AMERICAN FUEL & PETROCHEMICAL MANUFACTURERS v. ENVIRONMENTAL PROTECTION AGENCY
No. 17-1258
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 20, 2019 Decided September 6, 2019
Consolidated with 18-1027, 18-1040, 18-1041 On Petitions for Review of an Action of the United States Environmental Protection Agency
Before: HENDERSON, TATEL, and GRIFFITH, Circuit Judges.
Bryan M. Killian argued the cause for petitioner National Biodiesel Board. With him on the briefs was Douglas A. Hastings.
Devorah Ancel argued the cause for Environmental Petitioners. With her on the briefs was Eric Huber.
Benjamin R. Carlisle, Attorney, and Michael R. Eitel, Senior Trial Attorney, U.S. Department of Justice, argued the causes for respondent. With them on the brief were Jeffrey H. Wood, Acting Assistant Attorney General, Jonathan D. Brightbill, Deputy Assistant Attorney General, and David P.W. Orlin, Attorney, U.S. Environmental Protection Agency.
Thomas Allen Lorenzen argued the cause for intervenors in support of respondent responding to National Biodiesel Board. With him on the brief were Robert A. Long Jr., Kevin King, Stacy Linden, Richard S. Moskowitz, Robert J. Meyers, and Elizabeth B. Dawson. David Y. Chung and John P. Wagner entered appearances.
Seth P. Waxman, David M. Lehn, Saurabh Sanghvi, Claire H. Chung, Robert A. Long, Jr., Kevin King, Matthew W. Morrison, Bryan M. Stockton, Bryan M. Killian, and Douglas A. Hastings were on the brief for intervenors Growth Energy, et al. in support of respondent.
Matthew W. Morrison, Bryan M. Stockman, Seth P. Waxman,
Opinion for the Court filed PER CURIAM.
PER CURIAM: The Clean Air Act’s Renewable Fuel Program mandates that certain amounts of renewable fuel must be introduced into the U.S. fuel supply each year. In late 2017, the EPA promulgated its final 2018 Rule, which, as in previous years, established overall targets for the fuel market and imposed individual compliance obligations on fuel refineries and importers. These consolidated cases concern various challenges to the 2018 Rule. Several petitioners maintain it is too strict, others allege it is too lax, and still others argue that the EPA failed to follow proper procedures in its promulgation. We conclude that all these challenges lack merit, except for one: that the EPA violated its obligations under the Endangered Species Act by failing to determine whether the 2018 Rule may affect endangered species or critical habitat. We therefore grant the petition for review filed by the Gulf Restoration Network and Sierra Club and remand the 2018 Rule without vacatur for the EPA to comply with the Endangered Species Act. We deny all other petitions for review.
I. Background
A. The Renewable Fuel Program
Enacted in 2005 and amended in 2007, the Renewable Fuel Program (the “Program” or “RFS Program”), alternatively called the Renewable Fuel Standard, was designed “[t]o move the United States toward greater energy independence and security” and “to increase the production of clean renewable fuels.” Energy Independence and Security Act of 2007, Pub. L. No. 110-140, pmbl., 121 Stat. 1492, 1492; see also id. §§ 201–210 (amending the Program); Energy Policy Act of 2005, Pub. L. No. 109-58, § 1501, 119 Stat. 594, 1067–76 (enacting the Program). To accomplish these goals, the Program regulates suppliers through “applicable volume[s]”—mandatory and annually increasing quantities of renewable fuels that must be “introduced into commerce in the United States” each year—and tasks the EPA Administrator with “ensur[ing]” that those annual targets are met.
The Program specifies annual fuel-volume requirements for four overlapping categories of fuel. The first and broadest category, “renewable fuel,” includes any “fuel that is produced from renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in” either “a transportation fuel,”
The Program lists calendar years and corresponding applicable volumes for each type of fuel. These tables run through 2022 for renewable fuel, advanced biofuel, and cellulosic biofuel; for 2018, the statute mandates applicable volumes of 26, 11, and 7 billion gallons, respectively. See
Although the statutory tables initially appear to admit no exception, their applicable volumes in fact provide only starting points. Under certain circumstances, the Program grants the Administrator authority
The first waiver is mandatory. The Program requires that if in any year “the projected volume of cellulosic biofuel production is less than the minimum applicable volume” set by statute, then “the Administrator shall reduce the applicable volume of cellulosic biofuel . . . to the projected volume available during that calendar year.”
The second waiver flows from the first. For any year in which the EPA reduces the applicable volume of cellulosic biofuel based on a projected shortfall, “the Administrator may also reduce the applicable volume of renewable fuel and advanced biofuels . . . by the same or a lesser volume.”
The last waiver, the so-called general waiver, is also discretionary. It permits the Administrator to “reduc[e] the national quantity of renewable fuel required” by the Program “based on a determination” that any of three circumstances exist: first, “that implementation of the requirement would severely harm the economy . . . of a State, a region, or the United States,”
After exercising any waivers and finalizing an applicable volume for each type of fuel, the EPA must by November 30 of each year calculate and promulgate “renewable fuel obligation[s] that” will “ensure[] that the [Program’s] requirements . . . are met” in the upcoming year.
To begin with, there is the threshold question of who, exactly, must satisfy renewable fuel obligations—that is, who are the “obligated parties”? Although the statute states that “[t]he renewable fuel obligation determined for a calendar year . . . shall . . . be applicable to refineries, blenders, and importers, as appropriate,”
Next, each year the EPA must transform its aggregate, fuel-sector-wide applicable volumes into individual compliance obligations that sum to the requisite whole. To do this, the Program instructs the EPA to translate the applicable volumes into “percentage[s] of transportation fuel sold or introduced into commerce in the United States.”
Although the nuances of the percentage standard are mostly beyond the scope of this case, one feature requires mention. When calculating percentage standards for any given year, the EPA accounts for any small refineries that have received exemptions by requiring non-exempt obligated parties to produce proportionally more. See Regulation of Fuels and Fuel Additives: 2011 Renewable Fuel Standards, 75 Fed. Reg. 76,790, 76,805 (Dec. 9, 2010) (explaining that small-refinery exemptions “result in a proportionally higher percentage standard for remaining obligated parties”). The problem is that while the EPA must promulgate annual percentage standards by November 30 each year, refineries may petition for an exemption “at any time,”
Finally, after the obligated parties have been identified and their percentage standards have been set, there remains the matter of compliance. The Program does not require each obligated party to produce precisely the right mix of fuel itself. See
B. The 2018 Rule
To fulfill its annual rulemaking obligation under
The Proposed Rule further solicited comment on three other issues. First, although the EPA initially concluded that it should not exercise its general waiver authority to reduce applicable volumes further, it solicited comment on whether it should exercise that authority due to either severe economic harm or inadequate domestic supply. Id. at 34,213. Second, it solicited comment on how it should account for small refinery exemptions when translating the 2018 applicable volumes into percentage standards. Id. at 34,241–42. And third, it solicited comment on the current RIN trading market. Id. at 34,211. It clarified, however, that it was “not soliciting comment on any aspect of the current RFS regulatory program other than those specifically related to RIN trading . . . and the proposed annual standards for 2018 and biomass-based diesel applicable volume for 2019.” Id.
During the comment period, the EPA published supplemental information regarding its proposal and requested further comment on aspects of the Proposed Rule. See Renewable Fuel Standard Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019; Availability of Supplemental Information and Request for Further Comment (“Supplemental Information”), 82 Fed. Reg. 46,174 (Oct. 4, 2017). In particular, in response to this court’s intervening decision in Americans for Clean Energy, the EPA solicited comment on the meaning of the phrases “inadequate domestic supply” and
Over 235,000 comments later, the EPA promulgated its final 2018 Rule in December 2017. See Renewable Fuel Standard Program: Standards for 2018 and Biomass-Based Diesel Volume for 2019 (“2018 Rule”), 82 Fed. Reg. 58,486, 58,487 (Dec. 12, 2017). The 2018 Rule tracked the Proposed Rule with only slight modifications. The EPA reduced the applicable volume for cellulosic biofuel to match the agency’s updated projection of the amount of cellulosic biofuel that would be produced in 2018. Id. at 58,487. It also exercised its full cellulosic waiver authority to reduce the applicable volumes for advanced biofuel and renewable fuel by an equal amount. Id. And as anticipated in the Proposed Rule, the EPA declined to exercise its general waiver authority to reduce applicable volumes further due to inadequate domestic supply or severe economic harm. Id. The EPA adopted the following final applicable volumes and percentage standards:
2018 RULE: APPLICABLE VOLUMES & PERCENTAGE STANDARDS
| Applicable Volume (billions of gallons) | Percentage Standard | |
|---|---|---|
| Cellulosic Biofuel | 0.288 | 0.159% |
| Biomass-Based Diesel | 2.1 (2019) | 1.74% |
| Advanced Biofuel | 4.29 | 2.37% |
| Total Renewable Fuel | 19.29 | 10.67% |
Id. at 58,487, 58,491. The EPA further explained that it calculated the percentage standards without prospectively adjusting for potential small refinery exemptions and that it did not intend to adjust retroactively the fuel percentage standards to account for exemptions it subsequently granted. Id. at 58,523. The EPA also declined to address as “beyond the scope of this rulemaking” comments asking it to reconsider its RIN policy for renewable fuel exports and its definition of obligated parties. Assessment and Standards Div., Office of Transp. and Air Quality, EPA, EPA-420-R-17-007, Renewable Fuel Standard Program – Standards for 2018 and Biomass-Based Diesel Volume for 2019: Response to Comments 223 (December 2017) (“Response to Comments”), Joint Appendix (J.A.) 1446.
C. Procedural History
After the EPA promulgated its final rule, four groups of interested parties petitioned for review in this court. American Fuel & Petrochemical Manufacturers, a national trade association of U.S. refineries and petrochemical manufacturers, and Valero Energy Corporation, a Texas-based energy company that refines transportation fuels, produces biofuels, and sells them in the United States (together, the “Obligated Parties”), both filed petitions for review challenging the 2018 Rule as setting applicable volumes and percentage standards too high. On the other hand, the National Biodiesel Board, a biodiesel industry trade association, petitioned for review of the 2018 Rule on the ground that the Rule set applicable volumes and percentage standards too low. Independently, the Sierra Club and Gulf Restoration Network,
While the petitions before us were pending, another panel of this court resolved several petitions challenging the EPA’s final rule setting applicable volumes and percentage standards for 2017 and the applicable volume for biomass-based diesel for 2018. See Alon Ref. Krotz Springs, Inc. v. EPA, No. 16-1052, slip op. at 6–7 (D.C. Cir. Aug. 30, 2019) (deciding related case Coffeyville Res. Ref. & Mktg., LLC v. EPA, No. 17-1044 (D.C. Cir. filed Feb. 9, 2017)).
II. Jurisdiction and Standards of Review
We have jurisdiction of a timely petition for review of the EPA’s regulations implementing the Program.
We also may reverse an EPA action under the Program if we determine that it is “otherwise not in accordance with law” or “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”
We proceed to apply these standards of review to each of the claims raised in these consolidated cases. In Part III we address arguments regarding the 2018 Rule’s applicable volumes, including claims that the EPA erred both in exercising its full cellulosic waiver authority and in declining to exercise its general waiver authority. Next, in Part IV we discuss challenges to the ways in which the EPA translates applicable volumes into compliance obligations, specifically its treatment of RINs generated by renewable fuel exports, its definition
III. Applicable Volumes
We begin with the 2018 Rule’s applicable volumes. To arrive at those requirements, the EPA proceeded through a series of interlocking steps. It began by projecting 288 million gallons of cellulosic biofuel production in 2018—6.71 billion gallons short of the Program’s 7-billion-gallon statutory target—and exercised its mandatory waiver accordingly. See 2018 Rule, 82 Fed. Reg. at 58,492, 58,495–504. Next, after estimating “reasonably attainable” volumes of other advanced biofuels and considering “the costs and benefits associated with” achieving those volumes, the EPA decided to exercise its full cellulosic waiver authority to reduce advanced biofuel and renewable fuel applicable volumes to 4.29 and 19.29 billion gallons, respectively. Id. at 58,513. And finally, the EPA considered but rejected using its general waiver authority, concluding that neither “severe economic harm” nor “inadequate domestic supply” warranted further reductions in applicable volumes. Id. at 58,516–18.
Petitioners find fault in each of these steps. First, the Obligated Parties argue that the EPA miscalculated its projection of cellulosic biofuel production. Second, the National Biodiesel Board contends that the EPA impermissibly considered financial costs when deciding to set applicable volumes of advanced biofuels below reasonably attainable levels. And third, the Obligated Parties argue that, for various reasons, the EPA unreasonably interpreted and refused to exercise its general waiver authority. None of these challenges has merit.
A. Liquid Cellulosic Biofuel Projection
In the 2018 Rule, the EPA projected that 288 million gallons of cellulosic biofuel would be produced in 2018: the sum of 274 million gallons of liquefied and compressed natural gas and 14 million additional gallons of liquid cellulosic biofuel. See 2018 Rule, 82 Fed. Reg. at 58,503 tbl.III.D.3-1. Only this latter liquid estimate is at issue in this case.
To arrive at its liquid cellulosic projection, the EPA “use[d] the same general approach as . . . in previous years.” Id. at 58,498. It began by sorting potential producers according to whether they had previously “achieved consistent commercial scale production” of liquid cellulosic biofuel. Id. Then it defined two ranges “of likely production volumes for 2018,” one “for each group of companies.” Id. It set the low end of each range at last year’s “actual RIN generation” (for consistent producers) or zero (for new producers) and estimated the high end of each range (for both groups) by considering “a variety of factors,” including each facility’s “expected start-up date,” “ramp-up period,” and “capacity.” Id. at 58,499. And finally, the EPA selected what it calls a “percentile value”—in simplified terms, a number somewhere between the endpoints of each range—to extract “from the established range[s] a single projected production volume for each group of companies.” Id. at 58,498–99. The lower the percentile value, the lower the resulting projection.
The Obligated Parties complain that by relying on this percentile method, which has produced overestimations in the past,
Given that the Obligated Parties offer no other grounds to doubt the EPA’s liquid cellulosic biofuel projection methodology, we conclude that the EPA’s estimate, as required, “took a ‘neutral aim at accuracy’ and was otherwise reasonable and reasonably explained.” Id. at 729 (quoting Am. Petroleum Inst. v. EPA, 706 F.3d 474, 476 (D.C. Cir. 2013)).
B. Cellulosic Waiver
Having projected that only 288 million gallons of cellulosic biofuel would be produced in 2018, the EPA did as the Program requires and “reduce[d] the applicable volume of cellulosic biofuel” from 7 billion gallons “to [that] projected volume.”
It began by considering what volumes of advanced biofuels would be “reasonably attainable in 2018,” excluding volumes whose attainment would result in the “diversion of advanced feedstocks from other uses or diversion of advanced biofuels from foreign sources.” 2018 Rule, 82 Fed. Reg. at 58,505. Based on an extensive analysis of various advanced biofuels (primarily imported sugarcane ethanol and advanced biodiesel and renewable diesel), the EPA projected that in addition to 288 million gallons of cellulosic biofuel, about 4.11 billion gallons of non-cellulosic advanced biofuels were reasonably attainable. See id. at 58,513. Although less than the statute’s 11-billion-gallon target, the EPA’s combined 4.4-billion projection, in a sense, exceeded statutory expectations: while the Program implicitly requires 4 billion gallons of non-cellulosic advanced biofuel (11 billion minus 7 billion), the EPA estimated that up to 4.11 billion gallons could, in fact, be made available (110 million gallons above the 4-billion-gallon floor).
Next, the EPA had to decide whether to require those 110 million gallons of non-cellulosic advanced biofuels “to partially backfill for”—i.e., compensate for—“missing cellulosic volumes.” Id. at 58,505. Acknowledging that it had mandated such backfilling in previous years, the EPA nonetheless explained that, “as a result of a stronger policy focus on the economic
The National Biodiesel Board argues that by taking cost considerations into account, the EPA erred in exercising its full cellulosic waiver. We disagree.
The Board first argues that the EPA “waive[d] the advanced-biofuel volume solely to save obligated parties money,” NBB Br. 23, and that in so doing, the 2018 Rule “strayed too far” from the Program’s “market forcing” purpose, id. at 21 (quoting Ams. for Clean Energy, 864 F.3d at 710). Neither proposition is correct. To begin with, the EPA hardly “[s]et[] the advanced-biofuel volume based entirely on costs.” Id. To the contrary, in calculating the reasonably attainable volume of advanced biofuels, the EPA analyzed many factors, all of which justified a 6.6-billion-gallon reduction—and only then did it rely on cost considerations to support an additional 110-million-gallon decrease. And the EPA’s decision to consider costs fell well within its discretion. As this court observed in Americans for Clean Energy, because “the text of the cellulosic waiver provision does not direct [the] EPA to ‘consider particular factors,’” the “EPA enjoys broad discretion” “to consider ‘a range of factors’ in determining whether to exercise its cellulosic waiver authority.” 864 F.3d at 734 (quoting Monroe Energy, 750 F.3d at 915–16). The Board offers no persuasive reason to conclude that those factors must exclude costs.
The Board next contends that the EPA failed to justify its decision to abandon its former practice of requiring non-cellulosic advanced biofuels to backfill for cellulosic deficits
up to reasonably attainable levels. Under normal circumstances, the 2018 Rule‘s explanation would have been perfectly sufficient: the EPA both “display[ed] awareness that it [was] changing position” and offered “good reasons for the new policy.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009). The Board, however, argues that this is not the typical case. Because the EPA‘s prior practice of requiring all reasonably attainable levels to be produced “engendered serious reliance interests,” says the Board, the 2018 Rule was required to “provide ‘a more detailed justification‘” than usual. NBB Br. 24 (quoting Fox Television Stations, 556 U.S. at 515). According to the Board, the EPA failed to satisfy this heightened requirement.
Again, we disagree. First, it is far from obvious that renewable fuel producers possess the sort of reliance interests that merit special consideration.
Finally, the Board suggests that the non-delegation doctrine prohibits any interpretation of the EPA‘s cellulosic waiver authority broad enough to permit the EPA to consider costs. This argument we easily reject. To satisfy the constitutional requirement that “[a]ll legislative Powers . . . shall be vested in . . . Congress,”
C. General Waiver
After reducing applicable volumes of cellulosic biofuel, advanced biofuel, and renewable fuel by the amount of the cellulosic shortfall, the EPA then considered whether “severe[] harm [to] the economy or environment” or “an inadequate domestic supply” existed such that further reductions were justified.
Before addressing the particulars of the EPA‘s general waiver determination, the Obligated Parties make an antecedent argument: that the EPA began its analysis at the wrong baseline. They ground their contention in the Program‘s general waiver provision, which states that the EPA “may waive the requirements of paragraph (2)“—that is, the statutory applicable volumes—“by reducing the national quantity of renewable fuel required under paragraph (2).”
The Obligated Parties ask too much. As an initial matter, the statute is at least ambiguous when it comes to sequencing the cellulosic and general waivers. Both provisions grant the EPA authority to “waive” or “reduce” the applicable volumes established by “paragraph (2),” but neither provision indicates what the EPA should do if, as here, it has already decided to reduce those volumes.
Consequently, because “Congress has not directly addressed the precise question at issue,” we need determine only “whether the agency‘s answer is based on a permissible construction of the statute.” Chevron, 467 U.S. at 843. And indeed it is. Not only is it reasonable to interpret one waiver authority as reducing paragraph (2)‘s volumes for purposes of the other waiver authority, but, as the EPA points out, “[t]here is no logical reason why [the agency] should base its waiver decision” on hypothetical volumes “that will not actually be implemented . . . because they have been reduced.” EPA Br. 37. We have no basis, therefore, for overriding the EPA‘s reasonable interpretation of the Program‘s text with a requirement—cumbersome at best and absurd at worst—that the EPA conduct counterfactual analyses of scenarios it has already rejected.
2. Severe Economic Harm
We turn, then, to the EPA‘s examination of whether the 2018 Rule‘s applicable volumes as reduced by the cellulosic waiver “would severely harm the economy . . . of a State, a region, or the United States.”
The Obligated Parties first take issue with the EPA‘s interpretation of the requisite causal link between applicable volumes, on the one hand, and severe harm to the economy, on the other. The EPA interprets the general waiver provision “as requiring a demonstration that implementation of the RFS Program itself would cause severe economic harm (as opposed to allowing a waiver if severe economic harm were demonstrated for any reason,
The EPA has set a high bar, to be sure, but we disagree with the Obligated Parties’ assertion that the bar is so high as to be unreasonable. At bottom, this dispute comes down to an interpretation of the phrase “would severely harm the economy.”
As to the Obligated Parties’ analytical objection, they question whether the EPA provided adequate reasons for its determination that “further reductions” of applicable volumes “on the basis of severe economic harm” were not “warranted.” 2018 Rule, 82 Fed. Reg. at 58,518. To reach this conclusion, the EPA first acknowledged various comments regarding the 2018 Rule‘s financial “impacts on specific companies” but explained that “statements generally claiming financial difficulties, potential for closure, and the high cost of RIN purchases alone” failed to support a determination “that severe economic harm to a State, a region, or the United States [was] occurring.” Assessment of Waivers 5, J.A. 1041. Then, observing “that the 2018 volumes generated through the maximum reduction permitted under the cellulosic waiver authority are nearly the same as the volume requirements for 2017,” the EPA explained that it would, in effect, use 2017 as a test case by considering both “[w]hether severe economic harm ha[d] occurred . . . in 2017, and . . . whether the economic conditions in 2018 might be expected to be substantially different than those in 2017.” 2018 Rule, 82 Fed. Reg. at 58,518. Based on its assessment of “market overcompliance, retail fuel prices, fuel supply, crop prices, and refinery closures” in recent years along with “crop-based feedstock futures prices” and “projected gasoline demand” for 2018, the EPA concluded that the 2017 requirements had not “caus[ed] severe economic harm to a State, a region, or the United States” and that “market conditions in 2018” were unlikely “to cause compliance with the applicable standards to have a higher potential for severe economic harm than in 2017.” Assessment of Waivers 14–15, J.A. 1050–51.
The Obligated Parties nonetheless argue that the EPA erred by “ignor[ing] actual data regarding state and regional economic jeopardy.” Obligated Parties Br. 29 (emphasis omitted). For this claim, they cite two facts: first, that “the largest refiner on the East Coast” declared bankruptcy after the 2018 Rule went into effect, portending, in the Obligated Parties’ view, additional “refinery shutdowns,” Obligated Parties Reply Br. 12, 15; and second, that RIN costs are “escalating” and, in the Obligated Parties’ estimation, not easily passed on to consumers, Obligated Parties Br. 29.
But the EPA did, in fact, address this purported evidence of economic harm. As to threatened refinery closures, the EPA noted that the commenting refineries lacked “any concrete evidence that their financial difficulties are caused primarily or even significantly by the RFS program.” Assessment of Waivers 5, J.A. 1041. And as to compliance costs, the EPA explained that the refineries had failed to show “why they cannot recoup the cost of RINs through higher prices of their products.” 2018 Rule, 82 Fed. Reg. at 58,517. Although the Obligated Parties may disagree with the EPA‘s analysis, they have fallen far short of showing that the EPA either “entirely failed to consider an important aspect of the problem” or “offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass‘n, 463 U.S. at 43. Mindful that we may not “substitute [our] judgment for that of the agency,” id., we conclude that the EPA did not act arbitrarily and capriciously in declining to exercise the economic-harm prong of its general waiver authority.
3. Inadequate Domestic Supply
The Obligated Parties also take issue with the EPA‘s failure to exercise the general waiver “based on a determination . . . that there is an inadequate domestic supply.”
After dipping its toe into the water, however, the EPA waded no further. Instead, the final 2018 Rule analyzed each category of fuel under both a production-only and an imports-inclusive interpretation of “domestic supply.” Concluding that “a waiver is not warranted” “[u]nder either approach,” the EPA adopted neither definition—in effect, deciding not to decide. 2018 Rule, 82 Fed. Reg. at 58,516. Its analysis proceeded as follows.
The EPA began by discussing the supply of “non-advanced” renewable fuel—primarily corn ethanol—that could fill the 15-billion-gallon gap between the Program‘s requirement of 11 billion gallons of advanced biofuel (4.29 after the cellulosic waiver) and 26 billion gallons of total renewable fuel (19.29 after the cellulosic waiver). 2018 Rule, 82 Fed. Reg. at 58,516–17. Explaining that “the total domestic production capacity of corn ethanol in the [United States] is about 16 billion gallons” and that “total production . . . in 2016 exceeded 15 billion gallons,” the EPA concluded the market could supply sufficient “conventional renewable fuel” with or without imports. Id. at 58,517.
Turning next to cellulosic biofuel, the EPA explained that 286 million gallons of its 288-million-gallon projection was “expected to come from domestic sources” and that pre-2018 “carryover cellulosic biofuel RINs” were available to facilitate “additional compliance flexibility.” Id. “Given the importance that Congress placed on the growth of cellulosic biofuel volumes” and the 2018 Rule‘s “projection that compliance with a 288 million gallon requirement is feasible,” the EPA decided it “would not exercise its discretion to lower the 288 million gallon projected cellulosic biofuel volume by 2 million gallons even if [it] were to interpret the term ‘domestic supply’ to exclude imported volumes.” Id.
That left only non-cellulosic advanced biofuel. Having already determined that 4.11 billion gallons (4.4 billion minus 288 million) was “reasonably attainable,” the EPA dismissed any concern that there would be an “inadequate domestic supply” of advanced biofuel under an imports-inclusive interpretation. See id. at 58,516. But, as the EPA acknowledged, a production-only interpretation presented a closer question. The EPA observed that “a significant portion of the advanced biofuel available in previous years has been from imported biofuels,” and it noted comments “suggest[ing] that, without imported volumes, the domestic industry could not ramp up production quickly enough to compensate for the exclusion of imports from our analysis.” Id. at 58,517. The 2018 Rule, however, also highlighted comments to the contrary. “Some commenters pointed to total domestic production capacity and feedstock availability,” the EPA explained, “to argue that domestic producers are capable of compensating for volumes that would not be provided through imports.” Id. Faced with this “uncertainty,” the EPA concluded that based on “the distinct possibility that the domestic industry could compensate for exclusion of imports” and “the availability of imported volumes and carryover RINs,” it “would
This belt-and-suspenders approach, though perhaps not maximally efficient, relieved the EPA of any obligation to choose conclusively one interpretation of “domestic supply” over the other. To be sure, “an agency rule would be arbitrary and capricious if the agency . . . entirely failed to consider an important aspect of the problem.” Motor Vehicle Mfrs. Ass‘n, 463 U.S. at 43. But by explaining that it would decline to exercise its general waiver under either a production-only or imports-inclusive interpretation, the EPA made that choice itself unimportant. And because the EPA sufficiently “acknowledge[d] factual uncertainties and identif[ied] the considerations it found persuasive” with respect to each of its alternative analyses, we find no fault in the substance of the 2018 Rule‘s “predictive judgments” about the adequacy of domestic supply. Rural Cellular Ass‘n v. FCC, 588 F.3d 1095, 1105 (D.C. Cir. 2009).
Nor are we persuaded by the Obligated Parties’ contention that the imports-inclusive option would have “impermissibly twisted the [Program‘s] statutory language.” Obligated Parties Br. 32. Implied by the Obligated Parties’ interpretive argument is a bold assertion: that the EPA could have acted arbitrarily and capriciously by merely contemplating, without adopting, an erroneous interpretation of the statutory text. But even assuming that premise, we conclude that the EPA permissibly considered what would have been a reasonable interpretation of an ambiguous statutory phrase. Indeed, this court has previously offered “import capacity” as an example of the sorts of “supply-side factors” that the “‘inadequate domestic supply’ provision authorizes [the] EPA to consider” when “examining whether the supply of renewable fuel is adequate.” Ams. for Clean Energy, 864 F.3d at 710. We can hardly blame the EPA for permitting itself to consider whether this court spoke accurately. See Supplemental Notice, at 46,178 & n.19 (explaining the EPA‘s view that “the court‘s statements,” while “dicta,” “may indicate the scope of permissible, but not required, interpretations“).
In conclusion, even though the EPA declined to interpret “inadequate domestic supply,” its refusal to exercise the domestic-supply prong of its general waiver authority was nonetheless “the product of reasoned decisionmaking.” Motor Vehicle Mfrs. Ass‘n, 463 U.S. at 52. We reject the Obligated Parties’ contrary arguments.
4. Ethanol Projection
Before moving away from the EPA‘s general waiver analysis, we must address one final point: the Obligated Parties’ argument that the EPA failed to produce a well-reasoned estimate of attainable ethanol production, thus making “its final volume determinations . . . arbitrary and capricious.” Obligated Parties Br. 41; see also Oral Arg. Tr. 8–9 (conceding that any errors in the EPA‘s ethanol projection could affect only the general waiver, as the EPA exercised in full its cellulosic waiver).
The Obligated Parties misapprehend the EPA‘s ultimate task. The Program imposes no free-floating obligation on the EPA to estimate “the reasonably attainable supply of ethanol.” Obligated Parties Br. 37. Nor does it permit, much less require, the EPA to craft applicable volumes of any fuel from scratch. Instead, the statute establishes applicable volumes—in 2018, 26 billion gallons of renewable fuel, no more than 15 gallons of it
The 2018 Rule‘s explanation is more than satisfactory. Citing the Renewable Fuels Association‘s “2017 Ethanol Industry Outlook,” the EPA explained that the U.S. market had the capacity to produce “about 16 billion gallons” of corn ethanol and had in fact produced some 15.25 billion gallons in 2016. 2018 Rule, 82 Fed. Reg. at 58,517 & n.135. The EPA further supplied a lengthy memorandum analyzing “various conditions and constraints in the marketplace . . . for the two most prominent biofuels, ethanol and biodiesel.” Memorandum from David Korotney, Office of Transp. and Air Quality, EPA, to Docket EPA-HQ-OAR-2017-0091, Market Impacts of Biofuels 1 (Nov. 27, 2017), J.A. 1180. “[B]ased both on levels achieved in the past and” predictions regarding “how the market might respond to the applicable standards,” the EPA offered “a range of possible outcomes with varying levels of [ethanol blends], imported sugarcane ethanol, advanced biodiesel and renewable diesel, and conventional biodiesel and renewable diesel,” all of which would satisfy the (post-cellulosic waiver) “total renewable fuel and advanced biofuel volume requirements of 19.29 and 4.29 billion gallons, respectively.” Id. at 11, J.A. 1190. This analysis provided more than enough support for the EPA‘s determination that neither inadequate supply nor economic harm warranted use of the general waiver.
D. 2019 Biomass-Based Diesel Applicable Volume
In addition to establishing renewable fuel obligations for cellulosic biofuel, advanced biofuel, and renewable fuel for calendar year 2018, the 2018 Rule also finalized the biomass-based diesel applicable volume for 2019—a year for which the Program lists no statutory applicable volume. See 2018 Rule, 82 Fed. Reg. at 58,518–22. Following the same “approach [it used] in setting the final [biomass-based diesel] volume requirement for 2018,” the EPA decided to maintain the biomass-based diesel requirement at 2.1 billion gallons, the same as in 2018. Id. at 58,522. Central to the EPA‘s analysis was its assessment that because “RIN generation data has consistently demonstrated that the advanced biofuel volume requirement . . . [is] capable of incentivizing the supply of [biomass-based diesel] above and beyond the [biomass-based diesel] volume requirement,” “the 2019 advanced volume requirement“—not the biomass-based diesel requirement—would drive “the level of [biomass-based diesel] production and imports that occur in 2019.” Id. at 58,521–22. In other words, the EPA determined that while its biomass-based diesel requirement might set a floor on production, it would hardly impose a ceiling. The EPA therefore concluded that a 2.1-billion-gallon requirement would “strike[] the appropriate balance between” “maintaining support for the [biomass-based diesel] industry” and “providing a market environment where the development of other advanced biofuels is incentivized.” Id.
IV. Other Facets of the Program
The Obligated Parties and the National Biodiesel Board also challenge three of the EPA‘s regulations implementing the Program. The Obligated Parties contend that the EPA, as part of the 2018 rulemaking process, should have reconsidered both its RIN policy for renewable fuel exports and its definition of “obligated party.” The National Biodiesel Board, in turn, argues that the EPA should have accounted for retroactively granted small refinery exemptions in calculating percentage standards. As explained below, the Obligated Parties’ challenges are untimely and the National Biodiesel Board‘s challenge was not preserved.
A. The EPA‘s RIN Policy for Renewable Fuel Exports
Under the EPA‘s current regulations, obligated parties cannot use RINs generated from renewable fuel that is later exported from the United States to satisfy their renewable fuel obligations under the Program. See
The EPA correctly dismissed comments regarding its RIN policy for renewable fuel exports as outside the scope of the 2018 Rule. In the Proposed Rule, the EPA delineated those issues for which it was—and was not—soliciting comment: “EPA is not soliciting comment on any aspect of the current RFS regulatory program other than those specifically related to RIN trading . . . and the proposed annual standards for 2018 and biomass-based diesel applicable volume for 2019.” Proposed Rule, 82 Fed. Reg. at 34,211. The Obligated Parties do not dispute that the EPA‘s RIN policy for renewable fuel exports falls outside these enumerated subjects for comment. Instead, the Obligated Parties point to five other statements in the Proposed Rule and Supplemental Information that they argue brought the EPA‘s RIN policy for renewable fuel exports within the scope of the rulemaking: (1) the EPA‘s acknowledgment that “[r]eal-world challenges” have
Because comments regarding the EPA‘s RIN policy for exported renewable fuel were outside the scope of the 2018 rulemaking, we lack jurisdiction to consider the Obligated Parties’ instant challenge to the policy. Generally, “[a] petition for review of action of [the EPA] in promulgating . . . any control or prohibition under [the Program] . . . shall be filed within sixty days from the date notice of such promulgation, approval, or action appears in the Federal Register.”
In an apparent attempt avoid the sixty-day filing period, the Obligated Parties argue that the EPA acted arbitrarily and capriciously by failing even to reconsider its RIN policy for renewable fuel exports. According to the Obligated Parties, altering that policy is a significant alternative that the EPA should have considered when settling on the 2018 Rule‘s applicable volumes and percentage standards. Although an agency must consider comments “relevant to the agency‘s decision and which, if adopted, would require a change in an agency‘s proposed rule,” it “does not have to ‘make progress on every front before it can make progress on any front.‘” Nat‘l Mining Ass‘n v. MSHA, 116 F.3d 520, 549 (D.C. Cir. 1997) (per curiam) (first quoting Home Box Office, Inc. v. FCC, 567 F.2d 9, 35 n.58 (D.C. Cir. 1977) (per curiam); then quoting Pers. Watercraft Indus. Ass‘n v. Dep‘t of Commerce, 48 F.3d 540, 544 (D.C. Cir. 1995)). Here, the Obligated Parties have not explained how a change in the EPA‘s RIN policy for renewable fuel exports would have required the agency also to change its proposed applicable volumes and percentage standards. Therefore, the EPA could, without acting arbitrarily and capriciously, take the discrete action of establishing annual applicable volumes and percentage standards under the Program while declining to reconsider its RIN policy for renewable fuel exports.
B. The EPA‘s Definition of “Obligated Party”
The Clean Air Act gives the EPA some leeway in determining which parties in the transportation fuel industry must comply with the Program‘s percentage standards. The Act provides that renewable fuel obligations “shall . . . be applicable to refineries, blenders, and importers, as appropriate.”
There is no doubt that the EPA is correct that comments regarding the agency‘s “obligated party” definition fell outside the scope of the 2018 rulemaking. In the Proposed Rule, the EPA expressly declared that it was not reopening the issue: “EPA is not re-opening for public comment in this rulemaking the current definition of ‘obligated party.‘” Proposed Rule, 82 Fed. Reg. at 34,211. Because the EPA did not reopen the issue, the Obligated Parties’ challenge to the EPA‘s rule is untimely by over seven years, see Regulation of Fuels and Fuel Additives: Modifications to Renewable Fuel Standard Program, 75 Fed. Reg. 26,026, 26,037 (May 10, 2010), and we therefore lack jurisdiction to review the limited reach of the EPA‘s regulations obligating only refineries and importers of transportation fuel, see Sierra Club, 895 F.3d at 16.
The Obligated Parties, however, again attempt to side-step the sixty-day filing requirement by arguing that the EPA acted contrary to the Clean Air Act as well as arbitrarily and capriciously by declining to reconsider its definition of “obligated party” in promulgating the annual applicable volumes and percentage standards in the 2018 Rule. We need not consider this argument because this court‘s recent decision in Alon Refining resolves the issue. See slip op. at 53.
C. The EPA‘s Method of Accounting for Small Refinery Exemptions
After establishing the applicable volumes for a particular year, the EPA translates those volumes into percentage standards by dividing the applicable renewable fuel volumes by the total volume of transportation fuel expected to be sold in the United States in that year. See
This solution, however, is only partial: the EPA does not currently account for small refinery exemptions granted after it promulgates percentage standards for that year—so-called retroactive exemptions. To address any deficiency in its current approach, the EPA solicited comment on how it should account for small refinery exemptions in its calculation of the 2018 percentage standards. Proposed Rule, 82 Fed. Reg. at 34,241–42. The EPA ultimately maintained its previous policy of adjusting fuel percentages for exemptions granted before the percentage standards are promulgated but not for exemptions
granted after. 2018 Rule, 82 Fed. Reg. at 58,523.
The National Biodiesel Board challenges the EPA’s decision to retain its policy of disregarding retroactive small refinery exemptions as failing to “ensure[]” that obligated parties’ renewable fuel contributions achieve total applicable volumes pursuant to
The Board, however, did not make its current challenge during the 2018 rulemaking. Under the Clean Air Act, “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment . . . may be raised during judicial review.”
The Board identifies two sets of comments it claims preserved its current challenge, but both failed to give “adequate notification of the general substance” of the Board’s current proposal. Id. In one set of comments, the American Petroleum Institute suggested that the EPA cease granting retroactive exemptions altogether. In a similar vein, the other set of comments by BP Products of North America asked the EPA to cease granting retroactive exemptions or, in the alternative, to adjust applicable volumes after the standards are promulgated to account for any retroactive exemptions. The Board’s offered solutions are significantly different from these proposals—the Board does not ask the EPA to cease granting retroactive
At oral argument, the Board acknowledged that neither of its proposals “specifically was in front of the Agency” but claimed that they are merely “alternative proposals” and that the Board “d[oes] not have a specific proposal” that the EPA must adopt. Oral Arg. Tr. 64, 66. Instead, the Board argued that “the Court should tell EPA that its duty to ensure requires it to do something, and then send [the 2018 Rule] back to the Agency for the Agency to decide what that something is.” Oral Arg. Tr. 65–66. Regardless whether we can vacate the 2018 Rule due to the EPA’s failure to do an unspecified “something,” the Board did not make this argument in its briefs and has therefore forfeited the issue. See Elec. Privacy Info. Ctr. v. Presidential Advisory Comm’n on Election Integrity, 878 F.3d 371, 379 n.6 (D.C. Cir. 2017).
As a fallback, the Board argues that the EPA’s policy regarding small refinery exemptions is a “vital assumption” underlying the 2018 Rule and therefore no comment was necessary to preserve its current challenge. Under the “key assumption” doctrine, an agency has the “‘duty to examine key assumptions as part of its affirmative burden of promulgating and explaining a non-arbitrary, non-capricious rule’ and therefore . . . ‘must justify that assumption even if no one objects to it during the comment period.’” Okla. Dep’t of Envtl. Quality v. EPA, 740 F.3d 185, 192 (D.C. Cir. 2014) (alteration in original) (quoting Appalachian Power Co. v. EPA, 135 F.3d 791, 818 (D.C. Cir. 1998) (per curiam)). But the key assumption doctrine applies to aspects of a rule that are foundational to its existence, such as assumptions regarding the agency’s statutory authority, see Nat. Res. Def. Council v. EPA, 755 F.3d 1010, 1023 (D.C. Cir. 2014) (“[T]hat EPA had statutory authority . . . to exempt some hazardous-waste-derived fuels from regulation was a ‘key assumption’ underlying EPA’s exercise of its discretion . . . .” (internal quotation mark omitted)), or those pertaining to the agency’s analytical methodology, see Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 535 (D.C. Cir. 1983) (“[A]ggregate analysis is a vital assumption underlying the [EPA’s] model. Thus, EPA must justify that assumption even if no one objects to it during the comment period . . . .”). How the EPA accounts for exemptions granted to a subset of a subset of a subset of obligated parties (small fuel refineries experiencing disproportionate economic hardship) is hardly an assumption undergirding the entire 2018 Rule. In any event, the EPA examined its policy regarding retroactive exemptions, solicited comment on the issue, and reasonably rejected the proposals it received. See Proposed Rule, 82 Fed. Reg. at 34,241–42; 2018 Rule, 82 Fed. Reg. at 58,523. Thus, to the extent the EPA’s method of accounting for retroactive exemptions in its percentage standard calculations is a “key assumption,” the EPA has carried its “affirmative burden . . . [to] justify that assumption.” Okla. Dep’t of Envtl. Quality, 740 F.3d at 192 (quoting Appalachian Power Co., 135 F.3d at 818).
V. Regulatory Flexibility Act
The Regulatory Flexibility Act requires an agency to perform a regulatory flexibility analysis when conducting a rulemaking.
We decline to exercise our discretion to hear this argument brought only by an intervenor and not by any of the petitioners. By failing to file a timely petition for review, the Coalition forfeited any guarantee to judicial review of its claim. See E. Ky. Power Coop., Inc. v. FERC, 489 F.3d 1299, 1305 (D.C. Cir. 2007). Generally, “[i]ntervenors may only argue issues that have been raised by the principal parties.” Nat’l Ass’n of Regulatory Util. Comm’rs v. ICC, 41 F.3d 721, 729 (D.C. Cir. 1994). “[O]nly in ‘extraordinary cases’ will we depart from our general rule.” Id. at 730 (quoting Lamprecht v. FCC, 958 F.2d 382, 389 (D.C. Cir. 1992)). For example, we will consider an intervenor-only argument that raises “‘an essential’ predicate” to the issues raised by the petitioners—that is, if the argument has been “fully litigated in the agency proceedings and [is] potentially determinative of the outcome of judicial review.” Synovus Fin. Corp. v. Bd. of Governors, 952 F.2d 426, 433–34 (D.C. Cir. 1991). But we are reticent to consider an intervenor-only argument if the intervenor “had every incentive to petition for review of the administrative decision and its failure to do so was without excuse.” Id. at 434.
The Coalition’s challenge does not constitute an extraordinary case. Instead of demonstrating that its argument presents an “essential predicate” to the issues the petitioners raise or is otherwise of unusual importance, the Coalition emphasizes (1) that the EPA did not object to its motion to intervene, (2) that the Regulatory Flexibility Act argument raises a pure question of law, and (3) that the Coalition has a history of challenging the EPA’s definition of obligated parties. The Coalition points to no case, and we are aware of none, in which we have relied on similar facts to justify considering an intervenor-only argument.
On the other hand, we believe this case is indistinguishable from Time Warner Entertainment Co. v. FCC, 56 F.3d 151 (D.C. Cir. 1995). In Time Warner, we declined to consider an argument under the Regulatory Flexibility Act made only by the intervenor, the Small Cable Business Association. Id. at 202–03. In doing so, we observed that the Association had “participated in the agency proceedings and had the opportunity to file an independent petition for review of the Commission’s alleged rejection of the Association’s . . . [Regulatory Flexibility Act] claim[].” Id. at 202. Just so here. The Coalition submitted comments on the Proposed Rule asking the EPA to conduct a regulatory flexibility analysis, and the EPA’s alleged failure to conduct the requested analysis gave the Coalition every incentive to file its own petition for review of the final 2018 Rule.
VI. Endangered Species Act
Finally, the Environmental Petitioners argue that the EPA failed to comply with its obligations under the Endangered Species Act (ESA),
A. Jurisdiction
We have jurisdiction over challenges to “final action[s]” taken by the EPA under the Clean Air Act.
We do not understand the claim so broadly. Although the Environmental Petitioners criticize the RFS Program and complain that the EPA has never consulted on the Program during the past decade, their actual challenge is to the 2018 Rule. According to their petition, they “seek review” of “the EPA’s failure to comply with the requirements” of the ESA “in promulgating the Final Rule,” and they charge the EPA “in this instance” with failing to consult with the Services “to ensure that the Final Rule” would not harm listed species. Envtl. Pet’rs Pet. ¶ 2, No. 18-1040 (D.C. Cir. Feb. 9, 2018). Because the promulgation of the 2018 Rule is a discrete agency action, this challenge is squarely within our jurisdiction under the Clean Air Act.
B. Standing
The EPA also argues that we may not consider the challenge because the Environmental Petitioners lack standing. “The Constitution limits our ‘judicial Power’ to ‘Cases’ and ‘Controversies,’ and there is no justiciable case or controversy unless the plaintiff has standing.” West v. Lynch, 845 F.3d 1228, 1230 (D.C. Cir. 2017) (quoting
The parties do not dispute that one of the Environmental Petitioners—the Sierra Club—satisfies the latter two elements of associational standing. Nor could they. As an organization dedicated to protecting and enjoying the environment, Addendum to Envtl. Pet’rs Br. (“Add.”) 275, 289, the Sierra Club “has an obvious interest in challenging the EPA’s failure to engage in consultation,” a process that ensures that agency action “does not go forward without full consideration of its effects on listed species,” Ctr. for Biological Diversity, 861 F.3d at 182 (internal quotation marks omitted). Also, the claim asserted (that the EPA violated its obligations under the ESA) and the relief requested (an order requiring the EPA to comply with its obligations) do not require any member of the Sierra Club to participate in this suit. See id.
The only disputed element of associational standing is the first: whether at least one of the Sierra Club’s members would have standing to sue in his or her own right. Generally, a plaintiff must meet three requirements to have standing. The plaintiff must have suffered (1) a concrete and particularized injury that (2) was caused by the challenged conduct and (3) is likely to be redressed by a favorable judicial decision. See Hollingsworth v. Perry, 570 U.S. 693, 704 (2013) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992)); Ctr. for Biological Diversity, 861 F.3d at 181–82.
This case involves a twist on the usual standing inquiry because the claim—that the EPA failed to meet its obligations under the ESA—describes an “archetypal procedural injury.” Ctr. for Biological Diversity, 861 F.3d at 182 (quoting WildEarth Guardians v. Jewell, 738 F.3d 298, 305 (D.C. Cir. 2013)). In cases involving a procedural injury, our “primary focus” is “whether a plaintiff who has suffered personal and particularized injury has sued a defendant who has caused that injury,” and our analyses of the injury and of causation tend to involve similar concepts. Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 664 (D.C. Cir. 1996) (en banc) (citing Lujan, 504 U.S. at 572 n.7); see Ctr. for Biological Diversity, 861 F.3d at 182–83. As to injury, the Sierra Club must show that the failure to comply with the ESA “affects its members’ concrete . . . interests,” Ctr. for Biological Diversity, 861 F.3d at 183; in other words, that the failure “demonstrably increased some specific risk of environmental harm[s]” that “imperil” the members’ “particularized interests” in a species or habitat with which the members share a “geographic nexus,” Fla. Audubon Soc’y, 94 F.3d at 666–68; see Ctr. for Biological Diversity, 861 F.3d at 183–84. As to causation, the Sierra Club must show two links: “one connecting the omitted procedural step to some substantive government decision that may have been wrongly decided because of the lack of that procedural requirement” and “one connecting that substantive decision to the plaintiff’s particularized injury.” Ctr. for Biological Diversity, 861 F.3d at 184 (alterations and internal quotation marks omitted). The Sierra Club need not show that harm to a member “has in fact resulted from the EPA’s procedural failures,” but the Club must “demonstrate that there is a ‘substantial probability’ that local conditions will be adversely affected”
The Sierra Club has established injury and causation through at least two of its members, C. Elaine Giessel and William Fontenot. We begin by describing their interests, then we explain how the 2018 Rule affects those interests.
Giessel has aesthetic and recreational interests in observing the whooping crane. Watching birds, including whooping cranes, is one of her family’s favorite activities. Add. 286. For many years, she has supported the conservation of critical habitat for the whooping crane. In 1997, she helped create an organization that supports a Texas wildlife refuge; she now visits the refuge annually to see the whooping cranes. Id. at 283–84. She also belongs to an organization that supports the Quivira National Wildlife Reserve in Kansas, and several times per year she visits that refuge and another in Kansas, the Cheyenne Bottoms State Waterfowl Management Area. She intends to continue visiting these areas “for the foreseeable future,” and her “enjoyment would be greatly diminished by the loss of the Whooping cranes.” Id. at 285. These interests are “undeniably . . . cognizable interest[s] for purpose of standing.” Ctr. for Biological Diversity, 861 F.3d at 183 (quoting Lujan, 504 U.S. at 562–63).
Fontenot has similarly cognizable educational and conservation interests in observing and studying the sturgeon that live in the Gulf of Mexico and the Mississippi River Basin. He has visited their habitat in the Gulf and intends to do so again in the future. Add. 298. As the Conservation Chairman for a Sierra Club Chapter, he has “been active in efforts to protect the Gulf Sturgeon and its habitat,” including commenting on the 2011 draft plan for the Bogue Chitto Refuge at the mouth of the Mississippi River. Id. at 299. He has studied sturgeon, such as those in the Pearl River in the Mississippi River Basin, and he wishes to continue studying the species because it helps him understand, protect, and educate others about the Gulf and the Mississippi River. Id. at 296–99.
The interests of Giessel and Fontenot are harmed by the EPA’s alleged failure to comply with its ESA obligations in promulgating the 2018 Rule. The EPA’s own 2018 Triennial Report concluded that the Program’s annual standards likely cause the conversion of uncultivated land into agricultural land for growing crops that can be used to make biofuels. Since the Program was enacted, acreage planted with corn and soybeans has increased, and the evidence suggests that some of this increase “is a consequence of increased biofuel production mandates.” Id. at 123–25. In the same vein, a declaration by Dr. Tyler Lark, an associate researcher at the University of Wisconsin-Madison’s Center for Sustainability and the Global Environment, explains that many studies have found that the RFS Program has heightened demand for ethanol, thus increasing the production of corn, soybeans, and similar crops and incentivizing the conversion of uncultivated land to agricultural land for growing these crops. See id. at 3–7 (Lark Decl. ¶¶ 4–8). Land conversion is particularly marked in areas surrounding ethanol refineries. See id. at 7–8 (Lark Decl. ¶¶ 9–10).
According to the EPA’s Triennial Report and Dr. Lark, this increase in crop production and land conversion harms the habitats of numerous animals and fish, see id. at 212–20; id. at 9–18 (Lark Decl. ¶¶ 12–23), including—critically—the particular habitats of the whooping cranes and
Gulf sturgeon are also at risk. The increase in crop production and land conversion caused by the Program’s annual standards “negatively impact[s] water quality.” Id. at 125–26. In particular, the standards contribute to oxygen deficiencies (known as hypoxia) in the northern Gulf of Mexico. Id. Indeed, “[t]he link between the Renewable Fuel Standard, increased cropping intensification, and hypoxia in the Gulf of Mexico” is “well established.” Id. at 20 (Lark Decl. ¶ 27) (citing studies). This may harm sturgeon, which are “vulnerable” to hypoxia and have migration and feeding ranges and critical habitat in the Gulf and at the mouth of the Mississippi River. Id. at 21 (Lark Decl. ¶¶ 28–29); accord. id. at 65; see also
In these ways, the 2018 Rule created a demonstratable risk to the particularized interests of two Sierra Club members in the whooping crane in Kansas and the sturgeon in the Gulf and the Mississippi River Basin. That risk is an injury to those members. We reached the same conclusion in Center for Biological Diversity v. EPA, 861 F.3d 174 (D.C. Cir. 2017). There, an environmental association likewise charged the EPA with failing to meet its ESA obligations before approving a pesticide that was toxic to insects. Id. at 180. We held that two members of the association suffered cognizable injuries because the EPA’s alleged failure created a “demonstrable risk” to (1) a beetle that one member sought to observe in a particular habitat several times a year, and (2) a butterfly that lived in a county frequently visited by another member, who intended to return to the county “to look for” the butterfly. Id. at 183–84. Here, the 2018 Rule poses a similar risk to species that share a “geographical nexus” with the Sierra Club members. Id. (quoting Fla. Audubon Soc’y, 94 F.3d at 667). The members have suffered cognizable injuries.
As to causation, the EPA’s alleged failure to comply with its ESA obligations is plainly connected to the setting of standards in the 2018 Rule, and those standards might have come out differently if the EPA had complied. See id. at 184. Also, there is a “substantial probability” that the EPA’s ultimate decision adversely affected local conditions in Kansas, the Gulf, and the Mississippi River Basin, harming cranes and sturgeon to the detriment of Giessel and Fontenot. Id. (internal quotation marks omitted). This establishes causation. Again, Center for Biological Diversity is instructive. In that case, we held that causation existed due to the substantial
The EPA dismisses all this as “generalized concerns with RFS statutory provisions and past RFS action,” which “do not provide ‘evidence’ that the 2018 Rule causes the same alleged injuries.” EPA Br. 91. We disagree. The EPA’s argument relies on the wrong standard. The Environmental Petitioners need not show that the 2018 Rule “in fact” causes the same injuries; they must show only a “substantial probability” of injury. Ctr. for Biological Diversity, 861 F.3d at 183–84 (internal quotation marks omitted). The EPA’s Triennial Report and the Lark declaration provide evidence of just that. They describe the effects of the annual standards promulgated over the past decade, and the 2018 Rule is simply the next iteration of those standards. Thus, the report and declaration certainly serve as evidence of the likely effects of the 2018 Rule.
The EPA also argues that this case is more like Florida Audubon Society than Center for Biological Diversity. Not so. In Florida Audubon Society, an environmental association challenged a new federal tax credit that allegedly harmed wildlife habitats by incentivizing ethanol production. 94 F.3d at 662. We held that no member had standing because there was only a “general risk” of harm throughout the United States, without a “geographic nexus” connecting a member to areas harmed by the tax credit. Id. at 667–68. Also, the chain of causation showing that the tax credit would harm habitats was too “protracted” and “speculative,” for the chain depended on “predictive assumptions” about uncertain incentives and “presume[d] certain ‘independent action[s] of some third party.’” Id. at 670 (quoting Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 42 (1976)). By contrast, here the members of the Sierra Club share a geographic nexus with areas likely affected by the 2018 Rule, and the chain of causation does not depend on predictive assumptions about a novel agency action. We have a decade’s worth of information, including the EPA’s own Triennial Report, on the effects of the Program’s annual standards. And unlike in Florida Audubon Society, those standards do not simply establish uncertain tax incentives that might lead third parties to take actions that harm habitats, but rather directly regulate biofuel producers who are “before this court.” Id. at 670. It requires “no great speculative leap” to conclude that the EPA caused an injury to the members of the Sierra Club. Ctr. for Biological Diversity, 861 F.3d at 183 n.7.
This injury is also redressable. In this context, the requirement of redressability is “relaxed.” Id. at 185 (quoting WildEarth Guardians, 738 F.3d at 306). The Sierra Club need not show that the EPA “would alter” the 2018 Rule if ordered to comply with its ESA obligations, but rather that “the EPA could reach a different conclusion.” Id. (quoting Nat’l Parks Conservation Ass’n v. Manson, 414 F.3d 1, 5 (D.C. Cir. 2005)). The Sierra Club has made this showing. There “remains at least the possibility” that the EPA could set different standards by, for example, invoking the general waiver for severe environmental harm. Id.; see
Having established that at least one of its members would have standing to sue,
C. Preservation
The EPA next argues that we may not consider the Environmental Petitioners’ challenge because it was not preserved. As we explained in Part IV.C, the Clean Air Act directs that “[o]nly an objection to a rule . . . raised with reasonable specificity during the period for public comment . . . may be raised during judicial review.”
The Environmental Petitioners preserved their claim in a letter sent to the EPA on July 14, 2017. At that time, the upcoming fuel standards were those that were to be promulgated in the 2018 Rule. The letter criticizes the Program generally, but it also objects that the EPA did not consult on the Program’s annual standards. The letter states on its first page that the EPA has violated the ESA “[b]y failing to initiate and complete consultation with the [Services] in . . . setting annual volumetric standards for renewable fuels” and in “failing to exercise[] its waiver authority.” J.A. 1450. The letter elaborates that the “annual standards” have harmed various species, and in setting the standards, the EPA “ha[s] not complied” with its obligations under the ESA. J.A. 1458–69. The letter specifically identifies these annual standards through 2017.
The EPA argues that the letter is not sufficiently specific because it does not refer to the forthcoming 2018 standards or urge the EPA to consult on the 2018 Rule in particular. Given these omissions, we too might doubt that the letter preserved an objection to the 2018 Rule were it not for some additional facts: the EPA placed the letter in the administrative record for the 2018 Rule, and the letter appears on the EPA’s rulemaking docket as a comment on the 2018 Rule. See EPA Docket, EPA-HQ-OAR-2017-0091-5030, J.A. 1450; Oral Arg. Tr. 106. In our view, these facts lend substantial support to the argument that the letter can be reasonably read to target the 2018 Rule and provided “adequate notification of the general substance” of the challenge. Nat. Res. Def. Council, 571 F.3d at 1259 (quoting S. Coast Air Quality Mgmt. Dist., 472 F.3d at 891). After all, the EPA’s own actions reflect as much.
We note that the letter is dated July 14, 2017, making it possible that the EPA received the letter before and not “during the period for public comment” that opened on July 21.
D. Merits
Because this claim survives the EPA’s threshold objections, we turn to its merits. The Environmental Petitioners argue that the EPA did not comply with its obligations under the ESA in promulgating the 2018 Rule. The ESA requires each federal agency to “insure that any action authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any [listed] species or result in the destruction or adverse modification” of designated critical habitat by adhering to the consultation process.
The EPA claims that it was not obligated to make an effects determination or consult with the Services on the 2018 Rule because the Clean Air Act required the agency to establish certain fuel volumes, which eliminated any discretion it might otherwise have had to act differently based on information gathered through consulting with the Services. It is true that the EPA’s duty to consult with the Services “covers only discretionary agency actions and does not attach to actions . . . that an agency is required by statute to undertake.” Nat’l Ass’n of Home Builders v. Defs. of Wildlife, 551 U.S. 644, 669 (2007). But the EPA’s argument fails because the agency had discretion to reduce fuel volumes in at least two ways. First, the EPA could have invoked its authority to issue a general waiver allowing it to reduce statutory volumes that “would severely harm the . . . environment of a State, a region, or the United States.”
The EPA next argues that it made a “no effect” determination, thus eliminating any obligation to consult with the Services. According to the EPA, it “expressly determined that its actions do not affect” listed species, EPA Br. 99, by stating in response to comments that “any harm to threatened or endangered species or their critical habitat that may be associated with crop cultivation in 2018 could not be attributed with reasonable certainty to EPA’s action” in promulgating the 2018
These statements are not a “no effect” determination. The inability to “attribute[]” environmental harms “with reasonable certainty” to the 2018 Rule, EPA Br. 99 (quoting J.A. 1249), is not the same as a finding that the 2018 Rule “will not affect” or “is not likely to adversely affect” listed species or critical habitat. Moreover, the EPA made this purported “no effect” determination in response to comments urging the EPA to reduce volumes through a finding of “severe environmental harm” under
By failing to make an effects determination, the EPA did not comply with its obligations under the ESA. See
The Environmental Petitioners ask us to go a step further and make the effects determination ourselves. In their view, the evidence conclusively establishes that the 2018 Rule “may affect” listed species or critical habitat. Envtl. Pet’rs Br. 28–29. This would trigger formal consultation,
Finally, the Environmental Petitioners do not ask us to vacate the 2018 Rule. Envtl. Pet’rs Br. 31 (seeking remand “without vacatur”). Accordingly, and consistent with our practice in similar cases, our remand is without vacatur. See, e.g., Ctr. for Biological Diversity, 861 F.3d at 188–89; North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008) (per curiam).
VII. Conclusion
For the foregoing reasons, we deny the petitions for review filed by American Fuel & Petrochemical Manufacturers, Valero Energy Corporation, and the National Biodiesel Board. We grant the Environmental Petitioners’ petition for review and remand the 2018 Rule without vacatur for further proceedings consistent with this opinion.
So ordered.