Sierra Club v. U.S. Envtl. Prot. Agency

• Decision Date: 12 August 2014
• Docket Number: Nos. 11–73342,11–73356.,s. 11–73342
• Citation: 762 F.3d 971
• Parties: SIERRA CLUB; Center for Biological Diversity; Greenaction for Health and Environmental Justice, Petitioners, v. U.S. ENVIRONMENTAL PROTECTION AGENCY; Lisa P. Jackson, in her official capacity as Administrator, U.S. Environmental Protection Agency; Gina McCarthy, in her official capacity as Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency, Respondents, Avenal Power Center, Respondent–Intervenor. El Pueblo para el Aire y Agua Limpio, Petitioner, v. U.S. Environmental Protection Agency; Lisa P. Jackson, in her official capacity as Administrator of the USEPA; Jared Blumenfeld, in his official capacity as Regional Administrator for Region IX of the USEPA, Respondents, Avenal Power Center, Respondent–Intervenor.
• Court: U.S. Court of Appeals — Ninth Circuit

762 F.3d 971

SIERRA CLUB; Center for Biological Diversity; Greenaction for Health and Environmental Justice, Petitioners,

v.U.S. ENVIRONMENTAL PROTECTION AGENCY; Lisa P. Jackson, in her official capacity as Administrator, U.S. Environmental Protection Agency; Gina McCarthy, in her official capacity as Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency, Respondents,Avenal Power Center, Respondent–Intervenor.

El Pueblo para el Aire y Agua Limpio, Petitioner,

v.U.S. Environmental Protection Agency; Lisa P. Jackson, in her official capacity as Administrator of the USEPA; Jared Blumenfeld, in his official capacity as Regional Administrator for Region IX of the USEPA, Respondents,Avenal Power Center, Respondent–Intervenor.

Nos. 11–73342, 11–73356.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted Oct. 8, 2013.

Filed Aug. 12, 2014.

Paul R. Cort (argued) and George Torgun, Earthjustice, Oakland, CA, for Petitioners Sierra Club, Center for Biological Diversity, and Greenaction for Health and Environmental Justice.

Ingrid Brostrom and Brent Newell, Center on Race, Poverty & the Environment, San Francisco, CA, for Petitioner El Pueblo Para El Aire y Agua Limpio.

Ignacia S. Moreno, Assistant Attorney General, and Stephanie J. Talbert (argued), United States Department of Justice, Environment & Natural Resources Division, Washington, D.C.; Brian Doster, David Coursen, Melina Williams, and Julia Walters, United States Environmental Protection Agency, for Respondents.

William R. Warne (argued), Jane E. Luckhardt, Elizabeth B. Stallard, Gregory T. Broderick, and Nicholas Rabinowitch, Downey Brand LLP, Sacramento, CA, for Respondent–Intervenor.

John J. Davis, Jr. and Andrew J. Kahn, Davis, Cowell & Bowe, LLP, San Francisco, CA, for Amici Curiae Avenal–Area Unions.

On Petition for Review of an Order of the United States Environmental Protection Agency.

Before: N. RANDY SMITH and JACQUELINE H. NGUYEN, Circuit Judges, and GORDON J. QUIST, Senior District Judge.^*

OPINION

NGUYEN, Circuit Judge:

Avenal Power Center LLC (“Avenal Power”) applied to the United States Environmental Protection Agency (“EPA”) for a Prevention of Significant Deterioration Permit (“Permit”), to build and operate the Avenal Energy Project, a 600 megawatt natural gas-fired power plant in the city of Avenal, California. Although EPA had a statutory duty under the Clean Air Act to either grant or deny the Permit application within one year, 42 U.S.C. § 7475(c), it failed to do so. After the deadline passed but before taking any final action, EPA tightened the applicable air quality standards. Avenal Power filed suit and sought to compel EPA to issue the Permit under the old standards that would have applied had EPA acted within the statutory deadline. Initially, EPA responded that it could not legally do so, because the Clean Air Act explicitly requires any newly constructed facility to employ the best available control technology (“BACT”) for regulated pollutants and meet air quality standards in effect at the time a permit is issued. See42 U.S.C. § 7475(a)(3)-(4). Months later, however, EPA reversed course and granted Avenal Power the Permit without regard to the new regulations, which by then had gone into effect. EPA contends that, under narrow circumstances, it has the authority to grandfather certain permit applications like Avenal Power's, and that its decision is entitled to deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Sierra Club, Greenaction for Health and Environmental Justice, Center for Biological Diversity, and El Pueblo para el Aire y Agua Limpio (collectively “Petitioners”), challenge EPA's action.

Applying Chevron, we hold that the Clean Air Act unambiguously requires Avenal Power to demonstrate that the Avenal Energy Project complies with the regulations in effect at the time the Permit is issued. Because “Congress has directly spoken to the precise question at issue,” Chevron, 467 U.S. at 842, 104 S.Ct. 2778, EPA cannot waive this requirement. We therefore GRANT the Petition for review, VACATE the decision to issue the Permit, and REMAND for proceedings consistent with this opinion.

BACKGROUND

Avenal Power proposes to build and operate a power plant, the Avenal Energy Project, near the agricultural communities of Avenal, Huron, and Kettleman City, within California's San Joaquin Valley Pollution Control District. The facility would generate electricity from two 180–megawatt natural gas combustion turbine generators, and a 300–megawatt steam turbine generator that utilizes heat from the combustion turbines. According to EPA, the facility “will be equipped with state-of-the-art control technology and will be one of the lowest emitting power plants of its kind.” It is undisputed, however, that its expected emissions of several pollutants, including nitrogen dioxide (“NO2”), carbon dioxide (“CO2”), and sulfur dioxide (“SO2”), are sufficient to subject it to regulation under the Clean Air Act.

On February 15, 2008, Avenal Power submitted an application to EPA for a Permit. The Regional Administrator determined the application to be administratively complete on March 19, 2008. As of that date, EPA had not yet promulgated national ambient air quality standards (“NAAQS”) for NO2 or SO2 emissions, or BACT requirements for greenhouse gases, including CO2. NAAQS, which are regularly reviewed and revised by the EPA Administrator, set hourly limits on the emission of designated pollutants. See42 U.S.C. §§ 7409, 7409(d)(1); 40 C.F.R. § 52.21(b)(50). The BACT requirement consists of “an emission limitation based on the maximum degree of reduction of each [regulated] pollutant” that EPA determines is achievable “through application of production processes and available methods, systems, and techniques” in view of “energy, environmental, and economic impacts and other costs.” 42 U.S.C. § 7479(3).

On June 16, 2009, after the one-year decision making period had elapsed, see42 U.S.C. § 7475(c), the Regional Administrator finally issued a Statement of Basis describing the reasons for the proposed approval of the Permit. The Statement of Basis is subject to notice and comment procedures that afford the public an opportunity to participate in the review process by submitting written comments and appearing at a hearing to voice support or concern. See42 U.S.C. § 7475(a)(2); 40 C.F.R. §§ 124.10–12. During the comment period in this case, EPA held an informational meeting and two hearings. Concerned that the Avenal Energy Project would adversely impact the environment and health and quality of life of local residents, Petitioners filed comments opposing issuance of the Permit.

While Avenal Power's Permit application was still under consideration, EPA adopted more stringent NAAQS and revised the BACT requirement. Specifically, EPA tightened NAAQS for NO2, capping hourly emissions at 100 parts per billion (“ppb”), with the new regulations to take effect on April 12, 2010. SeePrimary National Ambient Air Quality Standards for Nitrogen Dioxide, 75 Fed.Reg. 6,474, 6,475 (Feb. 9, 2010). EPA further subjected greenhouse gases such as CO2 to BACT requirements, effective January 2, 2011. SeeReconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed.Reg. 17,004 (Apr. 2, 2010). Finally, EPA published a final rule establishing a new hourly SO2 NAAQS of 75 ppb, to become effective August 23, 2010. SeePrimary National Ambient Air Quality Standards for Sulfur Dioxide, 75 Fed.Reg. 35,520 (June 22, 2010).

Facing a slew of new regulations, and frustrated by the delay, Avenal Power filed suit on March 9, 2010, in the United States District Court for the District of Columbia, to compel EPA to issue the Permit. Two months later, EPA requested that Avenal Power complete a cumulative air impact assessment of the Avenal Energy Project's hourly NO2 emissions to address its compliance with the revised NAAQS. Although Avenal Power cooperated and submitted additional documentation, the process took months.

In late August 2010, after the new NO2 and SO2 NAAQS had gone into effect, Avenal Power requested an expedited judgment on the pleadings from the D.C. district court in an effort to compel EPA to issue the Permit without consideration of the newly effective regulations. EPA opposed the motion, arguing that even though it missed the one-year statutory deadline to act on Avenal Power's application, the Clean Air Act prohibits the agency from granting the Permit unless Avenal Power complies with the superseding standards. In support of its position, EPA cited public guidance issued by the Director of its Office of Air Quality Planning and Standards.¹See Memorandum from Stephen D. Page, EPA Office of Air Quality Planning and Standards, Applicability of the Federal Prevention of Significant Deterioration Permit Requirements to New and Revised National Ambient Air Quality Standards (Apr. 1, 2010) (hereinafter “Page Memo”), available at http:// www. epa. gov/ region 7/ air/ nsr/ nsrmemos/ psdnaaqs. pdf. EPA also promised the district court it would issue a final decision by December 31, 2010—that is, before the revised regulations on greenhouse gases went into effect on January 2, 2011. It eventually became clear, however, that a final decision would not be forthcoming by that date, further forestalling administrative proceedings. ² And sure enough, the deadline passed without a final decision.

At this point, after conducting what it described as a “policy review,” EPA reversed course. In a declaration submitted to the D.C. district court, EPA contended that “EPA believes it is appropriate to grandfather,” i.e., exempt, Avenal Power's application from the NO2 and SO2 hourly NAAQS, and the BACT requirement for greenhouse gases. EPA concluded that it possessed...