State of Maryland v. EPA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 16, 2020 Decided May 19, 2020

No. 18-1285

STATE OF MARYLAND,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

CITY OF NEW YORK, ET AL.,

INTERVENORS

Consolidated with 18-1287, 18-1301

On Petitions for Review of an Action of the

United States Environmental Protection Agency

William J. Kassab, Deputy Attorney General, Office of the

Attorney General for the State of Delaware, argued the cause

and filed the briefs for petitioner State of Delaware.

Joshua Berman argued the cause for Citizen Petitioners.

With him on the briefs were Ariel Solaski, Jon A. Mueller, Leah

Kelly, Ann Brewster Weeks, Graham McCahan, Sean H.

Donahue, and Susannah L. Weaver. Hayden W. Hashimoto

entered an appearance.

2

Michael F. Strande, Assistant Attorney General, Office of

the Attorney General for the State of Maryland, argued the

cause for petitioner State of Maryland. With him on the briefs

were Brian E. Frosh, Attorney General, and Joshua M. Segal,

Special Assistant Attorney General.

Letitia James, Attorney General, Office of the Attorney

General for the State of New York, Morgan A. Costello and

Claiborne E. Walthall, Assistant Attorneys General, Barbara

D. Underwood, Solicitor General, Steven Wu, Deputy Solicitor

General, David S. Frankel, Assistant Solicitor General, Gurbir

S. Grewal, Attorney General, Office of the Attorney General

for the State of New Jersey, Aaron A. Love, Deputy Attorney

General, and Christopher G. King were on the brief for

petitioner-intervenors State of New York, et al.

Richard L. Revesz and Jack Lienke were on the brief for

amicus curiae Institute for Policy Integrity at New York

University School of Law in support of petitioners.

Samara M. Spence, Attorney, U.S. Department of Justice,

argued the cause for respondent. With her on the brief were

Jeffrey Bossert Clark Sr., Assistant Attorney General,

Jonathan Brightbill, Principal Deputy Assistant Attorney

General, and Abirami Vijayan and Stephanie L. Hogan,

Counsel, U.S. Environmental Protection Agency.

Norman W. Fichthorn, E. Carter Chandler Clements,

Garry S. Rice, Rae E. Cronmiller, and Janet J. Henry were on

the brief for respondent-intervenors.

Before: HENDERSON, GARLAND, and KATSAS, Circuit

Judges.

3

Opinion for the Court filed PER CURIAM.

PER CURIAM: The Clean Air Act, 42 U.S.C. §§ 7401 et

seq., charges the United States Environmental Protection

Agency (EPA) with regulating air pollution, including ozone.

Clean Air Act section 110 requires individual states to adopt

plans for the implementation and enforcement of EPA-

mandated national air quality standards. Id. § 7410. But

because pollutants are readily transported across large areas,

without regard to state boundaries, upwind emissions can

impede downwind states’ attainment of the national standards.

To address this unequal burden, section 110 includes a “Good

Neighbor Provision,” which requires state plans to prohibit

emissions that will “contribute significantly” to nonattainment

in any other state. Id. § 7410(a)(2)(D)(i)(I). The EPA has

developed a four-step framework to address Good Neighbor

obligations in this context. At Step One, it identifies downwind

areas projected to have trouble attaining the relevant air quality

standard. At Step Two, the EPA determines which upwind

states are “linked” to the downwind nonattainment sites. At

Step Three, it calculates the optimal level of pollution control,

considering the marginal cost of emission reductions and

anticipated downwind air quality improvements. The EPA

then formulates an emissions budget for each state, accounting

for achievable reductions. Finally, at Step Four, the EPA

typically promulgates federal implementation plans that

require upwind states’ participation in a regional cap-and-trade

program to bring about compliance with their Good Neighbor

obligations.

Separately, Clean Air Act section 126(b) authorizes “[a]ny

State” to petition the EPA for a finding that an upwind source

“emits or would emit” in violation of the Good Neighbor

Provision’s prohibition. Id. § 7426(b). If the EPA makes the

requested finding, the offending source must cease operations

4

unless it complies with federally enforceable emission

limitations. In 2016 Maryland and Delaware filed section

126(b) petitions requesting that the EPA impose additional

limitations on certain upwind sources that were purportedly

contributing to the two States’ nonattainment of the national

ozone standards. Both States sought to require the optimization

of existing selective catalytic reduction controls; Maryland also

addressed the operation of selective non-catalytic reduction

controls at two facilities and Delaware requested that one

facility burn only natural gas.

The EPA denied the petitions on October 5, 2018.

Because a section 126(b) petition seeks a finding that the

upwind source has violated the Good Neighbor provision, the

EPA applies the same four-step framework it developed in the

implementation of section 110. The EPA denied Delaware’s

petitions at Step One, finding that Delaware had not

demonstrated a current or future in-state air quality problem

and that, under the EPA’s own modeling, no such problem

would exist under either the 2008 or 2015 ozone standards.

Alternatively, the EPA concluded that denial was warranted

under Step Three because Delaware failed to identify any

available cost-effective controls at the named sources.

Although Maryland survived Steps One and Two, the EPA

denied its petition at Step Three. Like Delaware, Maryland

failed to identify further cost-effective emission reductions at

sources operating with catalytic controls. For the remaining

sources named in Maryland’s petition, the EPA explained that

non-catalytic controls were not cost-effective in this context.

Maryland, Delaware and a coalition of environmental groups

(Citizen Petitioners) petition for review of the EPA’s denials.

Although we reject some of the EPA’s Step One

determinations, we find, with one exception, that it reasonably

denied the petitions at Step Three. We conclude, however, that

the EPA’s explanation was inadequate with respect to non-

5

catalytic controls. We therefore grant Maryland’s petition for

review in part and remand this issue to the EPA. We deny all

other petitions for review.

I. Background

A. Statutory Framework

The Clean Air Act instructs the EPA to establish a primary

and secondary National Ambient Air Quality Standard

(NAAQS), see 42 U.S.C. § 7409, for each air pollutant “which

may reasonably be anticipated to endanger public health or

welfare,” id. § 7408(a)(1)(A). 1 Once established by the EPA,

these standards “become the centerpiece of a complex statutory

regime aimed at reducing the pollutant’s atmospheric

concentration.” Am. Trucking Ass’ns, Inc. v. EPA, 283 F.3d

355, 358–59 (D.C. Cir. 2002). The EPA first promulgated the

NAAQS for ground-level ozone, i.e., smog, in 1979. See

Revisions to the National Ambient Air Quality Standards for

Photochemical Oxidants, 44 Fed. Reg. 8202 (Feb. 8, 1979). In

1997 it set the ozone NAAQS at a level of 80 parts per billion

(ppb), measured over an eight-hour period. See National

Ambient Air Quality Standards for Ozone, 62 Fed. Reg. 38,856

(July 18, 1997). The EPA subsequently reduced the ozone

NAAQS to 75 ppb in 2008, see National Ambient Air Quality

Standards for Ozone, 73 Fed. Reg. 16,436 (Mar. 27, 2008), and,

in 2015, to 70 ppb, see National Ambient Air Quality Standards

for Ozone, 80 Fed. Reg. 65,292 (Oct. 26, 2015).

1

A “primary” NAAQS must specify the level of air quality

“requisite to protect the public health,” while “allowing an adequate

margin of safety.” 42 U.S.C. § 7409(b)(1). A “secondary” NAAQS,

on the other hand, “specif[ies] a level of air quality . . . requisite to

protect the public welfare.” Id. § 7409(b)(2).

6

To promote attainment and maintenance of the NAAQS,

the “EPA, in coordination with state governments, divides the

country geographically into ‘[a]ir quality control region[s].’”

NRDC v. EPA, 777 F.3d 456, 458 (D.C. Cir. 2014) (alterations

in original) (quoting 42 U.S.C. § 7407). “Some areas lie within

a single state while others encompass portions of two or more

states.” Del. Dep’t of Nat. Res. & Envtl. Control v. EPA, 895

F.3d 90, 94 (D.C. Cir. 2018). Once the EPA issues a new or

revised NAAQS, it “designates each area as ‘attainment,’

‘nonattainment,’ or ‘unclassifiable’ with respect to the

NAAQS.” Id. (citing 42 U.S.C. § 7407(d)(1)(A), (B)). An

“attainment” area meets the NAAQS, that is, the atmospheric

concentration of the regulated pollutant is less than the

allowable level; an “unclassifiable” area, as the name suggests,

cannot be classified due to the absence of available

information; and a “nonattainment” area exceeds the NAAQS

or contributes to a violation in a nearby area. 42 U.S.C.

§ 7407(d)(1)(A)(i)–(iii). Ozone nonattainment areas are

further classified by operation of law, according to the severity

of their air quality problems, as marginal, moderate, serious,

severe, or extreme. Id. § 7511(a)(1). These classifications

determine how long the area has in order to attain the primary

NAAQS. Id. An ozone nonattainment area that misses its

attainment deadline is generally bumped up to the next highest

classification, id. § 7511(b)(2)(A), which “impose[s]

additional regulatory responsibilities on the states composing

that area,” Del. Dep’t of Nat. Res., 895 F.3d at 94.

Following the promulgation of a NAAQS, each state must

submit a state implementation plan (SIP) that “provides for

implementation, maintenance, and enforcement” of the

NAAQS within that state. 42 U.S.C. § 7410(a)(1). For states

in nonattainment areas, “SIPs must show how the areas will

achieve and maintain the relevant NAAQS.” S. Coast Air

Quality Mgmt. Dist. v. EPA, 882 F.3d 1138, 1143 (D.C. Cir.

7

2018). In particular, SIPs for ozone nonattainment areas must

adopt certain measures, see, e.g., id. at 1143–44, intended to

bring about attainment “as expeditiously as practicable” and

not later than specific statutory deadlines, 42 U.S.C.

§ 7511(a)(1). If a state fails to submit a SIP, or if its submission

is incomplete or disapproved, the EPA must issue a federal

implementation plan (FIP) that requires the state to correct the

identified deficiency. Id. § 7410(c)(1).

State-level air quality regulation is an inherently

complicated endeavor because “[a]ir pollution is transient,

heedless of state boundaries. Pollutants generated by upwind

sources are often transported by air currents, sometimes over

hundreds of miles, to downwind States.” EPA v. EME Homer

City Generation, L.P., 572 U.S. 489, 496 (2014). For example,

ground-level ozone is not emitted directly into air. Rather, it is

the product of chemical reactions between nitrogen oxides

(NOx) and non-methane volatile organic compounds in the

presence of sunlight. See New York v. EPA, 133 F.3d 987, 989

(7th Cir. 1998). Thus, the upwind emission of ozone

precursors can seriously threaten downwind attainment of the

ozone NAAQS. “As the pollution travels out of state, upwind

States are relieved of the associated costs,” which “are borne

instead by the downwind States, whose ability to achieve and

maintain satisfactory air quality is hampered by the steady

stream of infiltrating pollution.” EME Homer City, 572 U.S. at

496.

To alleviate this potential inequity, Congress included a

Good Neighbor Provision in the Clean Air Act. Under the

Good Neighbor Provision, SIPs must prohibit in-state sources

“from emitting any air pollutant in amounts which will . . .

contribute significantly to nonattainment in, or interfere with

maintenance by, any other State with respect to any

[NAAQS].” 42 U.S.C. § 7410(a)(2)(D)(i). If the SIP is

8

incomplete or inadequate, a FIP may be necessary to address

the state’s Good Neighbor obligations. See id. § 7410(c)(1).

Separate from the SIP and FIP process, Clean Air Act

section 126(b) authorizes “[a]ny State or political subdivision”

to petition the EPA “for a finding that any major source or

group of stationary sources emits or would emit any air

pollutant in violation of” the Good Neighbor Provision. 42

U.S.C. § 7426(b). 2 The EPA must “make such a finding or

deny the petition” within sixty days. Id. In other words, it

“must act quickly . . . and not wait the potential several years

that it would take for states to fully adopt SIPs implementing

new NAAQS.” GenOn REMA, LLC v. EPA, 722 F.3d 513, 520

(3d Cir. 2013). But the EPA still must determine whether an

upwind source has violated the Good Neighbor Provision and,

accordingly, its evaluation of each section 126(b) petition is

tied to its interpretation and implementation of the Good

Neighbor Provision. Once a petition is granted, the offending

source must cease operations within three months unless it

complies with EPA-mandated “emission limitations.” 42

U.S.C. § 7426(c).

B. Regulatory History

In 2011 the EPA issued the Cross-State Air Pollution Rule

(CSAPR), which placed emission limitations on upwind states

that violated their Good Neighbor obligations with respect to

the 1997 and 2006 fine particulate matter NAAQS and the 1997

ozone NAAQS. See Federal Implementation Plans: Interstate

2

Although § 7426(b) refers to any emission “in violation of the

prohibition of section 7410(a)(2)(D)(ii),” we have held that this

cross-reference is a scrivener’s error and should be read to refer to

the Good Neighbor Provision in § 7410(a)(2)(D)(i). See

Appalachian Power Co. v. EPA, 249 F.3d 1032, 1040–44 (D.C. Cir.

2001) (per curiam).

9

Transport of Fine Particulate Matter and Ozone and Correction

of SIP Approvals, 76 Fed. Reg. 48,208 (Aug. 8, 2011). To

account for the revised ozone NAAQS, the EPA promulgated

an update to the CSAPR in 2016. See Cross-State Pollution

Rule Update for the 2008 Ozone NAAQS, 81 Fed. Reg. 74,504

(Oct. 26, 2016) [hereinafter Update Rule]. The Update Rule

finalized FIPs to address twenty-two states’ Good Neighbor

obligations with respect to the more-stringent 2008 ozone

NAAQS. Substantively, the Update Rule established further

limits on ozone season 3 NOx emissions from electric

generating units (EGUs) in those states. Id. at 74,507. To

quantify the necessary reductions, the EPA applied a four-step

framework.

At Step One, the EPA considered current and modeled

future air quality data at downwind monitors (i.e., receptors) to

identify areas expected to have trouble attaining or maintaining

the 2008 ozone NAAQS. Id. at 74,517. The EPA utilized a

monitoring site’s earlier “design values”—a three-year

historical average of a receptor’s air quality data—to generate

multiple ozone-level projections for 2017. Id. at 74,532. With

the 2008 ozone NAAQS of 75 ppb, any receptor with a

projected design value of less than 76 ppb was determined to

be in attainment. See id. A receptor was designated

nonattainment if its average projected design value and its most

recent monitored design value (2013–2015) equaled or

exceeded 76 ppb. Id. In addition, the EPA defined a

“maintenance” receptor as any site that is currently in

3

The ozone season runs May 1 through September 30. See

Update Rule, 81 Fed. Reg. at 74,507. “Ozone levels are generally

higher during the summer months” because “[t]he potential for

ground-level ozone formation increases during periods with warmer

temperatures and stagnant air masses.” Id. at 74,513. Reducing

emissions during this timeframe is thus a critical component of the

EPA’s regulatory approach.

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attainment but has a projected average design value that

exceeds the NAAQS, or that has an average design value below

the NAAQS but a maximum projected design value of 76 ppb

or greater. Id.

At Step Two, the EPA identified the upwind states

“linked” to nonattainment or maintenance at downwind

monitors. Id. at 74,518. First, the EPA calculated each state’s

contribution to downwind ozone formation. Next, because the

Good Neighbor Provision prohibits only those emissions that

“contribute significantly to nonattainment” or “interfere with

maintenance,” the EPA screened out upwind states that

contributed less than one per cent of the 2008 ozone NAAQS

(i.e., 0.75 ppb) to ozone formation in a downwind state. Id. at

74,537. Simply put, only those “States . . . whose contributions

to a specific receptor meet or exceed the screening threshold

are considered linked to that receptor.” Id.

At Step Three, the EPA applied a multifactor test—

considering cost, NOx reduction potential, and downwind air

quality impacts—to quantify the magnitude of the emission

reductions required by the Good Neighbor Provision. Id. at

74,519. The EPA measured the expected reductions at

different cost-control levels: $800/ton, $1,400/ton, $3,400/ton,

$5,000/ton, and $6,400/ton. Id. at 74,540–42. “Each level . . .

represents an estimated marginal cost per ton of NOx reduced

and is characterized by a set of pollution control measures.” Id.

at 74,540. For each cost-control level, the EPA also estimated

corresponding air quality improvements at downwind

receptors. It ultimately concluded that a control cost of $1,400

per ton—which represents turning on and fully operating

existing, idled selective catalytic reduction controls—

constituted the point “at which incremental EGU NOx

reduction potential and corresponding downwind ozone air

quality improvements are maximized with respect to marginal

11

cost.” Id. at 74,550. The EPA then quantified each state’s

emissions “budget” by projecting the emissions that would

occur under $1,400 per ton cost controls. Id. at 74,553.

Emissions that can be reduced at or below the selected control

level are considered “significant” for purposes of Good

Neighbor compliance. See EPA Br. 10.

Finally, at Step Four, the EPA implemented an allowance

trading program to achieve the required emission reductions.

See Update Rule, 81 Fed. Reg. at 74,521. Each state receives

an allocation of individual allowances authorizing the emission

of a designated quantity of ozone season NOx. Id. at 74,554.

The total allowances equal that state’s emissions budget and

are allocated among sources in that state. Because allowances

can be bought and sold through market transactions, sources

can emit more NOx than otherwise permitted by purchasing

additional allowances. Id. Each state, however, can emit no

more than 121 per cent of its emissions budget. Id.

Importantly, the Update Rule was promulgated as a partial

remedy. Because downwind states with a moderate

nonattainment classification faced a July 2018 attainment

deadline, the EPA focused solely on near-term emission

reductions. See id. at 74,540 (“[T]he EPA limited its analysis

of potential NOx reductions in each upwind state to those that

could be feasibly implemented for the 2017 ozone season,

which is the last full ozone season prior to the July 20, 2018

attainment date.”). Accordingly, analysis of further controls

was anticipated “in any future action that may be necessary to

address upwind states’ full emission reduction obligations with

respect to the 2008 ozone standard.” Id. A number of parties

challenged the Update Rule and we invalidated it in part. See

Wisconsin v. EPA, 938 F.3d 303, 309 (D.C. Cir. 2019) (per

curiam). Because upwind states could continue to significantly

contribute to downwind air quality beyond the downwind

12

attainment deadline, we concluded the Update Rule was

inconsistent with the Clean Air Act, which “require[s] upwind

States to eliminate their significant contributions in accordance

with the deadline by which downwind States must come into

compliance with the NAAQS.” Id. at 313.

In December 2018, the EPA promulgated the Close-Out

Rule. See Determination Regarding Good Neighbor

Obligations for the 2008 Ozone National Ambient Air Quality

Standard, 83 Fed. Reg. 65,878 (Dec. 21, 2018) [hereinafter

Close-Out Rule]. The Close-Out Rule found that, for the 2008

ozone NAAQS, it was not feasible to implement cost-effective

emissions controls before 2023—two years after the 2021

attainment deadline for serious areas—and, moreover, that all

downwind states would attain the NAAQS by 2023 even

without further upwind emission reductions. Id. at 65,904–05,

65,917. Due in part to its finding that regionwide NOx

emissions had declined twenty-one per cent in the Update

Rule’s first year, id. at 65,899, the EPA concluded that the

Update Rule fully resolved the Good Neighbor obligations for

twenty upwind states, id. at 65,879. We vacated the Close-Out

Rule because it relied on the same statutory interpretation of

the Good Neighbor Provision that Wisconsin rejected. New

York v. EPA, 781 F. App’x 4 (D.C. Cir. 2019) (per curiam).

C. Procedural History

In 2016, Maryland and Delaware both filed section 126(b)

petitions with the EPA. Maryland’s sole petition alleged that

thirty-six EGUs, in “five upwind states that EPA ha[d] already

determined are significantly contributing to Maryland’s ozone

problem,” were violating the Good Neighbor Provision with

respect to the 2008 ozone NAAQS. Md. Cover Ltr at 1 (J.A.

48). According to Maryland, 2015 ozone season monitoring

data demonstrated that these units either were not optimizing

13

their existing controls or had ceased running these controls

regularly during the ozone season. Md. Pet. at 4–5 (J.A. 53–

54). Contending that the EPA’s regional cap-and-trade

approach did not prevent sources from emitting above

achievable limits on particularly bad ozone days, id. at 3 (J.A.

52), Maryland requested source-specific limitations that would

require the “targeted EGUs to run their existing NOx control

technology effectively on each day of the ozone season,” id. at

4 (J.A. 53).

Delaware submitted four petitions, each addressing a

different upwind facility. All four petitions requested a finding

that EGUs at the named facilities violated the Good Neighbor

Provision with respect to both the 2008 and 2015 NAAQS.

Delaware alleged that three of the facilities were not optimizing

their existing controls. The fourth facility—the Brunner Island

power plant in Pennsylvania (Brunner Island)—did not have

catalytic controls installed. It was, however, then in the process

of adding natural gas capacity. Delaware maintained that

Brunner Island’s continued ability to burn coal warranted the

imposition of short-term NOx emission limits and asked the

EPA to impose an enforceable requirement that Brunner Island

burn only natural gas. Del. Brunner Island Pet. at 20, 22 (J.A.

238, 240).

Although section 126(b) requires the EPA to act within

sixty days after receipt of a petition, the EPA sought to extend

its deadline by six months pursuant to 42 U.S.C. § 7607(d)(10).

But the EPA failed to hold a public hearing or otherwise act on

Maryland’s petition by the new deadline. Maryland filed suit

and the United States District Court for the District of

Maryland ordered the EPA to “sign a notice taking final agency

action on Maryland’s petition on or before September 15,

2018.” Maryland v. Pruitt, 320 F. Supp. 3d 722, 732 (D. Md.

2018). The EPA proposed to deny the Maryland and Delaware

14

petitions on June 8, 2018, see Response to Clean Air Act

Section 126(b) Petitions from Delaware and Maryland, 83 Fed.

Reg. 26,666 (June 8, 2018) and finalized the denials on October

5, 2018, see Response to Clear Air Act Section 126(b) Petitions

from Delaware and Maryland, 83 Fed. Reg. 50,444 (Oct. 5,

2018) [hereinafter Response to Delaware and Maryland].

The EPA, using the same four-step Good Neighbor

framework it applied in the Update Rule, concluded that neither

Maryland nor Delaware could establish a Good Neighbor

violation. First, the EPA determined that Maryland satisfied

Steps One and Two because the EPA modeled a 2017

maintenance problem at Maryland’s Harford County receptor

for the 2008 ozone NAAQS and the upwind states named in

Maryland’s petition are linked to that receptor according to the

EPA’s contribution modeling. Id. at 50,464. Maryland’s

petition failed, however, at Step Three. Maryland requested

that EGUs be required to operate and optimize existing

catalytic controls.4 But, because this same control strategy was

already reflected in the Update Rule’s emissions budgets, the

EPA determined that “all identified cost-effective emission

reductions have already been implemented for the 2008 ozone

NAAQS with respect to the” identified sources. Id. This was

so, the EPA said, based on both “a conceptual case as to why

those reductions will be achieved through the [Update Rule’s]

existing allowance trading program, and an evidence-based

case that reductions based on control optimization [were]

already achieved in 2017.” Id. at 50,462.

4

Catalytic and non-catalytic controls both involve injecting a

reagent into an exhaust flue, where it reacts with NOx to produce

molecular nitrogen and water. As their names suggest, catalytic

controls facilitate this reaction with a catalyst. Non-catalytic controls

do not. See Appalachian Power Co. v. EPA, 135 F.3d 791, 798 nn.7–

8 (D.C. Cir. 1998) (per curiam).

15

As for EGUs operating selective non-catalytic reduction

controls, the EPA concluded “that fully operating with [non-

catalytic controls] is not a cost-effective NOx emissions

reduction strategy for these sources.” Id. at 50,469. Although

Maryland submitted a comment asking the EPA to assess its

petition under the 2015 ozone NAAQS, the EPA declined to do

so, finding that Maryland’s petition had requested a decision

with respect to the 2008 ozone NAAQS only. Id. at 50,463.

The EPA denied Delaware’s petitions at Steps One and

Two and, in the alternative, at Step Three. First, Delaware

failed to satisfy its purported burden under section 126(b) to

demonstrate “that there is a current or future nonattainment or

maintenance problem in Delaware based on violations of the

[2008 or 2015 ozone] NAAQS, []or that the named sources are

improperly impacting downwind air quality on days when such

violations would be expected.” Id. at 50,457. Delaware’s

identification of individual exceedances (i.e., an eight-hour

measurement above the NAAQS) at its own monitors was

insufficient because the EPA considers “[v]iolations, rather

than exceedances” as “the relevant metric for identifying

nonattainment and maintenance problems.” Id. at 50,456. Nor

did the fact that areas of Delaware were designated

nonattainment for the 2008 NAAQS indicate, by itself, that the

State would have future attainment problems. Id. Under the

EPA’s interpretation of the Good Neighbor Provision, if a

downwind state will attain the NAAQS without further upwind

reductions, there is no air quality problem necessitating

additional emission limitations. Otherwise, the EPA would

over-control upwind states by imposing limitations on

emissions that do not significantly contribute to downwind

nonattainment. Id. For this reason, although commenters

identified Delaware monitors that were currently exceeding the

2015 ozone NAAQS, the commenters failed to “identify any

projected air quality violations in a future year associated with

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the relevant attainment dates.” Id. Commenters also identified

monitors in the Philadelphia-Wilmington-Atlantic City

nonattainment area that were violating the 2008 and 2015

ozone NAAQS. Because Delaware’s New Castle County is

included in this multistate area, the commenters argued that

“Delaware’s attainment of the ozone NAAQS is tied to the

attainment of the other monitors in the nonattainment area.” Id.

at 50,460. But the EPA interpreted section 126(b) to authorize

findings only with respect to downwind receptors within the

petitioning state and, accordingly, declined to consider these

data. Id.

Although the EPA found Delaware’s conclusions

unsupported and technically deficient, id. at 50,456, it

nevertheless proceeded to analyze independently Delaware’s

petitions at Step One. Relying on the modeling it conducted in

connection with the Update Rule, the EPA determined that

Delaware was not projected to have any nonattainment or

maintenance receptors with respect to the 2008 ozone NAAQS

and its most recent design values were not to the contrary. Id.

at 50,458. And, although the modeling evinced air quality

problems in Delaware for the 2015 ozone NAAQS, the EPA

deemed upwind control unnecessary because it projected

Delaware to attain the 2015 ozone NAAQS by 2023. Id. at

50,459. Even though Delaware is first subject to the 2021

marginal nonattainment deadline,5 the EPA determined that

2023 is in fact the relevant future analytic year because it is the

5

New Castle County was designated as marginal nonattainment

for the 2015 ozone NAAQS given its inclusion in the Philadelphia-

Wilmington-Atlantic City multistate nonattainment area. See

Additional Air Quality Designations for the 2015 Ozone National

Ambient Air Quality Standards, 83 Fed. Reg. 25,776, 25,794 (June

4, 2018). The three-year attainment deadline for marginal areas runs

from 2018, when the area was designated under the 2015 NAAQS.

See 42 U.S.C. § 7511(a)(1); NRDC, 777 F.3d at 464–66.

17

last full year that will inform analysis of the 2024 moderate

attainment deadline—the first deadline requiring downwind

states to implement controls on existing sources. Id. at 50,461.

Notwithstanding the EPA’s denial of Delaware’s petitions

at Step One, it found, in the alternative, that Step Three

constituted an independent basis for denial. Three of

Delaware’s petitions pertained to sources with catalytic

controls. As with Maryland’s petition, the EPA determined

that emission reductions associated with the operation of

catalytic controls were already implemented through the

Update Rule. Id. at 50,465. Delaware’s Brunner Island

petition also failed to show that the facility “emits or would

emit in violation” of the Good Neighbor Provision. Id. at

50,470. Brunner Island primarily burned natural gas during the

2017 ozone season, achieving emission reductions consistent

with Delaware’s proposed control strategy. Id. at 50,470–71.

Accordingly, the EPA concluded that “no additional feasible

and cost-effective NOx emissions reductions . . . have been

identified.” Id. at 50,470. And, because the EPA predicted that

Brunner Island would continue to burn natural gas for

economic reasons, it found that the facility would not emit in

violation of its Good Neighbor obligations. Id. at 50,471.

Maryland, Delaware, and Citizen Petitioners (collectively,

the Petitioners) petition for review, challenging the denial of

Delaware’s petitions at Step One of the Good Neighbor

framework and the denial of both States’ petitions at Step

Three. New York, New Jersey, and New York City6 intervened

6

The EPA recently denied a Section 126 petition from New

York on substantially similar grounds. See Response to Clean Air

Act Section 126(b) Petition from New York, 84 Fed. Reg. 56,058

(Oct. 18, 2019). New York, New Jersey, and New York City have

petitioned for review of that denial. New York v. EPA, No. 19-1231

(D.C. Cir. filed Oct. 29, 2019).

18

on behalf of the Petitioners and several power companies

intervened in support of the EPA.

We have jurisdiction under the Clean Air Act. See 42

U.S.C. § 7607(b)(1). We may reverse any EPA action found

to be “arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law.” Id. § 7607(d)(9)(A). To

determine whether an action is arbitrary and capricious, “we

apply the same standard of review under the Clean Air Act as

we do under the Administrative Procedure Act.” Allied Local

& Reg’l Mfrs. Caucus v. EPA, 215 F.3d 61, 68 (D.C. Cir. 2000).

In doing so, we must “give an ‘extreme degree of deference’ to

the EPA’s evaluation of ‘scientific data within its technical

expertise,’ especially where, as here, we review the ‘EPA’s

administration of the complicated provisions of the Clean Air

Act.’” Miss. Comm’n on Envtl. Quality v. EPA, 790 F.3d 138,

150 (D.C. Cir. 2015) (per curiam) (citation omitted) (first and

second quoting City of Waukesha v. EPA, 320 F.3d 228, 247

(D.C. Cir. 2003) (per curiam); then quoting Catawba Cty. v.

EPA, 571 F.3d 20, 41 (D.C. Cir. 2009) (per curiam)). Further,

we “review[] the EPA’s interpretation of the Clean Air Act

under the familiar two-step framework formulated in Chevron,

. . . defer[ring] to the EPA’s interpretation if the statutory text

is ambiguous and the EPA’s interpretation is reasonable.” Am.

Fuel & Petrochemical Mfrs. v. EPA, 937 F.3d 559, 574 (D.C.

Cir. 2019) (per curiam).

II. Denial of Delaware’s Petitions at Step One

The Petitioners first argue that the EPA arbitrarily denied

Delaware’s section 126(b) petitions at Step One. They assert

that the EPA impermissibly refused to consider data from an

out-of-state receptor and data regarding nonattainment before

2023. The EPA contests both points. In addition, it contends

19

that, regardless of whether its own analysis was flawed,

Delaware bore the burden of proof and failed to meet it.

A. Burden of Proof

We first consider whether the EPA permissibly assigned

the burden of proof to Delaware. On this question of statutory

construction, we ask only whether the EPA’s position

reasonably interprets the governing provisions of the Clean Air

Act. See Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842–44

(1984).

We begin with statutory text. Section 126(b) provides that

“[a]ny State or political subdivision may petition the

Administrator for a finding” of a violation of the Good

Neighbor Provision. 42 U.S.C. § 7426(b). Section 126(b)

makes clear that the petitioning state must initiate the process.

As a general “default rule,” the burden of proof falls “upon the

party seeking relief.” Schaffer ex rel. Schaffer v. Weast, 546

U.S. 49, 57–58 (2005) (civil litigation). The same rule governs

formal proceedings under the Administrative Procedure Act. 5

U.S.C. § 556(d) (“[T]he proponent of a rule or order has the

burden of proof.”). And the provision of the Clean Air Act

governing section 126(b) proceedings does nothing to displace

the default rule. See 42 U.S.C. § 7607(d). This strongly

suggests that the default rule should apply. See Astoria Fed.

Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108 (1991).

Statutory context reinforces this conclusion. The Clean

Air Act requires the EPA to resolve a section 126(b) petition

“[w]ithin 60 days after receipt . . . and after public hearing,” 42

U.S.C. § 7426(b), though the EPA may extend the deadline to

six months, id. § 7607(d)(10). In New York v. EPA, 852 F.2d

574 (D.C. Cir. 1988), we held that this compressed timeline

supports requiring the petitioning state to bear the burden of

20

proof. There, three states argued that section 126(b) required

the EPA “to take the investigatory steps necessary to determine

whether” there was any violation of the Good Neighbor

Provision. Id. at 578. We rejected this contention that the EPA

must itself “conduct whatever data-gathering and research is

necessary to either prove . . . or affirmatively disprove” a

state’s allegations. Id. Given the sixty-day deadline, we

thought it “reasonable to conclude that Congress did not intend

that the Administrator be required to perform all these duties in

such a short period of time.” Id.

We recognize that the petitioning states in New York

sought to compel the EPA to evaluate entire SIPs, whereas

Delaware seeks only a finding that individual upwind sources

emit excessively. This distinction makes little difference, for

any evaluation under the Good Neighbor Provision requires

time-intensive research and analysis assessing air quality

problems in the petitioning downwind state, the cause of those

problems in upwind states, and the cost-effectiveness of

possible solutions. As we explained in New York, these tasks

are at odds with a sixty-day deadline. We therefore hold that

the EPA reasonably interpreted section 126(b) to require

Delaware to bear the burden of proof.

B. Consideration of Out-of-State Monitors

We now address the EPA’s decision not to consider air

quality data from non-attaining receptors outside Delaware,

“even if such monitors are located in a multistate

nonattainment area that includes [Delaware].” Response to

Delaware and Maryland, 83 Fed. Reg. at 50,460. The EPA

construes the “petition authority” set out in section 126(b) as

“limited to states and political subdivisions seeking to address

interstate transport of pollution impacting downwind receptors

within their geographical borders.” Id. (emphasis added).

21

Delaware and Petitioner-Intervenors assert that section 126(b)

plainly authorizes Delaware to petition based on out-of-state

monitoring data or, alternatively, that the EPA’s statutory

interpretation is unreasonable.

Again, we start with the text. See NRDC v. Browner, 57

F.3d 1122, 1125 (D.C. Cir. 1995). In relevant part, section

126(b) provides that “[a]ny State or political subdivision may

petition the Administrator for a finding that any major source

or group of stationary sources emits or would emit any air

pollutant in violation of [the Good Neighbor Provision].” 42

U.S.C. § 7426(b). Starting with the premise that “[a]ny State”

can file a section 126(b) petition, Delaware contends the EPA’s

interpretation conflicts with the statute’s plain meaning

because the text does not “explicitly bar[] a state from

petitioning EPA for a finding that a source is affecting

downwind receptors in another state.” Del. Br. 19. Delaware’s

emphasis is misplaced—a liberal construction of “[a]ny State”

does not mandate a similarly expansive scope for the petition

itself. 7 In other words, that any state can petition the EPA says

7

The parties’ discussion of Delaware Department of Natural

Resources is largely beside the point. There, we considered whether

an attainment-date extension, which may be granted “[u]pon

application by any State,” 42 U.S.C. § 7511(a)(5), required every

state in a multistate area to request the extension. Resolving the

question at Chevron step one, we held that “‘any State’

unambiguously permits EPA to consider an application filed by

fewer than all states in a multistate nonattainment area.” Del. Dep’t

of Nat. Res., 895 F.3d at 99. Here, there is no dispute that a single

state within a multistate nonattainment area can file a section 126(b)

petition based on air pollution within its own borders. The fact that

“any State” was given unambiguous meaning in a different context

does not resolve whether “any State” can file a section 126(b)

petition to determine whether an upwind source is contributing to air

pollution in a different state.

22

nothing about whether the petitioning state can rely on air

quality data from a different state to support its requested

finding that an upwind source violates the Good Neighbor

Provision. Although Delaware construes this silence in its

favor, the fact remains that Congress “has [not] directly spoken

to the precise question at issue.” Chevron, 467 U.S. at 842.

We turn, therefore, to Chevron step two, where “we

presume that when an agency-administered statute is

ambiguous with respect to what it prescribes, Congress has

empowered the agency to resolve the ambiguity. The question

for a reviewing court is whether in doing so the agency has

acted reasonably and thus has ‘stayed within the bounds of its

statutory authority.’” Util. Air Regulatory Grp., 573 U.S. at

315 (quoting City of Arlington v. FCC, 569 U.S. 290, 297

(2013)). Although we defer to a permissible construction of

the Clean Air Act, the EPA’s interpretation must be

“reasonable in light of the Act’s text, legislative history, and

purpose.” Allied Local & Reg’l Mfrs. Caucus, 215 F.3d at 68

(citation omitted).

The EPA primarily argues that statutory context dictates a

narrow construction for section 126(b) petitions. First, other

Clean Air Act provisions “that contain petition authority . . .

expressly allow for any person to petition the EPA” whereas

section 126(b) is limited to states and political subdivisions.

Response to Delaware and Maryland, 83 Fed. Reg. at 50,460

(emphasis added); see, e.g., 42 U.S.C. § 7661d(b)(2). But this

observation has little bearing on the question before us. “Any

State” plainly includes Delaware and the fact that the section

126(b) petition process is comparatively circumscribed does

not mean an otherwise qualified petitioner is thereafter subject

to additional, implicit limitations. Next, the EPA contends that

“the context of . . . section 126 as a whole suggests these

provisions are meant to moderate interstate transport concerns

23

between affected states and upwind sources, not between any

third party (even if such party is another state) and upwind

sources.” Response to Delaware and Maryland, 83 Fed. Reg.

at 50,460 (emphasis added). For example, section 126(a)

requires certain upwind sources “to provide written notice to

all nearby States the air pollution levels of which may be

affected by such source.” 42 U.S.C. § 7426(a)(1). The EPA

imports this language into section 126(b), reading in a

requirement that the petitioning state be “directly affected by

upwind pollution.” Response to Delaware and Maryland, 83

Fed. Reg. at 50,460 (emphasis added). And, according to the

EPA, Delaware is not “affected” because it has provided no

evidence of an in-state air quality problem.

The EPA’s position is unavailing. Although Congress, in

section 126(a), referred specifically to “States . . . which may

be affected by such [upwind] source,” 42 U.S.C. § 7426(a)(1),

it included no analogous limitation in section 126(b).

Moreover, it is not at all obvious when a state is “affected.”

Indeed, section 126(a) requires a new or modified source to

provide written notice if it “may significantly contribute to

levels of air pollution in excess of the [NAAQS] in any air

quality control region outside” the source’s own state. Id.

§ 7426(a)(1)(B). Because “air quality control regions” include

multistate areas, id. § 7407(b)(1), (c), it is unclear whether all

states in a shared nonattainment area are “affected”—and are

therefore owed written notice—regardless of where in the

multistate area the offending air pollution is measured. Thus,

even accepting the EPA’s proffered interpretation—that only

affected states may file section 126(b) petitions to protect

against violating upwind sources—the same ambiguity arises.

Although statutory context, on its own, does not resolve

matters, the EPA also found that “the legislative history for

[section 126(b)] suggests the provision was meant to address

24

adverse air impacts only in the petitioning state.” Response to

Delaware and Maryland, 83 Fed. Reg. at 50,460. Its brief foray

into the legislative history is, at best, unilluminating. It relies

solely on the Conference Report accompanying the Clean Air

Act Amendments of 1977, which added section 126. The

Senate’s proposed amendment is described in the Report as

cabining section 126(b)’s petition authority to findings that an

upwind source “adversely affect[s] the air quality in the

petitioning State.” H.R. Rep. No. 95-564, at 146 (1977) (Conf.

Rep.). This summary language, which the EPA erroneously

ascribes to the amendment itself, see Response to Delaware and

Maryland, 83 Fed. Reg. at 50,460 n.47, does not appear in the

enacted text, see Clean Air Act Amendments of 1977, Pub. L.

No. 95-95, § 123, 91 Stat. 685, 724. Nor does the EPA suggest

this limitation was considered and debated, beyond its brief

assertion that “[t]he House concurred with the Senate’s

amendment” and, despite making revisions elsewhere, “did not

indicate changes to this sentence.” Response to Delaware and

Maryland, 83 Fed. Reg. at 50,460 n.47.

Delaware and Petitioner-Intervenors contend that, even if

a state must be “affected” in order to file a section 126(b)

petition, “upwind emissions that impact non-attaining

receptors within a multistate nonattainment area affect all of the

included states’ air quality . . . , regardless of where the

particular non-attaining receptor happens to be located.” Del.

Reply Br. 4. First, because ozone and its precursor pollutants

are easily transported over large areas, without regard to

political boundaries, selectively placed ozone monitors are

intended to “serve as proxies for identifying broader air quality

problems.” Pet’r-Intervenors Br. 29.8 Consequently, a

8

The EPA objects that Petitioner-Intervenors’ argument was

not raised in the comment period and is therefore forfeited. See 42

U.S.C. § 7607(d)(7)(B) (“Only an objection . . . raised with

reasonable specificity during the period for public comment . . . may

25

violating monitor anywhere in the shared nonattainment area

signals that other locations may face similar problems.

Second, for states in a shared nonattainment area, out-of-

state receptors can cause very real regulatory consequences.

Because a nonattainment area includes “any area . . . that

contributes to ambient air quality in a nearby area that does not

meet” the ozone NAAQS, 42 U.S.C. § 7407(d)(1)(A)(i), a

state’s attainment status is necessarily linked to all other states

comprising the multistate area. A non-attaining receptor

anywhere in the multistate area causes the entire area to be

designated nonattainment and, in turn, the states must

coordinate a collective response irrespective of the offending

monitor’s location. See id. § 7511a(j)(1). Thus, Delaware and

Petitioner-Intervenors attack the EPA’s notion that considering

monitoring data from outside the petitioning state would

impermissibly “allow states to act in the role of citizen

attorneys general on behalf of other states.” EPA Br. 39. They

maintain that, to the contrary, a state acts on its own behalf

when it raises a shared nonattainment problem because its own

be raised during judicial review.”). “But the word ‘reasonable’

cannot be read out of the statute in favor of a hair-splitting approach.

In other words, the Act does not require that precisely the same

argument that was made before the agency be rehearsed again, word

for word, on judicial review.” Appalachian Power Co., 135 F.3d at

817–18. In its comments, Delaware argued that its attainment status

was tied to the status of the Philadelphia-Wilmington-Atlantic City

nonattainment area. See Del. Cmts. at 4 (J.A. 345). This is largely

the same argument now offered by Petitioner-Intervenors. And

because the EPA has “considered the particular challenge raised on

judicial review, it is of no import whether that challenge is phrased

in exactly the same way in each forum.” Appalachian Power Co.,

135 F.3d at 818.

26

attainment status has been affected by the upwind source. We

agree.

The untenability of the EPA’s interpretation is clear when

we consider its practical effect on the section 126(b) petition

process. Section 126(b) permits downwind states to petition

for a finding that an upwind source is violating the Good

Neighbor Provision, which prohibits emissions that will

“contribute significantly to nonattainment in . . . any other

State.” 42 U.S.C. § 7410(a)(2)(D)(i)(I). There is no dispute

that Delaware could file a section 126(b) petition to address an

upwind source’s contribution to an in-state non-attaining

receptor. But, according to the EPA, Delaware has no recourse

if its regulatory burden is attributable to a monitor in

Pennsylvania, even though Delaware remains bound by the

corresponding nonattainment designation. And, because

Delaware cannot compel another state to file a section 126(b)

petition, it is stuck in regulatory limbo, affected by an upwind

source yet unable to avail itself of the intended remedy for

addressing upwind contributions to nonattainment.

The EPA’s efforts to explain away this incongruity fall

flat. First, the EPA contends that “concerns about the impacts

of upwind pollution on out-of-state monitors in a shared

multistate nonattainment area . . . can be addressed under other

statutory processes.” Response to Delaware and Maryland, 83

Fed. Reg. at 50,460. But the Clean Air Act creates the section

126(b) petition process as an alternative to the use of

implementation plans. See supra at 8. Indeed, with respect to

the requirements of the Good Neighbor Provision and section

126, “the EPA has consistently acknowledged that Congress

created these provisions as two independent statutory processes

to address the problem of interstate pollution transport.”

Response to Delaware and Maryland, 83 Fed. Reg. at 50,452.

The EPA cannot ignore section 126(b)’s standalone remedy

27

simply because it has other regulatory options at its disposal.

Next, the EPA asserts that Delaware’s obligations as a member

of a multistate nonattainment area should have no bearing on

the EPA’s interpretation of section 126(b). Granted,

“[p]ortions of Delaware were included in the Philadelphia

nonattainment area because . . . those portions were themselves

contributing to the air quality problems in Pennsylvania.” Id.

at 50,460. But, contrary to the EPA’s characterization,

Delaware is not trying to “relieve [itself] . . . of the specific

planning obligations associated with its inclusion in an area

designated nonattainment.” Id. Rather, it asks merely that

upwind sources contributing to air quality problems in the

multistate nonattainment area shoulder a comparable

regulatory burden, as the section 126(b) petition process

contemplates.

In sum, states in a multistate nonattainment area share not

only a nonattainment designation but also the concomitant

responsibility to limit their own emissions. To equalize the

burdens between upwind and downwind states, the Clean Air

Act authorizes a state to petition the EPA for a finding that

upwind emissions significantly contribute to that state’s

nonattainment of the ozone NAAQS. But, under the EPA’s

interpretation, a state cannot file a section 126(b) petition if its

nonattainment status is caused by a receptor outside its political

boundaries, even as the state remains burdened by the

corresponding regulatory obligations. It is arbitrary for the

EPA to subject states like Delaware to this burden while

denying access to the intended remedy. Cf. Catawba Cty., 571

F.3d at 39 (“[S]tatutory interpretation that is arbitrary and

capricious is unreasonable under Chevron step two.” (citing

Northpoint Tech., Ltd. v. FCC, 412 F.3d 145, 151 (D.C. Cir.

2005))). We therefore conclude that the EPA’s interpretation

of section 126(b) is unreasonable, at least if the petition

involves “monitors . . . located in a multistate nonattainment

28

area that includes the petitioning state.” Response to Delaware

and Maryland, 83 Fed. Reg. 50,460. Accordingly, the EPA

could not ignore Delaware’s evidence of non-attaining

receptors in the Philadelphia-Wilmington-Atlantic City

nonattainment area.

C. Selection of Year to Measure Air Quality

We next consider a question of timing: In evaluating a

section 126(b) petition at Step One, for what year must the EPA

assess nonattainment in the downwind state? The Petitioners

argue that the EPA must focus on current nonattainment or, at

a minimum, nonattainment at the next future attainment

deadline applicable to the petitioning downwind state. We

disagree with the Petitioners on the first point, but we agree

with them on the second.

1. Current Nonattainment

The Petitioners contend that current nonattainment is

enough to satisfy Step One. The EPA responds that section

126(b), like the Good Neighbor Provision, concerns only

nonattainment that will last into the future. Again, the EPA’s

interpretation of the statute is reasonable.

Section 126(b) requires a finding on whether an upwind

source “emits or would emit” a pollutant in violation of the

Good Neighbor Provision. 42 U.S.C. § 7426(b). By cross-

referencing the Good Neighbor Provision, “Congress clearly

hinged the meaning of § 126 on that of” the Good Neighbor

Provision. Appalachian Power Co. v. EPA, 249 F.3d 1032,

1049–50 (D.C. Cir. 2001) (per curiam). As a result, “the

substantive inquiry for decision is the same” under both

provisions. Id. at 1047 (quotation marks omitted).

29

The Good Neighbor Provision requires SIPs to prohibit

any in-state source “from emitting any air pollutant in amounts

which will . . . contribute significantly to nonattainment in, or

interfere with maintenance by, any other State with respect to

any [NAAQS].” 42 U.S.C. § 7410(a)(2)(D)(i). In determining

the temporal scope of this rule, the key word is “will.” In North

Carolina v. EPA, 531 F.3d 896 (D.C. Cir.) (per curiam),

modified on reh’g in part, 550 F.3d 1176 (D.C. Cir. 2008), we

held that the EPA reasonably construed “will”—which denotes

the future tense—to limit the Good Neighbor Provision to

downwind air quality problems (of nonattainment or

maintenance) that are currently present and will continue into

the future. See id at 913–14.

North Carolina resolves the question presented here.

Section 126(b) requires a finding on whether an emission

causes a violation of the Good Neighbor Provision. And an

upwind source that currently contributes to downwind air

quality problems, but that will not contribute to these problems

in the future, does not cause such a violation. Thus, in its Step

One analysis, the EPA permissibly excluded downwind areas

that are not currently attaining the NAAQS but that will reach

attainment by a relevant future date.

The Petitioners press four counterarguments. First, they

contend that the EPA’s approach of requiring future

nonattainment is inconsistent with inclusion of the present

tense in section 126(b), which covers any major source that

“emits or would emit” a pollutant in violation of the Good

Neighbor Provision. But to violate the Good Neighbor

Provision, as the EPA has permissibly construed it, the source

must contribute to both current and future downwind

nonattainment. See id. at 914. And if no such violation will

materialize, then the fact of current nonattainment is irrelevant.

30

The Petitioners suggest that the word “will” must take on

a different meaning as incorporated into section 126(b) than it

does in the Good Neighbor Provision itself, lest the present-

tense “emits” be entirely collapsed into the future conditional

“would emit.” But statutes are not chameleons, acquiring

different meanings when presented in different contexts. See

Clark v. Martinez, 543 U.S. 371, 382 (2005). If present-only

nonattainment does not trigger a violation of the Good

Neighbor provision, then it cannot trigger a violation of that

same provision as incorporated into section 126(b).

In any event, the EPA’s interpretation does not turn

“emits” into surplusage. Sometimes, current emissions do

contribute to future nonattainment. For example, the EPA

evaluates attainment of ozone standards based on certain

concentrations averaged over three consecutive years. See

Response to Delaware and Maryland, 83 Fed. Reg. at 50,456.

Thus, to predict air quality for 2023, the EPA looks to actual or

predicted air quality between 2020 and 2022. So a source that

pollutes right now, in 2020, “emits” pollutants that “will

contribute” to pollution levels—and possibly nonattainment—

for 2023. That gives “emits” independent meaning.

Second, the Petitioners argue that North Carolina itself

rejected the EPA’s current reading of section 126(b). After

holding that the EPA could permissibly construe the Good

Neighbor Provision as focused on future nonattainment, we

stated that this “does not mean that EPA may ignore present-

day violations for which there may be another remedy, such as

relief pursuant to section 126.” 531 F.3d at 914. But North

Carolina presented no question involving section 126, so our

statement about it was dictum. As a consequence, we had no

occasion to substantively address this interpretive question.

31

Third, the Petitioner-Intervenors contend that the EPA’s

interpretation disregards the accelerated enforcement deadlines

in section 126. Under the Good Neighbor Provision,

implementation plans must ensure that upwind states do not

contribute significantly to downwind nonattainment at the next

future downwind deadline. See Wisconsin, 938 F.3d at 313–

20. Those deadlines can be three to twenty years in the future.

See 42 U.S.C. § 7511(a)(1). In contrast, section 126 gives

upwind sources only three months, extendable to three years,

to eliminate significant contributions after the EPA finds a

violation of the Good Neighbor Provision. Id. § 7426(c). The

petitioner-intervenors argue that this shortened enforcement

horizon reflects heightened concern with current

nonattainment. They are right that section 126(b) provides for

fast remediation, but what is remediated must nonetheless be a

violation of the Good Neighbor Provision. And as we have

explained, its scope does not change depending on whether

enforcement is sought under section 126(b). See Appalachian

Power Co., 249 F.3d at 1047.

Fourth, the Citizen Petitioners invoke a past section 126(b)

finding that they say turns entirely on current nonattainment.

In 2011, the EPA granted New Jersey’s petition regarding

sulfur dioxide emissions from a nearby Pennsylvania power

plant. See Final Response to Petition from New Jersey

Regarding SO2 Emissions from the Portland Generating

Station, 76 Fed. Reg. 69,052, 69,053 (Nov. 7, 2011). Although

the EPA had promulgated a sulfur dioxide NAAQS in 2010, it

had not yet set future attainment deadlines. But the agency

nonetheless granted the petition because the power plant was

significantly contributing to current nonattainment. See id. at

69,053, 69,058.

The Citizen Petitioners are mistaken to suggest that the

EPA’s present position is inconsistent with agency precedent.

32

For several decades, the EPA has consistently interpreted the

Good Neighbor Provision to require future nonattainment. See

Close-Out Rule, 83 Fed. Reg. at 65,889 (discussing past agency

actions), vacated on other grounds, New York, 781 F. App’x at

4. The agency’s treatment of New Jersey’s petition fit that

pattern. Downwind sulfur dioxide pollution is usually caused

by one or a few nearby sources. See Data Requirements Rule

for the 2010 1-Hour Sulfur Dioxide (SO2) Primary National

Ambient Air Quality Standard (NAAQS), 80 Fed. Reg. 51,052,

51,057 (Aug. 21, 2015). In the case of the Pennsylvania plant,

actual emissions were causing pollution levels more than two

times greater than the applicable NAAQS, and otherwise

allowable emissions would have caused pollution levels more

than seven times greater. See Response to Petition from New

Jersey Regarding SO2 Emissions from the Portland Generating

Station, 76 Fed. Reg. 19,662, 19,668, 19,672 (Apr. 7, 2011).

Because a single source was causing New Jersey to exceed the

NAAQS by a wide margin, the EPA could reasonably have

concluded that, absent intervention, New Jersey’s current

nonattainment would persist into the future.

No such extrapolation would be reliable for ozone. Ozone

precursors are transported over long distances, so downwind

ozone problems often are caused by numerous upwind sources.

See EME Homer City., 572 U.S. at 496–97. And ozone

concentrations can be significantly affected by meteorological

variables. See Findings of Significant Contribution and

Rulemaking on Section 126 Petitions for Purposes of Reducing

Interstate Ozone Transportation, 64 Fed. Reg. 28,250, 28,292

(May 25, 1999). All of this makes predicting future levels for

ozone far more complex than doing so for sulfur dioxide. See

Michigan v. EPA, 213 F.3d 663, 674 (D.C. Cir. 2000) (per

curiam). The New Jersey finding thus does nothing to

undermine the EPA’s position in this case.

33

2. Future Nonattainment

The Petitioners next argue that, looking to the future, the

EPA was required to measure air quality in the year that

corresponds with the next applicable downwind attainment

deadline. We agree.

The Good Neighbor Provision requires upwind states to

eliminate excess emissions “consistent with” Title I of the

Clean Air Act, which includes the deadlines for downwind

states to attain the ozone standards. See 42 U.S.C.

§ 7410(a)(2)(D)(i). As we recently explained in Wisconsin, an

implementation plan violates the Good Neighbor Provision if

it fails to “eliminate upwind States’ significant contributions to

downwind pollution by the statutory deadline for downwind

States to meet the NAAQS for ozone.” 938 F.3d at 314.

Because section 126(b) incorporates the Good Neighbor

Provision, the EPA must find a violation if an upwind source

will significantly contribute to downwind nonattainment at the

next downwind attainment deadline. Therefore, the agency

must evaluate downwind air quality at that deadline, not at

some later date.

In this case, Delaware’s next attainment deadline under the

2015 ozone NAAQS is the deadline for marginal

nonattainment areas, which falls in 2021. See supra at 16 &

n.5. Yet when conducting its analysis of Delaware’s petitions

at Step One, the EPA chose to examine the State’s air quality

in 2023. This decision cannot be reconciled with the Good

Neighbor Provision as we construed it in Wisconsin.

The EPA’s responses are unpersuasive. It argues that

marginal nonattainment areas often achieve the NAAQS

without further downwind reductions, so it would be

unreasonable to impose reductions on upwind sources based on

the next marginal attainment deadline. Nonetheless, Delaware

34

must achieve attainment “as expeditiously as practicable but

not later than” 2021, 42 U.S.C. § 7511(a)(1), so upwind

sources violate the Good Neighbor Provision if they will

significantly contribute to Delaware’s failure to meet that

deadline. See Wisconsin, 938 F.3d at 314. The EPA adds that

if Delaware’s marginal area fails to reach attainment by 2021,

it will be automatically bumped up to a moderate

nonattainment status and then subjected to a 2024 deadline.

See 42 U.S.C. § 7511(b)(2). But that does not make

Delaware’s obligation to attain the NAAQS by 2021 any less

binding. And an upgrade from a marginal to a moderate

nonattainment area carries significant consequences, such as a

requirement to provide for annual emissions reductions in SIPs.

See id. § 7511a(b). So long as upwind sources significantly

contribute to Delaware’s nonattainment at its 2021 attainment

deadline, they violate the Good Neighbor Provision.

D. Whether Delaware Carried Its Burden

In sum, here is the basic legal framework for analysis of

Delaware’s section 126(b) petitions at Step One. First,

Delaware bore the burden to prove a violation of the Good

Neighbor Provision. Second, the EPA was required to consider

data from out-of-state receptors in the Philadelphia-

Wilmington-Atlantic City Attainment Area, which includes

parts of Delaware. Third, the EPA was not required to consider

downwind areas reflecting only current nonattainment, but it

was required to consider areas reflecting nonattainment both

currently and at the next attainment deadline. Applying these

rules, we conclude that the EPA’s decision to reject Delaware’s

petitions at Step One was arbitrary with respect to petitions

under the 2008 ozone standards, but not with respect to

petitions under the 2015 ozone standards.

35

1. 2008 NAAQS

In its petitions under the 2008 NAAQS, Delaware failed to

identify any receptor connected to the State showing current or

future nonattainment. See Response to Delaware and

Maryland, 83 Fed. Reg. at 50,456. The petitions simply noted

the number of days that air pollution levels in the State had

exceeded the NAAQS. See Del. Conemaugh Pet. at 3 (J.A.

160); Del. Homer City Pet. at 3(J.A. 193); Del. Brunner Island

Pet. at 3 (J.A. 221); Del. Harrison Pet. at 3 (J.A. 248). But the

EPA measures nonattainment based on the fourth-highest daily

maximum ozone concentration, averaged across three

consecutive years. See Response to Delaware and Maryland,

83 Fed. Reg. at 50,456. Delaware’s petitions failed to provide

that information and thus failed to carry the State’s burden of

proof at Step One.

Delaware provided additional information in its comments

responding to the EPA’s proposed denial of its petitions. 9

Specifically, it highlighted data from a receptor in Bristol,

Pennsylvania that was part of the Philadelphia-Wilmington-

Atlantic City attainment area. The EPA declined to consider

this data because it came from an out-of-state receptor. See

Response to Delaware and Maryland, 83 Fed. Reg. at 50,456.

As explained above, that decision was arbitrary and capricious.

The EPA makes no suggestion that, had it considered data from

the Bristol receptor, it still might have concluded that Delaware

failed to carry its burden at Step One. We therefore hold that

Delaware carried its burden.

9

The EPA has not argued that Delaware forfeited reliance on

this information by failing to offer it in its petitions.

36

2. 2015 NAAQS

In its petitions under the 2015 NAAQS, Delaware also

failed to provide data showing any current or future

nonattainment. In its comments on the EPA’s proposed denial,

Delaware showed current nonattainment at both the Bristol

monitor and an in-state monitor in New Castle. Del. Cmts. at

4, 10 (J.A. 345, 351). But Delaware offered no data showing

nonattainment at either monitor in 2021, the deadline for both

areas under the 2015 NAAQS. Id. at 4, 10 (J.A. 345, 351).

Because Delaware failed to show that upwind sources will

significantly contribute to nonattainment at its next future

deadline, it failed to carry its Step One burden. See Wisconsin,

938 F.3d at 314.

After rejecting Delaware’s petitions on this ground, the

EPA went on to conduct its own independent analysis of future

attainment, which erroneously considered pollution levels in

2023 rather than 2021. But because the EPA independently

rested its decision on Delaware’s failure to carry its burden of

proof, the agency’s error on this point was harmless.

III. Denial of All Petitions at Step Three

Having concluded our review at Step One of the EPA’s

Good Neighbor framework, we proceed to Step Three: the

identification of cost-effective reductions at the named sources.

On this front, the parties have separate disputes with respect to

the sources that have catalytic controls; the sources that have

non-catalytic controls; and the one facility, Brunner Island,

with neither. We take each in turn.

A. Catalytic Controls

Delaware’s three petitions not related to Brunner Island

involve sources that, the State claims, are failing to optimize

37

their catalytic controls. Similarly, thirty-two out of the thirty-

six sources in Maryland’s petition have catalytic controls that

the State says they are failing to optimize. The EPA concluded

in the Update Rule that such optimization is a cost-effective

strategy for reducing NOx emissions. This, Petitioners say, is

more or less the ball game. If optimization is the measure of

Good Neighbor compliance, and if the named sources are

failing to optimize, then it necessarily follows that those

sources are not currently in compliance with the Good

Neighbor Provision.

The EPA offered two answers in its denial. First, it said,

the latest data showed that “the control optimization and the

emission reductions anticipated from the [Update Rule] are

being realized from the 34 units with [catalytic controls].”

Response to Delaware and Maryland, 83 Fed. Reg. at 50,465

(emphasis added). Second, it explained, “even in the event of

any single-unit variation in performance, the overall reductions

[attributable to optimization] are occurring within the same

airshed due to the fact that state budgets and assurance levels

were set to ensure those reduction levels statewide and

regionwide” through the Update Rule’s trading program. Id. at

50,466. In other words, the logic of a cap-and-trade program

is that not all sources will reduce their individual emissions to

the same extent. We uphold the EPA’s first answer as

reasonable and do not address the second.

The parties disagree about how to tell if any given source

is optimizing its controls. (No one has knocked on the plants’

doors to see for themselves.) How high do a source’s emissions

need to be before we can conclude that it is failing to optimize?

For purposes of the Update Rule, the EPA concluded that

optimizing catalytic controls would result in an average NOx

emissions rate of 0.10 lb/mmBtu. Update Rule, 81 Fed. Reg.

at 74,543. That figure was based on the third-best average

38

performance of the covered sources between 2009 and 2015, a

choice we upheld in Wisconsin over the objection that the EPA

should have chosen an even lower figure. 938 F.3d at 320–21.

Now suppose a source is found emitting above the EPA’s

estimated average—at 0.11 lb/mmBtu, for instance—after the

Update Rule. Is the source failing to optimize? Petitioners

seem to think so. See, e.g., Md Br. 29; Citizen Pet’rs Br. 16–

17; Pet’r-Intervenors Br. 46–47. But the EPA explains why

that may not be so:

The optimized rate for any particular unit depends on

the unit-specific characteristics, such as boiler

configuration, burner type and configuration, fuel

type, capacity factor, and control characteristics such

as the age, type, and number of layers of catalyst and

reagent concentration and type.

Response to Delaware and Maryland, 83 Fed. Reg. at 50,466

n.62. As a result, the bare fact that a source emits above 0.10

lb/mmBtu is equivocal. It could be evidence that the source is

not optimizing, or it could be evidence that that particular

source’s optimized rate is higher than average.

In that light, the EPA approached the question from the

opposite direction: What sorts of rates are likely to result if a

source does not consistently operate its catalytic controls? The

agency pegged that figure at 0.20 lb/mmBtu, a rate that sources

can usually hit by operating only their combustion controls.

See id.10 And as the agency observed, virtually all of the

10

Of course, any threshold the agency chose would present a

trade-off. Short of determining each source’s true optimized rate, an

undertaking in some tension with the general principle that section

126 allocates the initial evidentiary burden to Petitioners, see supra

Part II.A, the EPA could not avoid either under- or over-inclusion.

39

sources equipped with catalytic controls nationwide beat that

mark in 2017, after the Update Rule went into effect,

“including every unit with [catalytic controls] named in

Delaware’s and Maryland’s petitions.” Id. at 50,466. The

remaining few either achieved as much based on preliminary

2018 data, are not located in the states targeted by the petitions,

or have since retired. See id.

Maryland and Citizen Petitioners do not respond directly

to the EPA’s explanation for applying a 0.20 lb/mmBtu rule of

thumb, as opposed to the 0.10 lb/mmBtu average it articulated

in the Update Rule. But they mount a further argument that

these particular sources are not achieving their individual

optimized rates because they have performed more efficiently

in the past. In particular, the Petitioners calculated the “highest

30-day rolling average rate of emissions experienced by [each]

source during its best ozone season,” Md. Br. 23, and argue that

the EPA should have required sources to match that

performance. The trouble with this argument is that it mirrors

one we rejected in Wisconsin. There, in choosing to look to

each source’s third-best ozone season for purposes of the

Update Rule, the EPA explained that sources’ very best rates

are not, in the main, consistently achievable. See Wisconsin,

938 F.3d at 320–21; Update Rule, 81 Fed. Reg. at 74,544.

Having found EPA’s reasoning on that question reasonable

once, we do so again here.

Delaware’s objection is somewhat different. The State

acknowledges EPA’s use of the 0.20 lb/mmBtu threshold, but

points out that some of the named sources emitted above that

mark on individual days of the ozone season. See Del. Br. 30–

31. Since the EPA bases attainment on daily concentrations,

not seasonal emissions, Delaware argues that the EPA should

likewise control daily emissions to avoid the possibility that

sources will idle their controls on days with high electricity

40

demand. We did not have the occasion to consider the Update

Rule’s reliance on a seasonal cap in Wisconsin, since no party

challenged that decision there. But as the EPA explained here,

there appears to be “very little difference” between “NOx rates

for EGUs for hours with high energy demand” and “seasonal

average NOx rates.” Response to Delaware and Maryland, 83

Fed. Reg. at 50,466. In other words, Delaware’s concern

makes sense but has not been observed in practice. The EPA

also noted that there may be valid operational reasons not to

operate catalytic controls on particular days, “e.g., to avoid

damaging or plugging of the [control] or taking a forced outage

where a breakdown leaves the unit unavailable to produce

power.” Id. at 50,466-67. As a result, that a source ends up

emitting above 0.20 lb/mmBtu on a particular day is not

necessarily evidence of a failure to optimize. The EPA’s

explanation was reasonable. 11

B. Non-Catalytic Controls

We now turn to the next control strategy at issue.

Maryland contends that the four electric generating units in its

petition that do not have catalytic controls should be required

to operate their non-catalytic controls. Maryland argues that

the EPA cannot rely on the Update Rule’s conclusion that such

controls are not cost-effective in light of our decision in

Wisconsin. We agree, and because we do not read the denial

11

Maryland argues, relatedly, that the Clean Air Act itself

requires daily limits—that a seasonal cap is not a valid “emission

limitation” within the meaning of the statute because it does not

“limit[] the quantity, rate, or concentration of emissions of air

pollutants on a continuous basis.” 42 U.S.C. § 7602(k). But

Maryland did not present this interpretive claim in its comments; it

said only that daily limits would be a good idea. See Md. Reply Br.

6 (citing Md. Cmts. at 6, 11, 39, 45 (J.A. 290, 295, 323, 329)). The

argument is therefore forfeited. See 42 U.S.C. § 7607(d)(7)(B).

41

to have offered an adequate argument in the alternative, we

remand it to the agency with respect to this issue.

The EPA explained concisely its conclusion that operating

non-catalytic controls at these sources would not be cost-

effective. The Update Rule, the agency said, had already

concluded as much on a regional level. See Response to

Delaware and Maryland, 83 Fed. Reg. at 50,469–70. And there

was no reason to think these sources were any different, it

continued, because the units identified “are relatively small in

size and have low emission levels, indicating that the units have

a relatively limited ability to substantially reduce NOx

emissions.” Id. at 50,470.

We cannot endorse this explanation after Wisconsin.

There, we concluded that the Update Rule was impermissibly

“partial.” Wisconsin, 938 F.3d at 318. As relevant here, in

choosing a cost-effectiveness threshold, the Update Rule did

not consider control strategies that could not have been

implemented in time for the 2017 ozone season. Id. at 313. As

the EPA concedes, the agency’s judgment about the cost-

effectiveness of non-catalytic controls may change when it

conducts a new comparative analysis in response to the

Wisconsin remand. See Recording of Oral Arg. at 35:06;

accord Close-Out Rule, 83 Fed. Reg. at 65,898

(acknowledging that the EPA could have revisited the Update

Rule’s conclusion about non-catalytic controls in the Close-

Out Rule if it had found a continuing air quality problem). In

that light, the EPA cannot rely mechanically on the Update

Rule for the proposition that non-catalytic controls are not cost-

effective. And the denial does not seriously suggest that its

brief discussion of these particular units amounted to a

standalone cost-effectiveness analysis. See EPA Br. 78

(suggesting only that the EPA “reviewed the specific emissions

42

levels of the named sources to determine if anything had

changed” since the Update Rule was promulgated).

We recognize that Wisconsin does not imply that non-

catalytic controls are cost-effective—or even that the EPA, on

remand, will choose a different cost threshold than the one it

originally did.12 Indeed, Counsel suggested at argument that

the EPA’s judgment about non-catalytic controls “probably”

would not change. See Recording of Oral Arg. at 52:29. But

under the familiar rule of SEC v. Chenery Corp., 318 U.S. 80

(1943), we must review an agency’s action on the basis of

reasons it actually gave, not ones it hypothetically could. And

while there are gestures in the denial at an alternative argument

that Petitioners bear the burden to establish that a control is

cost-effective at Step Three (and failed to do so here), the EPA

ultimately based its decision on its own conclusion that non-

catalytic controls are not cost-effective. In that light, we need

not decide what burden a petitioner may have to show cost-

effectiveness. 13

C. Brunner Island

Finally, we address Delaware’s Brunner Island petition.

Brunner Island, which has installed neither catalytic nor non-

catalytic controls, added natural gas capacity to augment—and

eventually replace—its coal-firing generation units. Delaware

argues that voluntary conversion is not enough and that the

EPA must affirmatively prohibit the facility from burning coal.

12

Cf. Michigan, 213 F.3d at 680 (noting that EPA’s “selection

of the cut-off point [is] essentially unbounded,” given the sense in

which we have permitted the agency to consider cost-effectiveness).

13

Given the possible alternative rationales identified by the

EPA, we do not vacate the denial. See Allied-Signal, Inc., v. U.S.

Nuclear Regulatory Comm’n, 988 F.2d 146, 150-51 (D.C Cir. 1993).

43

The EPA declined to impose the requested limitation,

concluding that Brunner Island had not violated its Good

Neighbor obligations. The EPA’s determination is reasonable.

Brunner Island significantly reduced its pollution footprint

by operating primarily on natural gas during the 2017 ozone

season. Compared to the 2016 season, NOx emissions fell from

3,765 tons to 877 tons, as the emissions rate declined from

0.370 lb/mmBtu to 0.090 lb/mmBtu. See Response to

Delaware and Maryland, 83 Fed. Reg. at 50,470–71. In other

words, consistent with Delaware’s proposed control strategy,

Brunner Island utilized its natural gas capabilities to achieve a

low NOx emissions rate during the 2017 ozone season.

Because Delaware did not identify any “additional feasible and

cost-effective NOx emissions reductions,” it could not

“demonstrate that, at this current level of emissions, Brunner

Island emits in violation of” the Good Neighbor Provision. Id.

The EPA next explained that favorable natural gas prices,

coupled with the incentive for Brunner Island to sell unused

emissions allowances, supported its “belie[f that] Brunner

Island will continue to primarily use natural gas as fuel during

future ozone seasons for economic reasons.” Id. at 50,471.

Thus, Delaware’s petition also failed to show that Brunner

Island “would emit” in violation of the Good Neighbor

Provision.

According to Delaware, the installation of a NOx control

technology does not, by itself, prevent a future violation of the

Good Neighbor Provision. Rather, a corresponding regulatory

requirement is necessary to ensure optimal operation and, on

this front, “passive market forces are an unacceptable

emissions limitation under the [Clean Air] Act.” Del. Br. 34.

Delaware asserts that the EPA, by crediting Brunner Island’s

voluntary choice to burn natural gas, contravened section

126(c)’s instruction that a violating source may continue

44

operating only if it “complies with such emission limitations

. . . as may be provided by the Administrator.” 42 U.S.C.

§ 7426(c) (emphasis added). As Delaware sees it, the EPA

must affirmatively ensure that Brunner Island maintains its

NOx reductions in the future. But section 126(c) contemplates

EPA-mandated limitations only for “a source referred to in

paragraph (2),” id., that is, “any major existing source . . . after

such finding has been made with respect to it,” id. § 7426(c)(2).

And because the requisite finding is one “made under

subsection (b),” id. § 7426(c)(1), the imposition of limitations

under section 126(c) is therefore predicated on finding, under

section 126(b), that a source “emits or would emit” in violation

of the Good Neighbor Provision, id. § 7426(b). Put differently,

the remedies to cure a Good Neighbor violation are distinct

from whether a violation has occurred in the first place. See

Response to Delaware and Maryland, 83 Fed. Reg. at 50,472

(“[T]he EPA only implements federally enforceable limits

under step four of the four-step framework for sources that the

EPA determines have emissions that significantly contribute to

nonattainment or interfere with maintenance of the ozone

NAAQS downwind under steps one, two, and three.”). The

EPA determined that Brunner Island does not, and would not,

emit in violation of the Good Neighbor Provision.

Accordingly, it was not required to issue federally enforceable

limitations under the Clean Air Act.

Petitioner-Intervenors dispute the EPA’s Good Neighbor

determination, alleging that Brunner Island could, at any time,

revert to burning coal which, considering its 2016 NOx

emissions rate of 0.370 lb/mmBtu, proves it “would emit” in

violation of the Good Neighbor Provision. See Pet’r-

Intervenors Br. 48. The EPA concluded such a reversion was

unlikely, considering Brunner Island’s strategic decision to

invest in natural gas, the economic incentive to burn natural gas

and sell unused emission allowances through the NOx trading

45

program, and price projections indicating that natural gas will

remain a less expensive fuel source. See Response to Delaware

and Maryland, 83 Fed. Reg. at 50,471. The EPA also noted

that, pursuant to a settlement agreement, Brunner Island’s

owner “agree[d] to operate only on natural gas during the ozone

season . . . starting on January 1, 2023, . . . and cease coal

operations after December 31, 2028.” Id. at 50,471 n.79.

Petitioner-Intervenors offer no evidence contradicting the

EPA’s record determination beyond unsupported conjecture

that Brunner Island could decide to burn coal.

Moreover, Delaware and Petitioner-Intervenors provide

no reason that the EPA could not consider all known conditions

affecting Brunner Island’s anticipated emissions. “Our review

under the ‘arbitrary and capricious’ standard is narrow and

does not permit us to substitute our policy judgment for that of

the Agency.” Bluewater Network v. EPA, 370 F.3d 1, 11 (D.C.

Cir. 2004). “Thus, when an agency’s decision is primarily

predictive, our role is limited; we require only that the agency

acknowledge factual uncertainties and identify the

considerations it found persuasive.” Rural Cellular Ass’n v.

FCC, 588 F.3d 1095, 1105 (D.C. Cir. 2009). Here, the EPA

discussed the economic incentives built into the cap-and-trade

program, outlined Brunner Island’s business strategy and

highlighted natural gas price projections prepared by

independent analysts. See Response to Delaware and

Maryland, 83 Fed. Reg. at 50,471. And it acknowledged the

fallibility of its predictions, conceding that “Brunner Island’s

operations [could] change such that the facility is operating

primarily on coal during future ozone seasons.” Id. at 50,472.

In that case, if “future emission levels increase,” Delaware can

“submit[] another petition regarding Brunner Island’s

impacts.” Id. Accordingly, we find that the EPA reasonably

explained its predictive judgment.

46

IV. Nonconsideration of Maryland’s Petition

Under 2015 NAAQS

Finally, Maryland argues that the EPA’s refusal to

evaluate its petition under the 2015 ozone NAAQS was

arbitrary and capricious. We disagree.

To preserve an issue for our review, a party generally must

raise the issue before the agency. The Clean Air Act

specifically provides that issues must be raised during the

period for public comment in order to be reviewable here. See

42 U.S.C. § 7607(d)(7)(B). Likewise, general administrative-

law principles require timely preservation of issues before the

agency. See United States v. L.A. Tucker Truck Lines, Inc., 344

U.S. 33, 37 (1952); Nuclear Energy Inst., Inc. v. EPA, 373 F.3d

1251, 1297 (D.C. Cir. 2004).

In this case, Maryland’s section 126(b) petition did not ask

the EPA to make a finding that upwind sources were

significantly contributing to its nonattainment of the 2015

NAAQS. On the contrary, the petition sought a finding only

“with respect to the 2008 ozone [NAAQS].” Md. Cover Ltr. at

1 (J.A. 48). Moreover, Maryland repeatedly described its

emissions problem, its requested finding, and its proposed

remedy by reference to the 2008 NAAQS. See Md. Pt. at 1, 3,

4, 17 (J.A. 50, 52, 53, 66). Because Maryland did not ask for

a finding under the 2015 standards, the EPA permissibly

declined to make one. See Appalachian Power Co. v. EPA, 251

F.3d 1026, 1036 (D.C. Cir. 2001) (“An agency cannot be

faulted for failing to address such issues that were not raised by

petitioners.”).

Maryland contends that its petition did request a finding

under the 2015 NAAQS, if not in so many words. Specifically,

Maryland noted that a timely remedy might allow some in-state

areas also to reach attainment under the 2015 standards. See

47

Md. Pet. at 9, 13, 14 (J.A. 58, 62, 63). But that does not amount

to requesting a finding under those standards. Instead, it

suggests only that a finding under the 2008 standards might

have produced further in-state benefits under other standards.

Alternatively, Maryland responds that its petition did not

need to request a finding under the 2015 NAAQS. Maryland

reasons that, when it filed the petition in November 2016, the

EPA had not yet issued attainment designations for it under the

2015 NAAQS. But whether it would have been premature for

Maryland to request a finding under the 2015 standards at that

time is beside the point. In its November 2016 petition—the

only one at issue here—Maryland did not request a finding

under the 2015 standards. Now that the EPA has designated

areas in Maryland as failing to attain those standards, the State

remains free to file a separate petition requesting a finding

under them.

Finally, Maryland notes that it asked for a finding under

the 2015 standards in its comments to the EPA’s proposed

denial of its petition. But that request came too late. Consistent

with Maryland’s petition, the EPA’s proposed action did not

address the 2015 standards and failed to give public notice that

it might do so. See Response to Delaware and Maryland, 83

Fed. Reg. at 50,463. With the proceeding so far along,

Maryland could not properly request an entirely new finding.

We recognize that Maryland was required to preserve

arguments in its response to the proposed denial, 42 U.S.C.

§ 7607(d)(7)(B), but that hardly entitled it to raise points

wholly outside the scope of the notice generated by its own

prior petition. Because Maryland’s request for a finding under

the 2015 NAAQS fell outside the scope of the pending

rulemaking—as triggered by Maryland’s own petition—the

EPA had no obligation to address it. See Am. Fuel &

Petrochemical Mfrs., 937 F.3d at 585–86.

48

V. Conclusion

For the foregoing reasons, we grant Maryland’s petition

for review in part and remand the non-catalytic controls issue

to the EPA. We otherwise deny the petitions for review.