Sierra Club v. Envtl. Prot. Agency

• Decision Date: 16 March 2018
• Docket Number: No. 16-1021,C/w 13-1256,16-1021
• Citation: 884 F.3d 1185
• Parties: SIERRA CLUB, et al., Petitioners v. ENVIRONMENTAL PROTECTION AGENCY and E. Scott Pruitt, Administrator, U.S. Environmental Protection Agency, Respondents American Chemistry Council, et al., Intervenors
• Court: U.S. Court of Appeals — District of Columbia Circuit

884 F.3d 1185

SIERRA CLUB, et al., Petitioners

v.ENVIRONMENTAL PROTECTION AGENCY and E. Scott Pruitt, Administrator, U.S. Environmental Protection Agency, Respondents

American Chemistry Council, et al., Intervenors

No. 16-1021

C/w 13-1256

United States Court of Appeals, District of Columbia Circuit.

Argued September 15, 2017

Decided March 16, 2018

James S. Pew, Wilton, CT, argued the cause for petitioners. With him on the briefs were Neil Gormley, Patton Dycus, and Eric Schaeffer. Sanjay Narayan entered an appearance.

Norman L. Rave Jr., Attorney, U.S. Department of Justice, argued the cause and filed the brief for respondents. Perry M. Rosen, Attorney, entered an appearance.

Lauren E. Freeman, Washington, DC, argued the cause for industry intervenor-respondents. With her on the brief were Makram B. Jaber, Washington, DC, William L. Wehrum Jr., Washington, DC, Felicia H. Barnes, Washington, DC, Douglas A. McWilliams, Cleveland, OH, Allen A . Kacenjar, Cl eveland, OH, Katy M. Franz, Robert D. Cheren, William F. Lane, Raleigh, NC, and Alan H. McConnell, Raleigh, NC. David M. Friedland, Washington, DC, Lisa M. Jaeger, Washington, DC, Quentin Riegel, Washington, DC, Ronald A. Shipley, Arlington, VA, Shannon S. Broome, San Francisco, CA, and Charles H. Knauss, Washington, DC, entered appearances.

Before: Rogers, Srinivasan and Pillard, Circuit Judges.

Pillard, Circuit Judge:

Industrial boilers are heavy-duty furnaces used to generate steam and other useful heat for a wide range of applications, such as milling paper and manufacturing car parts. These boilers reach and sustain extremely high temperatures, relying on varying combinations of fuels and combustion techniques to do so. But all share a common environmental risk: Without adequate controls in place, they send into the air large quantities of toxic pollutants that endanger public health.

To mitigate such dangers, the Environmental Protection Agency (EPA or Agency) issued rules under the Clean Air Act to govern emissions of those pollutants. See Final Rule on Reconsideration, National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters , 78 Fed. Reg. 7138, 7144 (Jan. 31, 2013). A slew of legal challenges followed. We have already considered and resolved most of them in United States Sugar Corp. v. EPA (U.S. Sugar ), 830 F.3d 579 (D.C. Cir. 2016). But because EPA granted petitions for reconsideration on two issues, we agreed to sever those issues from U.S. Sugar . Upon additional consideration, EPA made some changes to its rules. Several environmental groups, which we refer to collectively as Sierra Club, challenge the reconsidered rules, and we now take up their petitions.¹ See Final Rule on Reconsideration II, National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters , 80 Fed. Reg. 72,790 (Nov. 20, 2015).

The first challenge concerns EPA regulations that indirectly control a group of organic pollutants by limiting carbon monoxide emissions as a proxy for the targeted pollutants. After calculating emissions limits for the organic pollutants by reference to the amount of carbon monoxide emitted by the best performing boilers in each subcategory, EPA concluded that the lowest of the carbon monoxide limits were too low, so it substituted a single, higher limit that it deemed sufficient to control the pollutants. Sierra Club contends that the EPA's about-face was unjustified and contrary to the Clean Air Act.

The second challenge concerns rules governing how boilers operate while starting up and shutting down. Given the high temperatures involved, startup and shutdown can take hours, during which conditions inside a boiler are in flux. EPA found it infeasible to set numeric limits on pollutants during startup and shutdown, so instead set qualitative "work practice" standards. Sierra Club contends that those work practice standards give boiler operators unlawful leeway to pollute.

For the reasons that follow, we conclude that Sierra Club is right on the first score but wrong on the second. EPA did not adequately justify its change of direction on the carbon monoxide limits because it failed to explain how the revised limits would minimize the targeted pollutants to the extent the Clean Air Act requires. But its startup and shutdown work practice standards are permissible because, consistent with the Clean Air Act, they reasonably approximate what the best-performing boilers can achieve.

I.

As amended in 1990, the Clean Air Act (Act) specifies a list of nearly two hundred hazardous air pollutants (HAPs) for which the EPA must set national emissions standards. See 42 U.S.C. § 7412(b), (d) ; U.S. Sugar , 830 F.3d at 593. EPA is first required to categorize and, where appropriate, sub-categorize potential sources of each HAP. See 42 U.S.C. § 7412(c), (d). The Agency must categorize polluters by volume of emissions. Id. § 7412(c). The most voluminous polluters, dubbed "major sources," id. § 7412(a)(1), must be regulated with particular care, see id. § 7412(d)(1). The Agency must also distinguish between new sources and existing ones. U.S. Sugar , 830 F.3d at 593–94 (citing 42 U.S.C. § 7412(d)(3) ). EPA also may further "differentiate 'among classes, types, and sizes of sources.' " Id. (quoting 42 U.S.C. § 7412(d)(1) ).

Here, the relevant category is major-source industrial, commercial, and institutional boilers and process heaters—which EPA refers to, for short, as industrial boilers. This category runs the gamut of heavy-duty boilers used by industries and large institutions, but excludes similar, separately regulated equipment that burns solid waste or generates electricity. See Proposed Rule, National Emission Standards for Hazardous Air Pollutants for Major Sources:Industrial, Commercial, and Institutional Boilers and Process Heaters , 75 Fed. Reg. 32,006, 32,009, 32,016 (June 4, 2010). A single set of rules governs the industrial boilers at issue here during startup and shutdown. See 80 Fed. Reg. at 72,824. Because EPA identified "significant design and operational differences" among these industrial boilers based on their primary fuels and (for certain HAPs) the combustion technology used to burn those fuels, however, EPA imposed separate operating-state emissions limits on subcategories identified by those criteria. Id. at 32,017 ; see also 78 Fed. Reg. at 7144.

After categorizing sources, EPA prescribes standards for sources in each category or subcategory. The basic approach is technology-forcing: For major sources like those at issue here, EPA must identify the "maximum degree of reduction in emissions" that is "achievable" using current technology. 42 U.S.C. § 7412(d)(2). It must then use that maximum achievable degree of reduction as an emissions cap for all similar sources. See U.S. Sugar , 830 F.3d at 594 ; Mexichem Specialty Resins, Inc. v. EPA , 787 F.3d 544, 549–50 (D.C. Cir. 2015).

Congress prescribed how EPA must define those "maximum achievable control technology" (MACT) standards. EPA must at least set a so-called "MACT Floor" with respect to each pollutant—the minimum that sources must do to control emissions of the pollutant. 42 U.S.C. § 7412(d)(3) ; see U.S. Sugar , 830 F.3d at 594. The "floor" terminology can be confusing, because MACT Floors—baseline emissions standards—are upper limits, or caps, on emissions. MACT Floors allow emission of each pollutant only up to the level achieved either by the "best controlled similar source" in the relevant subcategory (for new sources), or by the lowest-emitting twelve percent of sources (for existing sources). 42 U.S.C. § 7412(d)(3) ; see U.S. Sugar , 830 F.3d at 594.

EPA may be required to set a "beyond-the-floor" standard as well—a more-stringent-still emissions cap calling on sources to perform even better than the current best performers. See U.S. Sugar , 830 F.3d at 594–95. EPA must set a beyond-the-floor standard if it determines that additional emissions reduction would be achievable "taking into account costs, certain health and environmental effects, and energy requirements." Nat'l Ass'n for Surface Finishing v. EPA , 795 F.3d 1, 4–5 (D.C. Cir. 2015) ; see 42 U.S.C. § 7412(d)(2). Ordinarily, MACT Floors and beyond-the-floor standards that EPA crafts must apply "continuously" whenever sources are at risk of emitting pollutants—even when the sources are operating outside of normal parameters because they are starting up, shutting down, or malfunctioning. See Sierra Club v. EPA , 551 F.3d 1019, 1027–28 (D.C. Cir. 2008).

The Act gives EPA certain kinds of carefully circumscribed flexibility, two of which figure centrally in this case. First, EPA may sometimes regulate a HAP indirectly, by controlling a proxy, or "surrogate," instead of the pollutant itself. See Sierra Club v. EPA , 863 F.3d 834, 838 (D.C. Cir. 2017). The Act nowhere expressly contemplates regulation by surrogate, but we have held it permissible in some circumstances, so long as the resulting rules are reasonably calculated to control the relevant HAPs to the extent the statute demands. See U.S. Sugar , 830 F.3d at 628-29. Second, EPA may sometimes set qualitative "work practice" standards, requiring sources to use certain protocols designed to minimize emissions in lieu of numeric limits measuring pollutants actually emitted. See 42 U.S.C. § 7412(h). Work practice standards can be thought of as a statutory Plan B; EPA may resort to them only when using numeric limits is "not feasible." Id . § 7412(h)(1). The statute defines when EPA may conclude that numeric limits are infeasible, including—as relevant here—when "the application of measurement methodology to a particular class of sources is not practicable due to technological or economic limitations." Id. § 7412(h)(2)(B). When EPA sets work practice standards, those standards must be, in EPA's judgment, "consistent...