Natural Res. Def. Council v. Envtl. Prot. Agency & Gina Mccarthy

• Decision Date: 22 September 2014
• Docket Number: 98–1431.,Nos. 98–1379,98–1429,s. 98–1379
• Citation: 755 F.3d 1010
• Parties: NATURAL RESOURCES DEFENSE COUNCIL and Sierra Club, Petitioners v. ENVIRONMENTAL PROTECTION AGENCY and Gina McCarthy, Respondents. American Chemistry Council, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

755 F.3d 1010

NATURAL RESOURCES DEFENSE COUNCIL and Sierra Club, Petitioners

v. ENVIRONMENTAL PROTECTION AGENCY and Gina McCarthy, Respondents.American Chemistry Council, Intervenor.

Nos. 98–1379, 98–1429, 98–1431.

United States Court of Appeals, District of Columbia Circuit.

Argued May 12, 2014.

Decided June 27, 2014.

Rehearing En Banc Denied Sept. 22, 2014.

Held Invalid

40 C.F.R. §§ 261.4(a)(16), 261.38On Petitions for Review of Final Action of the United States Environmental Protection Agency.

James S. Pew argued the cause for the petitioners. Khushi K. Desai and David R. Case were on brief.

Norman L. Rave, Jr., Attorney, United States Department of Justice, argued the cause for the respondents. Robert G. Dreher, Acting Assistant Attorney General, and Steven Silverman and Alan H. Carpien, Attorneys, United States Environmental Protection Agency, were on brief. Cynthia J. Morris, and Christopher S. Vaden, Attorneys, United States Department of Justice, and Lois J. Schiffer, Attorney, National Capital Planning Commission, entered appearances.

Michael W. Steinberg argued the cause for the intervenor. David M. Kerr and Leslie A. Hulse were on brief.

Thomas Sayre Llewellyn, Harry M. Ng and Deanne M. Ottaviano were on brief for amici curiae American Petroleum Institute et al. in support of the respondents.

Before: HENDERSON and MILLETT, Circuit Judges, and SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge:

Petitioners Natural Resources Defense Council, Sierra Club and Environmental Technology Council (collectively, Petitioners) seek review of a portion of a 1998 rule of the Environmental Protection Agency (EPA) creating a “Comparable Fuels Exclusion” from regulation under section 3004(q) of the Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. § 6924(q). SeeHazardous Waste Combustors; Revised Standards, 63 Fed.Reg. 33,782, 33,783–801, 33,823–35 (June 19, 1998) (1998 Rule) (codified at 40 C.F.R. §§ 261.4(a)(16) and 261.38). Section 6924(q) directs EPA to establish standards applicable to all facilities that produce, burn for energy recovery or distribute/market fuels derived from specific listed hazardous wastes. The Comparable Fuels Exclusion exempts from section 6924(q)'s mandate all fuels deemed comparable to non-hazardous-waste-derived fossil fuels because they satisfy EPA's specifications. See40 C.F.R. §§ 261.4(a)(16), 261.38. We conclude the Comparable Fuels Exclusion is inconsistent with the plain language of section 6924(q), which requires that EPA establish standards applicable to all fuel derived from hazardous waste. Accordingly, we grant the petitions for review filed by the Natural Resources Defense Council (NRDC) and the Sierra Club (collectively, Environmental Petitioners) and vacate the Comparable Fuels Exclusion.

I.

RCRA, codified at 42 U.S.C. §§ 6901 et seq., is “a comprehensive environmental statute under which EPA is granted authority to regulate solid and hazardous wastes.” Am. Mining Cong. v. EPA (AMC I), 824 F.2d 1177, 1179 (D.C.Cir.1987). Subtitle C of RCRA, 42 U.S.C. §§ 6921–39g, governs “Hazardous Waste Management” and “establishes a ‘cradle to grave’ federal regulatory system for the treatment, storage, and disposal of hazardous wastes.” Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 211 (D.C.Cir.2007) (quotation marks and citation omitted). RCRA defines “hazardous waste” as “a solid waste, or combination of solid wastes” which, because of its characteristics, may “cause, or significantly contribute to an increase in mortality or ... serious ... illness [or] pose a substantial present or potential hazard to human health or the environment when improperly ... managed.” 42 U.S.C. § 6903(5). A “solid waste,” in turn, is defined as “any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material.” Id. § 6903(27) (emphasis added). Section 6924 provides generally that EPA “shall promulgate regulations establishing such performance standards, applicable to owners and operators of facilities for the treatment, storage, or disposal of hazardous waste identified or listed under this subchapter, as may be necessary to protect human health and the environment.” Id. § 6924(a).

Until 1985, EPA regulations expressly exempted from section 6924's hazardous waste standards “material ... being burned as a fuel for the purpose of recovering usable energy,” under the theory that such material was not “discarded,” 40 C.F.R. § 261.2(c)(2) (1984), and therefore not “solid waste,” as defined in 42 U.S.C. § 6903(27), or, consequently, “hazardous waste,” which is defined in section 6903(5) “as a subset of ‘solid waste,’ ” Horsehead Res. Dev. Co. v. Browner, 16 F.3d 1246, 1263 (D.C.Cir.1994); see AMC I, 824 F.2d at 1189 (noting regulations existing in November 1984 had “provided that unused commercial chemical products were solid wastes only when ‘discarded’ [and] ‘[d]iscarded’ was at that time defined as abandoned (and not recycled) by being disposed, burned, or incinerated (but not burned for energy recovery)” (citing 40 C.F.R. §§ 261.33, 261.2(c) (1983))). In 1984, the Congress attempted to eliminate EPA's regulatory energy recovery exemption when it enacted section 6924(q) as part of “The Hazardous and Solid Waste Amendments of 1984,” Pub.L. No., 98–616, § 204(b)(1), 98 Stat. 3221, 3236–37 (Nov. 8, 1984). See AMC I, 824 F.2d at 1189 (noting Congress “apparently added [section 6924(q)(1) ] to override” 40 C.F.R. § 261.33 (1983)); Horsehead Res. Dev. Co., 16 F.3d at 1253 (“Exempting facilities that burned hazardous waste for energy recovery from Subtitle C's requirements created a regulatory ‘loophole’ by means of which over half of the hazardous waste generated in the United States came to be burned in [boilers and industrial furnaces] not subject to RCRA. Congress closed this loophole by enacting RCRA section 3004(q)[, which] set a deadline of November 8, 1986 for the EPA to promulgate regulations governing the burning of hazardous waste for energy recovery.” (citation omitted)).

Section 6924(q) governs “[h]azardous waste used as fuel” and mandates that EPA regulate entities that produce, burn for energy recovery or distribute/market hazardous-waste-derived fuel. In particular, it provides that EPA “shall promulgate regulations establishing ... as may be necessary to protect human health and the environment”: “(A) standards applicable to the owners and operators of facilities which produce a fuel ... from any hazardous waste identified or listed under [42 U.S.C. § 6921], ... (B) standards applicable to the owners and operators of facilities which burn, for purposes of energy recovery, any [such] fuel ... or any fuel which otherwise contains any hazardous waste ... and (C) standards applicable to any person who distributes or markets any [such] fuel ... or any fuel which otherwise contains any hazardous waste.” 42 U.S.C. § 6924(q)(1)(A)-(C).¹ In January 1985, pursuant to section 6924(q), EPA eliminated the energy recovery exclusion. SeeHazardous Waste Management System; Definition of Solid Waste, 50 Fed.Reg. 614, 664 (Jan. 4, 1985) (amending definition of “solid waste” to provide that “[m]aterials are solid wastes if they are recycled” by, inter alia, “[b]urning for energy recovery”).

EPA proposed the Comparable Fuels Exclusion in 1996. SeeRevised Standards for Hazardous Waste Combustors, 61 Fed.Reg. 17,358, 17,529–30 (Apr. 19, 1996). Following notice and comment, the final version was published in the 1998 Rule. See63 Fed.Reg. at 33,823–29. The Comparable Fuels Exclusion exempts from the section 6924(q) hazardous waste fuel standard requirement all “comparable fuels,” which are “fuels which are produced from a hazardous waste, but which are comparable to some currently used fossil fuels.” ²Id. at 33,782; see id. at 33,783–801. To be comparable, the fuel must “meet specification levels comparable to fossil fuels for concentrations of hazardous constituents and for physical properties that affect burning,” such as heating value and viscosity. 63 Fed.Reg. at 33,783; see40 C.F.R. §§ 261.4(a)(16) (“The following materials are not solid wastes for the purpose of this part: ... [c]omparable fuels or comparable syngas fuels that meet the requirements of § 261.38.”), 261.38 (setting out “[s]pecifications for excluded fuels” as well as other conditions and limitations). The Comparable Fuels Exclusion also imposes notification requirements, including (1) that the generator of a comparable fuel provide to the appropriate State or to EPA notice of, inter alia, the hazardous waste content and the location where it will be burned and (2) that the burner of such fuel publish in a local newspaper notice of the fact, location and estimated extent of the burning. 63 Fed.Reg. at 33,784, 33,797–98 (codified at 40 C.F.R. § 261.38(b)(2)).³

EPA's stated rationale for the Comparable Fuels Exclusion was that EPA “has discretion to classify ... as a fuel product, not as a waste” a “hazardous waste-derived fuel [that] is comparable to a fossil fuel in terms of hazardous and other key constituents and has a heating value indicative of a fuel.” Id. at 33,783. Under this rationale, EPA explained, it “can reasonably determine that a material which is a legitimate fuel and which contains hazardous constituents at levels comparable to fossil fuels is not being ‘discarded’ within the meaning of RCRA section 1004(27) [42 U.S.C. § 6903(27) (defining “solid waste)”], and therefore is not “waste.” 63 Fed.Reg. at 33,783. Such a determination, EPA continued, “promotes RCRA's resource recovery goals without creating any risk greater than those posed by the commonly used commercial fuels.” Id. In setting its comparable fuel specifications, EPA used a “benchmark” approach “based on the level of hazardous and other constituents normally found in fossil fuels” so...