Nat'l Ass'n of Clean Water Agencies v. Envtl. Prot. Agency

• Decision Date: 24 October 2013
• Docket Number: Nos. 11–1131,12–1237.,12–1236,11–1167,11–1185,s. 11–1131
• Citation: 734 F.3d 1115
• Parties: NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY and Gina McCarthy, Administrator, EPA, Respondents MaxWest Environmental Systems, Inc., et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

734 F.3d 1115

NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES, Petitioner

v. ENVIRONMENTAL PROTECTION AGENCY and Gina McCarthy, Administrator, EPA, RespondentsMaxWest Environmental Systems, Inc., et al., Intervenors.

Nos. 11–1131, 11–1167, 11–1185, 12–1236, 12–1237.

United States Court of Appeals, District of Columbia Circuit.

Argued May 3, 2013.

Decided Aug. 20, 2013.

Rehearing En Banc Denied Oct. 24, 2013.

On Petitions for Review of a Final Rule of the United States Environmental Protection Agency.

Jeffrey A. Knight argued the cause for petitioners/respondents-intervenors National Association of Clean Water Agencies, et al. With him on the briefs were Peter H. Wyckoff and Steven A. Hann.

James S. Pew argued the cause for petitioner Sierra Club. With him on the briefs was Jonathan A. Wiener.

Lisa Sharp argued the cause for intervenor MaxWest Environmental Systems Inc. With her on the briefs was D. Cameron Prell.

Michele L. Walter and Martha C. Mann, Attorneys, U.S. Department of Justice, argued the causes and filed the brief for respondents.

Jonathan A. Wiener argued the cause for respondent-intervenor Sierra Club. With him on the brief was James S. Pew.

Steven A. Hann, Jeffery A. Knight, and Peter H. Wyckoff were on the brief for respondents-intervenors National Association of Clean Water Agencies, et al.

Before: GARLAND, Chief Judge, BROWN, Circuit Judge, and SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge SENTELLE.

SENTELLE, Senior Circuit Judge:

In March 2011, the Environmental Protection Agency (“EPA”) issued a final rule establishing emission standards for sewage sludge incinerators under § 129 of the Clean Air Act, 42 U.S.C. § 7429. SeeStandards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Sewage Sludge Incineration Units, 76 Fed.Reg. 15,372 (Mar. 21, 2011). Determining that sewage sludge incinerators were “solid waste incineration unit[s]” as defined in § 129(g)(1), the EPA promulgated “maximum achievable control technology” (“MACT”) standards for two subcategories of sewage sludge incinerators.

The Clean Air Act cabins EPA's discretion in setting MACT standards, requiring EPA to base the standards on the emissions achieved by the best-performing existing incinerators. See42 U.S.C. § 7429(a)(2). But acting under pressure of a court order to establish the MACT standards by a set deadline, EPA took a targeted approach to collecting emissions data and used several different methods to estimate the emissions levels achieved by existing incinerators. See76 Fed.Reg. at 15,386.

The petitioners challenge several different aspects of the rulemaking. Petitioners National Association of Clean Water Agencies and Hatfield Township Municipal Authority (collectively, “NACWA”) challenge EPA's authority to regulate sewage sludge incinerators under § 129, asserting that sewage sludge incinerators do not fall within the scope of § 129(g)(1)'s definition of “solid waste incineration unit.” Petitioners NACWA and Sierra Club seek review of the sewage sludge incinerator emission standards, challenging several aspects of EPA's methodology for estimating the emission levels achieved by the best performing units. In addition to these petitioners, MaxWest Environmental Systems, developer of a proprietary biosolids management process, intervenes to challenge EPA's treatment of its technology in the sewage sludge incinerator rule.

For the reasons stated below, we deny NACWA's petition for review as to EPA's authority to regulate sewage sludge incinerators under § 129. As to the petitioners' challenges to EPA's methodology in setting emission standards, we agree that in some respects EPA has not adequately established that its estimations are reasonable, and so remand parts of the sewage sludge incinerator rule to EPA for further proceedings without vacating the current standards. We otherwise deny the petitions for review, and will not consider intervenor MaxWest's arguments as they are not within the scope of issues raised by the petitioners.

I. BACKGROUNDA. Statutory Background

The Clean Air Act requires EPA to set emission standards for polluting sources “to protect and enhance the quality of the Nation's air resources.” 42 U.S.C. § 7401(b)(1). Section 112 of the Clean Air Act, 42 U.S.C. § 7412, requires EPA to set emission standards for a list of hazardous air pollutants emitted by major sources and area sources. Id. § 7412(d). Section 129 is more specific, directing EPA to establish emission standards for a list of nine pollutants emitted by solid waste incineration units. Id. § 7429(a). Subject to certain exceptions not relevant to this case, § 129 defines a “solid waste incineration unit” as “a distinct operating unit of any facility which combusts any solid waste material from commercial or industrial establishments or the general public (including single and multiple residences, hotels, and motels).” Id. § 7429(g)(1).

Under § 129, the standards established by EPA must reflect “the maximum degree of reduction” in the emissions of a list of pollutants ¹ that EPA, “taking into consideration the cost of achieving such emission reduction, and any non-air quality health and environmental impacts and energy requirements, determines is achievable for new or existing units” in each category of sources. Id. § 7429(a)(2). EPA refers to these standards as the “maximum achievable control technology” standards, abbreviated as the MACT standards. Northeast Maryland Waste Disposal Authority v. EPA, 358 F.3d 936, 939–40 (D.C.Cir.2004).

Congress set parameters governing EPA's establishing of the MACT standards, which EPA has implemented through a two-step process. First, EPA sets a baseline level of stringency for emissions controls known as the MACT floor. For new units, the MACT floor is the level of emissions control “that is achieved in practice by the best controlled similar unit,” as determined by EPA. 42 U.S.C. § 7429(a)(2). For existing units, the MACT floor is “the average emissions limitation achieved by the best performing 12 percent of units” in each category. Id. Second, EPA determines whether more stringent “beyond-the-floor” MACT standards are achievable, taking into consideration the factors listed in § 129(a)(2).

The Clean Air Act makes promulgating MACT standards under § 112 and § 129 mutually exclusive. Id. § 7429(h)(2). Although the statutory directive on setting MACT standards is virtually identical under § 112 and § 129, EPA's decision to regulate a source under one section rather than the other has practical consequences. For example, the list of pollutants for which EPA must set MACT standards differs between the two sections. Compare id. § 7412(b) (list of hazardous air pollutants), with id. § 7429(a)(4) (list of nine pollutants for which EPA must set MACT standards for solid waste incinerators). The stringency of regulation for sources covered under these sections can also differ, depending on the type of source. Under § 129, all solid waste incinerators within § 129(g)(1)'s definition of “solid waste incineration unit” are subject to the MACT standards that EPA establishes for that category of incinerator. See id. § 7429(a). In contrast, the MACT standards established under § 112 are mandated only for “major sources,” defined as sources that have the potential to emit ten tons per year or more of any hazardous air pollutants, or twenty-five tons per year or more of any combination of hazardous air pollutants. See id. § 7412(a)(1), (d)(5).

For sources that are not “major sources”—defined in § 112(a)(1) as “area sources”—EPA is given the discretion to establish standards providing “for the use of generally available control technologies or management practices ... to reduce emissions of hazardous air pollutants.” Id. § 7412(d)(5). The generally available control technology standard is not governed by the same statutory requirements as the MACT standard, giving EPA more flexibility in regulating area sources. Because EPA determined in 2002 that no sewage sludge incinerator emitted hazardous air pollutants at such a level as to qualify as a major source, the generally available control technology standard would apply to sewage sludge incinerators if EPA regulated them under § 112. SeeNational Emission Standards for Hazardous Air Pollutants: Revision of Source Category List Under Section 112 of the Clean Air Act, 67 Fed.Reg. 6,521, 6,523. (Feb. 12, 2002). Sewage sludge incinerators also would not be subject to monitoring and siting review requirements, which are mandated by § 129 but not by § 112. See42 U.S.C. § 7429(a)(3), (c).

B. Regulatory Background

Publicly-owned treatment works, owned by municipalities or regional authorities, are responsible for managing all sewage that enters into the sanitary sewer system. Publicly-owned treatment works first treat the wastewater, creating sewage sludge in the process, then use various methods to dispose of the sewage sludge. Many publicly-owned treatment works use sewage sludge incinerators to dispose of sewage sludge. EPA's inventory of sewage sludge incinerators stood at 204 at the time of the rulemaking. 76 Fed.Reg. at 15,387.

EPA proposed emission standards for sewage sludge incinerators in October 2010, asserting its authority under § 129 to regulate “other categories of solid waste incineration units.” See 75 Fed Reg. at 63,263; 42 U.S.C. § 7429(a)(1)(E). EPA began to develop these standards after the District Court for the District of Columbia determined that EPA was failing to discharge its non-discretionary duty under provisions of § 112, and ordered EPA to do so. See75 Fed.Reg. at 63,264. Although the specific § 112 obligations with which EPA had failed to comply are not relevant to this petition, the district court determined that § 112 required EPA to set emission standards for sewage sludge incinerators.²See Sierra Club v. Jackson,1:01–CV–1537, EFC No. 84 at 23 (D.D.C....