, Attys., Dept. of Justice, Washington, D.C., Arthur W. Busch, Administrator, E.P.A., Region VI, Dallas, Tex., John Bonine, E.P.A., Alan G. Kirk, II, Acting Asst. Adm. for Enforcement and Gen. Counsel, William B. Saxbe, U.S. Atty. Gen., Dept. of Justice, Washington, D.C., Charles R. Barden, Executive Director, Texas Air Control Bd., Austin, Tex., for Environmental Protection Agency.

Before BELL and CLARK, Circuit Judges, and BOYLE, District Judge.

BELL, Circuit Judge:

This case requires that we resolve a major dispute between the Environmental Protection Agency and the State of Texas, several of that state's political subdivisions, and numerous of its corporate citizens. The difficulties arose after the EPA determined that Texas' own air quality implementation plan for control of photochemical oxidant pollution 1 would not assure the attainment of federal ambient air quality standards by May 31, 1975, as required by Section 110 of the Clean Air Act Amendments of 1970, 42 U.S.C.A. 1857c-5 (1974 Supp.). Pursuant to its statutory authority and duty, 2 the EPA disapproved the Texas plan and issued proposed regulations which would, in its opinion, insure attainment of the air quality standard. These regulations adopted the measures contained in Texas' plan, but also imposed additional controls. After holding public hearings, the EPA promulgated final regulations which in some respects reflected concerns and priorities revealed at the hearings, but which nonetheless imposed on five of the six involved air quality control regions (AQCR's) 3 requirements more severe

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than those in the Texas Plan. See 38 Fed.Reg. 30633-51 (Nov. 6, 1973).

Twenty-five separate petitions for review were timely filed, and all have been consolidated into the case before us. On Feb. 28, 1974, a panel of this court granted a stay pending appeal as to those portions of the EPA's regulations which go beyond the state's proposed plan. That panel also ordered that this appeal be heard on an expedited basis. Since the measures in the state's own plan are not in dispute and have not been stayed, this litigation has not delayed their effectiveness. As we will discuss specifically at several points in this opinion, these state controls account for the bulk of the emissions reductions needed to meet the oxidant standard.

The principal questions presented are whether it was proper for the EPA first to determine that the state's plan was inadequate, and then to promulgate its own plan incorporating more onerous regulations. While a negative answer to the first question would settle the second question, an affirmative answer to the first issue is not similarly dispositive. It is possible that the EPA could properly determine that Texas' plan would not insure attainment of quality standards, but would be arbitrary, capricious, or beyond its authority, in its determination of the nature and quantity of additional control measures. We hold that the EPA determined in a legal and enforceable manner that the state's plan was inadequate. However, we also hold that certain of the EPA's additional regulations are either invalid or must be deferred for further agency consideration. The specific effects of our various holdings, on a region-by-region and regulation-by-regulation basis, are summarized at the close of the opinion.

The factual issues are numerous and complex. We will therefore first outline the elements of the dispute. We will then address ourselves to the standard of review applicable in this case, and will then proceed to a seriatim discussion of the several contentions raised by petitioners.

THE DISPUTE IN OUTLINE

Determining the measures required to meet air quality standards for photochemical oxidants involves a multistep analytical process. Initially, of course, it is necessary to set the standards. These however may not be challenged in this proceeding, 4 and petitioners do not openly do so. The second step, since the control strategy for oxidant pollution relies on control of hydrocarbon emissions, see note 1 supra, is to determine the relationship between the quantity of those emissions and the resultant maximum level of oxidants. 5 This relationship can be expressed as a 'reduction model' which shows, for each current maximum level of oxidant pollution, the percentage reduction in hydrocarbon

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emissions that is necessary to achieve the oxidant air quality standard. These models are normally displayed in graphical form, as illustrated in Figure 1. Petitioners raise as an important issue the EPA's choice of reduction model.

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The next step is determination of where on the reduction model curve a given AQCR is located. That is, in order to derive from the model the required reduction in hydrocarbon emissions, the existing level of oxidant pollution must be determined. We note, with some relief, that the parties appear to agree on this point, so that the reduction model issue is the only source of dispute as to how great are the necessary reductions.

Finally, there must be a prediction of the effect, in terms of reducing hydrocarbon emissions, of each control measure. As will be discussed below, there is considerable controversy on this point, especially as to the state's proposed requirements.

To summarize, petitioners and the EPA differ as to the model which determines how great a reduction in hydrocarbon emissions is necessary, and also as to how effective in achieving the required reductions particular measures will be. In general, the state's calculations indicate that the ambient air quality standards can be attained in each AQCR through its Regulation V, imposing extensive controls on stationary sources, such as factories and refineries. 6 The EPA's position is that

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the state not only underestimates the reductions required to meet air quality standards, but also overestimates the reductions to be obtained by its plan. Thus the EPA found it necessary in five of the six regions to impose varying degrees of control on transportation-related emissions, and in one of those regions also to prohibit the construction of additional stationary pollution sources.

Finally, petitioners attack various of the EPA's required control measures on grounds more specific than their general claim that the state's calculations are correct and its plan adequate. Part IV of this opinion will deal with these more particularized issues, as well as with the related issue whether the EPA erred in its failure to grant Texas a blanket two-year extension of the target date for...

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