PPG Industries, Inc. v. Harrison

• Decision Date: 08 January 1979
• Docket Number: No. 77-2989,77-2989
• Citation: 587 F.2d 237
• Parties: , 9 Envtl. L. Rep. 20,086 PPG INDUSTRIES, INC., Petitioner, v. Adlene HARRISON, Regional Administrator, and Douglas M. Costle, Administrator of Environmental Protection Agency, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 237

587 F.2d 237

12 ERC 1641, 9 Envtl. L. Rep. 20,086

PPG INDUSTRIES, INC., Petitioner, v. Adlene HARRISON, Regional Administrator, and Douglas M Costle, Administrator of Environmental Protection Agency, Respondents.

No. 77-2989.

United States Court of Appeals Fifth Circuit.

Jan. 8, 1979.

Oliver P. Stockwell, Charles, La., George P. Cheney, Jr., PPG Industries, Inc., Pittsburgh, Pa., Charles F. Lettow, Washington, D. C., for petitioner.

J. Berry St. John, Jr., John M. Wilson, New Orleans, La., Clyde R. Hampton, Denver, Colo., Douglas D. Ehrlich, Houston, Tex., for intervenor Continental Oil Co.

Douglas M. Costle, Administrator, EPA, Griffin B. Bell, Atty. Gen., Bethami Auerbach, EPA, Michael P. Carlton, Land and Natural Resources Div., James W. Moorman, Asst. Atty. Gen., Angus Macbeth, Chief, Pollution Control Section, Dept. of Justice, Washington, D. C., for respondent.

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

Before RONEY, TJOFLAT and HILL, Circuit Judges.

RONEY, Circuit Judge:

In this case PPG Industries, Inc. appeals an action of the Administrator of the Environmental Protection Agency (EPA) subjecting the "waste heat" boilers of its recently constructed power plant to new source performance standards for fossil fuel-fired steam generating units. 40 C.F.R. §§ 60.40-46 (1977). PPG first challenges this Court's jurisdiction to entertain the appeal, having filed its petition for review both here and in the district court because of jurisdictional uncertainty. On the merits PPG contends that the performance standards for fossil fuel-fired steam generators have no application to its waste heat boilers, which are fueled only partially by fossil fuels. Even if the standards apply, PPG argues, the final action taken by the Administrator here was without statutory authority for two reasons: first, having started construction before the effective date of the regulations, the waste heat boilers were not a "new source" to which the statute applied; second, the Administrator had authority only to set standards for emission limitations, whereas here a standard for source fuel was imposed. In any event, PPG asserts the Administrator's action was arbitrary and capricious. Finding this Court lacks jurisdiction, we dismiss the petition.

I. PPG's Lake Charles Facility

Petitioner PPG Industries, Inc. owns and operates a chemical manufacturing plant located at Lake Charles, Louisiana, which requires large amounts of steam and electricity for its operations. To meet its energy requirements, PPG recently constructed a power plant designed to take advantage of fuel-efficient "cogeneration" technology. The power plant is comprised of two similar units. In each unit fossil fuel is burned in a General Electric gas turbine generator to produce electricity. Energy, or "waste heat" thrown off by the turbine's exhaust, which would normally be discharged into the atmosphere, is funnelled as a heat source into a "waste heat" boiler which also burns fuel oil. This exhaust from the turbines contributes nearly 40% (approximately 371 million British thermal units per hour) of the total input to the waste heat boiler, while the remaining heat (approximately 598 million British thermal units per hour) is provided by combustion of fuel oil or natural gas, known as fossil fuels. The highly pressurized steam produced by the waste heat boiler is first used to turn a "backpressure" turbogenerator, thereby creating more electricity, and is then channelled into PPG's main plant for use in the manufacturing process.

The air pollutants from PPG's power plant are similar to those of any other boiler fired by fuel oil. The pollutant of principal concern is sulfur dioxide, which is formed during combustion of sulfur-bearing fuels in the presence of oxygen. Virtually all of the sulfur dioxide emissions from the power plant are directly attributable to the combustion of fuel oil in the waste heat boiler and virtually none to the gas turbine exhausts.

PPG can control its sulfur dioxide emissions through use of either flue gas desulfurization equipment ("scrubbers") or fuel oil with a low sulfur content. In addition to sulfur dioxide emissions, PPG's power plan will emit particulate matter and nitrogen oxides. These pollutants are not of great concern in this case because nitrogen oxides are controlled primarily through boiler design, and combustion of fuel oil does not produce significant particulate emissions.

II. The Statutory and Regulatory Framework

In passing the Clean Air Act Amendments of 1970, Congress for the first time established a comprehensive federal-state scheme for the control and abatement of air pollution. Pub.L. No. 91-604, 84 Stat. 1676 (December 31, 1970), Codified at 42 U.S.C. § 1857 (1970). The Clean Air Act was again substantially amended in 1977, Pub.L. No. 95-95, 91 Stat. 685 (August 7, 1977), and the final amended version is codified at 42 U.S.C.A. § 7401-7642. ¹

The 1970 Amendments required the EPA Administrator to set national ambient air quality standards for "criteria" pollutants. ² Each state, in turn, was required to adopt and submit for EPA approval a plan providing for "implementation, maintenance, and enforcement" of the national standards within the given state. 42 U.S.C.A. § 7410.

While emissions from both existing and new sources of pollution are regulated under the various state implementation plans, Congress, "concerned that new plants new sources of pollution would have to be controlled to the greatest degree practicable if the national goal of a cleaner environment was to be achieved," Essex Chem. Corp. v. Ruckelshaus, 158 U.S.App.D.C. 360, 486 F.2d 427, 434 n.14 (D.C.Cir.1973), Cert. denied, 416 U.S. 969, 94 S.Ct. 1991, 40 L.Ed.2d 558 (1974), determined that all new sources should be subject to an additional layer of federal control. It therefore enacted § 111, which required the establishment of "standards of performance" for all new sources. 42 U.S.C. § 1857c-6 (1970), As amended, 42 U.S.C.A. § 7411. "New source" is defined under the Act as "any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source." 42 U.S.C.A. § 7411(a) (2).

Under § 111(b), the Administrator was directed to publish, and from time to time revise, a list of those categories of stationary sources which he determined "may contribute significantly to air pollution which causes or contributes to endangerment of public health or welfare." Subsequently, he was to promulgate, after proposal and opportunity for public comment, standards of performance for new sources in the listed categories.

In accordance with this directive, the Administrator published an initial list of five stationary source categories on March 31, 1971. The listed sources were fossil fuel fired-steam generators, incinerators, portland cement plants, nitric acid plants, and sulfuric acid plants. Later that year, regulations establishing new source performance standards were proposed and promulgated for each of the listed categories of sources. Regulations of general applicability are grouped in Subpart A, 40 C.F.R. §§ 60.1-.15 (1977), while the regulations implementing the new source performance standards for fossil fuel-fired steam generators are located in Subpart D, 40 C.F.R. § 60.40-.46 (1977). The standards of performance are written as emission limitations (in pounds per million British thermal units heat input or grams per million calories) which may not be exceeded. See 40 C.F.R. §§ 60.42-.45 (1977).

The regulations define "fossil fuel-fired steam generating unit" and "fossil fuel" as follows:

(a) "Fossil-fuel fired steam generating unit" means a furnace or boiler used in the process of burning fossil fuel for the purpose of producing steam by heat transfer.

(b) "Fossil fuel" means natural gas, petroleum, coal, and any form of solid, liquid, or gaseous fuel derived from such materials for the purpose of creating useful heat.

Id. § 60.41. The Subpart D provisions are made applicable to "(e)ach fossil-fuel fired steam generating unit" of more than 250 million British thermal units per hour heat input. Id. § 60.40.

Each fossil fuel-fired steam generating unit must meet performance standards for particulate matter, sulfur dioxide, and nitrogen oxides. Id. §§ 60.42-. 44. In order to measure compliance, § 60.45 provides that the source owner or operator must install, calibrate, maintain, and operate continuous monitoring systems for measuring the opacity of emissions, sulfur dioxide and nitrogen oxides emissions, and either oxygen or carbon dioxide in the flue gases.

III. Agency and Court Proceedings

As a result of correspondence in 1975 and 1976 with PPG and intervenor Continental Oil Company (Continental), EPA learned of the construction of the new power plant at PPG's Lake Charles facility. In response to an EPA inquiry, PPG informed the agency that it planned to start construction of the two waste heat boilers on January 1, 1976, and July 1, 1977. EPA promptly requested information regarding the construction of the power plant to determine whether it would be subject to new source performance standards promulgated under § 111 of the Clean Air Act.

In responses of May 14, 1976, and June 28, 1976, PPG provided detailed information on the design and construction of the new power plant, along with information regarding other power generating facilities at the Lake Charles works.

In a letter dated October 5, 1976, the Acting Director of the Enforcement Division of EPA's Region VI advised PPG that the performance standards for fossil fuel-fired steam generating units would apply to the waste heat boilers of the power plant because in the Director's view the construction of the boilers was commenced after August 17, 1971, the...