Case Information
*2 Before DAVIS and BENAVIDES, Circuit Judges, and RESTANI, [*] Judge DAVIS, Circuit Judge and RESTANI, Judge:
Before the court are consolidated petitions for direct review of a decision of the United States Environmental Protection Agency (“EPA”) approving (1) the State of Texas’s one-hour ozone attainment demonstration state implementation plan (“SIP”) for the Houston-Galveston severe ozone nonattainment area, and (2) the state’s control strategy (collectively referred to as the “Houston SIP”). See Approval and Promulgation of Implementation Plans, 66 Fed. Reg. 57,160 (EPA Nov. 14, 2001) (final rule). Petitioners consist primarily of industries subject to the emissions controls in the Houston SIP, a county government affected by some of the SIP’s provisions, environmental groups, and individuals who live and work in the Houston-Galveston area. Finding that the EPA’s final rule approving the Houston SIP is not arbitrary, capricious, or otherwise not in accordance with law, we deny the petitions for review.
I. B ACKGROUND
A. Statutory Background
The Clean Air Act (“CAA” or “the Act”), 42 U.S.C. §§ 7401–7671q (2000), establishes a comprehensive program for controlling and improving the nation’s air quality through state and federal regulation. The EPA is responsible for, among other things, identifying air pollutants that endanger the public health and welfare and formulating National Ambient Air Quality Standards (“NAAQS”) that specify the maximum permissible concentrations of those pollutants in the *3 ambient air. Id. §§ 7408–7409. The EPA administrator has promulgated NAAQS for various pollutants, including ozone. See 40 C.F.R. § 50.9(a) (promulgating the one-hour ozone standard relevant to the present dispute). The one-hour NAAQS for ozone is .12 parts per million (although EPA often refers to it as 124.5 parts per billion (“ppb”)), and an area attains the standard when maximum measured hourly average ozone concentrations exceed the NAAQS no more than one day per calendar year. See id. subsection (b).
While the EPA determines the standards of air quality, the CAA imposes upon the states the primary responsibility for ensuring that the ambient air meets the NAAQS for the identified pollutants. 42 U.S.C. § 7407(a). The Act requires each state to preparе a one-hour ozone attainment demonstration SIP providing for the implementation, maintenance, and enforcement of the NAAQS for each air quality control region within the state. Id. § 7410(a)(1). The CAA requires each SIP to, among other things: (1) “include enforceable emission limitations and other control measures, means, or techniques . . . as may be necessary or appropriate” to meet the statutory attainment deadline; (2) establish and operate “appropriate devices, methods, systems, and procedures” to “monitor, compile, and analyze data on ambient air quality;” (3) include an enforcement program; (4) contain “adequate provisions” to prohibit emissions activity that will significantly interfere with attainment or deteriorate air quality; (5) provide “necessary assurances” that the state has adequate resources “and authority under State (and, as appropriate, local) law to carry out [its] implementation plan;” (6) require owners and operators of stationary sources to monitor emissions and provide reports to the state; (7) provide for revision of the SIP as may be necessary to comply with revised NAAQS or to implement improved methods of attaining such standard; and (8) provide for the performance of air quality modeling as the EPA *4 directs in order to predict an air pollutant’s effect on ambient air quality. 42 U.S.C. § 7410(a)(2); see id. § 7502(c)(6) (requiring attainment of the NAAQS by the statutory deadline in designated nonattainment areas like Houston-Galveston).
Thus, the CAA supplies the goals and basic requirements of state implementation plans,
but the states have broad authority to determine the methods and particular control strategies they
will use to achieve the statutory requirements. See Union Elec. Co. v. EPA,
B. Facts and Procedural History
The Houston-Galveston area, a large geographic area consisting of eight counties, is one air quality control region in Texas. Houston-Galveston has one of the most serious ozone problems in the country. In order to comply with the CAA’s requirement for attainment of the one-hour ozone standard by 2007, Texas adopted the attainment demonstration SIP at issue in this case, which the EPA approved in its final rule.
An “attainment demonstration SIP” has two components: (1) the attainment demonstration, which is based on computer modeling that predicts whether the area will meet the ozone standard by the statutory deadline of 2007; and (2) the state’s control strategy, which is its plan for achieving the actual emissions reductions needed for attainment. Modeling efforts for the Houston-Galveston SIP were complicated by a number of unique environmental factors and a *5 shortage of readily-available control options sufficient to provide the needed reductions. [1] Nevertheless, Texas developed an attainment demonstration and control strategy that its analyses confirmed would reach attainment by 2007. [2]
The EPA evaluated the State’s modeling and associated analyses and determined that they
were consistent with the CAA and EPA’s implementing regulations. EPA also conducted an
exhaustive review of the State’s control strategy and found that it was as stringent or more
stringent than any other SIP in the country. See
*6 Petitioners, most of whom participated in the underlying administrative proceedings, now challenge EPA’s approval of the Houston SIP and Texas’s control strategy. [3] Two petitioners, BCCA Appeal Group (“BCCA”) [4] and Brazoria County, [5] essentially oppose the Houston SIP because they beliеve some of its control measures are too stringent and will nevertheless fail to attain the NAAQS for ozone. BCCA raises numerous legal challenges to the EPA’s approval of Texas’s modeling and the State’s use of other analytical methods used to demonstrate attainment, claims that the control strategy will not achieve the statutory standard, and asserts that the EPA erred in approving the SIP while withholding final action on certain state-adopted rule provisions integral to the SIP’s control strategy. Brazoria County maintains that certain components of Texas’s emissions control strategy violate state law and that EPA’s approval of those measures was arbitrary and capricious.
Conversely, the environmental petitioners believe the Houston SIP does not go far enough in adopting sufficient control measures to achieve attainment by the statutory deadline. Petitioners Environmental Defense, David Marrack, Jane Elioseff, Galveston-Houston Association for Smog Prevention, and the Galveston Bay Conservation and Preservation Association (collectively “Environmental Defense” or “ED”) challenge Texas’s attainment *7 demonstration, the SIP’s inclusion of an enforceable commitment to adopt additional control measures in order to achieve attainment, and the motor vehicle emissions budgets (“MVEB”) included in the SIP. Petitioner Natural Resources Defense Counsel (“NRDC”) raises various challenges to EPA’s approval of the SIP’s Voluntary Mobile Emissions Reductions Program (“VMEP”) and the Texas Emissions Reduction Program (“TERP”). Petitioner Sierra Club’s claims focus on the Houston SIP’s treatment of reasonably available control measures (“RACM”).
II. J URISDICTION AND S TANDARD OF R EVIEW
The court has jurisdiction to review the EPA’s approval of the Houston SIP pursuant to section 307(b)(1) of the CAA, 42 U.S.C. § 7607(b)(1). The court must uphold the EPA’s findings, conclusions, and ultimate action approving the Houston SIP unless “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Administrative Procedure Act, 5 U.S.C. § 706(2)(A) (2000); see Sierra Club v. United States EPA, 314 F.3d 735, 739 (5th Cir. 2002).
III. D ISCUSSION
The APA’s standard of review is narrow. A rule is “arbitrary and capricious” only where
the agency has considered impermissible factors, failed to consider important aspects of the
problem, offered an explanation for its decision that is contrary to the record evidence, or is so
irrational that it could not be attributed to a difference in opinion or the result of agency expertise.
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
The court applies the two-step Chevron analysis to questions involving the EPA’s
interpretations of the statutes it administers. See Chevron U.S.A., Inc. v. NRDC,
interpretation is reasonable, it will be upheld. See Smiley v. Citibank, N.A.,
A. Whether BCCA Has Standing to Challenge the SIP Approval
As an initial matter, EPA argues that BCCA lacks standing to challenge EPA’s approval
of the attainment demonstration. BCCA bears the burden of establishing Article III standing. See
Lujan v. Defenders of Wildlife,
According to the EPA, BCCA is injured, if at all, as a result of the specific control measures Texas adopted in the Houston SIP. Accordingly, EPA argues that BCCA’s injury is not fairly traceable to EPA and would not be redressed by a favorable decision. EPA also claims that BCCA has not suffered an injury in fact with respect to certain point source NOx control provisions and, therefore, lacks standing to challenge those provisions. BCCA accuses the EPA *10 of mis-characterizing the legal nature of its claims by confusing its motive with its method. While BCCA’s motive may be to alter the mix of various air quality control measures in the Houston SIP, its legal challenge is based on the EPA’s statutory authority to approve a SIP when it is allegedly based on flawed modeling, fails to demonstrate attainment of the ozone standard, and materially differs from the proposed SIP. Thus, BCCA maintains that its injury, being subject to a SIP that fails to meet minimum statutory standards, was caused by the EPA and would be redressed by a decision in its favor. We agree.
This court has held that companies forced to comply with EPA regulatory requirements
meet each prong of the standing test. American Forest & Paper Association involved a group of
industries that were subject to a state’s pollutant discharge permit requirements.
The present case is analogous to that in American Forest & Paper. Like the permitting
program at issue there, the EPA’s role in approving air pollution control plans is limited. The
EPA must approve a plan if it meets minimum statutory requirements, and states are free to
impose stricter measures. See 42 U.S.C. § 7410(k)(3); Union Elec. Co.,
Contrary to EPA’s characterization of BCCA’s claims, the legal basis for BCCA’s challenge is the SIP’s compliance with the minimum requirements of the CAA, not the SIP’s stringency. BCCA has suffered an injury in fact in the form of the costs of compliance with the Houston SIP’s control measures, along with the added risk that its members will be responsible for any penalties assessed for the Houston SIP’s failure to attain the ozone standard by the statutory deadline. BCCA’s injury is fairly traceable to EPA because, if BCCA’s claims are true, EPA unlawfully approved a SIP that failed to meet minimum statutory requirements. Finally, BCCA’s injury is redressable by a decision in its favor because EPA would be forced to disapprove the portions of the Houston SIP the court finds incompatible with the CAA. See 42 U.S.C. § 7410(k)(3). In addition, the approved SIP is federally enforceable against BCCA’s members, so that a favorable decision would redress that threat of injury as well. See id. § *12 7413(b)–(c) (subjecting violators to civil and criminal penalties). Accordingly, the court finds that BCCA has established its right to sue the EPA under Article III.
B. Whether BCCA and Brazoria County Waived Arguments Not Properly Raised
During the Administrative Process
EPA argues that even if BCCA has standing to pursue its challenge to EPA’s action, BCCA failed to raise, or properly present, its challenges to the Houston SIP during the comment period. EPA also asserts that, because none of the arguments advanced by petitioner Brazoria County were raised in the administrative proceedings before the EPA, the County is prohibited from seeking judicial review of these matters.
1. BCCA
Although the EPA has an obligation to give full consideration to significant comments
raised during the administrative proceedings, “it is still incumbent upon intervenors who wish to
participate [in the proceeding] to structure their participation so that it is meaningful, so that it
alerts the agency to the intervenors’ position and contentions.” Vermont Yankee Nuclear Power
Corp. v. NRDC,
administrative proceedings should not be a game or forum to engage in unjustified obstructionism by making cryptic and obscure references to matters that “ought to be” considered and then, after failing to do more to bring the matter to the agency’s attention, seeking to have that agency determination vacated on the ground that the agency failed to consider matters “forcefully presented.”
Vermont Yankee,
EPA concedes that the documentation supporting BCCA’s challenges to its approval of the Houston SIP—deposition transcripts, hearing transcripts, and exhibits compiled in connection with a state court action—was submitted to the EPA during the comment period. EPA argues, however, that BCCA, like the commenter in Northside, failed to alert the EPA to the relevant portions of the voluminous material it submitted to the agency and to explain how that material relates to the specific objections in its comments. EPA maintains that BCCA’s comments, much like those in Northside, provided only cursory descriptions of the documents themselves. EPA provides only one concrete example of this phenomena in its brief, claiming that the only direction in BCCA’s comments with regard to more than 1,000 pages of hearing transcripts was: “In particular, the Group points to the testimony, and related exhibits, of Dr. Harvey Jeffries and Dr. Tom Tesche.” BCCA Comments, J.A. Tab 1a, at 3. EPA claims that this vague reference to two еxperts’ testimony fails to explain how the referenced testimony is relevant to the issues BCCA raised in its comments, where the testimony could be located in the voluminous transcripts, or which “related exhibits” were relevant and where they could be found.
The court has reviewed BCCA’s comments and finds that petitioner sufficiently clarified its position for the EPA. BCCA expressed the Group’s “very serious concerns . . . about the *14 feasibility and economic consequences of the . . . NOx point source controls,” stated that the photochemical grid modeling that formed the basis for the State’s control strategy was “fundamentally flawed,” and that the proposed control strategy “will not attain the standard.” BCCA Comments, J.A. Tab 1a, at 2. Contrary to EPA’s characterization of the comments regarding the expert testimony, the court finds that BCCA sufficiently explained the issue to which the testimony was relevant. See id. at 3. It is apparent when reading the entire paragraph from which the EPA cherry picks its argument that the testimony relates to BCCA’s objections to the SIP’s NOx controls, which were based on the photochemical modeling results. BCCA raised objections to the modeling as well, claiming that its failure to account for ozone “spikes” rendered it fundamentally flawed, and BCCA commented on the statistical and graphical tests used to validate the model. See infra Part III.C. The comments also criticized the EPA’s approval of the supplemental analyses Texas employed in formulating its control strategy, i.e., the quadratic equation and its inputs, as well as the EPA’s weight-of-evidence analysis. Accordingly, the court concludes that BCCA was a meaningful participant in the administrative proceedings, and EPA’s arguments to the contrary fail.
2. Brazoria County
Petitioner Brazoria County challenges for the first time speed limit reductions, [7] vehicle inspection/maintenance provisions, and lawn equipment operating restrictions [8] in the Houston *15 SIP. The County’s central argument is that these provisions were adopted by Tеxas in violation of state law and, therefore, the EPA’s approval of the SIP is arbitrary and capricious. EPA responds that, because the County, or any other petitioner, failed to raise these issues during the administrative proceedings, the arguments are waived. [9] The court agrees.
Generally, in considering a petition for review from a final agency order, this court will not
consider questions of law which were neither presented to nor passed on by the agency. E.g.,
Bass v. United States Dep’t of Agriculture,
Therefore, only in exceptional circumstances should a court review for the first time on
appeal a particular challenge to the EPA’s approval of a state implementation plan that was not
raised during the agency proceedings. See, e.g., 1000 Friends,
Brazoria County does not dispute that it failed to raise its arguments before the EPA. The County provides no justification for its failure to properly raise these claims during the administrative proceedings. In addition, rather than challenging EPA’s failure to perform a statutory duty, the County asks us to declare that the EPA acted arbitrarily in failing to perform a function not mandated by statute. See supra n.11. We decline the invitation. The County has waived its state law-based arguments by failing to present them to the EPA. [11] As mentioned above, the County claims that certain provisions in the Houston SIP were invalid under Texas state law and, therefore, EPA’s approval of those provisions was arbitrary and capricious. The court notes that the CAA only requires that the states provide “necessary assurances that the State . . . will have adequate . . . authority under State (and, as appropriate, local) law to carry out such implementation plan (and is not prohibited by any provision of . . . State law from carrying out such implementation plan or portion thereof).” 42 U.S.C. § 7410(a)(2)(E)(i). There is no statutory requirement that the EPA review SIP
(continued...) *18 C. Whether EPA’s Approval of Texas’s Attainment Demonstration Is Supported by the
Record and Consistent with the CAA
Section 182(c)(2)(A) of the CAA requires Texas to demonstrate that the Houston SIP will achieve attainment of the ozone NAAQS by the statutory deadline. 42 U.S.C. § 7511a(c)(2)(A). “This attainment demonstration must be based on photochemical grid modeling [12] or any other analytical method determined . . . to be at least as effective.” Id. (footnote added). EPA approved Texas’s attainment demonstration for the Houston-Galveston area because the agency concluded, based on all the evidence, that the area would reach attainment of the NAAQS for *19 ozone by 2007 and that no additional measures would advance the attainment date. See 66 Fed. Reg. at 57,160.
Texas’s attainment demonstration includes both photochemical grid modeling and supplemental analyses that EPA considered in its “weight-of-evidence” analysis. As an initial matter, BCCA contends that Texas’s photochemical grid modeling was flawed because it failed to simulate rapidly-forming ozone рeaks, known as “spikes,” [13] and overestimated ozone formation in other parts of the Houston-Galveston area. [14] Thus, BCCA argues that EPA’s reliance on the faulty modeling renders its approval of the Houston SIP arbitrary and capricious. In addition, BCCA and Environmental Defense both question the legality of EPA’s weight-of-evidence approach that considers other analytical methods in addition to the attainment demonstration itself. Part 1 of this section discusses petitioners’ challenges to Texas’s photochemical grid modeling and EPA’s approval thereof. Part 2 addresses the legality of EPA’s decision to approve *20 the Houston SIP after determining that, based on all the record evidence, the SIP would achieve attainment of the ozone NAAQS by 2007.
1.
EPA’s Approval of Texas’s Attainment Demonstration
Texas used an EPA-approved photochemical grid model, the Comprehensive Air Quality
Model with Extensions, in its attainment demonstration for the Houston-Galveston area. Texas
applied the model to a large geographic region, covering over 220,000 square kilometers, to
ensure that all the major emission sources were included in the model’s results. Texas adjusted
the model to account for the unique land-sea breeze phenomenon conducive to ozone formation
in the region. See supra n.1 and accompanying text. Before using the model to predict future
ozone concentrations, however, Texas validated the model by performing a test run (“the base
case”) that compared the model’s predictions with actual air quality data for a chosen time period.
The base time period covered four days, September 8–11, 1993, that featured both high ozone
concentrations and the land-sea breeze weather patterns characteristic of the Houston-Galveston
area. Following EPA-accepted protocols, Texas then entered emissions data into the model for
the base time period, ran the model, and cоmpared the predicted results with actual ozone
concentrations measured at 34 air quality monitors in Houston-Galveston during the base time
period. Texas then applied a battery of tests and analyses set forth in EPA guidance, including
diagnostic and sensitivity analyses, graphical displays, and statistical tests, which collectively
demonstrated that the model’s base case performance was acceptable. See
Once it validated the model, Texas used it to predict ozone concentrations for the 2007 attainment date based on anticipated changes in the number and type of emissions sources. The *21 state then introduced its proposed control strategy and ran the model’s “attainment test,” which compared the predicted ozone levels to the NAAQS for ozone for all the grid cells in the selected episode. The model showed that Texas’s proposed strategy would significantly reduce ozone concentrations in the Houston-Galveston area, but not enough to meet the applicable ozone standard.
In response, Texas, following an approach set forth in EPA guidance, estimated the
additional emissions reductions necessary to bring the area into attainment, and adopted a revised
control strategy that would provide for attainment by 2007.
While photochemical grid models are imperfect tools for predicting future air quality, a
modeled attainment demonstration “provide[s] a reasonable expectation that the measures and
procedures outlined will result in attainment of the NAAQS by [the statutory deadline].” 1996
Modeling Guidance, J.A. Tab 43, at 3. “[A] reviewing court must remember that the [agency] is
making predictions, within its area of special expertise, at the frontiers of science. When
examining this kind of scientific determination, as opposed to simple findings of fact, a reviewing
court must generally be at its most deferential.” Baltimore Gas & Elec. Co. v. NRDC, 462 U.S.
87, 103 (1983). The court’s role is to evaluate whether the EPA’s projections represent arbitrary
*22
or capricious exercises of its authority, not whether they are accurate. Texas v. EPA, 499 F.2d
289, 301 (5th Cir. 1974). Finally, there is a presumption of regularity to the EPA’s choice of
analytical methodology, so challenging parties must overcome a “considerable burden.” Am.
Petroleum Inst. v. EPA,
The court finds that EPA’s reliance on the model’s results was not arbitrary, capricious, or
contrary to law. In its final rule, the EPA addressed BCCA’s concern that the model fails to
account for ozone spikes. See
The EPA’s final rule also addressed BCCA’s concern that the photochemical grid model
both over- and under-predicted ozone in some areas. See id. at 57,164. EPA’s final rule explains
that the model was validated by a battery of diagnostic and sensitivity analyses and graphical and
*23
statistical performance measures. Id. The model’s “Unpaired Peak Accuracy,”
[16]
“Normalized
Bias,”
[17]
and “Gross Error”
[18]
statistical test results were all within the suggested limits in the EPA
*24
Guideline for each day of the base case period, which demonstrated that the model was predicting
ozone concentrations in the Houston-Galveston area with a reasonable degree of accuracy. 66
Fed. Reg. at 57,164. EPA considered all model performance measures and concluded that the
model performed well. Id. While the EPA recognized that the graphical model performance for
one day of the base period indicated that the model underestimated ozone at some locations and
overestimated ozone at others, the EPA attributed the error to the model’s difficulty replicating
wind speed and direction due to the area’s unique land-sea breeze phenomenon.
[19]
Id.; see supra
n.1. Nevertheless, because the diagnostic and sensitivity tests revealed no flaws in model
formulations, and statistical measures confirmed that the model generally predicted the right
magnitude of ozone peaks, the EPA determined that the model provided an acceptable tool for
*25
estimating the amount of emissions reductions needed for attainment.
Because EPA considered BCCA’s arguments during the administrative process and
offered a rational explanation for its reliance on the model despite the model’s inability to exactly
replicate Houston-Galveston’s unique meteorological conditions, the court upholds EPA’s
approval of Tеxas’s photochemical grid model. See Burlington Truck Lines,
2. EPA’s Weight-of-Evidence Analysis
The statute requires that an attainment demonstration be “based on photochemical grid
modeling or any other analytical method determined . . . to be at least as effective.” 42 U.S.C. §
7511a(c)(2)(A). Due to the inherent uncertainties in air quality modeling, EPA has interpreted the
statute to allow states to supplement their photochemical modeling results with additional
evidence to demonstrate attainment.
As previously discussed, Texas’s modeled control strategy alone did not demonstrate
attainment of the NAAQS for ozone by the 2007 statutory deadline. In accordance with EPA
guidance, Texas supplemented its modeling with other evidence to show that the area would
reach attainment by 2007. Texas first used a quadratic equation to calculate the “gap” in NOx
emissions reductions between those achieved by the modeled control strategy and the levels
required to achieve the NAAQS. See
The statute requires that an attainment demonstration be “based on photochemical grid modeling;” the statute does not require that an attainment demonstration be based solely or directly on photochemical grid modeling. See 42 U.S.C. § 7511a(c)(2)(A). As such, the statute is ambiguous as to how the photochemical grid modeling may be used. As the statute does not specifically govern the precise question at issue, the court must determine whether EPA’s interpretation of it is entitled to deference.
EPA’s weight-of-evidence approach to approving the Houston SIP was set forth in notice-
and-comment rulemaking, and as such it is entitled to deference if it is reasonable. See Mead, 533
U.S. at 227–31. EPA has interpreted the “based on” language to allow for the assessment of
additional emissions controls, not modeled, as part of the weight-of-evidence analysis. See 66
Fed. Reg. at 57,171. The model’s results are the “principal component” of EPA’s weight-of-
evidence determination, but the weight-of-evidence approach allows Texas to supplement the
modeled results with additional control measures. Id. at 57,170; 1996 Modeling Guidance, J.A.
Tab 43, at S-1 (“In a weight of evidence determination, model results are weighed heavily.”).
Furthermore, because the statute also grants EPA the broad authority to approve equally effective
alternatives to photochemical grid modeling, Congress could not have intended to bar EPA from
*29
considering data in addition to modeled results. See 42 U.S.C. § 7511a(c)(2)(A) (giving EPA
Administrator broad discretion to approve “other analytical method[s]”). As such, EPA’s
conclusion that the weight-of-evidence approach to approving attainment demonstrations is
consistent with the CAA is reasonable and is entitled to deference. See 1000 Friends,
Texas modeled 88 percent of the emissions reductions necessary for attainment, and the results from Texas’s modeling formed the starting point for EPA’s weight-of-evidence analysis. Petitioners contest EPA’s approval of Texas’s use of the quadratic equation to calculate the additional reductions needed for attainment. Texas, however, followed the general approach described in EPA’s 1999 Modeling Guidance to identify the amount of additional emissions reductions needed for attainment. Texas evaluated the model’s reaction to three hypothetical control strategies imposed on the modeled episode day with the highest ozone levels. Dec. 2000 SIP, J.A. Tab 12a, at 3-47. Based upon the results, Texas and EPA developed a quadratic equation that represented the relationship between NOx emissions and ozone levels. 66 Fed. Reg. at 57,174. Thus, the quadratic equation used in Texas’s supplemental analysis was “based on,” and was an extension of, actual photochemical grid modeling results from Houston-Galveston, *30 and it was used only to assess the 12 percent portion of the state’s control strategy that was not included in the modeling. See id. at 57,172. Accordingly, EPA found that the quadratic equation was a sound scientific method for estimating the additional NOx reductions, beyond the modeled controls, that would be necessary for the Houston-Galveston area to reach attainment. Id. at 57,174.
As discussed, the quadratic equation was used to estimate what the model would predict
to be the peak ozone concentration for the future episode if Texas had modeled its complete
control strategy. Because the EPA’s approval of the model itself was reasonable, see supra Part
III.C.1, EPA reasonably concluded that additional analyses based on and derived from the model
also predicted peak ozone levels with reasonable accuracy. Petitioners have not met their
“considerable burden” of overcoming the presumption of regularity that attaches to EPA’s choice
of analytical methodology. See Am. Petroleum Inst.,
D. Whether EPA Erred in Withholding Action on Certain Provisions of the Houston
SIP
On November 14, 2001, the EPA approved the Texas Mass Emissions Cap and Trade program, one element of Texas’s control strategy, as a revision to the Houston SIP. Approval and Promulgation of Air Quality State Implementation Plans (SIP), 66 Fed. Reg. 57,252 (EPA Nov. 14, 2001) (final rule). The program is mandatory for stationary facilities that emit NOx in the Houston-Galveston area, and facilities are required to meet annual maximum NOx allowances. *31 Id. Facilities may bank, sell, or purchase their allowances. Id. In addition, the program has a provision that allows facilities to use emission reduction credits, discrete emission reduction credits (“DERCs”), and mobile discrete emission reduction credits (“MDERCs”) “in lieu of allowances if they are generated in the [Houston-Galveston] area.” Id. However, EPA deferred action on DERCs and MDERCs so that neither credit can be used until EPA approves of those measures. See id. n.1.
BCCA argues that EPA acted contrary to law and failed to observe proper procedure in
approving the Houston SIP while withholding final action on the DERC and MDERC provisions,
which would allow compliance with the mandated NOx reductions through the use of emissions
reductions credits. EPA responds that its decision to withhold action on the DERC and
BCCA’s opening brief also challenges EPA’s failure to act on an alternate
80 percent reduction in emissions from industrial point sources (“ESADs”), as
opposed to the EPA-approved 90 percent reduction. The use of the lower
reductions in the Texas SIP was expressly conditioned upon further study and
submission of a SIP revision to EPA. EPA’s final rule approving the SIP therefore
found that the issue was not ripe for its review because thе record did not provide
the needed scientific data or modeling to show that the alternate ESAD would
achieve the NAAQS for ozone.
The court finds BCCA’s reasoning unpersuasive and its reliance on case law from other
circuits misplaced. Riverside Cement Co. v. Thomas,
These cases are inapposite to support BCCA’s position. Unlike the situation in Riverside
Cement and Indiana & Michigan Elec., EPA did not, in effect, amend Texas’s proposal in a way
that eliminated a prerequisite to, or an exception to, the approved rule’s application. In fact,
Indiana & Michigan Elec. actually supports EPA’s action because the court stated, “if some
provisions in a plan are independent of others, there is no reason why the agency must consider all
of the provisions at the same time.”
*34 E. Whether EPA’s Approval of the SIP’s “Enforceable Commitment” to Adopt
Additional Controls on a Fixed Schedule is Consistent with the CAA
The EPA-approved control measures in the Houston SIP achieve 94 percent of the NOx
reductions needed for attainment.
Nothing in the CAA speaks directly to enforceable commitments. The CAA does, however, provide EPA with great flexibility in approving SIPs. A SIP may contain “enforceable emission limitations and other control measures, means, or techniques . . . as well as schedules and timetables for compliance, as may be necessary or appropriate” to meet the CAA’s requirements. 42 U.S.C. § 7410(a)(2)(A) (emphasis added); see 42 U.S.C. § 7502(c)(6) (using the same language to describe nonattainment area plan requirements). [28] Thus, according to the *36 plain language of the statute, SIPs may contain “means,” “techniques,” and/or “schedules and timetables for compliance” that the EPA considers “appropriate” for attainment so long as they are “enforceable.” See id. § 7410(a)(2)(A). “Schedules and timetables” is broadly defined as “a schedule of required measures including an enforceable sequence of actions or operations leading to compliance with an emission limitation, prohibition or standard.” 42 U.S.C. § 7602(p). The remaining terms are not dеfined by the Act. Because the statute is silent on the issue of whether enforceable commitments are appropriate means, techniques, or schedules for attainment, EPA’s interpretation allowing limited use of an enforceable commitment in the Houston SIP must be upheld if reasonable.
EPA interprets § 7410(a)(2)(A) to mean that enforceable emission limitations and other
control measures do not necessarily need to generate reductions in the full amount needed to
attain. Rather, EPA interprets the statutory language to allow limited use of other “means” and
“techniques,” such as enforceable commitments, so long as the entire package of measures and
*37
rules provides for attainment.
In the present case, EPA determined that Texas’s limited use of the enforceable
commitment as part of its overall control strategy was appropriate within the meaning of CAA
sections 110(a)(2)(A) and 172(c)(6), 42 U.S.C. §§ 7410(a)(2)(A) and 7502(c)(6). See 66 Fed.
Reg. at 57,177. In applying the three-factor test to the Houston SIP, the EPA found that the first
*38
factor supported the use of an enforceable commitment here because it only addressed a small
portion of the overall plan. In fact, the enforceable commitment addresses only six percent of the
total emission reductions needed to attain the standard. See id. at 57,178. The second factor also
weighed in favor of approving the commitment because Texas “provided EPA with sufficient
information to assure EPA that it will be capable of adopting controls to achieve the necessary
level of emission reductions.” Id. Texas provided EPA with a list of soon-to-be-available,
cutting-edge technologies that would achieve at least 56 tons/day of NOx emission reductions by
the statutory deadline, thereby justifying its use of the enforceable commitment as opposed to
adopted control measures. See id. Finally, because Texas was in the process of exploring,
developing, and assessing the capabilities of those cutting-edge technologies, some of which were
further along in the development process than others, EPA approved the two-tiered timetable for
adopting the additional controls covered by the commitment. Id.; see supra n.26. EPA
considered this timetable to be as expeditious as possible given the technological circumstances, in
addition to the time Texas would need to adopt the measures that would achieve the necessary
emission reductions.
*39 The court finds that EPA reasonably concluded that an enforceable commitment to adopt additional control measures on a fixed schedule was an “appropriate” means, technique, or schedule or timetable for compliance under the statute. See 42 U.S.C. §§ 7410(a)(2)(A) and 7502(c)(6). The statute is silent or ambiguous on this issue. Because the EPA’s approval of the enforceable commitment in the Houston SIP was promulgated under notice-and-comment rulemaking, EPA’s interpretation is entitled to Chevron deference if it is based on a permissiblе
construction of the statute. EPA’s three-factor test reasonably evaluates whether an enforceable
commitment would be “appropriate” in a given situation. This test guarantees that a state’s use of
an enforceable commitment as part of its overall control strategy is limited in scope and that the
state is capable of fulfilling the commitment pursuant to an expeditious, yet practicable, schedule.
In the present case, EPA carefully considered each factor and found that Texas’s use of the
commitment was appropriate. Despite the uncertainty as to the exact technologies Texas will
actually employ to achieve attainment by 2007, EPA considered the possibilities Texas submitted
with its SIP and determined that the state is capable of adopting these “cutting-edge” controls to
achieve the standard. See
F. Whether EPA Properly Approved the Motor Vehicle Emissions Budget in the
Houston SIP
A Motor Vehicle Emissions Budget or MVEB establishes the maximum level of on-road
emissions that, when considered with emissions from all other sources, still provides for
attainment of the ozone NAAQS by the statutory deadline.
[32]
40 C.F.R. § 93.101;
Plaintiff Environmental Defense disagrees with the EPA’s approval of the MVEB for the Houston SIP, claiming that (1) the EPA could not approve the budgets because the Houston SIP does not provide for attainment, and (2) the EPA violated the transportation conformity provisions of the CAA and its regulations. For the reasons that follow, these arguments fail.
First, because we have already affirmed the EPA’s approval of the Houston SIP’s
attainment demonstration, which includes an enforceable commitment to adopt additional control
measures on a fixed schedule, Environmental Defense’s first challenge to the EPA’s approval of
the MVEBs must similarly be rejected. See 1000 Friends,
approval of the MVEB “when considered with the emissions reduction programs in place and when considered with Maryland’s enforceable commitment to implement all other control measures necessary to reach attainment . . . .”) (emphasis added)).
*42
Environmental Defense’s arguments based on the transportation conformity provisions of
the CAA and its implementing regulations are equally without merit. Environmental Defense
incorrectly argues that a budget that does not provide for attainment, does not provide the
“necessary emissions reductions” required by 7506(c)(2)(A). The statute cited requires a
transportation plan or transportation improvement program to be consistent with an approved
MVEB; it has nothing to do with EPA’s preceding action of approving the MVEB itself. See 42
U.S.C. § 7506(c)(2)(A). Moreover, 40 C.F.R. § 93.118(e)(4)(iv) provides that the EPA will not
find a MVEB adequate for transportation conformity purposes unless “the motor vehicle
emissions budget(s), when considered together with all other emissions sources, is cоnsistent with
applicable requirements for . . . attainment.” Id. EPA’s adequacy finding here was consistent
with the regulation because EPA reasonably found that the Houston SIP’s MVEB would achieve
attainment when considered with all other sources.
G. Whether EPA’s Approval of the Texas Emissions Reduction Plan is Supported by
the Record
The Texas Emissions Reduction Plan or TERP is a discretionary economic incentive program to reduce emissions. At issue is TERP’s diesel emission reduction program that provides *43 financial incentives to help private and public entities purchase or lease cleaner diesel technology for mobile sources. Tex. Health & Safety Code Ann., Title 5, Subtitle C, Ch. 386, SubChap. C. Texas’s program is modeled after the Carl Moyer Program in California, which was very successful. Economic incentives, like TERP, are explicitly allowed under the Act as one tool to achieve attainment. See 42 U.S.C. § 7410(a)(2)(A). Congress directed EPA to promulgate regulations for economic incentive programs, id. § 7511a(g)(4), and EPA did so by enacting regulations for statutory incentive programs and by issuing guidelines for discretionary incentive programs. 40 C.F.R. Pt. 51, Subpt. U.
NRDC alleges that EPA’s approval of the TERP diesel program is arbitrary and capricious because the state did not provide adequate information about resources, implementation, and legal authority. We agree with the EPA that the state did provide all of the information required by the Act and that its approval of the program was reasonable on the record.
In considering TERP, the EPA reviewed the state’s estimated costs, funding mechanisms,
funding allocations, and estimated emission reductions from this program.
NRDC argues that the state did not comply with certain provisions of the CAA. Section 110(a)(2)(E) of the CAA requires a SIP to “provide . . . necessary assurances that the State . . . will have adequate personnel, funding, and authority . . . to carry out such implementation plan.” 42 U.S.C. § 7410(a)(2)(E)(I). The NRDC submits that this section requires a state to do so as to each specific control measure, mean, or technique in a state’s SIP. This would mean that Texas would have to make the “necessary assurances” for its TERP program. We disagree. The plain language of the statute only requires a state to give assurances that it has the funding, personnel, and authority to implement the plan as a whole (“such implementation plan”). It does not require such assurances for each specific control measure.
While the Act does not define “necessary assurances,” other circuits have held that
“Congress has left to the Administrator’s sound discretion determination of what assurances are
‘necessary.’” NRDC v. EPA,
NRDC also argues that the CAA requires a state or local agency to provide a step-by-step description of implementation and an implementation schedule. The statute includes no such requirements. The Act simply requires state and local agencies to make an early allocation of responsibility for SIP planning and implementation and that a properly authorized agency prepares and submits the SIP. See 42 U.S.C. § 7504(a). There is no requirement that states must provide a step-by-step description of how specific SIP provisions will be implemented or a specific schedule for each measure’s implementation. See id. NRDC’s argument that 42 U.S.C. §
7410(a)(2)(E) requires an implementation commitment on the part of state must also fail. This section provides that where a local or regional entity is responsible for implementation of any portion of a SIP, the state must ultimately ensure “adequate implementation” of that provision. As thе State of Texas is responsible for TERP, not a local or regional entity, this statute is inapplicable.
H . Whether EPA Reasonably Interpreted the CAA as Allowing Emission Reductions
from the Voluntary Mobile Emission Reduction Program to be Considered in Reaching Attainment, and Whether the Record Supports EPA’s Approval of the Program in the Houston SIP
*47 The EPA encourages states to develop voluntary measures to reduce air pollution caused by vehicle emissions, such as trip reduction programs or growth management strategies, by granting limited SIP credit in appropriate circumstances for Voluntary Mobile Emission Reduction Programs or VMEP. See Guidance on Incorporating Voluntary Mobile Source Emission Reduction Programs in State Implementation Plans at 1 (Oct. 24, 1997) (“VMEP Guidance”). The EPA believes that such voluntary measures, which rely on the discretionary actions of public or private parties, can provide emissions reductions that would not be available through traditional state regulatory programs. Id. at 3, 5. The EPA’s VMEP Guidance provides
a framework for states to obtain credit for such emission reductions. States must identify and
describe the voluntary measures in its VMEP and include supportable projections of emissions
reductions associated with the measures. Id. at 2, 6–7. The state must also make an enforceable
commitment to monitor, assess, and report on the implementation and emissions effects of the
VMEPs, as well as to timely remedy any shortfall in emissions reductions that do not meet the
projected levels. Id.; see
*48 The EPA’s authority for the VMEP program is § 7410(a)(2)(A), which, as previously discussed, allows “enforceable . . . control measures, mеans or techniques . . . as may be necessary or appropriate to meet the applicable requirements of this chapter.” Due to increasing levels of mobile emissions despite improved technology, the EPA determined that limited voluntary measures that reduce emissions are “appropriate” measures under the CAA if enforceable against the states as described above. VMEP Guidance at 3–4. Additional authority for EPA’s VMEP policy can be found in 42 U.S.C. § 7408(f)(1)(B), which allows EPA to publish “information on additional methods or strategies that will contribute to the reduction of mobile source related pollutants during periods in which any primary ambient air quality standard will be exceeded.” The EPA is allowed substantial discretion in its assessment of what constitutes an approvable SIP and whether the control measures, means, or techniques contained in the SIP are necessary and appropriate. Based on our review of the record, the EPA’s VMEP Guidance is a reasonable exercise of that discretion consistent with the CAA.
The Texas VMEP consists of 14 voluntary measures designed to achieve 23 tons/day of NOx reductions. The state’s decision to use voluntary measures was necessary due to the large magnitude of reductions needed for attainment. Many of the measures in the VMEP were existing voluntary programs that the state wanted to take SIP credit for towards its attainment demonstration. The VMEP added a few new programs that were already in development by Houston-Galveston Area Council, the regional transportation agency.
Additionally, vehicle emissions are expected to be the largest category of NOx emissions in 2007. Dec. 2000 Plan at 6-1.
NRDC argues that the EPA’s approval of Houston’s VMEP is arbitrary and capricious because the state did not provide adequate information about resources, implementation and legal authority for the program. Again, we agree with the EPA that the state did provide all of the information required by the Act and that its approval of the program was consistent with the CAA and reasonable on the record.
The state provided supporting documentation for each voluntary measure that included a
description of the measure, the identified or predicted participants, the basis for the quantified
emission reductions, and commitments to monitor, assess, and report emission reductions for the
voluntary measures. While the state did not make a separate specific commitment to remedy any
shortfall in the VMEPs, it believed that the existing enforceable commitment regarding adoption
of additional NOx controls also applied to any shortfall in reductions from VMEPs. Based on
its review of each VMEP measure and the SIP’s recognition of the state’s commitment to
“monitor, evaluate, and report” on the VMEP, as well as “to remedy in a timely manner any SIP
credit shortfall if the VMEP program does not achieve projected emission reductions,” the EPA
believed that Texas had fulfilled its requirements for VMEP submissions. The EPA’s final rule
*50
included a detailed discussion of the state’s commitments. See
In summary, the EPA’s VMEP policy is a reasonable interpretation of the statute and the EPA’s approval of the Texas VMEP is upheld as reasonable on the record. To the extent this challenge to VMEP is based on a contention that the CAA requires a state to provide necessary assurances as to each specific measure, mean, or technique or on a contention that the CAA requires a state or local agency to provide a step-by-step description of implementation and an implementation schedule, we reject those positions as discussed above.
I. Whether EPA’s Findings on “Rеasonably Available Control Measures” in the
Houston SIP Were in Accordance with the CAA and Supported by the Record
All nonattainment area SIPs must provide for implementation of “all reasonably available
control measures as expeditiously as practicable.” 42 U.S.C. § 7502(c)(1). The EPA interprets
this section as imposing a duty to implement only those control measures that contribute to
attainment as expeditiously as practicable. See Sierra Club v. United States EPA,
*51 Sierra Club challenges EPA’s approval of the RACM analysis on essentially two grounds.
First, Sierra Club argues that EPA’s interpretation of RACM is contrary to the CAA. This court, however, recently held that EPA’s interpretation of RACM is reasonable. Sierra Club, 314 F.3d at 744. The court found that EPA “need not require an analysis of all transport control measures” (“TCMs”) specifically listed in 42 U.S.C. § 7408(f), and that EPA could properly conclude that the CAA only requires transport control measures that would contribute to expeditious attainment. Id. The court also affirmed EPA’s interpretation that “potential measures requiring intensive and costly implementation were not RACMs because they could not be readily implemented due to excessive administrative burden or local conditions such as high costs.” Id. Therefore, Sierra Club’s challenge to EPA’s interpretation of “reasonably available control measures” must be rejected.
Second, Sierra Club argues that EPA’s approval of a RACM-deficient plan was arbitrary
and capricious. EPA reviewed what the state submitted and agreed that all RACMs were
included in the Houston SIP.
*52
EPA’s consideration of whether the potential RACM were economically feasible and
would advance attainment is permitted under the statute. Sierra Club,
IV. C ONCLUSION
For the foregoing reasons, the court denies the petitions for review and upholds EPA’s action approving the Houston SIP.
DENIED.
Notes
[*] The Honorable Jane A. Restani, U.S. Court of International Trade, sitting by designation.
[1] The Houston-Galveston area’s unique “land-sea breeze” meteorological
condition affects ozone formation and movement around the region, adding a “level
of complexity . . . not seen anywhere else in the country.”
[2] The State’s sophisticated computer mоdeling simulated ozone formation in the Houston-Galveston area despite the land-sea breeze phenomenon, and additional analyses confirmed that the control strategy would achieve attainment by the statutory deadline.
[3] Petitioners apparently divided up the issues for briefing, and the environmental petitioners generally adopt each other’s arguments.
[4] BCCA Appeal Group is comprised of owners and operators of stationary sources of air pollution that are subject to Texas’s control measures.
[5] Brazoria County is one of eight counties within the Houston-Galveston area. Fort Bend County initially joined Brazoria County’s petition for review, but later voluntarily withdrew from the action. Fort Bend County’s petition was terminated on November 26, 2002.
[6] Thus, this case is distinguishable from cases where petitioners attempted to
challenge SIPs that not only met the CAA’s minimum requirements, but also
exceeded them. Because the states can adopt more stringent air pollution control
measures than federal law requires, the EPA is empowered to disapprove state plans
only when they fall below the level of stringency required by federal law. See, e.g.,
Duquesne Light Co. v. United States EPA,
[7] Under the SIP, the speed limit would be lowered to 55 mph effective May 1, 2002.
[8] Use of lawn equipment would be limited to certain afternoon hours between April 1 and October 31 of each year.
[9] The City of Houston and the State of Texas, intervenors in this action, concur with EPA’s waiver argument. These intervenors also argue that this court lacks jurisdiction to consider the alleged errors of state law raised by the County’s petition for review. Because Brazoria County’s claims can be disposed of upon the court’s finding of waiver, see discussion infra, the difficult question of whether the federal courts should properly adjudicate stаte law issues relating to state implemention plan development need not be addressed.
[10] Circuit precedent does conflict in this area, see City of Seabrook v. United
States EPA,
[10] (...continued)
court’s primary basis for finding no waiver was that “[t]he EPA has cited no
authority for the proposition that an argument not raised during the comment period
may not be raised on review.”
[11] (...continued) submissions to ensure compliance with state law, contrary to the County’s position in this litigation. Such a requirement would be extremely burdensome and negate the rationale for having the state provide assurances in the first instance. The EPA is entitled to rely on a state’s certification unless it is clear that the SIP violates state law, and proof thereof, such as a state court decision, is presented to the EPA during the SIP approval process. See Ohio Envtl. Council v. United States EPA, 593 F.2d 24, 27–29 (6th Cir. 1979) (holding that EPA was not arbitrary and capricious in relying upon a state’s certification that its action was lawful and enforceable under state law).
[12] Photochemical grid modeling is computerized air quality modeling “that
evaluates how emissions from various sources combine in the atmosphere and
predicts the concentration of pollutants that likely will result.” 1000 Friends, 265
F.3d at 220 n.4. This technique employs complex computer models that can predict
ozone levels as of the statutory attainment date based on monitoring data,
meteorology, the area’s projected growth, planned emission reductions, and other
factors. Id. (citation omitted).
The photochemical grid model overlays a grid on the geographical area being
studied and simulates emissions and ozone concentrations in each “cell” of the grid.
[13] Ozone “spikes” are dramatic increases in measured ozone over short periods of time, ranging from several minutes to an hour. BCCA points out in its brief that from 1990 to 1998, there were 106 instances of ozone spikes measured by monitors in the Houston-Galveston area. That amounts to approximately one spike per month in an area covering 220,000 square kilometers. BCCA argues that the model’s failure to predict the exact location of spikes renders it irreparably flawed. BCCA similarly argues that the EPA’s approval of the Houston SIP was contrary to law because the control strategy does not control for spikes and, therefore, cannot bring the area into attainment with the ozone standard. Id. at 51. These arguments are rejected for the reasons explained in Part III.C.1, infra.
[14] The agency’s final rule considered, but rejected, identical criticisms of
Texas’s modeling raised during the comment period. See
[15] The legality of the state’s enforceable commitment is discussed infra Part III.E.
[16] The “Unpaired Peak Accuracy” test measures the difference between the highest observed ozone concentration at any time at any monitoring station and the highest model-predicted ozone concentration at any time in any grid cell. 1991 Modeling Guidance, J.A. Tab 42, at 54 & 81. BCCA asserts that Texas’s passing statistic for this test was achieved by manipulating the model between 1997 and 2000. EPA responds that this point was not raised, and that BCCA relies upon matierials and testimony not properly identified, during the comment period. Regardless, the record reflects only that Texas improved its modeling in 1997, which resulted in an overprediction of ozone concentrations in one grid cell. As discussed infra, EPA found that the overprediction resulted from the model’s difficulty in simulating wind speеd and direction, and that opinion is entitled to deference. Furthermore, BCCA’s claim that the model should not have passed the Unpaired Peak Accuracy test because it predicted an ozone peak approximately 45 miles from the actual peak location is misplaced. This test measures the difference between the highest observed ozone value and the highest model-predicted value over all hours and monitoring stations. Geographic location is simply not a factor in that test. Rather, the Normalized Bias and Gross Error tests take geographic proximity into account, and the model passed those tests for all days in the base time period.
[17] The “Normalized Bias” test measures the model’s ability to replicate observed patterns during times when available monitored data and modeling data are most likely to represent similar spatial scales. 1991 Modeling Guidance, J.A. Tab 42, at 54. EPA concluded that Texas’s model performed acceptably on the Normalized Bias test because it produced results within EPA’s suggested ranges for all days in the base time period. BCCA argues that these passing statistics mask “compensating errors” in the model, i.e., an ozone over-prediction in one area compensates for an under-prediction in another area. EPA’s Modeling Guidance recognizes that this test can be subject to compensating errors. 1991 Modeling Guidance, J.A. Tab 42, at 82. This is why EPA recommends that states apply a variety of statistical and other tests to validate models. See id. at 49–50, 53–57. (continued...)
[17] (...continued) Regardless, the notion that the Texas model masked compensating errors in the Normalized Bias test is directly refuted by the fact that the model passed the Gross Error statistical test. See infra n.18.
[18] The “Gross Error” test provides an overall assessment of the model’s precision. 1991 Modeling Guidance, J.A. Tab 42, at 54. In contrast to the Unpaired Peak Accuracy test, the Gross Error test comparеs predicted and monitored ozone values in the same geographic area. Under-predictions and over- predictions do not offset each other in the Gross Error test because the test assigns positive values to both. Id. at 83. The Texas model passed the Gross Error test for each of the four days in the modeled episode, which showed that the model was estimating ozone concentrations with an acceptable degree of geographic precision.
[19] Although it apparently did not raise the issue during the comment period, BCCA now asserts that Texas should have considered two additional graphical tests. The court declines to address the issue as EPA did not have the opportunity to do so in the first instance. See supra Part III.B.2 (applying the waiver doctrine to bar our consideration of issues not raised during the administrative proceedings).
[20] A commenter before the EPA, and petitioners here, criticize EPA’s
technique for estimating the ambient impact of additional emissions reductions not
modeled on grounds that EPA employed a rollback modeling technique that is
precluded under EPA regulations. See
[20] (...continued) ambient air quality concentrations decrease proportionately. Id. Thus, if 20 percent improvement in ozone is needed for attainment, it is assumed that a 20 percent reduction in emissions would be required. Id. EPA did not rely on this approach in its evaluation of the Houston-Galveston attainment demonstration. Id. EPA used a locally-derived relationship between emissions reductions and improvement in ozone levels as determined by the model and/or observed changes in air quality. Id. For example, if modeled or monitored results indicated that ozone was reduced by 25 ppb during a particular period, and that VOC emissions fell by 20 tons per day and NOx emissions fell by 10 tons per day during that period, EPA would develop a relationship for ozone improvement related to those reductions in emissions. Id. While the formula assumes a quadratic relationship between the emissions and ozone for a relatively small amount of ozone improvement, this is not a “proportional rollback” technique. Id. Furthermore, EPA makes limited use of these locally-derived adjustment factors to estimate the extent in which additional emissions reductions, not Texas’s core control strategies, would reduce ozone levels. Id. The state’s commitment to perform a mid-course review further convinced the EPA that Texas’s overall plan would result in attainment by 2007. Id. at 57,173.
[21] Contrary to Environmental Defense’s suggestion to the contrary, nothing in
the CAA or in EPA’s regulations or guidance requires a state to model its entire
control strategy. See 1000 Friends,
[22] Environmental Defense asserts that the weight-of-evidence determination is an improper “other analytical method” under 42 U.S.C. § 7511a(c)(2)(A) because the EPA Administrator did not make a specific determination that this approach is “at least as effective” as photochemical grid modeling. Because weight-of-evidence analysis is based on photochemical grid modeling, EPA did not use an “other analytical method” that would have required the Administrator’s effectiveness determination.
[23] (...continued) MDERC provisions.
[24] While EPA’s action may take away one option for compliance, it does not alter the obligation to reduce emissions to specified levels. This view is supported Texas’s express agreement to the timetable EPA proposed for considering the DERC and MDERC provisions. See Approval and Promulgation оf Implementation Plans, 66 Fed. Reg. 38,231, 38,232 (EPA July 23, 2001).
[25] These commitments are enforced by the EPA and citizens under the CAA.
See 42 U.S.C. §§ 7413 (federal enforcement) and 7604 (citizen suits). EPA has
approved enforceable commitments in the past and courts have enforced them, as
well as SIP provisions generally, against the states that failed to comply with those
commitments. See, e.g., 1000 Friends,
[26] Under the schedule, Texas was required to adopt additional controls to provide 25 percent of the reductions covered by the enforceable commitment, or 14 (continued...)
[26] (...continued)
tons/day of NOx, by December 2002.
[27] The City of Houston and BCCA Appeal Group support EPA’s position in their intervenor briefs.
[28] Environmental Defense claims that 42 U.S.C. § 7410(k)(4), which was enacted in 1990 amendments to the CAA and gives EPA discretionary authority to conditionally approve a SIP “based on a commitment of the State to adopt specific enforceable measures by a date certain,” was meant to supplant EPA’s practice of using enforceable commitments under § 7410(a)(2)(A). There is nothing in the statute or in the legislative history, however, to support this theory. Furthermore, the cases Environmental Defense relies upon, which address conditional SIP approvals or construe statutory provisions before the 1990 amendments, are inapposite. The legislative history of the 1990 amendments of § 7410(a)(2)(A) (continued...)
[28] (...continued) acknowledged EPA’s practice of fully approving SIPs that contained limited enforceable commitments, yet Congress made no changes to that section precluding the practice. See H.R. Rep. No. 101-490, pt. 1 at 218 (1990). In fact, the 1990 amendments expanded EPA’s authority under § 7410(a)(2)(A) by adding the “means” and “techniques” and “as . . . appropriate” language. This strengthens, rather than limits, the statutory basis for EPA’s practice of fully approving SIPs that contain enforceable commitments as part of an overall control strategy. Finally, because § 7410(a)(2)(A) is silent on the issue of whether an enforceable commitment is an “appropriate” “means” or “technique” to reach attainment, EPA’s interpretation must be upheld if the court finds it a permissible construction of the statute.
[29] Environmental Defense argues that EPA’s regulations and guidance preclude the use of enforceable commitments. ED bases this argument in part on the agency’s definitions in the Code of Federal Regulations of “control strategy” and “control measures.” The defintion of control stragegy is broad and does not support ED’s position, see 40 C.F.R. § 51.100(n)(1)–(8), and EPA has never construed the enforceable commitment to be a “control measure” within the meaning of the CAA. It is, rather, a “means” or “technique” specifically permitted under the Act. ED also claims that the enforceable commitment does not constitute a “measure[], rule[], or regulation[],” and therefore violates EPA’s regulation requiring each SIP to “demonstrate that the measures, rules, and regulations contained in it are adequate to provide for thе timely attainment and maintenance of the national standard it implements.” See 40 C.F.R. § 51.112(a). Contrary to ED’s contention, however, the enforceable commitment is a “rule” as defined by the Administrative Procedure Act. See 5 U.S.C. § 551(4). It creates specific rights, imposes specific obligations on, and is enforceable against the State of Texas. Therefore, we reject ED’s arguments that EPA lacks discretion under EPA regulations and guidance to approve enforceable commitments.
[30] The developing technologies submitted to EPA included, for example, diesel emulsion, fuel cells, diesel NOx reductions systems, energy efficiency measures, and several innovative ideas, such as marine loading operations and episodic emission controls, all of which required further scientific study. Approval and Promulgation of Implementation Plans, 66 Fed. Reg. 36,656, 36,665 (EPA July 12, 2001) (proposed rule).
[31] For over 20 years, EPA has consistently maintained its interpretation of the
CAA as allowing states to submit, and EPA to approve in appropriate
circumstances, a SIP that contains an enforceable commitment to adopt additional
controls as part of an overall control strategy. See
[32] The EPA’s regulations specifically define the motor vehicle emission budget as “that portion of the total allowable emissions defined in the submitted or approved control strategy implementation plan revision or maintenance plan for a certain date for the purpose of meeting reasonable further progress milestones or demonstrating attainment or maintenance of the NAAQS, for any criteria pollutant or its precursors, allocated to highway and transit vehicle use and emissions.” 40 C.F.R. § 93.101.
[33] An adequacy determination allows transportation planners to use the
MVEBs in a submitted, but not yet approved, SIP for conformity purposes. E.g.,
1000 Friends,
[34] The budgets for the 2007 attainment demonstration SIP are 79.5 tons/day
for VOCs and 156.7 tons/day for NOx.
[35] Intervenors Houston-Galveston Area Council, a transportation and air quality planning agency of the State of Texas, and Harris County support EPA’s approval of the MVEB in the Houston SIP.
[36] EPA approved the budgets after conducting a detailed examination of the
SIP’s control measures and technical analyses. See
[37] The EPA approved the TERP based on, among other things, its evaluation
of Texas’s revised funding projections allocating $25 million to the diesel emission
reduction program in Houston.
[37] (...continued) Implementation Plan, 67 Fed. Reg. 49,895 (EPA Aug. 1, 2002) (proposed rule). If this rule becomes final as proposed, the state will have 18 months to provide adequate funds for TERP or revise its SIP before sanctions are imposed. Id. EPA’s proposed rule does not, however, provide grounds for invalidating its prior approval of the SIP before the funding mechanism was invalidated.
[38] EPA’s guidance limits the SIP credit to three percent of the total future year emissions necessary to reach attainment until EPA gains additional experience in calculating credits for such voluntary measures. VMEP Guidance at 5.
[40] To reinforce its commitment to VMEPs, the state later submitted a SIP revision subsequent to EPA’s approval of the SIP clarifying that it has a specific enforceable commitment to remedy, by the attainment date, any shortfall in reductions credited to VMEPs. EPA proposed approval of this revision on September 18, 2002. See Proposed Approval and Promulgation of Implementation Plans, 67 Fed. Reg. 60,633 (EPA Sept. 26, 2002) (proposed rule). After the EPA received public comments on its proposal, it responded to comments and approved the state’s clarification of its enforceable commitment for VMEP. See Approval and Promulgation of Implementation Plans, 67 Fed. Reg. 68,941 (EPA Nov. 14, 2002) (final rule).
[41] BCCA Appeal Group, City of Houston, and Harris County, intervenors on this issue, support EPA’s interpretation of RACM and approval of Texas’s RACM demonstration.