MacClarence v. U.S. E.P.A.

• Decision Date: 04 March 2010
• Docket Number: No. 07-72756.,07-72756.
• Citation: 596 F.3d 1123
• Parties: Bill MacCLARENCE, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Stephen L. Johnson, Respondents.
• Court: U.S. Court of Appeals — Ninth Circuit

596 F.3d 1123

Bill MacCLARENCE, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; Stephen L. Johnson, Respondents.

No. 07-72756.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 5, 2009.

Filed March 4, 2010.

Robert Ukeiley, Law Office of Robert Ukeiley, Berea, KY, William M. Eddie, Field Jerger, LLP, Portland, OR, for the petitioner.

Ronald J. Tenpas, Assistant Attorney General, John C. Cruden, Deputy Assistant Attorney General, Andrew J. Doyle, Attorney, Environment & Natural Resources Division, Department of Justice, Washington, DC, Kristi M. Smith, Office of General Counsel, Environmental Protection Agency, Washington, DC, Julie A. Vergeront, Office of Regional Counsel, Region 10, Environmental Protection Agency, Seattle, Washington, for respondents United States Environmental Protection Agency, and Stephen L. Johnson, Administrator, United States Environmental Protection Agency.

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

Before RICHARD A. PAEZ and JOHNNIE B. RAWLINSON, Circuit Judges, and RANER C. COLLINS,^* District Judge.

PAEZ, Circuit Judge:

Bill MacClarence petitions this court for review of an order by the Environmental Protection Agency Administrator (the "Administrator") denying his request that the Environmental Protection Agency ("EPA") object to the issuance of a Clean Air Act Title V permit for pollutant-emitting activities at Gathering Center # 1 ("GC 1"), an oil and gas processing facility in Prudhoe Bay. The Alaska Department of Environmental Conservation's ("ADEC") granted the permit to British Petroleum Exploration (Alaska), Inc.'s ("BP"), which owns GC 1. We have jurisdiction to review MacClarence's petition for review pursuant to 42 U.S.C. §§ 7661d(b)(2) and 7607(b)(1). Because the Administrator's denial of MacClarence's request was not arbitrary or capricious, we deny the petition.

I. Background

A. The Prudhoe Bay Unit

The Prudhoe Bay Unit (PBU) is located on the North Slope of Alaska and extends over 300 square miles. It consists of a series of oil and gas facilities, including thirty-eight drill sites or "well pads" and six production centers, as well as support facilities for PBU workers. GC 1 is one of the six production facilities at the PBU. BP owns approximately 26.35% to 50.7% of the facilities at the PBU, including GC 1, and operates all of the PBU facilities pursuant to an agreement with the other owners. Although the PBU oil field is composed of a number of different oil leases, those leases have been unitized or pooled by the State of Alaska so that the field may be exploited efficiently.

The PBU facilities are engaged in a continuum of oil and gas refining activities, from drilling to sale.¹ Well pads in the PBU pump "three-phase" crude oil from the tundra beneath the PBU facilities. This oil is transferred to the production centers, including GC 1, where it is separated into processed crude oil, water, and hydrocarbon gases. The processed crude oil is pumped from the production centers to the Trans-Alaska Pipeline for sale, while other facilities at the PBU dispose of or re-inject the by-products of the production process.

B. Title V of the Clean Air Act

MacClarence petitioned the Administrator to object to a final permit issued for GC 1 pursuant to Title V of the Clean Air Act (the "CAA"), 42 U.S.C. §§ 7401 et seq. The CAA was enacted in 1963 to "protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population." § 7401(b)(1). Built on a scheme of "cooperative federalism," the CAA places the onus of enforcement on state and local governments, but "provides for `Federal financial assistance and leadership ... for the development of cooperative, Federal, State, regional, and local programs to prevent and control air pollution.'" N.Y. Pub. Interest Research Group v. Whitman (N.Y.PIRG I), 321 F.3d 316, 320 (2d Cir.2003) (quoting 42 U.S.C. § 7401(a)(3), (4); Connecticut v. EPA, 696 F.2d 147, 151 (2d Cir.1982)).

The Clean Air Act Amendments of 1990, Pub.L. No. 101-549, §§ 501-07, 104 Stat. 2399, 2635-48 (1990), enacted Title V of the CAA, which requires facilities that are "major sources" of pollutants to obtain operating permits from state-run permitting programs that have been approved by EPA. See 42 U.S.C. § 7661a. ADEC is Alaska's EPA-approved Title V permitting authority. 66 Fed.Reg. 63,184, 63,184 (Dec. 5, 2001). Each permit must "include enforceable emission limitations and standards, a schedule of compliance, a requirement that the permittee submit to the permitting authority ... the results of any required monitoring, and such other conditions as are necessary to assure compliance with applicable requirements of [the CAA]." 42 U.S.C. § 7661c(a). Title V, however, does not itself impose additional substantive clean air standards. 40 C.F.R. § 70.1(b).

Title V further provides for both EPA and public review of permits. 42 U.S.C. § 7661d; 40 C.F.R. § 70.8(d). After a permitting authority receives an application for a Title V permit, it is required to submit a copy of the permit application and the "permit proposed to be issued and issued as a final permit" to EPA, 42 U.S.C. § 7661d(a)(1)(B), and to provide the public with notice and opportunity to comment on the draft permit, 40 C.F.R. § 70.7(h). If the permit "contains provisions that are determined by the Administrator as not in compliance with the applicable requirements of [the CAA]," the Administrator, within forty-five days of receiving the proposed permit, "shall ... object to its issuance." 42 U.S.C. § 7661d(b)(1).

If the EPA does not object to the permit within this time frame, however, "any person" may petition the Administrator to make an objection within sixty days after the expiration of EPA's period of review. Id. § 7661d(b)(2). The petition must be based on objections that were made "with reasonable specificity during the public comment period" on the draft permit. Id. "[I]f the petitioner demonstrates to the Administrator that the permit is not in compliance with the requirements of [the CAA]," Title V provides that the Administrator "shall issue an objection. ..." Id. If EPA does object to a permit, "the permitting authority may not issue the permit unless it is revised" to meet the objection. Id. §§ 7661d(b)(3), (c).

C. Aggregation

Here, MacClarence petitioned for an objection pursuant to § 7661d(b)(2), arguing that the permit did not comply with the CAA because ADEC, in the final draft permit for GC 1, had not properly "aggregated" stationary sources of air pollution in the PBU. Title V and other CAA provisions, such as the "prevention of significant deterioration" (PSD) requirements, 42 U.S.C. §§ 7470-79, apply to certain "stationary sources" of air pollution. In some cases, several discrete stationary sources may be required to be aggregated into one single stationary source for purposes of compliance with these provisions.² For example, as noted above, Title V requires every "major source" of air pollution to obtain a permit. 42 U.S.C. § 7661a(a). The Title V regulations, in turn, define "major source" as a "stationary source (or any group of stationary sources that are located on one or more contiguous or adjacent properties, and are under common control of the same person (or persons under common control)) belonging to a single major industrial grouping. ..." 40 C.F.R. § 70.2 (emphasis added).

Similarly, the PSD requirements, which "ensure that the air quality in attainment areas or areas that are already `clean' will not degrade," Alaska Dep't of Envtl. Conservation v. EPA, 540 U.S. 461, 470, 124 S.Ct. 983, 157 L.Ed.2d 967 (2004) (quoting R. Belden, Clean Air Act 43 (2001)), may require the aggregation of stationary sources. Under the PSD requirements, "major stationary sources" may not be constructed or modified in a significant way "unless a permit prescribing emission limitations has been issued for the facility." Id. at 472, 124 S.Ct. 983 (citing 42 U.S.C. §§ 7475(a)(1), 7479(2)(C)). A "major stationary source," for PSD purposes, is a "stationary source" that emits or has the potential to emit a certain quantity of pollutants. 42 U.S.C. §§ 7479(1), 7602(j). In turn, a "stationary source" is "any building, structure, facility, or installation which emits or may emit a regulated ... pollutant." 40 C.F.R. § 51.166(b)(5). The regulations define "[b]uilding, structure, facility, or installation" as "all of the pollutant-emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person. ..." Id. § 51.166(b)(6).

As the record for this case reveals, the aggregation of pollutant-emitting activities for the purposes of designating a "major source" or "major stationary source" is not a clear-cut task. Under the governing regulations, however, determinations regarding "major sources" for purposes of issuing Title V permits and "major stationary sources" for purposes of meeting PSD requirements involve the same analysis; the aggregated sources must belong to the same industrial grouping, be located on continuous or adjacent properties, and be under common control. See 40 C.F.R. §§ 51.166(b)(6), 70.2. Over the years, EPA has provided some guidance on the aggregation of pollutant-emitting activities and the designation of "major sources" and "major stationary sources." When EPA promulgated regulations for the PSD program in 1980, it noted that a "stationary source" should reflect "a common sense notion of `plant.'" 45 Fed.Reg. 52,676, 52,694-95 (Aug. 7, 1980). EPA has also issued memoranda in order to provide regional EPA administrators and state permitting authorities with guidance in applying aggregation principles to designate stationary sources. See, e.g., Memorandum from Acting Assistant Administrator, EPA, to...