Resisting Envtl. Destruction on Indigenous Lands, Redoil v. U.S. Envtl. Prot. Agency

• Decision Date: 26 December 2012
• Docket Number: No. 12–70518.,12–70518.
• Citation: 704 F.3d 743
• Parties: RESISTING ENVIRONMENTAL DESTRUCTION ON INDIGENOUS LANDS, REDOIL; Alaska Wilderness League; Center for Biological Diversity; Natural Resources Defense Council; Northern Alaska Environmental Center; Oceana; Pacific Environment; Sierra Club; The Wilderness Society, Petitioners, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent, Shell Gulf of Mexico Inc.; Shell Offshore Inc., Respondents–Intervenors.
• Court: U.S. Court of Appeals — Ninth Circuit

704 F.3d 743

RESISTING ENVIRONMENTAL DESTRUCTION ON INDIGENOUS LANDS, REDOIL; Alaska Wilderness League; Center for Biological Diversity; Natural Resources Defense Council; Northern Alaska Environmental Center; Oceana; Pacific Environment; Sierra Club; The Wilderness Society, Petitioners,

v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent,Shell Gulf of Mexico Inc.; Shell Offshore Inc., Respondents–Intervenors.

No. 12–70518.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 28, 2012.

Filed Dec. 26, 2012.

Colin C. O'Brien (argued), Earthjustice, Anchorage, AK; Eric P. Jorgensen, Earthjustice, Juneau, AK, for Petitioners.

Ignacio S. Moreno, Daniel Pinkston (argued), Alan D. Greenberg, United States Department of Justice, Denver, CO, for Respondent.

Kathleen M. Sullivan (argued), William B. Adams, David S. Mader, Quinn Emanuel Urquhart & Sullivan LLP, New York, NY; Duane A. Siler, Sarah C. Bordelon, Tony G. Mendoza, Crowell & Moring LLP, Washington, D.C., for Intervenors–Respondents.

Lisa E. Jones, Samuel B. Boxerman, and James R. Wedeking, Sidley Austin, LLP, Washington, D.C., Mara E. Zimmerman, Washington, D.C., for Amicus Curiae American Petroleum Institute.

Cameron M. Leonard, Office of the Attorney General, Fairbanks, AK, for Amicus Curiae State of Alaska.

On Petition for Review of an Order of the Environmental Protection Agency, Environmental Appeals Board.

Before: MICHAEL DALY HAWKINS, M. MARGARET McKEOWN, and CARLOS T. BEA, Circuit Judges.

OPINION

McKEOWN, Circuit Judge:

Since 1990, the Environmental Protection Agency (“EPA”) has been responsible for regulating air pollution from offshore sources on the Outer Continental Shelf (“OCS”) under the Clean Air Act (“the Act”). 42 U.S.C. § 7627. We consider here whether the EPA's Environmental Appeals Board (“EAB”) properly upheld two air permits authorizing exploratory drilling operations in the Arctic Ocean by a drillship and its associated fleet of support vessels. The petition for review challenges two aspects of the permits: (1) the determination that support vessels, unlike the drillship itself, do not require the best available control technology (“BACT”) to control emissions; and (2) the exemption of the area within a 500–meter radius of the drillship from ambient air quality standards.

The application of BACT to support vessels requires us to reconcile conflicting provisions of the Act. In doing so, under Chevron U.S.A., Inc. v. NRDC, Inc., we defer to the EAB's reasonable interpretation of those provisions and related regulations. 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Likewise, we evaluate whether the EAB's decision on the ambient air boundary is a permissible application of the EPA's regulations. In both cases, we uphold the EPA's statutory and regulatory interpretations, and we deny the petition.

I. Background

Shell Gulf of Mexico, Inc. and Shell Offshore, Inc. (collectively “Shell”) purchased lease blocks ¹ in the Chukchi and Beaufort Seas off the North Slope of Alaska for oil and gas exploration. Shell plans to conduct this exploration via its drillship, the Discoverer, along with an associated fleet of support vessels, including icebreakers, oil spill response vessels, and a supply ship. As required by the Act, Shell applied for permits to emit pollutants in connection with its exploration activities. The EPA granted the permits, which were upheld in two administrative appeals to the EAB. Petitioners, Resisting Environmental Destruction on Indigenous Lands, an environmental organization, and other environmental groups (collectively “REDOIL”), challenge the permits on the basis that they do not satisfy the Act's air permit requirements. Shell intervened to oppose REDOIL's petitions.

Two permits are at issue, one for operation in the Chukchi Sea and the other for the Beaufort Sea. The permits allow Shell, subject to conditions, to construct and operate its Discoverer drillship and use its associated fleet for exploratory drilling activities between July 1 and November 30 each year. The Chukchi permit underwent two rounds of notice-and-comment before it was issued in March 2010. The Beaufort permit underwent one round of notice-and-comment before it was issued in April 2010. The EAB addressed the two permits together in the administrative proceedings that followed.

Under the permits, Shell must apply BACT—consisting of specific technologies selected by the EPA, such as good combustion practices, a particular ventilation system, or a type of fuel—to limit the emissions of specific pollutants subject to regulation under the Act. Central to this appeal, the EPA determined that BACT applies to the Discoverer when it is attached to the seabed at a drill site by at least one anchor, and to any vessel that is tied to the Discoverer under that condition. In short, the permits require Shell to comply with technological requirements for the Discoverer and the supply vessel whenever it is tied to the Discoverer. However, the permits do not prescribe technological requirements for the remaining vessels in the associated fleet because they will not be physically attached to the Discoverer.

REDOIL appealed the approval of the permits to the EAB, seeking to have BACT applied to the entire associated fleet whenever it is operating within 25 miles of the Discoverer, regardless of whether the vessels are tied to the drillship. REDOIL argued that § 7627 establishes an “unambiguous mandate” requiring the EPA to do so. Citing ambiguity in § 7627's requirements, the EAB denied review in December 2010, but remanded for reasons not at issue here. In re Shell Gulf of Mexico, Inc., OCS Appeal Nos. 10–01 through 10–04, 15 E.A.D. ––––, (Dec. 30, 2010).

On remand, the EPA issued revised air permits in September 2011. The revised permits allow the Discoverer an area with a 500–meter radius, measured from the center of the drillship, that is exempt from “ambient air” standards. The exemption is conditioned on the United States Coast Guard's establishment of an effective safety zone that prohibits members of the public from entering the area. Shell must also develop and implement a public access control program to (1) notify the general public of the prohibition on entering the safety zone, and (2) communicate to North Slope communities relevant information about exploration operations, such as timing and location.

REDOIL appealed the revised permits to the EAB, this time targeting the ambient air exemption. REDOIL urged that the exemption contravened both the definition of “ambient air” in the EPA's regulations and the agency's longstanding interpretation of those regulations. The EAB dismissed this second round of appeals in a January 2012 order, noting that ambient air exemptions are determined on a case-by-case basis. In re Shell Gulf of Mexico, Inc., OCS Appeal Nos. 11–02, 11–03, 11–04 & 11–08, 15 E.A.D. ––––, (Jan. 12, 2012). The permits became effective on January 27, 2012. Notice of Approval of Clean Air Act Outer Continental Shelf Permits Issued to Shell Gulf of Mexico, Inc., and Shell Offshore, Inc. for the Discoverer Drillship, 77 Fed.Reg. 7148, 7148 (Feb. 10, 2012).

REDOIL now seeks review of both the December 2010 EAB ruling declining to apply BACT to the entire associated fleet and the January 2012 EAB ruling on the 500–meter ambient air exemption.

II. Application of BACT to the Associated FleetA. Statutory Framework

Enacted in 1970, the Clean Air Act established a comprehensive program to protect and enhance air quality by limiting emissions from both stationary industrial sources and mobile sources. 42 U.S.C. § 7401 et seq. Central to this legislation are national air standards, known as “National Ambient Air Quality Standards” (“NAAQS”), set by the EPA for pollutants considered harmful to public health and the environment. 42 U.S.C. §§ 7408–10. The Act has been significantly amended twice, in 1977 and 1990. Clean Air Act Amendments of 1977, Pub.L. No. 95–95, 91 Stat. 685 (1977); Clean Air Act Amendments of 1990, Pub.L. No. 101–549, 104 Stat. 2399 (1990). The Prevention of Significant Deterioration (“PSD”) program and its related BACT requirement were first included in the 1977 amendment, which dealt with onshore sources of air pollution. 42 U.S.C. §§ 7470–7492. The PSD program was later applied to offshore sources on the OCS through the 1990 amendment. 42 U.S.C. § 7627. The extent to which BACT applies to an associated fleet turns on the interaction between the two amendments.

The 1977 amendment directed that major new stationary sources of pollution and major existing stationary sources that are being significantly modified must obtain preconstruction permits through a process called New Source Review. PSD is the New Source Review program for areas with relatively clean air—those areas that the EPA designates as in “attainment” with NAAQS or as “unclassifiable” due to insufficient data. 42 U.S.C. § 7471. The program's purpose is to protect the public from any adverse health or welfare effects of air pollution that may occur despite achievement of NAAQS, and to require careful evaluation of all consequences of new industrial development. 42 U.S.C. § 7470(1), (5).

Under the PSD program, “[n]o major emitting facility” “may be constructed” without a conforming permit. 42 U.S.C. § 7475(a)(1). “Major emitting facility” is defined, in part, as a “stationary source[ ] of air pollutants” with the potential to emit certain threshold levels of specified air pollutants subject to regulation. 42 U.S.C. § 7479(1). To obtain a PSD permit, such a facility must, among other things, satisfy two independent requirements. The first requirement concerns emissions: the owner or operator of the major emitting facility must conduct air quality analyses demonstrating that emissions from the facility will not cause or contribute to air pollution in violation of various air quality standards. 42 U.S.C. § 7475(a)(3). The second...