541 F.2d 1281 (8th Cir. 1976), 75-1182, National Renderers Ass'n v. E.P.A.

Docket Nº:75-1182.
Citation:541 F.2d 1281
Party Name:NATIONAL RENDERERS ASSOCIATION et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY and Russell E. Train, as Administrator, Respondents.
Case Date:August 30, 1976
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1281

541 F.2d 1281 (8th Cir. 1976)

NATIONAL RENDERERS ASSOCIATION et al., Petitioners,

v.

ENVIRONMENTAL PROTECTION AGENCY and Russell E. Train, as

Administrator, Respondents.

No. 75-1182.

United States Court of Appeals, Eighth Circuit

August 30, 1976

Submitted March 8, 1976.

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Edward W. Warren, Kirkland, Ellis & Rowe, Frederick M. Rowe, Washington, D. C., G. Lane Roberts, Jr., St. Louis, Mo., for petitioners; Philip J. Davis, Kirkland, Ellis & Rowe, Washington, D. C., on brief.

Lloyd S. Guerci, Atty., Dept. of Justice, Land & Natl. Resources Div., Edmund B. Clark, Atty., Dept. of Justice, Land & Natl. Resources Div., Washington, D. C., for respondents; Peter R. Taft, Asst. Atty. Gen., and Alfred T. Ghiorzi, Atty., Dept. of Justice, and Lee E. Caplin, Atty., EPA, Washington, D. C., on brief.

Before GIBSON, Chief Judge, and HEANEY and WEBSTER, Circuit Judges.

HEANEY, Circuit Judge.

The National Renderers Association, Inc., and its member companies, seek direct review of regulations promulgated by the Environmental Protection Agency setting forth standards of effluent discharges from new plants in this industry under § 306 of the Federal Water Pollution Control Act Amendments of 1972. 33 U.S.C. § 1316.

The rendering industry converts inedible animal raw materials into salable by-products for commercial use. The challenged regulations apply only to rendering operations conducted separate from slaughter or packing houses. These "independent" renderers pick up the animal waste left over at various meat and poultry processing sites, as well as dead animal stock from farms, and convert it into high protein meat-meal, tankage and inedible grease for animal and poultry feed, and tallow for soap and derivatives in the chemical industry. The raw materials, which are perishable, must be processed without delay. The renderers' collection area is generally restricted to a 150-mile radius.

On January 3, 1975, the EPA promulgated final regulations for the independent rendering industry. These regulations include "guidelines" for existing plants in the industry to be met by 1977 and 1983, and

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"standards" to be met by any new plants constructed after the effective date of these regulations. See 33 U.S.C. §§ 1311(b), 1314(b) and 1316(b). 1 Under these regulations, the average of the daily value for thirty consecutive days may not exceed:

40 C.F.R. §§ 432.100-432.106. 2

Small independent rendering plants that process less than 75,000 pounds of raw material per day are exempt from these regulations. 40 C.F.R. § 432.101(b).

We are concerned here only with the new source standards. These standards should reflect "the greatest degree of effluent reduction which the Administrator determines to be achievable through application of the best available demonstrated control technology." 33 U.S.C. § 1316(a)(1). In making this determination, the Administrator is required to consider the cost of achieving the necessary effluent reduction, 33 U.S.C. § 1316(b)(1)(B), and whether the cost is reasonable. CPC International, Inc., et al. v. Russell E. Train, et al., 540 F.2d 1329, at 1340-1342 (8th Cir. 1976) (CPC II ).

Our task is to determine whether the EPA's decision is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); CPC International Inc. v. Train, 515 F.2d 1032, 1044 (8th Cir. 1975) (CPC I ). To enable us to perform that task, the EPA must explicate fully its course of inquiry, its analysis and its reasoning. Appalachian Power v. EPA, 477 F.2d 495, 507 (4th Cir. 1973); Kennecott Copper Corp. v. Environmental Protection Agcy.,149 U.S.App.D.C. 231, 462 F.2d 846, 848-849 (1972).

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No serious challenge can be made to EPA's determination that there is presently available demonstrated control technology that will enable new rendering plants to meet the proposed new source standards. 3 Such is not the case, however, with respect to its determination of the technology required to meet the standards, the cost of that technology and the reasonableness of that cost. See CPC International Inc. v. Train, supra at 1044-1051 (CPC I ).

The petitioners argue that technology other than that specified by the EPA will be needed. They also argue that the initial cost of the technology will be higher than estimated and that annual costs 4 will be so high that new plants will not be built. We turn to a detailed consideration of these issues.

THE REQUIRED TECHNOLOGY

The petitioners assert that new plants must include the following in-plant equipment in addition to that specified by the EPA if new source standards are to be met: an equalization tank with agitator and pump (for medium-size plants), an air flotation system, a pump and piping to recirculate condenser water, a recycling system for air scrubber water and equipment for the segregation of drainage.

The EPA's decision that a recycling system for air scrubber water and equipment for the segregation of drainage need not be included in the cost of technology required to meet new source standards is not arbitrary and capricious. This record gives support to the EPA's finding that this equipment would be installed in any well-designed new plant whether or not the new source standards were in effect. It also supports the EPA's finding that including this equipment in the new plant would have a de minimus effect on the total cost of the new plant.

The EPA's decision that an equalization tank and an air flotation system can be excluded is, on the basis of this record, arbitrary and capricious.

The equalization tank, with agitator and pump, will cost approximately $7,000. This equipment will reduce shockloads, equalize flow and minimize the need for larger and more sophisticated lagoons or other "end of pipe" treatment. The equipment can be installed most efficiently and economically at the time the plant is built. Delay in installation will mean added expense and inconvenience at a later day. See pp. 1289-1290, infra.

Air flotation systems, costing approximately $45,000 are admittedly more effective in removing grease and solids than the alternate system suggested by the EPA, catch basins and mechanical skimmers, costing $15,000. The more sophisticated flotation systems will enable the industry to meet the new source standards in the most

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cost-effective way. The equipment will be necessary to meet the 1983 standards. If the equipment is not installed during initial construction, it will have to be installed after ten years with added installation and operational expense and inconvenience. See pp. 1289-1290, infra. 5

The EPA concedes that a pump and piping to recirculate condenser water will be necessary if new source standards are to be met. It argues, however, that the cost of this equipment should not be included as a cost of meeting water pollution control standards, but should be charged instead to the cost of meeting air pollution control standards. This is bureaucratic nonsense. The cost is reasonably related to water pollution and should be so considered. Moreover, § 306(b)(1)(B), 33 U.S.C. § 1316(b)(1)(B), requires that the non-water quality environmental impact be considered in establishing new source standards. Appalachian Power Company, et al. v. Russell E. Train, etc., et al., --- F.2d ----, at ---- - ---- (4th Cir. 1976).

The petitioners argue that the lagoon system suggested by the EPA is too small and inadequately designed. The EPA contends to the contrary. We are unable to resolve the controversy from this record. The size and design of the lagoon system is significantly affected by the in-plant controls. Now that we have determined that additional in-plant controls are necessary for new plants, the EPA shall reconsider the size and design of the lagoon system, shall determine the cost of the system selected and shall set forth the reasons for its decision in detail. In this reconsideration, a decision should be made as to whether or not the lagoons should be lined. If states generally require lined lagoons to prevent seepage of contaminated waste water, they should be included in the suggested technology...

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