CHESAPEAKE CLIMATE ACTION NETWORK, ET AL., PETITIONERS v. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT ALABAMA POWER COMPANY, ET AL., INTERVENORS
No. 15-1015
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 21, 2019 Decided March 13, 2020
Consolidated with 16-1169, 16-1349 On Petitions for Review of Agency Action of the United States Environmental Protection Agency
Patton Dycus argued the cause for petitioners. With him on the briefs were Neil Gormley, James S. Pew, and Eric Schaeffer. Sanjay Narayan entered an appearance.
Meghan E. Greenfield, Trial Attorney, U.S. Department of Justice, argued the cause for respondent. With her on the brief were Jeffrey Bossert Clark, Assistant Attorney General, and Jonathan D. Brightbill, Principal Deputy Assistant Attorney General. Norman L. Rave Jr. and Stephanie J. Talbert, Attorneys, entered appearances.
Lauren E. Freeman, Makram B. Jaber, Andrew D. Knudsen, C. Grady Moore, III, Margaret C. Campbell, and Emily Gerhardt were on the brief for industry intervenor-respondents.
Before: TATEL, PILLARD, and WILKINS, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKINS.
For the reasons that follow, we conclude that EPA erred in denying Petitioners’ petition for reconsideration. We grant the petition in No. 16-1349 because it was impracticable for Petitioners to raise their two objections during the notice-and-comment period and the objections were of central relevance to the final rule. Because we remand the final rule for EPA’s reconsideration, we do not reach the merits arguments set forth in No. 15-1015.1
I.
The Clean Air Act (“CAA“),
EPA must set HAP emission limits in the form of numerical limits whenever “feasible,”
In setting a MACT standard, EPA follows a two-step process. Id. at 594. First, it creates a “MACT floor” for each category of emissions source that “ensures that all HAP sources at least clean up their emissions to the level that their best performing peers have shown can be achieved.” Id. (internal quotation marks omitted). For sources like those at issue here, “the MACT floor cannot be less stringent than the average emissions limits achieved by the best performing 12 percent of existing sources in that category or subcategory.” Id. (citing
Congress recognized that numerical HAP emission limits for MACT standards may not always be “feasible,” so it included
In addition, although not expressly contemplated by the CAA, we have held that EPA has the “flexibility” to “regulate a HAP indirectly, by controlling a proxy, or ‘surrogate,’ instead of the pollutant itself.
Finally,
With this statutory framework in mind, we turn to the regulatory background that led to the final rule challenged here.
II.
Coal- and oil-fired electric utility steam generating units (sometimes referred to as “EGUs“) are one of the main sources of many HAPs emitted into our atmosphere. Air pollution from utility boilers at coal-fired and oil-fired power plants can be particularly problematic during a facility’s startup or shutdown period. According to EPA, an average power plant had between 9 and 10 startup events annually between 2011 and 2012, but some plants had over 100 startup events in 2011. Assessment – Revised, EPA-HQ-OAR-2009-0234-20451, at 4 (Nov. 2014). Environmental groups believe the number of startup events will increase as renewable energy and gas-fired units replace coal-fired power plants. Thus, EPA promulgated specific emission standards applicable during these periods.
A.
In February 2012, EPA promulgated the “MATS Rule,” which set national emission standards for HAPs emitted from utility boilers at coal-fired and oil-fired power plants. MATS Rule, 77 Fed. Reg. 9,304, 9,380-83 (Feb. 16, 2012). Not to be confused with MACT standards, MATS is shorthand for “Mercury and Air Toxics Standards.” Id. at 9,306. The MATS Rule requires a power plant to comply with established numerical emission limits at all times except during periods of startup and shutdown. Id. at 9,466. The numerical emission limits in the MATS Rule are “production-based,” so EPA believed that startup periods – in which production is by definition non-existent – required separate emissions limits. Id. at 9,381. The MATS Rule defined the period of “startup” as
either the first-ever firing of fuel in a boiler for the purpose of producing electricity, or the firing of fuel in a boiler after a shutdown event for any purpose. Startup ends when any of the steam from the boiler is used to generate electricity for sale over the grid or for any other purpose (including on-site use).
Id. at 9,486. EPA rationalized the definition “based on the fact that EGUs function to provide electricity primarily for sale to the grid but also at times for use on-site; therefore, EGUs should be considered to
there were almost no HAP data for startup and shutdown periods and almost all of the data failed to meet our data quality requirements. Thus, we do not have sufficient data on emissions that occur during startup and shutdown on which to set emission standards.
Id. Therefore, the MATS Rule promulgated non-numerical work practice standards for periods of startup and shutdown. Id. The work practice standards set forth in the MATS Rule required, among others, EGUs to use clean fuels for ignition. Id. at tbl. 3. The MATS Rule does not specifically cite to
B.
Following the promulgation of the MATS Rule, “[t]he EPA received petitions [for reconsideration] asserting that the public lacked an opportunity to comment on the startup and shutdown provisions in the final MATS [Rule].” Reconsideration of Certain New Source and Startup/Shutdown Issues, 77 Fed. Reg. 71,323, 71,330 (Nov. 30, 2012). EPA acknowledged that it had previously “proposed numerical standards for startup and shutdown periods, and in response to comments on the proposed rule [it] changed those standards in the final MATS to work practice standards.” Id. EPA re-opened the period for comment on the nature of the work practice standards during the startup period. Contrary to Intervenors’ assertion, EPA did not propose altering the endpoint of startup, which remained defined as the point in which the power plant is able to generate electricity.
C.
On June 25, 2013, EPA issued a Proposed Rule and Reopening of Comment Period. Reconsideration of Certain Startup/Shutdown Issues, 78 Fed. Reg. 38,001, 38,002 (June 25, 2013) (“2013 Proposed Rule“). EPA explained that in the preceding comment period, “comments raised several significant issues regarding the definition of startup,” among other issues. Id. Commenters proposed new startup endpoints based not on when the source first generated electricity, but on the number of hours after an EGU hits certain operational benchmarks because then air pollution control devices (“APCDs“) would be operational. Id. at 38,004. EPA noted that
The commenters asserted that an EGU remains in “startup” mode beyond the first generation of electricity because, according to the commenters, at that point in time many of the APCDs needed to comply with the requirements of this subpart may not be technically or safely capable of operation and those that are may be operating far from design conditions because the requisite temperature(s) and/or flow conditions have not been achieved.
Id. at 38,003. EPA sought comments on these suggested definitions “so that the public can review the industry-provided information and data and comment on the suggested revisions to the startup and shutdown provisions.” Id. at 38,002.
“In addition, the EPA request[ed] comment on the additional technical analyses it
The 2013 TSD identified those “several indicators” to be the removal efficacy of sulfur dioxide and nitrogen oxides emission APCDs, analyzing their average time for engagement across several categories. 2013 TSD, at 2. Although sulfur dioxide and nitrogen oxides are not HAPs, “EPA believes that the removal efficacy of [these] APCDs, as evidenced by hourly emission rates well below uncontrolled levels, may be used as an indicator of the end of the startup period for the purpose of the MATS rule.” Id.
The 2013 TSD identified a specific set of data3 on emissions in order to identify all startup events at different types of boilers. Id. EPA analyzed when (in terms of hours) after generation sulfur dioxide and nitrogen oxides emissions were reduced by APCDs, and then categorized those results by combustion technologies, APCD type, and boiler type. Id. EPA’s Assessment “found no significant difference in performance related to startup between the different groups assessed in this analysis,” and “could support defining the end of startup at coal-fired EGUs as occurring at [a specific capacity threshold] plus 3 hours or the start of electricity generation plus 6 hours, whichever comes first.” 78 Fed. Reg. at 38,005; see also 2013 TSD, at 19.
Neither the 2013 TSD nor the 2013 Proposed Rule referenced the work practice standards provision,
D.
Several environmental groups, including Petitioners, submitted comments in response to the 2013 Proposed Rule. Petitioners commented on the feasibility of numerical measurability after generation, pointing out the broader problem that EPA failed to make any finding that numerical emission standards during this extended time frame were infeasible under
E.
Ultimately, EPA adopted two alternative definitions of “startup,” each with its own end point, in the final rule at issue here. Reconsideration of Certain Startup/Shutdown
The first startup definition mirrors the original definition from the 2012 MATS Rule and the November 2012 action: startup begins with “the first-ever firing of fuel in a boiler for the purpose of producing electricity, or the firing of fuel in a boiler after a shutdown event for any purpose,” and it ends at electricity generation. Id. at 68,792. This portion of the Final Rule is not challenged here.
The alternative definition evolved from the proposed extended definition tested by the 2013 TSD. It defines the beginning of startup similarly to the first definition, but defines the end of startup as occurring at a later juncture: “Startup ends 4 hours after the EGU generates electricity . . . or 4 hours after the EGU makes useful thermal energy (such as heat or steam) for industrial, commercial, heating, or cooling purposes, whichever is earlier.” Id. at 68,792 (internal citations omitted).
EPA acknowledged that the 2013 TSD “did not attempt to identify the EGUs that were the best performing sources, but instead simply looked at a category-wide average time for engagement of APCDs.” Id. at 68,782. In order to “most closely follow[] the requirements” of
The 2013 Proposed Rule connected the removal efficacy of APCDs regulating sulfur dioxide and nitrogen oxides emissions to “achiev[ing] operating benchmarks,” 78 Fed. Reg. at 38,005, specifically the point where “APCDs needed to comply with the requirements of this subpart [became] technically or safely capable of operation,” id. at 38,003. The Final Rule filled in some gaps. According to the Final Rule, sulfur dioxide and nitrogen oxides emissions can be proxies of other emissions and their APCDs aid in the engagement of HAP controls “that industry commenters stated required additional time to engage after the start of generation of electricity or useful thermal energy.” 79 Fed. Reg. at 68,781. The takeaway in the Final Rule was that EPA believed the removal efficacy of APCDs regulating sulfur dioxide and nitrogen oxides emissions was reliable evidence of when EGUs can begin to not only remove pollutants but measure HAP emissions. See id. at 68,780.
F.
Petitioners submitted a petition for reconsideration of the Final Rule that objected to the alternative extended startup definition. Specifically, Petitioners objected to EPA’s late-breaking selection of the best performing power plants which formed the basis of its Final TSD analysis and objected to EPA’s conclusion that work practice standards were lawful under
III.
Although EPA and Intervenors do not challenge Petitioners’ standing under Article III to seek judicial review of both the denial of the petition for reconsideration and the Final Rule, the Court has an independent obligation to ensure standing exists. The Court concludes that because at least one Petitioner – Sierra Club – demonstrates standing, this case may proceed to the merits. See Ctr. for Biological Diversity v. EPA, 861 F.3d 174, 182 (D.C. Cir. 2017) (“When more than one association brings suit, we need only find one party with standing to satisfy the requirement.” (internal quotation marks and citations omitted)).
Article III of the Constitution provides an association with standing to sue “only if (1) at least one of its members would have standing to sue in his own right; (2) the interest it seeks to protect is germane to its purpose; and (3) neither the claim asserted nor the relief requested requires the member to participate in the lawsuit. ” Am. Trucking Ass’ns v. Fed. Motor Carrier Safety Admin., 724 F.3d 243, 247 (D.C. Cir. 2013) (internal quotation marks and citations omitted). Sierra Club’s member’s standing here, as demonstrated in the declaration attached to Petitioners’ Reply,4 is clear for the same reasons we articulated in previous cases involving these parties:
[Its] members “unquestionably live[d] within zones they claim are exposed to” regulated air pollutants and “our vacatur [would] require
EPA . . . to entertain and respond to the [Petitioners’] claims about the necessary scope and stringency of the standards” for regulating those pollutants. Sierra Club has “shown its members’ . . . concrete interest” of a type that its asserted procedural interest is “plainly designed to protect” and that its injury “is potentially redressable” by further agency action on remand.
Sierra Club v. EPA, 926 F.3d 844, 849 (D.C. Cir. 2019) (quoting Sierra Club v. EPA, 699 F.3d 530, 533 (D.C. Cir. 2012)). Because the interest Sierra Club seeks to protect is germane to its purpose and neither the claim asserted nor the relief requested requires the member to participate in the lawsuit, Sierra Club has established standing.
IV.
As we noted at the outset, Petitioners challenge both EPA’s denial of their petition for reconsideration and the Final Rule itself. The portions of the petition for reconsideration at issue here attack EPA’s determination in the Final Rule that the “best performing” power plants cannot reliably measure emissions until four hours after they generate electricity. This objection is really two-fold. First, Petitioners argue that EPA did not analyze which power plants were the “best performers”
In Clean Air Council v. Pruitt, 862 F.3d 1, 10 (D.C. Cir. 2017) (per curiam), we declined to resolve a dispute about whether our review of EPA’s treatment of the two
We need not resolve this issue here, as the same conclusion in Clean Air Council can be made here. Even under the more deferential arbitrary-and-capricious standard, EPA erred in concluding that the two identified issues from Petitioners’ petition for reconsideration did not meet the two requirements for reconsideration under
A.
We conclude that the first element of
A final rule is the “logical outgrowth” of a proposed rule if “interested parties should have anticipated that the change was possible, and thus reasonably should have filed their comments on the subject during the notice-and-comment period.” A final rule “fails the logical outgrowth test” if “interested parties would have had to divine the agency’s unspoken thoughts, because the final rule was surprisingly
distant from the proposed rule.”
Clean Air Council, 862 F.3d at 10 (quoting CSX Transp., Inc. v. Surface Transp. Bd., 584 F.3d 1076, 1080 (D.C. Cir. 2009)).
It is undisputed that the 2013 Proposed Rule was the first time that EPA introduced the idea of extending work practice standards beyond the point of generation to several hours after generation. It is also undisputed that the 2013 Proposed Rule and 2013 TSD did not identify which sources were considered the “best performing,” and neither referenced the section governing when work practice standards may replace numerical standards –
1.
The Final Rule’s reliance on an identified list of best performing power plants was not a logical outgrowth of the 2013 Proposed Rule. Given the Proposed Rule’s lack of any mention of best performing sources or
It is true that Petitioners did comment on the lack of best performing source analysis during the comment period. EPA argues that this forecloses relief, relying on Portland Cement Ass’n v. EPA, for the premise that a final rule is a logical outgrowth of the proposed rule where a petitioner commented on the issue. 665 F.3d 177, 189 (D.C. Cir. 2011) (per curiam). But in Portland Cement, the Court noted that EPA had sought comment on the matter and the petitioner had commented. Id. Portland Cement does not stand for the proposition that an individual’s comment in and of itself demonstrates sufficient notice from EPA to the individual. To the contrary, in Petitioners’ cited CSX Transportation, this Court recognized that “notice must come from the [Notice of Proposed Rulemaking,]” not the comments arising out of it. 584 F.3d at 1082. Because nothing in the 2013 Proposed Rule indicated EPA was setting its standards based on the best performing sources, the Final Rule’s reliance on its newly selected “best performers” cannot be considered a logical outgrowth of the 2013 Proposed Rule. Thus, it was impracticable for Petitioners to have raised this challenge during the comment period. Besides, even if we did consider the Petitioners’ mention of a best-performer analysis as relevant to the logical outgrowth test, their comment raised that analysis in a different context. Namely, Petitioners’ comment argued that EPA was required to apply a best-performer analysis in setting the work-practice standards; they said nothing of employing a best-performer analysis in order to determine the duration of startup.
Even if reliance on any “best performing sources” could be considered a logical outgrowth, EPA’s process for identifying those best performing sources was certainly not. To hold otherwise would place the unreasonable burden on commenters not only to identify errors in a proposed rule but also to contemplate why every theoretical course of correction the agency might pursue would be inappropriate or incorrect. It was simply impracticable for Petitioners to predict how EPA would cure the missing “best performer” component and then submit preemptive attacks on such hypothetical solutions. For this reason, we find unavailing EPA’s argument that mere similarities in analytical approaches of the 2013 TSD and the Final TSD render the latter a logical outgrowth of the former. EPA gave no notice that it would analyze
Petitioners to weigh in on whether additional factors beyond what was considered in the 2013 TSD should be considered when determining which sources are the best performing.
To sum up, Petitioners were not given the opportunity to comment on, propose revisions to, or otherwise challenge the process for selecting the “best performing” power plants that EPA first unveiled in the Final TSD. In this respect, because the final rule was not a logical outgrowth of the 2013 Proposed Rule, this first objection satisfies the first element of
2.
Turning to their second objection, Petitioners argue that EPA did not disclose “the critical reasoning behind its measurability analysis until its [F]inal [R]ule.” Pet’rs’ Opening Br. 42. It was only then, say Petitioners, that EPA asserted “that the point at which power plants begin to operate their pollution controls can be used as a proxy for when they can measure emissions,” id., because no technologically and economically feasible methodology exists to measure HAP emissions up until that point, see
As we demonstrate above, the Final Rule is the first time EPA connects an EGU’s ability to remove pollutants with its ability to measure HAP emissions. Id. at 68,779-80. EPA is correct that the 2013 TSD articulated that it was using certain removal efficacies as a proxy for the end of startup. The end of startup is clearly the beginning of when emissions are to be numerically measured for purposes of complying with existing numerical limits set forth in the MATS Rule. But nowhere in the 2013 TSD or the 2013 Proposed Rule does EPA express its belief that emissions are immeasurable from the point of electricity generation until the APCDs become operational. This key link is a critical statutory requirement for EPA to lawfully deviate from numerical standards and impose alternative, non-numerical work practice standards. Simply put, the 2013 Proposed Rule failed to disclose that it was using APCDs’ effectiveness as a proxy for measurability.
Again, recognizing that the 2013 Proposed Rule seriously lacked compliance with
Despite “conced[ing] that the 2013 Proposal could have been more explicit” on this point, EPA doubles down, arguing that the challenged premise – “that it was not feasible to establish numeric limitations” for HAPs until APCDs became operational – “was central” to the 2013 Proposal, Resp’t’s Br. 32, even though the 2013 Proposal lacks any reference to measurement feasibility or
B.
The parties agree that
EPA argues that Petitioners’ objections cannot be centrally relevant because they lack merit. We are not so convinced. What is clear is that if different best performers are selected, the extended startup definition’s end point would have to be recalculated, and unless EPA demonstrates that measurability is infeasible until APCDs become operational, work practice standards cannot be applied. These issues certainly meet the “central relevance” requirement.
VI.
For the foregoing reasons, the Court grants Petition No. 16-1349, vacates EPA’s denial of the petition for reconsideration, and remands to the agency for reconsideration. Petition Nos. 15-1015 and 16-1169 are dismissed.
So ordered.