Sierra Club & La. Envtl. Action Network v. Envtl. Prot. Agency

• Citation: 755 F.3d 968
• Decision Date: 27 June 2014
• Docket Number: 12–1295.,08–1145,Nos. 08–1144,s. 08–1144
• Parties: SIERRA CLUB and Louisiana Environmental Action Network, Petitioners v. ENVIRONMENTAL PROTECTION AGENCY, Respondent. American Petroleum Institute and Gasification Technologies Council, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

755 F.3d 968

SIERRA CLUB and Louisiana Environmental Action Network, Petitioners

v. ENVIRONMENTAL PROTECTION AGENCY, Respondent.American Petroleum Institute and Gasification Technologies Council, Intervenors.

Nos. 08–1144, 08–1145, 12–1295.

United States Court of Appeals,District of Columbia Circuit.

Argued May 12, 2014.

Decided June 27, 2014.

Held Invalid

40 C.F.R. § 261.4(a)(12)(i)On Petitions for Review of Final Actions of the United States Environmental Protection Agency.

Khushi K. Desai argued the cause for petitioners. With her on the briefs were David R. Case and James S. Pew.

Norman L. Rave Jr., Attorney, U.S. Department of Justice, argued the cause for respondent. With him on the brief were Robert G. Dreher, Acting Assistant Attorney General, and Alan H. Carpien, Attorney, U.S. Environmental Protection Agency. Cynthia J. Morris, Attorney, U.S. Department of Justice, entered an appearance.

Thomas Sayre Llewellyn argued the cause for intervenors. With him on the brief were Harry M. Ng and Deanne M. Ottaviano. Michael R. See entered an appearance.

Before: HENDERSON and MILLETT, Circuit Judges, and SENTELLE, Senior Circuit Judge.

Opinion for the Court by Circuit Judge MILLETT.

MILLETT, Circuit Judge:

In 2008, the Environmental Protection Agency promulgated a rule that exempts from regulation under the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901 et seq., certain hazardous residuals left over from the petroleum refining process. See73 Fed.Reg. 57 (Jan. 2, 2008). That exemption, referred to as the Gasification Exclusion Rule, applies when those residual materials are inserted into gasification units to produce “synthesis gas,” which is a type of fuel that may be burned for the recovery of energy.

Petitioners Sierra Club, Louisiana Environmental Action Network (Louisiana Network), and Environmental Technology Council petitioned this court for review of the Gasification Exclusion Rule, arguing that it violates RCRA's plain language requiring the regulation of hazardous wastes used as fuel, 42 U.S.C. § 6924(q), and that the Rule's promulgation violated the procedural and substantive requirements of the Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. We hold that the regulation violates the plain language of RCRA and, for that reason, is vacated.

IStatutory Framework

The Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., is the primary federal statute addressing the management of solid and hazardous waste. It prescribes a nationwide, “cradle-to-grave” regulatory framework governing the “safe treatment, storage and disposal of hazardous waste,” United Technologies Corp. v. EPA, 821 F.2d 714, 716 (D.C.Cir.1987), and charges the EPA with promulgating regulations setting the necessary standards to achieve those goals, 42 U.S.C. § 6922(a).

While the statute's definitional provisions can be technical and detailed, as relevant here, RCRA defines “hazardous waste” as “solid waste” that poses a danger to human or environmental health. 42 U.S.C. § 6903(5). “Solid waste,” in turn, is defined as garbage, refuse, sludge, “and other discarded material.” Id. § 6903(27).

In Section 6921, Congress mandated that the EPA promulgate regulations identifying the hazardous wastes that are subject to RCRA regulation, “taking into account toxicity, persistence, and degradability in nature, potential for accumulation in tissue, and other related factors such as flammability, corrosiveness, and other hazardous characteristics.” 42 U.S.C. §§ 6921(a)-(b).

Initially, the EPA declined to regulate hazardous materials that were burned as fuel or used to produce fuel, reasoning that those uses as fuel meant the materials were not “discarded,” and thus they were not regulable as waste. See40 C.F.R. § 261.2(c)(2) (1983); Horsehead Resource Dev. Co. v. Browner, 16 F.3d 1246, 1253 (D.C.Cir.1994) (citing 45 Fed.Reg. 33,084, 33,092–33,094, 33,120 (May 19, 1980)); see also American Mining Congress v. EPA, 824 F.2d 1177, 1189 (D.C.Cir.1987) ( AMC I ).

To redress that “major deficiency” in the EPA's administration of RCRA, S.Rep. No. 284, 98th Cong., 1st Sess. 36 (1983); H.R.Rep. No. 198, 98th Cong., 1st Sess. 39 (1983), Congress amended the statute in 1984 to add Section 6924(q). That Section specifically addresses the regulation of “Hazardous waste used as fuel.” 42 U.S.C. § 6924(q). Specifically, Section 6924(q) directs the EPA to establish regulatory standards, as “necessary to protect human health and the environment,” to govern facilities that:

(A) “produce a fuel” from “any hazardous waste identified or listed under section 6921 of this title,” whether alone or as a component combined with other materials;

(B) “burn, for purposes of energy recovery” a fuel produced under subsection (A) or containing any other hazardous waste component in fuel that is listed under Section 6921; or

(C) “distribute[ ] or market[ ] any fuel” produced under subsection (A) or containing any other hazardous waste component in fuel that is listed under Section 6921.

42 U.S.C. § 6924(q)(1). Congress added that, for purposes of this subsection, “the term ‘hazardous waste listed under section 6921’ ” shall “include[ ] any commercial chemical product” that “is listed under section 6921 of this title” and that, “in lieu of its original intended use, is (i) produced for use as (or as a component of) a fuel, (ii) distributed for use as a fuel, or (iii) burned as a fuel.” Id.

Regulatory Background

Eleven years after Congress adopted Section 6924(q), the EPA proposed a rule that would exclude from RCRA regulation those petroleum refinery waste products that are reinserted into specified petroleum refining processes. See60 Fed.Reg. 57,747 (Nov. 20, 1995). The EPA reasoned that such materials do not constitute “waste” because they are recycled as part of an ongoing petroleum production process, and thus are never “discarded” within the meaning of RCRA's definition of hazardous solid waste, 42 U.S.C. § 6903(5) & (27). See60 Fed.Reg. at 57,752–57,754. Among the refinery processes the EPA sought to exclude were distillation, catalytic cracking, fractionation, and thermal cracking (also known as coking). See id. at 57,753.

Three weeks before the final version of that regulation was to be issued, the EPA published a Notice of Data Availability requesting comment on whether “gasification” should be added to the list of excluded processes. See63 Fed.Reg. 38,139 (July 15, 1998). Gasification is a process that transforms oil-bearing, residual materials separated out by the petroleum refining process into a distinct form of fuel known as synthesis gas or “syngas,” which can be used for energy recovery. See63 Fed.Reg. at 38,141. Specifically, while syngas can be used to produce other chemicals, it can also be burned as a fuel to produce electricity or steam. See id.

When the EPA published the final rule three weeks later, however, gasification was not included as one of the exempt processes. See63 Fed.Reg. 42,110, 42,184 (Aug. 6, 1998).

Four years later, the EPA revisited the matter and proposed a rule that would exclude from RCRA regulation residual oil-bearing materials left over from the petroleum refining process that are destined for insertion into a gasification unit to produce synthesis gas. See67 Fed.Reg. 13,684 (March 25, 2002). That proposal differed from the query in the 1998 Notice of Data Availability in that it proposed that those materials would be exempt whether or not the gasification unit was part of a petroleum refining operation. Id. at 13,690 (codified at 40 C.F.R. § 261.4(a)(12)(i)).

Also unlike the original 1998 Notice of Data Availability, the proposed Gasification Exclusion Rule conditioned the exemption from RCRA on compliance with a series of conditions on the syngas-creation process: (1) the system into which the material is inserted must meet the proposal's definition of a “gasification system;” (2) the gasification system must generate a synthesis gas that meets the specifications for synthesis gas fuel that the EPA would exempt from the definition of solid waste; (3) the residual waste materials generated from the gasification system must not be placed on the land if they exceed the applicable regulatory standards for chromium, lead, nickel, vanadium, arsenic, or antimony; and (4) the oil-bearing hazardous secondary materials employed to create syngas must not be placed on the land or speculatively accumulated prior to insertion into the gasification system. 67 Fed.Reg. at 13,690.

Petitioners Sierra Club and Environmental Technology Council, as well as other members of the public, submitted comments on the proposed rule that expressed substantial concern about the potential for environmental harm if gasification units were allowed to operate without RCRA regulation, and offered suggestions to expand or alter the EPA's proposed conditions. See, e.g., Comments of the Environmental Technology Council, Docket No. EPA–HQ–RCRA–2002–002–0049 (Sept. 10, 2002); Comments of Sierra Club Lone Star Chapter, Docket No. EPA–HQ–RCRA–2002–0002–0060 (Sept. 10, 2002). In particular, those comments voiced concern that the proposed exclusion, even with the proposed conditions, would fail to regulate hazardous air emissions produced by the gasification process adequately, and Sierra Club explained that the resulting environmental risks would disproportionately affect the low-income and minority neighborhoods where many refineries are located. See id.

When the rule was finalized on January 2, 2008, however, the EPA simply appended “gasification” to the list of refining processes wholly exempted from RCRA in 40 C.F.R. § 261.4(a)(12)(i), abandoning all of its originally proposed conditions, and rejecting those suggested by commenters. See73 Fed.Reg. 57, 58 (Jan. 2, 2008). As a result, under the final Gasification Exclusion Rule, oil-bearing hazardous secondary materials that are otherwise hazardous wastes under Section 6921 of...