Am. Petroleum Inst. v. Envtl. Prot. Agency

• Citation: 401 U.S.App.D.C. 248,683 F.3d 382
• Decision Date: 08 June 2012
• Docket Number: No. 09–1038.,09–1038.
• Parties: AMERICAN PETROLEUM INSTITUTE, Petitioner v. ENVIRONMENTAL PROTECTION AGENCY, Respondent American Chemistry Council, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

683 F.3d 382

401 U.S.App.D.C. 248

AMERICAN PETROLEUM INSTITUTE, Petitioner

v.ENVIRONMENTAL PROTECTION AGENCY, Respondent

American Chemistry Council, et al., Intervenors.

No. 09–1038.

United States Court of Appeals,District of Columbia Circuit.

Argued Dec. 12, 2011.

Decided June 8, 2012.

On Petition for Review of a Final Action of the United States Environmental Protection Agency.

Thomas Sayre Llewellyn argued the cause for petitioner. With him on the briefs were Harry M. Ng, Michael R. See, and Wayne J. D'Angelo.

Daniel R. Dertke, Attorney, U.S. Department of Justice, argued the cause and filed the brief for respondent.

Vincent Atriano argued the cause for movant-intervenor Gulf Chemical Metallurgical Corporation. With him on the brief was Rebekah M. VanDrake.

Before: SENTELLE, Chief Judge, BROWN and GRIFFITH, Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge:

American Petroleum Institute (API) petitions for review of a 2008 EPA regulation deregulating many “hazardous secondary materials” under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901–6992k. Petitioner contends that EPA erred in not including in the deregulation a category of hazardous secondary material called spent refinery catalysts, which API's members generate during the petroleum refining process. After the parties completed briefing, EPA issued a notice of proposed rulemaking that, if made final, would significantly amend EPA's 2008 decision. As a result, we deem this controversy unripe as a prudential matter and order the case held in abeyance, subject to regular reports on the status of the proposed rulemaking.

I.

A. Statutory and Regulatory Framework

Congress enacted RCRA in response to the “rising tide in scrap, discarded, and waste materials.” Am. Mining Congress v. EPA, 824 F.2d 1177, 1179 (D.C.Cir.1987) (internal quotations omitted). Primary in RCRA, Congress empowered the EPA to regulate solid and hazardous waste. The statute defines “solid waste” as including “any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities....” 42 U.S.C. § 6903(27). EPA's authority to regulate hazardous waste under Subtitle C of RCRA, 42 U.S.C. §§ 6921–6939f, extends to a subset of solid waste as defined in the Act. Specifically,

(5) The term “hazardous waste” means a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may—

(A) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or

(B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed.

Id. § 6903(5). In furtherance of its regulatory duties under the Act, EPA has adopted regulations interpreting the statutory definitions. The regulations define a solid waste as “any discarded material” that is not excluded by variance granted under other cited sections of the regulations. 40 C.F.R. 261.2(a)(1). The regulations define “discarded material” as “any material” that is abandoned, recycled, “inherently waste-like,” or a specifically identified military munition. 40 C.F.R. § 261.2(a)(2)(i). If a material fits any one of these descriptions, it is “discarded material” and therefore “solid waste” (unless EPA or Congress specifically excludes the material from that definition), and EPA has authority to regulate it under RCRA.

B. The Regulated Materials: Spent Petroleum Refinery Catalysts

The materials at issue in this case are catalysts used in the petroleum refining process called hydrotreating and hydrorefining catalysts. These catalysts, generally nickel, cobalt, and/or molybdenum on an alumina base, remove sulfur and nitrogen compounds from petroleum by “cracking” the hydrocarbons that make up petroleum into smaller molecules under high-temperature, high-pressure conditions. Over time, these catalysts degrade as carbon deposits or metals—in particular, vanadium—attach to them. Once fully degraded, or “spent,” the catalysts are usually sent to a third party, which can either regenerate them for reuse or extract the valuable metals that have attached to the catalysts.

While useful, these catalysts carry risks. In particular, they have pyrophoric properties, i.e., a tendency to spontaneously heat and ignite in air, causing fires and release of toxic chemicals. EPA therefore proposed to list hydrotreating and hydrorefining catalysts as hazardous waste in 1995. Citing the need to encourage recycling of these catalysts, API—an association whose members own or operate refineries that generate spent refinery catalysts—urged EPA in comments responding to this proposal to list the catalysts only conditionally so that spent catalysts destined for recycling would not be listed as hazardous waste. EPA declined, listing the catalysts unconditionally as hazardous waste in a final rule in 1998. Since that time, all spent catalysts, whether destined for reclamation or not, have been classified as hazardous waste subject to stringent regulations.

C. The 2008 Rule

In 2007, EPA proposed a new rule that would change the classification of “hazardous secondary materials,” which include recycled or reclaimed spent refinery catalysts. Reasoning that materials recycled under specified circumstances are not “discarded” and are therefore not “solid waste,” EPA proposed to exclude hazardous secondary materials from the definition of solid waste in two situations. First, hazardous secondary materials legitimately reclaimed under the control of their generator would be excluded from “solid waste” because EPA determined that the generator under those circumstances is treating such material as a valuable commodity rather than as a waste (the “generator-controlled exclusion”). 72 Fed.Reg. 14,172, 14,184–88. Second, hazardous secondary materials would be excluded from “solid waste” if the generator transferred the materials to a third party for legitimate reclamation under specific conditions including recordkeeping, reasonable efforts on the part of the generator to ensure legitimate reclamation by the reclaimer, financial assurances by the reclaimer, and, importantly, containment of the materials. 72 Fed.Reg. at 14,188–97. This “transfer-based exclusion” was likewise based on the idea that third-party reclamation properly carried out was not consistent with the concept of “discard.”

The proposed rule would have excluded spent refinery catalysts from the definition of solid waste if they were sent to a third party for reclamation under the specific conditions set out in the proposed rule. Exclusion from “solid waste” would mean exclusion from costly Subtitle C regulation as hazardous waste. EPA issued a final rule in 2008 adopting generator-controlled and transfer-based exclusions from the definition of solid waste (the “2008 Rule”). But the final rule specifically omits spent refinery catalysts from those exclusions. EPA explained that it chose to make the catalysts ineligible for the deregulatory exclusions because of their pyrophoric properties.According to EPA, it would instead address the catalysts in a separate proposed rulemaking after seeking and considering “comment on specific conditions to address the pyrophoric properties of these hazardous secondary materials, particularly during transportation and storage prior to reclamation, in order for the Agency to determine that they are not being discarded.” 73 Fed.Reg. 64,668, 64,714 (October 30, 2008). That proposed rulemaking would either finalize a spent-catalyst-specific exclusion or make the spent catalysts eligible for the general exclusions. Id.

D. Procedural History and a Recent Proposed Rulemaking

API filed a petition for review of the 2008 Rule on January 27, 2009. The Sierra Club also petitioned for review of the 2008 Rule. On September 10, 2010, EPA entered into a settlement agreement with the Sierra Club. EPA agreed to propose, by June 30, 2011, a new rule addressing certain issues raised by the Sierra Club and to take final action on that rule by December 31, 2012.

In July 2011, soon after the close of briefing in this case, EPA published a new notice of proposed rulemaking in accordance with the settlement agreement to address the issues raised by the Sierra Club. In the proposed rule, EPA effectively revised the 2008 Rule in two relevant ways. First, spent hydrotreating and hydrorefining catalysts would now also be eligible for the generator-controlled exclusion from the definition of solid waste. 76 Fed.Reg. 44,094, 44,152 (July 22, 2011). Second, EPA proposed to eliminate altogether the transfer-based exclusion for hazardous secondary materials; those materials would again be considered solid waste—and thus hazardous waste—even if transferred to third parties for recycling and would be subject to an alternative Subtitle C standard. 76 Fed.Reg. at 44,108–10, 44,151. If this proposed rule were to become final without revision, then, spent refinery catalysts would be treated the same as other hazardous secondary materials: eligible for the generator-controlled exclusion from the definition of solid waste, but not eligible for a transfer-based exclusion, which would cease to exist.

Because EPA published the 2011 proposed rule after the parties had submitted their merits briefs, we asked the parties to address at oral argument the impact of that rule on justiciability. We now conclude that API's petition is not ripe for review.

II.

The ripeness doctrine generally deals with when a federal court can or should decide a case. Part of the doctrine is subsumed into...