Oklahoma v. U.S. Environmental Protection Agency

• Decision Date: 19 July 2013
• Docket Number: 12–9527.,Nos. 12–9526,s. 12–9526
• Court: U.S. Court of Appeals — Tenth Circuit
• Parties: State of OKLAHOMA; Oklahoma Industrial Energy Consumers, an unincorporated association, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. Sierra Club, Intervenor–Respondent, and PacifiCorp; American Coalition for Clean Coal Electricity; National Parks Conservation Association, Amici Curiae. Oklahoma Gas & Electric Company, Petitioner, v. United States Environmental Protection Agency, Respondent. Sierra Club, Intervenor–Respondent, and PacifiCorp; American Coalition for Clean Coal Electricity; National Parks Conservation Association, Amici Curiae.

723 F.3d 1201

State of OKLAHOMA; Oklahoma Industrial Energy Consumers, an unincorporated association, Petitioners,

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

Sierra Club, Intervenor–Respondent,

and

PacifiCorp; American Coalition for Clean Coal Electricity; National Parks Conservation Association, Amici Curiae.

Oklahoma Gas & Electric Company, Petitioner,

v.United States Environmental Protection Agency, Respondent.

Sierra Club, Intervenor–Respondent,

and

PacifiCorp; American Coalition for Clean Coal Electricity; National Parks Conservation Association, Amici Curiae.

Nos. 12–9526, 12–9527.

United States Court of Appeals,Tenth Circuit.

July 19, 2013.

E. Scott Pruitt, Oklahoma Attorney General, (P. Clayton Eubanks, Assistant Attorney General; Michael Graves and Thomas P. Schroedter of Hall Estill, Tulsa, OK, with him on the briefs), Oklahoma City, OK, for Petitioners State of Oklahoma and Oklahoma Industrial Energy Consumers.

Brian J. Murray of Jones Day, Chicago, IL, (Thomas E. Fennell of Jones Day, Dallas, Texas; Michael L. Rice of Jones Day, Houston, TX; Charles T. Wehland of Jones Day, Chicago, IL, on the briefs), for Petitioner Oklahoma City Gas & Electric Company.

Stephanie J. Talbert, United States Department of Justice, Environment & Natural Resources Division, Environmental Defense Section, Washington, D.C. (Ignacia S. Moreno, Assistant Attorney General; M. Lea Anderson and Barbara Nann, Of Counsel, United States Environmental Protection Agency, with her on the brief), for Respondent.

Andrea Issod, (Elena Saxonhouse and Sanjay Narayan with her on the brief), San Francisco, CA, for the Intervenor, Sierra Club.

Michael G. Jenkins, Assistant General Counsel, PacifiCorp Energy, Salt Lake City, Utah, and E. Blaine Rawson, Ray Quinney & Nebeker, P.C., Salt Lake City, UT, filed an amicus curiae brief on behalf of PacifiCorp, Amicus Curiae.

Paul M. Seby and Marian C. Larsen of Moye White LLP, Denver, CO, filed an amicus curiae brief on behalf of the American Coalition for Clean Coal Electricity, Amicus Curiae.

Stephanie Kodish, Knoxville, TN, filed an amicus curiae brief on behalf of the National Parks Conservation Association, Amicus Curiae.

Before BRISCOE, Chief Judge, KELLY and LUCERO, Circuit Judges.

BRISCOE, Chief Judge.

In these consolidated petitions for review, petitioners ¹ challenge a final rule promulgated by the United States Environmental Protection Agency under the Clean Air Act. The petitioners argue that the EPA impermissibly rejected Oklahoma's plan to limit the emissions of sulfur dioxide at Oklahoma Gas and Electric Company power plants and replaced it with its own more stringent regulations, which petitioners contend usurped the state's authority and will require sizable expenditures on unnecessary technology. We conclude that the EPA has authority to review the state's plan and that it lawfully exercised that authority in rejecting it and promulgating its own. Exercising our jurisdiction under 42 U.S.C. § 7607(b)(1), we deny the petitions for review.

I

A. Statutory Background

The Clean Air Act “uses a cooperative-federalism approach to regulate air quality.” U.S. Magnesium, LLC v. EPA, 690 F.3d 1157, 1159 (10th Cir.2012). Under the Clean Air Act (CAA), the Environmental Protection Agency (EPA) must create and review national ambient air quality standards for certain pollutants. See42 U.S.C. §§ 7408, 7409. States then have the responsibility to adopt state implementation plans (SIPs), “which provide [ ] for implementation, maintenance, and enforcement” of those primary and secondary air quality standards. § 7410(a)(1).

States, however, exercise this authority with federal oversight. The EPA reviews all SIPs to ensure that the plans comply with the statute. The EPA may not approve any plan that “would interfere with any applicable requirement” of this chapter of the United States Code. § 7410( l ). The EPA has a duty to create its own federal implementation plan (FIP) if either: 1) it “finds that a State has failed to make a required submission or finds that the plan or plan revision submitted by the State does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section”; or 2) it “disapproves a State implementation plan submission in whole or in part.” § 7410(c)(1). The duty to promulgate a FIP exists “unless the State corrects the deficiency, and the Administrator approves the plan or plan revision, before the Administrator promulgates such Federal implementation plan.” Id.

At issue in this case are the portions of the CAA that seek to protect visibility at certain national parks and wildlife areas. The CAA requires that the EPA promulgate regulations “to assure ... reasonable progress toward” preventing any future and “remedying ... any existing, impairment of visibility in mandatory class I Federal areas which impairment results from manmade air pollution.” § 7491(a)(1), (a)(4). It also requires that the EPA ensure that each state plan “contain[s] such emission limits, schedules of compliance and other measures as may be necessary to make reasonable progress toward meeting the national goal.” § 7491(b)(2).

Relevant in this case are the CAA's mandates regarding sources that contribute to visibility impairments. SIPs must include:

except as otherwise provided ... a requirement that each major stationary source which is in existence on August 7, 1977, but which has not been in operation for more than fifteen years as of such date, and which, as determined by the State (or the Administrator in the case of a [FIP] ) emits any air pollutant which may reasonably be anticipated to cause or contribute to any impairment of visibility in any such area, shall procure, install, and operate, as expeditiously as practicable (and maintain thereafter) the best available retrofit technology, as determined by the State (or the Administrator in the case of a [FIP] ) for controlling emissions from such source for the purpose of eliminating or reducing any such impairment.

§ 7491(b)(2)(A). To simplify, a state—or the EPA, when promulgating a FIP—must: 1) determine which of the eligible major stationary sources in their state contributes to visibility impairment; and then 2) determine the “best available retrofit technology” for controlling the emissions causing that impairment at that source. Id. When determining “best available retrofit technology” (BART):

the State (or the Administrator in determining emission limitations which reflect such technology) shall take into consideration [1] the costs of compliance, [2] the energy and nonair quality environmental impacts of compliance, [3] any existing pollution control technology in use at the source, [4] the remaining useful life of the source, and [5] the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology.

§ 7491(g)(2).

The CAA requires that the EPA create guidelines for the states “on appropriate techniques and methods for implementing this section.” § 7491(b)(1). For “a fossil-fuel fired generating powerplant having a total generating capacity in excess of 750 megawatts, the emission limitations required under this paragraph shall be determined pursuant” to the regulations promulgated by the EPA. § 7491(b). The EPA has promulgated these BART guidelines at 40 C.F.R. § 51.308(e).

B. Procedural Background

In 2005, the EPA issued an updated version of its Regional Haze Rule that required states to submit SIP revisions by December 17, 2007. See Regional Haze Program Requirements, 40 C.F.R. § 51.308(b). On January 15, 2009, the EPA took final action in finding that Oklahoma—along with 31 other states, the District of Columbia, and the U.S. Virgin Islands—failed to submit a SIP that addressed any of the Regional Haze elements by this deadline. See Finding of Failure To Submit State Implementation Plans Required by the 1999 Regional Haze Rule, 74 Fed.Reg. 2392–01 (Jan. 15, 2009). This triggered the EPA's duty to promulgate a federal implementation plan within two years. See42 U.S.C. § 7410(c)(1).

Before the EPA promulgated a FIP, however, Oklahoma submitted its SIP. See Oklahoma Regional Haze State Implementation Plan, Joint Appendix (JA) at 55 (Feb. 17, 2010). At issue in this petition are the SIP's BART determinations with respect to two units at Oklahoma Gas & Electricity's (OG & E's) Muskogee Generating Station and two units at its Sooner Generating Station. The Oklahoma SIP set a sulfur dioxide (SO2) emissions limits of 0.65 lb/mmBtu (thirty-day average) and 0.55 lb/mmBtu (annual average) for each of these four units. See OG & E Muskogee Generating Station BART Review, JA at 187 (Jan. 15, 2010); OG & E Sooner Generating Station BART Review, JA at 221 (Jan. 15, 2010). The BART for each of these units included OG & E's continued use of low-sulfur coal. The SIP considered, but rejected, an emissions limit that would require the installation of so-called scrubbers to remove SO2. See Muskogee BART Review, JA at 213; Sooner BART Review, JA at 247. “The cost for [dry scrubbers] is too high, the benefit too low and these costs, if borne, further extend the life expectancy of coal as the primary fuel in the Sooner [and Muskogee] facilit[ies] for at least 20 years and beyond,” according to OG & E's BART analyses. See id.

On March 22, 2011, the EPA proposed a rule that would partially approve and partially disapprove Oklahoma's SIP. Proposed Rule, 76 Fed.Reg. 16,168–01, 16,169 (Mar. 22, 2011). The SO2 emission limitations for OG & E's four units were among the parts of the SIP that the EPA proposed disapproving. The EPA said that Oklahoma failed to follow the promulgated regulations in determining BART. Id. at 16,182. Specifically, the EPA said that Oklahoma “did not properly ‘take into consideration the costs of compliance’ when it relied on cost estimates that greatly overestimated the costs of dry and wet scrubbing to conclude these controls were not cost...