Ctr. for Biological Diversity v. Envtl. Prot. Agency

• Decision Date: 12 July 2013
• Docket Number: 11–1336.,Nos. 11–1101,11–1285,11–1328,s. 11–1101
• Citation: 722 F.3d 401
• Court: U.S. Court of Appeals — District of Columbia Circuit
• Parties: CENTER FOR BIOLOGICAL DIVERSITY, et al., Petitioners v. ENVIRONMENTAL PROTECTION AGENCY and Lisa Perez Jackson, Respondents American Forest & Paper Association, Inc., et al., Intervenors.

722 F.3d 401

CENTER FOR BIOLOGICAL DIVERSITY, et al., Petitioners

v. ENVIRONMENTAL PROTECTION AGENCY and Lisa Perez Jackson, RespondentsAmerican Forest & Paper Association, Inc., et al., Intervenors.

Nos. 11–1101, 11–1285, 11–1328, 11–1336.

United States Court of Appeals, District of Columbia Circuit.

Argued April 8, 2013.

Decided July 12, 2013.

On Petitions for Review of Administrative Action of the Environmental Protection Agency.

Ann Brewster Weeks argued the cause for petitioners. With her on the briefs were Lisa J. Zak, Frank Rambo, Morgan Butler, Kevin P. Bundy, Vera P. Pardee, Brendan R. Cummings, David D. Doniger, Meleah A. Geertsma, and Nathaniel S.W. Lawrence. Jonathan F. Lewis entered an appearance.

Perry M. Rosen, Attorney, U.S. Department of Justice, argued the cause for respondents. With him on the brief was Scott Jordan, Attorney, U.S. Environmental Protection Agency.

Roger R. Martella Jr. argued the cause for respondent-intervenors. With him on the brief were Timothy K. Webster, Lisa E. Jones, Joel F. Visser, Charles H. Knauss, Shannon S. Broome, Norman W. Fichthorn, and Allison D. Wood. William R. Murray Jr. entered an appearance.

D. Cameron Prell, Neal Cabral, and Lisa Sharp were on the brief for amicus curiae National Association of Clean Water Agencies in support of respondents.

Before: HENDERSON, TATEL, and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

Concurring opinion filed by Circuit Judge KAVANAUGH.

Dissenting opinion filed by Circuit Judge HENDERSON.

TATEL, Circuit Judge:

As part of its ongoing effort to limit the emission of greenhouse gases, the Environmental Protection Agency issued a rule deferring regulation of “biogenic” carbon dioxide—non-fossil-fuel carbon dioxide sources such as ethanol—for three years. Citing scientific uncertainty over how to account for biogenic carbon dioxide's unique role in the carbon cycle, EPA justified this “Deferral Rule” on the basis of the de minimis, one-step-at-a-time, and administrative necessity doctrines. Several environmental groups now petition for review, arguing that EPA's invocation of these doctrines was arbitrary and capricious. For the reasons set forth below, we vacate the Deferral Rule.

I.

Under the Clean Air Act, if EPA determines that an “air pollutant ... may reasonably be anticipated to endanger public health or welfare,” 42 U.S.C. § 7521(a)(1), it must regulate that air pollutant under the Prevention of Significant Deterioration of Air Quality (PSD) and Title V permitting programs. See Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 132–44 (D.C.Cir.2012) (per curiam). The PSD program, which applies to areas of the country that are classified as in “attainment” or “unclassifiable” for any national ambient air quality standard, 42 U.S.C. §§ 7407(d)(1)(A), 7471, requires certain specified “major emitting facilit[ies],” such as iron and steel mills, to obtain state-issued construction permits if they have the potential to emit over 100 tons per year (tpy) of “any air pollutant,” and all other sources to obtain such permits if they have the potential to emit over 250 tpy, id.§§ 7475, 7479(1). Under the PSD program, sources need permits before starting a construction or modification project. See id.§§ 7411(a)(4), 7475, 7479(2)(C). To obtain a PSD permit, covered sources must install the “best available control technology” (BACT) for all regulated air pollutants—even for air pollutants whose emissions levels are insufficient to trigger the PSD permitting requirement. Id.§ 7475(a)(4). In other words, if a source emits two regulated air pollutants—say sulfur dioxide and particulate matter—but triggers the PSD permitting requirement only because it emits 500 tpy of sulfur dioxide, it must install BACT for both. The Title V program requires operational permits for stationary sources that have the potential to emit at least 100 tpy of any regulated air pollutant. See id. §§ 7661–7661f.

In response to the Supreme Court's decision in Massachusetts v. EPA, 549 U.S. 497, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007), EPA published an Endangerment Finding for greenhouse gases—a “well-mixed” and “aggregate” group of six gases, including carbon dioxide (CO2). Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act (“Endangerment Finding”), 74 Fed.Reg. 66,496, 66,499 (Dec. 15, 2009). Based on that finding, EPA issued a “cascading series of greenhouse gas-related rules and regulations.” Coalition for Responsible Regulation, 684 F.3d at 114. Partnering with the National Highway Traffic Safety Administration, EPA first promulgated the Tailpipe Rule, which established motor-vehicle emissions standards for greenhouse gases. See Light–Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule, 75 Fed.Reg. 25,324 (May 7, 2010). Because the “Tailpipe Rule automatically triggered regulation of stationary greenhouse gas emitters under” the PSD and Title V permitting programs, EPA then issued two rules “phasing in stationary source greenhouse gas regulation.” Coalition for Responsible Regulation, 684 F.3d at 115. In the Timing Rule, EPA concluded that major stationary emitters of greenhouse gases became subject to the PSD and Title V permitting requirements on January 2, 2011—the same date greenhouse gases were subjected to regulation under the Tailpipe Rule. See Reconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed.Reg. 17,004, 17,007 (Apr. 2, 2010). And in the Tailoring Rule, EPA, recognizing that literal application of the PSD and Title V emissions thresholds would cover millions of sources, “tailored” the statutory thresholds to “reliev[e] [the] overwhelming permitting burden[ ] that would ... fall on permitting authorities and sources.” Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule (“Tailoring Rule”), 75 Fed.Reg. 31,514, 31,516 (June 3, 2010). The Tailoring Rule staggers the applicability of the PSD and Title V permitting programs, “starting with the largest [greenhouse gas] emitters.” Id. at 31,514. Under Step One of the Tailoring Rule, which became effective January 2, 2011, the PSD and Title V permitting programs apply only to “ ‘anyway’ PSD [and Title V] sources, that is, sources that are subject to PSD [and Title V] anyway due to their emissions of conventional pollutants,” i.e., non-greenhouse-gas pollutants. Id. at 31,567. Under Step Two of the Tailoring Rule, which became effective six months later, the PSD and Title V permitting programs apply to sources with the potential to emit specified amounts of greenhouse gases. See id. at 31,516. In Coalition for Responsible Regulation, Inc. v. EPA, this court upheld the Endangerment Finding and Tailpipe Rule as neither arbitrary nor capricious, concluded that the PSD and Title V permitting programs were unambiguously triggered when EPA issued the Tailpipe Rule, and rejected challenges to the Timing and Tailoring Rules on standing grounds. See Coalition for Responsible Regulation, 684 F.3d at 113–14.

This case involves biogenic carbon dioxide emissions, which EPA defines as carbon dioxide emissions “directly resulting from the combustion or decomposition of biologically-based materials other than fossil fuels and mineral sources of carbon.” Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs (“Deferral Rule”), 76 Fed.Reg. 43,490, 43,493 (July 20, 2011). Biogenic carbon dioxide emissions are generated from, among other things, “the biological decomposition of waste in landfills, wastewater treatment[,] or manure management processes,” “fermentation during ethanol production,” and the “combustion of biological material, including all types of wood and wood waste, forest residue, and agricultural material.” Id. To use a familiar example, power plants running on coal emit fossil-fuel carbon dioxide whereas power plants burning feedstocks emit biogenic carbon dioxide.

Unlike fossil fuels that emit greenhouse gases only through human-induced combustion, biogenic sources emit carbon dioxide via both natural and anthropogenic processes. A forest fire, for example, will emit biogenic carbon dioxide regardless of whether it was sparked by lightning or as part of a clear-cutting operation. Dead trees emit carbon dioxide as part of the decomposition process. See Deferral for CO2 Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs: Proposed Rule (“Proposed Deferral Rule”), 76 Fed.Reg. 15,249, 15,252–54 (Mar. 21, 2011).

Significantly for the issue before us, biogenic carbon dioxide has a “unique role and impact ... in the carbon cycle.” Deferral Rule, 76 Fed.Reg. at 43,496. “Through relatively rapid photosynthesis, plants absorb CO2 from the atmosphere and add it to their biomass, which contains roughly 50% carbon by weight, through a process called sequestration.” Proposed Deferral Rule, 76 Fed.Reg. at 15,252. Carbon dioxide emitted by fossil-fuel combustion is reabsorbed over millennia, leading to a long carbon “debt” period. By contrast, carbon dioxide released by biogenic sources will be sequestered when new plants are grown. The extent to which biogenic sources can serve as a carbon “sink” will depend on the type of source and its life cycle. See id. at 15,252–54. Given biogenic carbon dioxide's role in the carbon cycle, many state and federal programs treat biofuels as “renewable resources and promote bioenergy projects when they are a way to address climate change.” Deferral Rule, 76 Fed.Reg. at 43,492. But to be clear, once carbon dioxide is released into the atmosphere, “it is not possible to distinguish between the radiative forcing associated with a molecule of CO2 originating...