Environmental Defense Fund, Inc. v. Administrator of the U.S. E.P.A., 88-1882

• Decision Date: 13 March 1990
• Docket Number: No. 88-1882,88-1882
• Citation: 898 F.2d 183
• Parties: , 283 U.S.App.D.C. 169, 20 Envtl. L. Rep. 20,577 ENVIRONMENTAL DEFENSE FUND, INC., Petitioner, v. ADMINISTRATOR OF THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, Alabama Power Company, et al., Standard Alaska Production Company, American Mining Congress, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 183

898 F.2d 183

31 ERC 1167, 283 U.S.App.D.C. 169, 20

Envtl. L. Rep. 20,577

ENVIRONMENTAL DEFENSE FUND, INC., Petitioner, v. ADMINISTRATOR OF THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent Alabama Power Company, et al., Standard Alaska Production Company, American Mining Congress, Intervenors.

No. 88-1882.

United States Court of Appeals District of Columbia Circuit.

Argued Nov. 6, 1989.

Decided March 13, 1990.

As Amended March 13, 1990.

Robert E. Yuhnke, for petitioner.

Craig D. Galli, Atty., Dept. of Justice, with whom Peter R. Steenland, Jr., Acting Deputy Asst. Atty. Gen., Dept. of Justice, Washington, D.C., and Gregory B. Foote, Atty., E.P.A., were on the brief for respondents.

Robert T. Connery, J. Peter Luedtke and Adelia S. Maddox, Washington, D.C., for American Mining Congress, Henry V. Nickel, Andrea Bear Field and Mel S. Schulze, Washington, D.C., for Alabama Power Co., et al., were on the brief for intervenors, American Mining Congress, et al. Adelia S. Maddox, Washington, D.C., and Edward M. Green, also entered appearances for American Mining Congress.

Alfred V.J. Prather, Edwin H. Seeger and Kurt E. Blase, Washington, D.C., entered appearances for intervenor, Standard Alaska Production Co.

Before WILLIAMS and SENTELLE, Circuit Judges, and ROBINSON, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

In its 1977 amendments to the Clean Air Act, Congress ratified a previously established program ¹ for the "prevention of sig nificant deterioration of air quality." See Sec. 127, Pub.L. No. 95-95, 91 Stat. 685, 731-42, adding to the Act Secs. 160-69, codified at 42 U.S.C. Secs. 7470-79 (1982). The stated purpose of these "PSD" provisions was (roughly) to protect the air quality in national parks and similar areas of special scenic or recreational value, and in areas where pollution was within the national ambient standards, while assuring economic growth consistent with such protection. Clean Air Act Sec. 160, 42 U.S.C. Sec. 7470. For two pollutants, sulfur dioxide and particulate matter ("Set I pollutants"), Congress followed the Environmental Protection Agency's earlier approach, fixing a maximum allowable increase (an "ambient air quality increment") over baseline concentrations. ² See Sec. 163, 42 U.S.C. Sec. 7473; compare prior rules, Prevention of Significant Air Quality Deterioration, 39 Fed.Reg. 42,510, 42,514-17 (1974). For several other pollutants ("Set II pollutants"), including nitrogen oxides, Congress took no immediate action. Instead it provided the EPA with general guidance as to regulations that it was to promulgate within two years. Sec. 166, 42 U.S.C. Sec. 7476. We deal here with the regulations governing nitrogen oxides, the only Set II pollutant that EPA has yet regulated. The case turns on the meaning, and above all the interrelationship, of the two main guides, Sec. 166(c) and (d):

(c) Such regulations shall provide specific numerical measures against which permit applications may be evaluated, a framework for stimulating improved control technology, protection of air quality values, and fulfill the goals and purposes set forth in section 7401 of this title [statement of purposes of Clean Air Act] and section 7470 of this title [statement of purposes of the PSD provisions].

(d) The regulations ... shall provide specific measures at least as effective as the increments established in section 7473 of this title [the Set I rules] to fulfill such goals and purposes, and may contain air quality increments, emission density requirements, or other measures.

Sec. 166(c), (d), 42 U.S.C. Sec. 7476(c), (d). Because the EPA did not adequately consider the requirements of subsection (c), we reverse.

I. An Overview of the Regulatory Scheme

Although in 1980 the EPA noted ten possible strategies for Set II, see Prevention of Significant Deterioration for Hydrocarbons, Carbon Monoxide, Nitrogen Oxides, Ozone, and Lead (PSD Set II) (Advanced Notice of Proposed Rulemaking), 45 Fed.Reg. 30,088 (1980) ("Advanced Notice"), ³ it ultimately decided to mimic Congress's approach for Set I. The first step, not here controverted, was the use of the same three-tiered scheme for classifying protected areas: Class I--comprising mainly large national parks and national wilderness areas; Class II--regions where the ambient air quality levels more than meet the national standards; and Class III--regions meeting the definition of Class I or Class II areas but redesignated at the behest of a state for higher levels of industrial development. Secs. 162, 164, 42 U.S.C. Secs. 7472, 7474; compare Prevention of Significant Deterioration for Nitrogen Oxides ("Proposed Rules"), 53 Fed.Reg. 3698, 3699/2-3 (1988) (noting statutory classifications and adopting them for Set II). (According to the EPA, no Class III areas have been established to date. Id.; Brief for Respondent at 11.)

EPA's second step, again not controverted here, was its decision to base the nitrogen oxide PSD program on "ambient air quality increments" similar to those for the Set I pollutants. ⁴ Though Congress contemplated that EPA might use increments for the Set II program, it did not require their use. See Sec. 166(d), 42 U.S.C. Sec. 7476(d). EPA tentatively rejected the alternatives to increments that it had considered in its 1980 Advanced Notice, but left the door open for a state to adopt an alternative strategy if it could show that its choice was as effective as EPA's. See Proposed Rules, 53 Fed.Reg. at 3709/2.

EPA's third step was to formulate the permissible increments "by reference to" the National Ambient Air Quality Standards ("NAAQS" or "ambient standards") established under Sec. 109 of the Clean Air Act, 42 U.S.C. Sec. 7409. In so doing, it rested on its view that Congress had used the ambient standards "as the benchmark for determining what constitutes 'significant deterioration' " for Set I pollutants and that the ambient standards were "the basic measure of air quality under the Act." See Proposed Rules, 53 Fed.Reg. at 3700/3. The three challenged aspects of the nitrogen oxide PSD program stem directly from this decision.

First, though by its terms Sec. 166 demands that the regulations cover "nitrogen oxides," the EPA regulated only one nitrogen oxide compound, nitrogen dioxide or NO2 , as this is the only compound for which it had established an ambient standard. ⁵ Second, as its ambient standard for NO2 imposes direct limits only for the annual average concentration, EPA defined the permissible increments only in terms of an annual average. Final Rules, 53 Fed.Reg. at 40,660/3. Short-term concentrations, which are only indirectly and incompletely limited by an annual average, may have adverse health and welfare effects (see, e.g., EDF Comments at 18 (noting high concentration "acid pulse" of nitric acid in springtime can cause ecological damage)), but EPA at present appears to believe the evidence too uncertain to justify including a short-term limit among the ambient standards for NO2 . See Retention of National Ambient Air Quality Standards for Nitrogen Dioxide, 50 Fed.Reg. 25,532, 25,536/3 (1985). Third, and most sharply contested, the EPA set the permissible increments of nitrogen dioxide at the same percentage of the nitrogen dioxide ambient standard as the percentage that the Set I increments were of their annual ambient standards (at the lower of the two percentages when they varied). The table below sets forth the lower of the primary and secondary national ambient air quality standards ⁶ for Set I and II pollutants at the time the increments for each were created (date in parentheses), and the increments for the pollutants both as absolute concentrations and as percentages of the ambient standards (in parentheses). Both standards and increments are expressed in micrograms per cubic meter. ⁷

II. The Interrelation of Subsections (c) and (d)

EDF's most critical objection is that EPA's construction of Sec. 166 collapsed subsection (c)'s general "goals and purposes" standard into subsection (d)'s requirement that the Set II restrictions be "at least as effective ... to fulfill such goals and purposes" as the ones adopted by Congress for Set I. The agency's logic was that by virtue of the "at least as effective" test, the percentages implicit in the Set I restrictions ⁸ could serve "as a proxy for all the PSD purposes set forth in the statute." Proposed Rules, 53 Fed.Reg. at 3701/2. Although we regard the ultimate fitting together of subsections (c) and (d) as a complex task on which the EPA necessarily deserves much leeway, its approach so far falls short of reasoned decisionmaking. To explain why, we will sift through some possible readings of the subsections and possible relations between them.

First, there are at least three possible meanings to subsection (d)'s "at least as effective" test. The EPA, with some hesitation, appears to have read it as requiring that the Set II rules be at least as stringent as those for Set I, i.e., that increments be set no lower, as percentages of a pollutant's ambient standards, than the Set I increments were as percentages of their respective ambient standards. See Proposed Rules, 53 Fed.Reg. at 3701/1. (EDF appears at times to accept this basic formulation. EDF Comments at 19.) ⁹ Proposed Rules, 53 Fed.Reg. at 3700/3. A second possible meaning is that the Set II rules must be at least as protective of the various environmental values threatened as the Set I increments were of the environmental values threatened by those pollutants. See id. at 3701/3 (asking whether statute should be read as calling for assessment of severity of effects of the pollutants). (EDF supports this reading, but realizes it is subsumed under its argument based on Sec. 166(c). Brief for Petitioner EDF at 45.) Finally, there is a literal interpretation, for the most part overlooked by both parties,...