836 F.3d 999
9th Cir.2016Background
- Sierra Pacific applied for an EPA PSD permit to build a cogeneration boiler at its Anderson, CA lumber mill that would burn primarily co‑located biomass waste (wood residues) and use natural gas only for startup, shutdown, and flame stabilization (capped at 10%).
- EPA processed the permit in two phases: an initial permit (not yet requiring GHG BACT), an EAB remand for a hearing issue, and then a supplemental BACT analysis after the D.C. Circuit vacated EPA’s biogenic‑carbon deferral, culminating in a final PSD permit (2014).
- Petitioners Helping Hand Tools and Center for Biological Diversity challenged EPA’s BACT analysis, asserting EPA should have: (1) treated solar or greater natural‑gas use as available control options (not excluded as a source redefinition); and (2) treated “burning biomass alone” and comparisons among biomass fuel stocks differently in the GHG/Bioenergy BACT analysis.
- EPA applied its GHG permitting guidance and the 2011 Bioenergy BACT Guidance, which (a) permits limiting Step 1 options where considering another fuel would ‘redefine the source,’ and (b) treats indirect environmental effects of different biomass feedstocks as appropriate for Step 4 analysis where science is uncertain.
- The Ninth Circuit denied the petitions, holding EPA’s determinations that solar and greater natural‑gas mixes would redefine Sierra Pacific’s project and that EPA’s Bioenergy BACT approach was reasonable were not arbitrary or capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EPA must include solar power as a Step 1 BACT fuel option (or whether doing so would "redefine the source") | Solar is a cleaner fuel and must be considered as a control alternative. | Considering solar would fundamentally change the project’s design and business purpose (burning co‑located biomass waste) and thus redefine the source. | EPA reasonably concluded solar would redefine the source; exclusion was not arbitrary. |
| Whether EPA must consider greater use of natural gas at Step 1 (instead of capping gas at 10%) | EPA should have analyzed a higher share of natural gas as a control option. | Natural gas use is incidental and limited by Sierra Pacific’s stated purpose; increasing it would disrupt the basic business purpose of using on‑site biomass waste. | EPA reasonably treated greater natural‑gas use as a redefinition; denial was not arbitrary. |
| Whether EPA may list "utilization of biomass fuel alone" as a Step 1 control option for bioenergy BACT (or whether that is impermissible) | Treating biomass combustion alone as a control option is nonsensical because it does not control emissions. | Biomass‑only acts as a baseline comparator in the top‑down BACT framework; EPA need not adopt it as the final choice. | EPA permissibly used biomass‑only as a baseline; listing it in Step 1 was not arbitrary. |
| Whether EPA erred by analyzing environmental differences among biomass fuel stocks in Step 4 rather than Step 1 | EPA should have quantitatively compared biomass feedstocks at Step 1. | Scientific uncertainty prevents reliable quantitative Step 1 comparisons; indirect effects belong in Step 4 and are appropriate for case‑by‑case analysis. | EPA acted reasonably given scientific uncertainty and properly placed such analysis in Step 4; deference warranted. |
Key Cases Cited
- Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427 (2014) (upholding EPA’s authority to require BACT for GHGs under PSD)
- Sierra Club v. EPA, 499 F.3d 653 (7th Cir. 2007) (permitting EPA discretion to exclude fuel alternatives that would redesign a proposed facility)
- Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87 (1983) (courts defer to agencies on technical/scientific matters at the frontiers of expertise)
- Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (agency statutory interpretation reviewed under two‑step Chevron framework)
- EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014) (deference to EPA statutory interpretation in Clean Air Act contexts)
- Wilderness Soc’y v. U.S. Fish & Wildlife Serv., 353 F.3d 1051 (9th Cir. 2003) (weight given to non‑binding agency interpretations depends on thoroughness and rationality)