National Petrochemical & Refiners Ass'n v. E.P.A.

• Decision Date: 03 May 2002
• Docket Number: No. 01-1092.,No. 01-1094.,No. 01-1134.,No. 01-1093.,No. 01-1404.,No. 01-1414.,No. 01-1130.,No. 01-1052.,No. 01-1132.,No. 01-1135.,01-1052.,01-1092.,01-1093.,01-1094.,01-1130.,01-1132.,01-1134.,01-1135.,01-1404.,01-1414.
• Parties: NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. International Truck and Engine Corporation, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

287 F.3d 1130

NATIONAL PETROCHEMICAL & REFINERS ASSOCIATION, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.

International Truck and Engine Corporation, et al., Intervenors.

No. 01-1052.

No. 01-1092.

No. 01-1093.

No. 01-1094.

No. 01-1130.

No. 01-1132.

No. 01-1134.

No. 01-1135.

No. 01-1404.

No. 01-1414.

United States Court of Appeals, District of Columbia Circuit.

Argued February 26, 2002.

Decided May 3, 2002.

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On Petitions for Review of Orders of the Environmental Protection Agency.

Theodore L. Garrett argued the cause for petitioner Cummins Inc. With him on the briefs was Andrew J. Heimert.

Julie R. Domike argued the cause and filed the briefs for petitioner Volvo Truck Corporation.

Michael F. McBride argued the cause for petitioner National Petrochemical & Refiners Association, et al. With him on the brief were Maurice H. McBride, Bruce W. Neely, John W. Lawrence, John S. Hahn, Julie Anna Potts, Janice K. Raburn, David T. Deal, Thomas Sayre Llewellyn and Chet M. Thompson.

William A. Anderson, II, argued the cause for petitioners Alliance of Automobile Manufacturers and Association of International Automobile Manufacturers, Inc. With him on the briefs were Julie C. Becker, Ellen L. Shapiro, Charles H. Lockwood and Susan A. MacIntyre.

Jed R. Mandel and Timothy A. French were on the briefs for Engine Manufacturer petitioners.

Eric G. Hostetler, Kent E. Hanson and Norman L. Rave, Jr., Attorneys, U.S. Department of Justice, argued the causes for respondents. With them on the briefs were Kenneth C. Amaditz, Attorney, U.S. Department of Justice, John T. Hannon, Michael J. Horowitz and Steven E. Silverman, Attorneys, U.S. Environmental Protection Agency.

Howard I. Fox and John D. Walke were on the brief for intervenors American Lung Association, et al.

Janice K. Raburn, David T. Deal, Thomas Sayre Llewellyn, Michael F. McBride, Bruce W. Neely, John W. Lawrence and Maurice H. McBride were on the brief for intervenor American Petroleum Institute, et al.

Hope M. Babcock, Richard Blumenthal, Attorney General, State of Connecticut, Kimberly Massicotte, Assistant Attorney General, M. Jane Brady, Attorney General, State of Delaware, Kevin Maloney, Assistant Attorney General, J. Joseph Curran, Jr., Attorney General, State of Maryland, Kathy M. Kinsey, Assistant Attorney General, Thomas F. Reilly, Attorney General, Commonwealth of Massachusetts, Kirsten H. Engel, Assistant Attorney General, Philip T. McLaughlin, Attorney General, State of New Hampshire, Maureen D. Smith, Assistant Attorney General, Eliot Spitzer, Attorney General, State of New York, Peter H. Lehner, Assistant Attorney General, Robert A. Reiley, M. Dukes Pepper, Jr., Sheldon Whitehouse, Attorney General, State of Rhode Island, Tricia K. Jedele, Assistant Attorney General, Barbara Beth Baird and Jeri G. Voge were on the brief for intervenors State and Territorial Air Pollution Program Administrators, et al. and amicus curiae South Coast Air Quality Management District. Jennifer L. Wazenski, Assistant Attorney General, State of Maryland, entered an appearance.

Laurence H. Levine, Robert M. Sussman, Julia A. Hatcher, William A. Anderson, II, Susan A. MacIntyre, Julie C. Becker and Ellen L. Shapiro were on the brief for intervenors International Truck and Engine Corporation, et al.

Before: SENTELLE and TATEL, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed PER CURIAM.

PER CURIAM:¹

We have here a set of challenges to an EPA rule affecting diesel fuel and engines. The rule requires drastic reductions in exhaust emissions starting in 2007 (for some emissions 95% lower than current standards). To aid in the achievement of the new emission standards, the rule also requires a 97% reduction in the sulfur level in diesel fuel. Numerous parties, including engine manufacturers (including Cummins Inc.), automobile makers, and fuel refiners, challenged the rule on various grounds, while others, including environmental groups and states, defended it. We deny the petitions.

I. The Regulations

Diesel engines emit nitrous oxides ("NO_x"), non-methane hydrocarbons, and particulate matter ("PM"), all of which are harmful to the environment and human health (as no party disputes). Fulfilling its duty under the Clean Air Act to set emission standards that "reflect the greatest degree of emission reduction achievable" through cost-effective technology, 42 U.S.C. § 7521(a)(3), the EPA decided on dramatic reductions of diesel engine emission standards, issuing a final rule on January 18, 2001: Control of Air Pollution from New Motor Vehicles: Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements, 66 Fed. Reg. 5002 (2001) (hereinafter "2007 Rule").

The 2007 Rule sets the following standards for diesel engines: 0.01 grams per brake-horsepower-hour (g/bhp-hr) for PM, 0.20 g/bhp-hr for NO_x, and 0.14 g/bhp-hr for non-methane hydrocarbons. 66 Fed. Reg. at 5005; 40 C.F.R. § 86.007-11(a)(1), (3). For PM and NO_x, the new standards are "90 percent and 95 percent below current standard levels, respectively." 66 Fed. Reg. at 5002. Engine emissions are to be measured by the Federal Test Procedure, see 40 C.F.R. § 86.1301-90 et seq., as well as two other test procedures that are not at issue in this case.

The standard for PM takes full effect in 2007. 66 Fed. Reg. at 5005. The standards for NO_x and non-methane hydrocarbons, however, will be phased in as follows: 50% of a manufacturer's sales for 2007, 2008 and 2009 engines and 100% of sales for 2010 and following. Id.; 40 C.F.R. § 86.007-11(g). During the phase-in period, manufacturers will be allowed to participate in an averaging, banking, and trading ("ABT") program. This program allows the generation of credits from engines that beat the standards; the credits can then be applied to engines that may not be able to meet the 2007 standards right away. 66 Fed.Reg. at 5109-11; 40 C.F.R. § 86.007-15. A crucial distinction is made here: Averaging across service classes (e.g., between light heavy-duty engines and heavy heavy-duty engines) is allowed, but not banking or trading. 66 Fed. Reg. at 5110.

The 2007 Rule also eliminates a preexisting exception — available only for turbocharged heavy-duty diesel engines — for emissions from engine crankcases. 66 Fed. Reg. at 5040; 40 C.F.R. § 86.007-11(c). As a result, any crankcase emissions not eliminated count against a vehicle's emission limit.

High pollutant levels in fuel make it impossible or at least far more difficult to achieve low emissions. Thus, under its authority to regulate any fuel components that significantly impair "the performance of any emission control device or system," 42 U.S.C. § 7545(c)(1)(B), the EPA also decided to require "a 97 percent reduction in the sulfur content of diesel fuel." 66 Fed. Reg. at 5002. As of 2006, the maximum sulfur content of diesel fuel will be reduced from 500 ppm to 15 ppm. (Under a 15 ppm cap, the EPA predicts that the average sulfur level in diesel will actually be 7 ppm. Response to Comments at 350.) Under its "Temporary Compliance Option," the EPA actually requires that only 80% of fuel from any given refinery meet the 15 ppm cap in years 2006-08. Any overachieving refiner will generate credits, which it can then use to average with another refinery owned by that refiner, bank for future years, or sell to another refiner. 66 Fed. Reg. at 5065.

II. The Emissions Standards

We review the 2007 Rule under the arbitrary and capricious standard of 42 U.S.C. § 7607(d), which is indistinguishable from the Administrative Procedure Act equivalent. See Ethyl Corp. v. EPA, 51 F.3d 1053, 1064 (D.C.Cir.1995); Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 519 (D.C.Cir.1983). Deference is particularly great where EPA's decision is based on complex scientific or technical analysis. Appalachian Power Co. v. EPA, 251 F.3d 1026, 1035 (D.C.Cir.2001).

A. Background on Emissions Control Technology

Diesel exhaust emissions can be controlled through the use of catalytic emission control devices in the vehicle's exhaust system. 66 Fed. Reg. at 5007. These resemble the familiar catalytic converters found on ordinary automobiles. Id. Current control devices for diesel engines work less well than they do for gasoline engines, because of diesels' "oxygen-rich and relatively cool ... exhaust environment." Id. at 5009. PM emissions are also more difficult to control in diesel engines because of the soot formed during diesel combustion. Id. Compounding the difficulties is the fact that "historical diesel NO_x, control approaches tend to increase PM and vice versa, but both are harmful pollutants that need to be controlled." Id.

Thus, in order to achieve drastic — and simultaneous — reductions in PM, NO_x, and non-methane hydrocarbons, engine manufacturers will need technical innovations in emission controls. The EPA predicts that two relatively new technologies will aid in achieving the 2007 reductions: the catalyzed diesel particulate filter ("particulate filter") and the NO_x, adsorber. 66 Fed. Reg. at 5036. In the following paragraphs, we explain briefly — and to the best of our understanding — how each technology works on the targeted emissions.

Particulate matter is made up of three things: Unburned carbon particles (or soot), unburned hydrocarbons (also called the "soluble organic fraction"), and sulfates (resulting from the oxidation of sulfur in the engine's exhaust). 66 Fed. Reg. at 5047. The majority of diesel PM is soot. Catalyzed particulate filters work by passing the exhaust through a ceramic or metallic filter that captures soot and other PM.

Particulate filters eventually become plugged up with particulate matter, at which point the collected particles (mostly carbon) have to be burned off (or oxidized). Id. The burning-off process is called "regeneration," and the result (from oxidizing...