Mont. Envtl. Info. Ctr. v. Thomas

• Citation: 902 F.3d 971
• Decision Date: 30 August 2018
• Docket Number: No. 16-71933,16-71933
• Parties: MONTANA ENVIRONMENTAL INFORMATION CENTER, Petitioner, v. Debra H. THOMAS, in her capacity as Acting Regional Administrator, United States Environmental Protection Agency, Region 8; U.S. Environmental Protection Agency, Respondents, Montana Department of Environmental Quality; Talen Montana, LLC, Respondents-Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

902 F.3d 971

MONTANA ENVIRONMENTAL INFORMATION CENTER, Petitioner,

v.Debra H. THOMAS, in her capacity as Acting Regional Administrator, United States Environmental Protection Agency, Region 8; U.S. Environmental Protection Agency, Respondents,Montana Department of Environmental Quality; Talen Montana, LLC, Respondents-Intervenors.

No. 16-71933

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 14, 2018, San Francisco, California

Filed August 30, 2018

George E. Hays (argued), San Francisco, California; Derf Johnson, Montana Environmental Information Center, Helena, Montana; for Petitioner.

Sheila Baynes (argued) and Jeffrey H. Wood, Acting Assistant Attorney General; Environmental Defense Section, Environment & Natural Resources Division, United States Department of Justice, Washington, D.C.; Kristi M. Smith, Brian Doster, Zach Pilchen, and Melina Williams, Office of General Counsel, Environmental Protection Agency, Washington, D.C.; for Respondents.

Norman J. Mullen (argued), Montana Department of Environmental Quality, Helena, Montana, for Respondent-Intervenor Montana Department of Environmental Quality.

Joshua Frank (argued), Baker Botts LLP, Washington, D.C., for Respondent-Intervenor Talen Montana LLC.

On Petition for Review of an Order of the Environmental Protection Agency

Before: Mary M. Schroeder and Johnnie B. Rawlinson, Circuit Judges, and William K. Sessions III,^* District Judge.

RAWLINSON, Circuit Judge:

Petitioner, Montana Environmental Information Center (Information Center), challenges an action of the United States Environmental Protection Agency (Agency) approving a 1994 revision to Montana’s State Implementation Plan (Implementation Plan). Information Center asserts that the Agency’s approval was arbitrary and capricious because Montana interprets one of its provisions less stringently than the Clean Air Act would allow. We have jurisdiction to review the EPA’s action under 42 U.S.C. § 7607(b)(1), and deny the petition for review.

I. Statutory and Regulatory Background

A. Clean Air Act

Congress passed the Clean Air Act to protect and enhance the quality of the nation’s air. See 42 U.S.C. § 7401(b)(1). To achieve this, "the States and the Federal Government partner[ed] in the struggle against air pollution." General Motors Corp. v. United States , 496 U.S. 530, 532, 110 S.Ct. 2528, 110 L.Ed.2d 480 (1990). We have deemed this partnership "a uniquely important system of cooperative federalism in the quest for clean air." Committee for a Better Arvin v. EPA , 786 F.3d 1169, 1173 (9th Cir. 2015) (citation omitted).

B. Federal-State Partnership

One of the Agency’s primary responsibilities under the Clean Air Act is to identify air pollutants that endanger the public health and welfare. See 42 U.S.C. § 7408(a). Once identified, the Agency must then set National Ambient Air Quality Standards (Air Quality Standards), which specify the maximum allowable concentration of those pollutants in the atmosphere. See id . § 7409. The Air Quality Standards are subject to periodic review and revision. See id . In sum, the federal government’s role in the federal-state partnership is to combat air pollution by identifying pollutants and then setting (and updating) Air Quality Standards.

But what of the states? "The [Clean Air Act] requires the states to submit State Implementation Plans, or ‘SIPs,’ showing how the states will attain [Air Quality Standards] ... " El Comite Para el Bienestar de Earlimart v. EPA , 786 F.3d 688, 692 (9th Cir. 2015) (citing 42 U.S.C. § 7410(a)(1) ); see also Whitman v. Am. Trucking Assn’s, Inc ., 531 U.S. 457, 470, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001) ("It is to the States that the [Clean Air Act] assigns initial and primary responsibility for deciding what emissions reductions will be required from which sources. ...") (citations omitted). These Implementation Plans must "make demonstrations (of how attainment, maintenance, and progress will be achieved) and [ ] provide a control strategy that will achieve the necessary reductions and otherwise meet the requirements of the Act." Hall v. EPA , 273 F.3d 1146, 1153 (9th Cir. 2001), as amended (citation omitted). Each plan must "specify the manner in which [Air Quality Standards] will be achieved and maintained within each air quality control region." 42 U.S.C. § 7407(a).

C. State Implementation Plans

If the Agency determines that a proposed Implementation Plan meets the applicable requirements, then that Implementation Plan "bec[o]me[s] federal law, not state law." Safe Air For Everyone v. EPA , 488 F.3d 1088, 1097 (9th Cir. 2007), as amended (emphasis in the original). That is true in part because Implementation Plans cannot be amended without the EPA’s further approval. See id .

When the Agency updates its Air Quality Standards, states have three years to revise their Implementation Plans to comply with the new standards. See 42 U.S.C. § 7410(a)(1). "These revisions need not be wholesale recastings of [Implementation Plans]; instead, the [Clean Air Act] allows the states to submit, and [the] Agency to review, piecemeal amendments dealing with discrete [Implementation Plan] provisions, leaving most of the plan untouched." Safe Air , 488 F.3d at 1092 (citation omitted).

In addition, Implementation Plans must comply with the Clean Air Act’s Prevention of Significant Deterioration program (PSD program). See 40 C.F.R. § 51.166(a)(1) ("[E]ach applicable State Implementation Plan ... shall contain emission limitations and such other measures as may be necessary to prevent significant deterioration of air quality."). The purpose of the PSD program is to ensure that major sources of air pollution do not degrade areas that either meet Air Quality Standards (also known as "attainment" areas) or cannot be classified as meeting—or not meeting—Air Quality Standards (also known as "unclassifiable" areas). 42 U.S.C. § 7407(d)(1). The PSD program combats degradation of these areas by requiring developers to acquire permits before constructing new sources of emissions or modifying existing ones. See 40 C.F.R. § 51.166(a)(7). The permit requirement applies to existing sources that are planned to undergo a "major modification," id ., resulting in a "significant emissions increase" and a "significant net emissions increase." Id . § 51.166(a)(1)(7)(iv)(a). "Significant emissions increases" are calculated by taking the "actual emissions" of a source, which establishes a representative baseline level of emissions, id . § 51.166(b)(47), and comparing that baseline to the projected emissions, post-modification. See id . § 51.166 (a)(7)(iv)(c).

This formula evokes the question of how to determine a source’s "actual emissions." The answer has evolved over time. In 1980, the Agency stated that actual emissions

shall equal the average rate, in tons per year, at which the unit actually emitted the pollutant during a two-year period which precedes the particular date and which is representative of normal source operation. The reviewing authority may allow the use of a different time period upon a determination that it is more representative of normal source operation.

40 C.F.R. § 51.24(b)(21)(1980).

In 1992, the Agency clarified that "a 2-year period which precedes the particular date" has "historically [meant] the 2 years immediately preceding the proposed change to establish the baseline." 57 Fed. Reg. 32,314, 32,323 (July 21, 1992) (citations omitted). Going forward, however, "the [Agency] would presume that any 2 consecutive years within the 5 years prior to the proposed change is representative." Id.

Ten years later, the Agency formally updated its definition of "baseline actual emissions." This update involved creating separate definitions for steam power plants and all other stationary sources. As of 2002, the baseline actual emissions of steam power plants equaled the average rate of a pollutant actually emitted "during any consecutive 24-month period selected by the owner or operator within the 5-year period immediately preceding [the] ... actual construction of the project. The reviewing authority shall allow the use of a different time period upon a determination that it is more representative of normal source operation." 40 C.F.R. § 51.166(b)(47)(i). The baseline actual emissions of non-steam sources equaled omissions occurring "during any consecutive 24-month period ... within the 10-year period immediately preceding" construction of a project. Id . § 51.166(b)(47)(ii).

Although the Clean Air Act requires each Implementation Plan to contain permitting processes that comply with the PSD program, the Act does not require verbatim adoption of the PSD program. Rather, a state is free to deviate so long as it "specifically demonstrates" that those deviations "are more stringent than or at least as stringent in all respects as the corresponding provisions [of the Clean Air Act.]" 40 C.F.R. 51.166(a)(7)(iv).

II. Factual and Procedural Background

Montana, "like every other state, was first required to submit [an Implementation Plan] to the [Agency] within thirteen months of the Act’s ... passage." Safe Air , 488 F.3d at 1093 (citing Train v. NRDC , 421 U.S. 60, 65, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975). In addition, Montana is required to revise its Implementation Plan concomitantly with EPA updates to federal standards. See 42 U.S.C. § 7410. Relevant to this case is a revision Montana submitted on March 30, 1994 (1994 Revised Implementation Plan). The revision contained the following definition of "actual emissions:"

Actual emissions as of a particular date shall equal the average rate, in tons per year, at which the unit actually emitted the pollutant during a two-year period which precedes the particular date and which is representative of normal source operation. The department may determine that a different time period is more representative of normal source operation. ...

This definition, in large part, mirrors the Agency’s 1980 definition of actual...