UTILITY AIR REGULATORY GROUP, PETITIONER v. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT NATIONAL PARKS CONSERVATION ASSOCIATION, ET AL., INTERVENORS
No. 12-1342
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Decided March 20, 2018
Argued November 16, 2017. Consolidated with 12-1343, 12-1344, 12-1425, 12-1480, 13-1003, 13-1045, 13-1129, 13-1178, 13-1179, 13-1180. On Petitions for Review of Final Action of the United States Environmental Protection Agency.
Norman W. Fichthorn, Aaron M. Flynn, Ken Paxton, Attorney General, Office of the Attorney General for the State of Texas, Priscilla M. Hubenak, Assistant Attorney General, Herman Robinson, Donald Trahan, Dwana King, Jackie Marve, Spencer Bowman, P. Stephen Gidiere, III, Thomas L. Casey, III, David W. Mitchell, C. Frederick Beckner, III, Stephanie Z. Moore, and Daniel J. Kelly were on the joint briefs for State and Industry petitioners. Courtney Burdette, Charlotte Goudeau, Peter D. Keisler, Elliott B. Vega,
Norman L. Rave, Jr., Attorney, U.S. Department of Justice, argued the cause and filed the brief for respondent. David A. Carson, Senior Counsel, Jessica O’Donnell and Martin F. McDermott, Attorneys, entered appearances.
Charles McPhedran argued the cause for Conservation Group intervenor-respondents. With him on the briefs were David S. Baron and Timothy D. Ballo. Thomas Cmar and Abigail M. Dillen entered appearances.
Norman W. Fichthorn, Aaron M. Flynn, Curtis T. Hill, Jr., Attorney General, Office of the Attorney General for the State of Indiana, Thomas M. Fisher, Solicitor General, Margaret Claiborne Campbell, Hahnah Williams, Renee Cipriano, J. Michael Showalter, David M. Flannery, Kathy G. Beckett, Edward L. Kropp, P. Stephen Gidiere, III, Thomas L. Casey, III, David W. Mitchell, C. Frederick Beckner, III, Stephanie Z. Moore, and Daniel J. Kelly were on the brief for State and Industry intervenor-respondents. Peter D. Keisler, Byron W. Kirkpatrick, and Timothy K. Webster entered appearances.
Before: GRIFFITH and PILLARD, Circuit Judges, and WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge WILLIAMS.
WILLIAMS, Senior Circuit Judge: On June 7, 2012 the Environmental Protection Agency issued another rule in a long succession of actions implementing Congress’s effort to restore air quality and visibility in certain national parks and wilderness areas (“Class I areas“) to what they would be under natural conditions. Regional Haze: Revisions to Provisions Governing Alternatives to Source-Specific Best Available Retrofit Technology (BART) Determinations, Limited SIP Disapprovals, and Federal Implementation Plans, 77 Fed. Reg. 33,642 (June 7, 2012) (“Final Rule“). In the rule, EPA took a step in the implementation of its Cross-State Air Pollution Rule, 76 Fed. Reg. 48,208 (Aug. 8, 2011) (“CSAPR“) (pronounced by counsel as if the S and the A were reversed, making it approximately “CASPER“). Specifically it amended its Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations, 70 Fed. Reg. 39,104 (July 6, 2005) (“Regional Haze Rule“), to specify that CSAPR’s requirements were stringent and effective enough for it to serve as a better-than-BART alternative for states participating in CSAPR, thus excusing states from compliance with BART itself.
The National Parks Conservation Association and the Sierra Club (“conservation petitioners“) challenge the portion of the Final Rule allowing states to treat CSAPR compliance as a better-than-BART alternative. Multiple power companies and the Utility Air Regulatory Group, as well as the State of Texas and the Louisiana Department of Environmental Quality (“state and industry petitioners“) challenge EPA’s disapproval of SIPs relying on CAIR as a better-than-BART alternative.
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The Regional Haze Rule requires states to impose best available retrofit technology (“BART“) on certain stationary pollution sources—usually electric generation plants—installed before August 1977.
We review EPA’s action to determine if it was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.” The standard we apply is the same under the judicial review provision of the Clean Air Act,
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We take the conservation petitioners’ arguments first. The parties now agree that their first main challenge—that our remand invalidating certain state emissions budges in EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015), undercut the factual basis for EPA’s finding that CSAPR is better than BART—is moot. EPA has conducted a fresh analysis of the better-than-BART issue in light of EME Homer City and concluded that its changes to CSAPR in response to the remand do not affect its determination that CSAPR is a better-than-BART regional alternative. See 82 Fed. Reg. 45,481, 45,490–94 (Sept. 29, 2017). Although the petitioners may challenge that finding in the future, they do not challenge it here, and we do not consider it further.
The petitioners argue next that EPA should not have relied on a “generic” “presumptive BART” for modeling its comparison to CSAPR but should have determined BART for each individual source, using the five-factor analysis that states must use when they make BART determinations for
A BART benchmark for purposes of calculating better-than-BART is usually based on “a determination of BART for each source subject to BART and covered by the [BART] alternative program.”
We think the attack on EPA’s use of presumptive BART, authorized by
In a cavalcade of attacks on alleged modelling errors, the conservation petitioners fix on a comment that EPA failed to address in its response to comments, specifically an assertion that EPA’s model does not take into account the remaining “useful life” of specific BART-eligible sources. Conservation Petitioners’ Br. 28. As a plant nears the end of its useful life, the state and EPA may tolerate less stringent emissions standards in the short run (because the cost of compliance exceeds emissions benefits in the “best” retrofit technology scenario) in exchange for zero emissions in the long run after the plant shuts down. See, e.g., 78 Fed. Reg. 51,686, 51,690 (Aug. 21, 2013) (shutdown of one unit in 2016 and a second in 2026 justified less stringent interim BART controls); 76 Fed. Reg. 12,651, 12,660–61 (Mar. 8, 2011) (similar).
EPA does not contest that it overlooked these comments. It argues now—reasonably, in our view—that the effects of a plant’s useful life are too speculative to model, and not significant enough to make any modeling a useful enterprise. We see no need to remand on this point for EPA to move this bit of post-hoc rationalization into a rulemaking record. Each petitioner mentioned useful life only within a few sentences of their combined 100 pages of comments, in both instances referring to hypothetical alternatives possibly altering the estimates of stringency in different directions. Joint Appendix 147, 179. The Administrative Procedure Act does not “require[] separate, specific rulings on each exception to a decision. The
The rest of the conservation petitioners’ arguments fail because they either repeat or assume premises that this Court has already rejected in CEED and UARG I. The petitioners note that Sierra Club was not a party to UARG I, so that issue preclusion is not a bar to its claim. Conservation Petitioners’ Br. 37 n.2. But the precedential value of those cases still applies. “We are of course bound by our prior panel decision,” New York–New York, LLC v. NLRB, 676 F.3d 193, 194–95 (D.C. Cir. 2012), and “it is not only the result but also those portions of the opinion necessary to that result by which we are bound,” Seminole Tribe of Florida v. Florida, 517 U.S. 44, 67 (1996).
The conservation petitioners urge us to require EPA to apply a more stringent better-than-BART test than the one we approved in UARG I. They say that in assessing CSAPR as an alternative to BART, EPA should not have compared CSAPR on its own and BART on its own (in the relevant regions), but rather should have estimated the difference between CSAPR on its own and CSAPR and BART together. Their reasoning is that CSAPR is implemented under a separate provision of the Clean Air Act unrelated to BART and will thus go into effect regardless of BART. See
This is the same argument that we rejected in UARG I, where we held that an emissions control program in place to satisfy an unrelated statutory provision is not disqualified from serving as a better-than-BART alternative. We thus affirmed EPA’s comparison between BART-without-CAIR and CAIR-without-BART to determine the adequacy of CAIR as a BART alternative. 471 F.3d at 1341; see also 70 Fed. Reg. at 39,139. In so doing we applied our understanding (and EPA’s) of the pertinent regulation,
must conduct dispersion modelling to determine differences in visibility between BART and the trading program for each impacted Class I area, for the worst and best 20 percent of days. The modelling would demonstrate “greater reasonable progress” [than BART, as required by
40 C.F.R. § 51.308(e) as a condition for a state’s using a better-than-BART alternative] if both of the following two criteria are met:(i) Visibility does not decline in any Class I area, and
(ii) There is an overall improvement in visibility, determined by comparing the average differences between BART and the alternative over all affected Class I areas.
But that bar is no obstacle to a claim that EPA’s interpretation of its regulation fails to satisfy Auer’s requirement of reasonableness. Auer v. Robbins, 519 U.S. 452, 461 (1997). Apart from any attack on
The difficulty with this reading is that it appears to render clause (ii) pure surplusage. If clause (i) requires modelling to show that visibility in every Class I area will be as good or better under CSAPR than under BART, then there would be no need to inquire whether there was an improvement measured by “the average differences between BART and the alternative over all affected Class I areas.” If every member of a set is superior to every member of some alternative set, the average of the first set is necessarily superior to the average of the second set. Because the petitioners’ proposed interpretation of
We should recall that the “greater reasonable progress” that
Finally, the conservation petitioners argue that, in comparing CSAPR and BART, EPA compared the wrong averages. Recall that clause (ii) of EPA’s better-than-BART standard is “determined by comparing the average differences between BART and the alternative over all affected Class I areas.”
The state and industry petitioners challenge two related aspects of EPA’s action: EPA’s rescission of its former rule finding participation in CAIR an adequate BART alternative and its concomitant disapproval of SIPs that relied on CAIR to meet their obligations under BART. In essence, the petitioners argue that if compliance with CAIR had for years allowed them to achieve greater reasonable progress than BART would have, their continued enforcement of emissions standards in line with the now-defunct CAIR must necessarily be found an adequate alternative to BART.
But, of course, without CAIR—which all parties agree is dead and beyond revival—there is no legal basis for a requirement that states control their sources at CAIR levels; indeed, for states that are not part of CSAPR, there is no legal basis for requiring states to participate in any haze-related interstate trading program. We cannot order EPA to consider CAIR an alternative to BART without resurrecting CAIR itself, a rule that we have already stricken and ordered to be vacated. North Carolina I, 531 F.3d at 901, remanded staying vacatur after reh’g, 550 F.3d at 1178. For this reason, EPA argues that the state and industry petitioners’ challenge is moot; there is apparently no relief we can give them. See Anderson v. Carter, 802 F.3d 4, 10 (D.C. Cir. 2015).
The petitioners save themselves from mootness only by couching their request for relief as “a contingency.” Argument Tr. 28. They argue that “if the CSAPR-for-BART rule—which NPCA and Sierra Club are challenging here—were to be vacated or rescinded, approval of the CAIR-for-BART SIPs would protect State and Industry Petitioners from the adverse effects of EPA’s June 2012 actions.” State & Industry Petitioners’ Reply Br. 3. The petitioners seem to have in mind CSAPR’s litigation history. When CSAPR was first challenged in this Court, we stayed implementation pending a decision on the merits and ordered EPA to continue to implement CAIR. EME Homer City Generation, L.P. v. EPA, No. 11-1302, Order (D.C. Cir. Dec. 30, 2011). After argument on the merits, we vacated CSAPR and again ordered EPA to keep implementing CAIR. EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 37–38 (D.C. Cir. 2012).
But the logic of that analogy does not follow here. In North Carolina II we recognized that CAIR offered some environmental benefit, so that EPA’s flawed CAIR rule was better than nothing. 550 F.3d at 1178. For that same reason we left CAIR in place while remanding CSAPR in EME Homer City. See 696 F.3d at 37–38. But here, CSAPR itself is not challenged, only EPA’s finding that CSAPR is a better-than-BART alternative. Even if we were to grant the conservation petitioners’ request, vacating CSAPR-for-BART would not restore CAIR-for-BART; it would leave BART in place alone, and CAIR-based SIPs would not become any less problematic. At any rate, because we do not grant the conservation petitioners’ request, and the state and industry petitioners have hitched their wagon to that star, their contingency theory fails.
The petitioners finally argue that EPA could nevertheless approve their CAIR-based SIPs, despite CAIR’s demise; EPA has in fact done so in one instance, so it must be feasible. Indeed, EPA approved Connecticut’s SIP application on April 26, 2013, 79 Fed. Reg. 39,322, 39,328 (July 10, 2014),1 even after it had disapproved the
EPA disapproved the state petitioners’ SIPs on June 7, 2012 in the final action that is challenged here. Final Rule, 77 Fed. Reg. at 33,653. At that time, North Carolina I’s reversal of CAIR had been on the books nearly four years, and North Carolina II had made abundantly clear that CAIR was suffered to continue only until EPA promulgated a revised cap and trading rule, at which time CAIR would be vacated. See 550 F.3d at 1178. EPA promulgated its final CSAPR rule on August 8, 2011. 76 Fed. Reg. at 48,208. By June 2012, we had stayed implementation of CSAPR while we reviewed the rule on its merits. But, apparently expecting that CSAPR would shortly be affirmed and take effect, EPA disapproved pending CAIR-based SIP applications and instructed states to submit SIPs based either on CSAPR or other non-CAIR alternatives to BART. See Final Rule, 77 Fed. Reg. 33,647–48. EPA may have been over-optimistic in its sense of timing, but its expectation that CSAPR would be approved and take effect was not unreasonable, and indeed was largely justified by the Supreme Court’s affirmance of CSAPR, EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014), subject to “as-applied” challenges to EPA’s state emissions budgets alleged to constitute “over-control,” id. at 1608–10; see also EME Homer City, 795 F.3d at 118 (granting some of petitioners’ as-applied challenges).
But that Supreme Court ruling did not come until 2014. In the interim, in August 2012, we ordered EPA to continue implementing CAIR, see EME Homer City, 696 F.3d at 38, and on November 19, 2012, EPA issued a memo announcing that it would approve CAIR-based SIPs pending a final resolution of the CSAPR challenge. Memorandum from Gina McCarthy, Assistant Administrator, EPA, to Air Division Directors, Regions 1–10, Nov. 19, 2012, at 1–3. Connecticut’s partially CAIR-based SIP was submitted in August 2012 and approved by EPA the following April. See 79 Fed. Reg. at 39,329. In sum, the difference in timing comes down to this: In June of 2012, EPA could have approved CAIR-based SIPs such as petitioners’ but chose not to, given its not unreasonable expectation that CAIR was shortly approaching its end; in April of 2013 (and for the indefinite future while CSAPR’s litigation fate remained uncertain), our direction in EME Homer City effectively barred EPA from rejecting Connecticut’s CAIR-based SIP on the ground of CAIR’s well-known legal infirmity. EPA suggests a variety of other factors that made its approval of Connecticut’s SIP reasonable, including Connecticut’s comparatively low emissions and its only partial reliance on CAIR. We need not address those factors, however. EPA’s different treatments of the petitioning states and Connecticut were not unreasonable at the relevant times, and the difference certainly provides no basis for us to declare the petitioning states subject to a rule that no longer exists.
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Because we find no merit in the conservation petitioners’ arguments and can afford
Denied.