Petition — CPC International, Inc. v. Costle
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fu the Supreme Court of the United States
OCTOBER TERM, 1976
No.
CPC INTERNATIONAL INC., ET AIL.,
Petitioners,
Vv.
RusSELL E. TRAIN, as Administrator of the
Environmental Protection Agency, et al.,
Respondents.
Petition For A Writ Of Certiorari To The
United States Court Of Appeals For The
Eighth Circuit
ROBERT C. BARNARD
CHARLES F. LETTOW
1250 Connecticut Avenue, N.W.
Washington, D. C. 20036
Attorneys for Petitioners
OF COUNSEL:
CLEARY, GOTTLIEB, STEEN & HAMILTON
1250 Connecticut Avenue, N.W.
Washington, D. C. 20036
JANUARY 14. 1977
OPINIONS BELOW
JURISDICTION a os
QUESTIONS PRESENTED ____
TABLE OF CONTENTS
Page
STATUTES, REGULATIONS, AND REGULATORY
OrpErRS INVOLVED
ED ee ee ee
REASONS FOR GRANTING THE WRIT __
1.
I.
Il.
CONCLUSION ..__—-—
THe EicutTuH Crracurt’s DECISION REsTs UPON AN
ASSUMED ANSWER TO THE QUESTION WHETHER
EPA’s New Source STANDARDS SHOULD CONTAIN
A “SAFETY VALVE” PROCEDURE
THERE Is A CONFLICT AMONG THE CouRTS OF AP-
PEALS OVER WHETHER EPA Is OBLIGED TO PROVIDE
IN Its STANDARDS FOR STATISTICALLY EXPECTED
“EXCURSIONS” FROM THE EFFLUENT VALUES
SPECIFIED IN THE STANDARDS _____
----
THE EIGHTH CircuIt’s DEvISION Errs IN APPROV-
ING THE AGENCY'S FAILURE Tc MAKE ANY PRo-
VISION IN THE New Source STANDARDS FOR
PRODUCT-MIx VARIATIONS AND THE DIFFERENT
EFFLUENTS RESULTING FROM MANUFACTURE OF
DISPARATE AND DIVERSE Propucts aT CornN WET
MILLs
11
TABLE OF AUTHORITIES
Page
CASES:
American Petroleum Institute v. Environmental Pro-
tection Agency, 540 F.2d 1023 (10th Cir. 1976). 12
Citizens To Preserve Overton Park, Inc. v. Volpe, 401
2 Rtg SARS rn acon mee em 13
CPC International Inc. v. Train, 515 F.2d 1032 (8th
Cir. 1975) (“CPC I”) * eso YY
E. I. du Pont de Nemours & Co. v. Train, Nos. 75-978,
75-1473, and 75-1705 ‘ 2,10, 11, 14
Essex Chemical Corp. v. Ruckelshaus, 158 U.S. App.
D.C. 360, 486 F.2d 427 (1973), cert. denied sub
nom. Appalachian Power Co. v. Environmental
Protection Agency, 416 U.S. 969 (1974) _..____ 12
FMC Corp. v. Train, 539 F.2d 973 (4th Cir. 1976) __ 11
WAIT Radio v. Federal Communications Commission,
135 U.S. App. D.C. 317, 418 F.2d 1153 (1969)... 9
STATUTES AND REGULATIONS:
Clean Air Act
§ 109, 42 U.S.C. § 1857c-4 _ car ae
Federal Water Pollution Control Act
$301(8), 33 USC. ¢ 131106) — >_>. 6
§ 304(b), 33 U.S.C. § 1314(b) ap ociagiiilidaiads 6
§ 306, 33 U.S.C. § 1316 SPE TEN I 2,3, 4,5, 12
§ 306(a)(1), 33 U.S.C. § 1316(a)(1) 4,5, 13
§ 306(b)(1)(A), 33 U.S.C. § 1316(b)(1)(A) 4
§ 306(b)(1)(B), 33 U.S.C. § 1316(b)(1)(B)_._ 4
§ 306(b)(2), 33 U.S.C. § 1316(b)(2) 13
§ 306(e), 33 U.S.C. § 1316(e) 11
620 UE ON i ei 11
(on Bene ci a
ii
Page
§ 402(a), 33 U.S.C. § 1342(a) 4
§ 402(a)(1), 33 U.S.C. § 1342(a)(1) 04
§ 402(b), 33 U.S.C. § 1342(b) 4
§ 402(b)(1)(A), 33 U.S.C. § 1342(b)(1)(A) 4
§ 402(c), 33 U.S.C. § 1342(c) ae 4
§ 408(d), 33 USC. §1348(d) tC
§ 402(e), 33 U.S.C. § 1342(e) 4
§ 402(f), 33 U.S.C. § 1342(f) 4
§ 402(k), 33 U.S.C. § 1342(k) ——
LS a |
§ 509(b), 33 U.S.C. § 1369(b) 6
§ 509(b)(1), 33 U.S.C. § 1369(b)(1) _._._§, 12
§ 509(b)(2), 33 U.S.C. § 1369(b)(2) 12
JUDICIAL CODE:
ES LES
CoDE OF FEDERAL REGULATIONS:
As I scien ns ~ccenciiamnineniiecinatinineetsion 12
EEE
40 C.F.R. § 406.10 _. __ piaainiceinanatliiaceaiaidesthiemliaialiiriadabad 5
40 C.F.R. § 406.15 pS ih at Sele eaaiienlileed 3, 6,11
40 C.F.R. § 415.225 da Pas ,
MISCELLANEOUS:
Federal Register Notices
38 Fed. Reg. 33438 (December 4, 1973) _..._-_-_-_-»__ 4
39 Fed. Reg. 10512 (March 20, 1974) 3,4,5
40 Fed. Reg. 52016 (November 7, 1975) ___. 3, 7, 8,13
41 Fed. Reg. 50823 (November 18, 1976) ____.___. - &e
iu the Supreme Court of the United States
OCTOBER TERM, 1976
No.
CPC INTERNATIONAL INC., ET AL.,
Petitioners,
Vv.
RUSSELL E. TRAIN, as Administrator of the
Environmental Protection Agency, et al.,
Respondents.
Petition For A Writ Of Certiorari To The
United States Court Of Appeals For The
Eighth Circuit
Petitioners CPC International Inc., et al., ask that a
writ of certiorari issue to review the judgment of the
United States Court of Appeals for the Eighth Circuit en-
tered in this case on August 18, 1976.
Opinions Below
The opinion of the court of appeals is reported at 540
F.2d 1329. The »pinion and the judgment of the court are
annexed hereto as Appendix A.
The decision of the court of appeals was the second
decision by the court in a continuing proceeding over which
the court had and has retained jurisdiction. In the first
decision, reported at 515 F.2d 1032, the court of appeals
ruled that the new source standards issued by the Environ-
mental! Protection Agency for the corn wet milling industry
were invalid, and the court remanded the standards to the
1 Petitioners are CPC International Inc. and the Corn Refiners Associa-
tion, Inc. Respondents are Russell E. Train, Administrator, Environ-
mental Protection Agency, and John Quarles, Deputy Administrator,
Environmental Protection Agency.
,
pee |
Agency for further inistrative proceedings. The second
decision, the subject of this petition, reflects the court's
review of the Administrator’s decision made in the proceed-
ings on remand from the court's first decision.
Jurisdiction
The judgment of the court of appeals here sought to be
reviewed was entered on August 18, 1976. On November
8, 1976, Mr. Justice Blackmun, acting in his capacity as
Circuit Justice for the Eighth Circuit, issued an order ex-
tending the time in which to file a petition for certiorari in
this case to and including January 15, 1977. The jurisdic-
tion of this Court is invoked under 28 U.S.C. § 1254(1).
Questions Presented
1. Whether standards of performance promulgated
under Section 306 of the Act to control effluent discharges
from sources constructed after the publication of proposed
standards (“new sources”) are “presumptively applicable”
to, rather than always binding on, such sources, such that
the Agency must provide a “safety valve procedure” ena-
bling an individual new source to obtain a discharge permit
different from the standards upon a proper factual show-
ing.”
2. Whether under the Act the Agency must provide in
its new source standards for the statistically expected “ex-
cursions” from the efflueni ievels specified in the standards.
3. Whether the Agency’s new source standards for the
corn wet milling industry are arbitrary and capricious in
ignoring product-mix variations and in failing to make any
provision for the different effluents resulting from manu-
facture of disparate and diverse products at corn wet mills.
Statutes, Regulations, And Regulatory Orders Involved
1. The Federal Water Pollution Control Act, as amended.
Sections 306 and 402 of the Act (33 U.S.C. §§ 1316 and
1342) are set forth in Appendix B, infra.
2 This question is presently before the Court in E. I. du Pont de
Nemours & Co. v. Train, Nos. 75-978, 75-1473, and 75-1705.
3.
2. “New Source Sta iards” for the Corn Wet Milling
Subcategory of the Grain Mills Point Source Category. The
regulations initially issued by the Administrator under Sec-
tion 306 which constitute standards of performance for new
sources in the corn wet milling industry are found at 40
C.F.R. § 406.15, added by 39 Fed. Reg. 10512-10515 (March
20, 1974). These regulations and portions of the rule-
making order by which they were promulgated are set
forth in Appendix C, infra.
3. The Administrator's “Decision Not To Revise New
Sources Performance Standards”. After the court of ap-
peals in its first decision in this case had ruled that the
Agency’s new source standards were invalid and had re-
manded them for further administrative proceedings, the
Agency requested further submissions and comments on its
standards and engaged a contractor to reevaluate the ef-
fluent results obtainable at new plants in the industry.
Based upon the initial administrative record and upon addi-
tional information compiled on the remand, the Adminis-
trator issued a “Decision Not To Revise New Sources
Performance Standards”. That decision was published in
the Federal Register at 40 Fed. Reg. 52016-52019 (Novem-
ber 7, 1975). Excerpts from the decision are set forth in
Appendix D, infra.
4. The Agency's recent amendment to the new source
standards. The Agency has recently amended its regula-
tions. The rulemaking order making the amendment is
found at 41 Fed. Reg. 50823 (November 18, 1976); portions
of this order are set forth in Appendix E, infra. The amend-
ment constitutes the Agency's action to comply with the
decision and remand of the court of appeals at issue in
this petition.
STATEMENT OF THE CASE
The Federal Water Pollution Control Act Amendments of
1972 restructured the federal government’s program for
water pollution control. Among other things, the 1972
4
Amendments added to the Federal Water Pollution Control
Act (“the Act”) a new provision, Section 306, 33 U.S.C.
§ 1316, which requires the Administrator to issue in the
form of regulations “Federal standards of performance for
new sources”. ({ 306(b)(1)(B).) These standards for the
control of the discharge of pollutants are to reflect “appli-
cation of the best available demonstrated control technol-
ogy” to sources the construction of which is commenced
after publication of proposed regulations prescribing the
standards.* (§ 306(a)(1).) Section 306(b)(1)(A) man-
dates that the Administrator of the Environmental Protec-
tion Agency (variously “the Administrator”, “EPA” or “the
Agency”) must issue standards for at least 27 separate
industrial categories of sources, including “grain mills”.
This petition relates to EPA’s new source standards for
the Corn Wet Milling Subcategory of the Grain Mills Point
Source Category.
1. Initial administrative proceedings and the first deci-
sion of the court of appeals. EPA published proposed new
. source standards for corn wet mills on December 4, 1973.
(38 Fed. Reg. 33438, 33442.) At the same time, the Agency
published proposed “effluent limitations guidelines” for
existing plants in the industry. (Id.) After the Agency had
received and evaluated comments on its proposed stand-
ards, final standards were issued which were slightly dif-
ferent from the proposal in format and in section-number
designations, but which contained precisely the same nu-
merical values for the pertinent pollutant parameters
(BOD:;, TSS, and pH ).* (39 Fed. Reg. 10512, 10515 (March
20, 1974).) Like the proposed standards, the final stand-
3 New sources, like existing sources, must obtain a permit to make a
discharge of pollutants into waters of the United States. Section 402
of the Act, 33 U.S.C. § 1342, provides the authority and basis for issu-
ance of permits both by EPA (§ 402(a)) and by qualified and approved
State authorities (§ 402(b)-(f)). Permits for new sources are to apply
the requirements of Section 306. See §§ 402(a)(1) and 402(b)(1)(A).
* “BOD,” is five-day biological oxygen demand, “TSS” is total sus-
pended solids, and “pH” refers to the logarithmic scale of values repre-
senting relative acidity or alkalinity. See CPC International Inc. v.
Train, 515 F.2d 1032, 1044 nn.21-23 (8th Cir. 1975) (“CPC I”).
5
ards applied to all new sources in the industry notwith-
standing the variety of end products manufactured at such
plants.* EPA set out its asserted technical basis for the
regulations in a book-like “Development Document”.
The petitioners, representatives of the corn wet milling
industry, filed a timely petition for review of the new source
standards in the Eighth Circuit.* That petition was con-
sidered by the court of appeals along with two separately
filed petitions to review EPA’s simultaneously issued guide-
line regulations for existing plants.
In CPC International Inc. v. Train, 515 F.2d 1032 (8th
Cir. 1975) (“CPC I”), the court of appeals ruled that the
new source standards were invalid because the Agency had
premised the standards upon a technology which had not
been “demonstrated” for the industry as required by Section
306(a)(1). (Id.,515 F.2d at 1047-1051.) EPA had asserted
that “deep bed filtration” was a technology which had been
used in some other industrial applications and at municipal
treatment works, and that it could make a projection of
results for the corn wet milling industry in reliance upon a
“transfer” of this technology. (Id., 515 F.2d at 1047-1048. )
The court held that the record showed no basis for use of
“transfer technology”. (Id., 515 F.2d at 1048-1049.) It
rejected the new source standards and remanded them to
the Agency.’
5 The regulations applied “to discharges resulting from the process in
which shelled corn is steeped in a dilute solution of sulfurous acid and
then processed by wet means into such products as animal feed, regular
and modified starches, corn oil, corn syrup, and dextrose.” (40 C.F.R.
§ 406.10, added by 39 Fed. Reg. 10512, 10514 (March 20, 1974).) This
specification of the coverage of EPA’s standards also pertains to the
Agency’s “efiuent limitations guidelines” applicable to existing plants in
the indusiry.
6 Section 509(b)(1) of the Act, 33 U.S.C. § 1369(b)(1), provides that
“[rjeview of the Administrator's action (A) in promulgating any stan-
dard of performance under section 306 .. . may be had by any inter-
ested person in the Circuit Court of Appeals of the United States for the
Federal judicial district in which such person resides or transacts such
business . . . [where the petition for review is filed within 90 days].”
TInm the same decision, the court of appeals ruled that for existing
plants EPA was mandated by the Act to issue guideline regulations
6
2. Further administrative proceedings and the second
decision of the court of appeals. As instructed by the court
of appeals in CPC I, EPA conducted further administrative
proceedings respecting the new source standards for corn
wet mills. Representatives of the industry made numerous
submissions to the Agency. Among the major issues in
these further proceedings were the questions (1) whether
the Agency had an obligation under the Act to provide in
its standards for the statistically expected “excursions”
from the effluent levels specified in the standards,* and (2)
whether in a standard based upon quantity of raw material
processed rather than products produced, the Agency
under Section 304(b), 33 U.S.C. § 1314(b), and that the Agency had
no authority to promulgate “limitations” by regulation under Sec-
tion 301(b) of the Act, 33 U.S.C. § 1311(b). Because the jurisdictional
provisions of Section 509(b) of the Act, 33 U.S.C. § 1369(b), did not
and do not provide that actions to review such guideline regulations
should be brought initially in the court of appeals, the court dismissed
the companion petitions for review of the simultaneously issued guide-
line regulations for the industry. (Id., 515 F.2d at 1037-1038.)
8 This issue arises because the numerical values in EPA’s standards
do not reflect lorz-term average performance results. Rather, for
enforcement purposes, EPA set the values in the regulations on a short-
term basis, i.e., for each pollutant parameter, as a “[m]aximum for
any 1 day” and as a maximum “[a]verage of daily values for 30
consecutive days.” See 40 C.F.R. § 406.15. Thus, the long-range aver-
age performance values on which EPA based its standards had to be
converted into the short-range values actually present in the regulations.
This conversion is most accurately and easily provided by a statistical
analysis of historical results from a plant or plants employing the
requisite technology and thus providing the long-range performance
values. “Variability factors” are obtained; these factors are multipliers
to convert the lower long-term average values into the higher values for
the particular short-range periods selected by the Agency as suitable for
regulatory purposes. The statistical calculations are made such that
the resulting short-term values will encompass a set tage (e.g.,
ordinarily 99 percent or perhaps 95 percent) of the expected results.
The remaining results (e.g., one percent or 5 percent, as the case may
be) are denominated “excursions”.
EPA stated the principle underlying such calculations, and their use
in setting standards, as follows: “Variability limitations will be set such
that all the mills listed as not violating the BOD and TSS annual
average will also not violate the thirty day average and daily maxi-
mums.” (Joint Deferred Appendix in the court of appeals, at N 3224.)
Petitioners do not contest this principle, but rather petitioners have
asserted and now assert that EPA has not followed it in these standards.
Lod
‘
should take product-mix variations into account by provid-
ing in the standards for the differing effluent results ob-
tained from the manufacture of disparate and diverse
products at corn wet mills.° At the conclusion of the pro-
ceedings, the Administrator issued a “Decision Not To
Revise New Sources Performance Standards”, in which he
rejected each of the positions advocated by the corn wet
mills. Respecting statistically expected “excursions”, the
Administrator said the Agency had chosen not to rely upon
the “effluent variability analysis of historical treatment
data contained in the Supplemental Development Docu-
ment... .” (40 Fed. Reg. at 52019.) Rather, statistical
calculations were “presented in the Supplemental Develop-
ment Document only as an illustretion that the new source
performance standard is reasonable and attainable in rela-
tion to existing overall industry practice.” (Id.) This re-
sponse avoided rather than answered the issue posed by
the milling companies. As to the differing effluent results
obtained by manufacture of a variety of products at the
mills, the Administrator responded that
“EPA has acknowledged, and continues to
acknowledge, that product mix variations may in-
deed have some 0d er on raw waste character-
istics of corn wet milling wastes. However, no
reliable and meaningful relationships between
roduct mix and waste flow characteristics has
n demonstrated to date either by EPA or in-
dustry.”
: (Id. at 52017-52018. )
EPA concluded that product mix differences were “inter-
related in a very complex and presently undefinable man-
ner” with other factors bearing on effluent results (id. at
® Most of EPA’s industry-category regulations are written on a differ-
ent basis than are these regulations. The majority of EPA’s regulations
are expressed in terms of pounds of allowable effluent per pounds of
production of a given product. See e.g., 40 C.F.R. § 415.225 (Inorganic
Chemicals Category—Titanium Dioxide Production Subcategory). The
regulations for corn wet mills, however, are premised upon the raw
material input (shelled corn) to the mills, and not upon the variety of
products manufactured from the shelled corn.
8
52018), and that no provision need be made in the stand-
ards for the manufacture of the different end products.
The petitioning companies returned to the court of
appeals seeking review of the Agency's refusal to revise
the standards. In its second ruling, CPC International Inc.
v. Train, 540 F.2d 1329 (8th Cir. 1976) (“CPC II”), the
court approved the Administrator’s decision in part and
rejected it in part. The court of appeals concluded that the
effluent values for BOD; in EPA’s standards were sup-
ported by results obtained at Clinton Corn Processing Co.’s
plant at Clinton, lowa, where a new treatment system had
been constructed, if the Clinton Corn data were adjusted
and interpreted to upgrade them for projected operations
at a new plant. (540 F.2d at 1334-1338; Appendix A infra
at 8a-15a.) However, the court rejected EPA’s values for
the TSS parameter, on the ground that neither the Clinton
Corn results nor results obtained at other plants in other
industries supported the TSS values in the standards. (540
F.2d at 1338-1340; Appendix A infra, at 15a-19a.) The
court again remanded the TSS portions of the standards to
the Agency, but with the explicit instructions either to
revise the originally set TSS values upward to particular
values which the court opined were supported by the
record,’® or to conduct further administrative proceedings
in an effort to justify lower values.
In its second ruling on the new source standards for the
corn wet milling industry, the court of appeals among other
things implicitly dealt with the matter of whether EPA's
standards for new sources are always binding on such
sources and have to be applied by rote in permits. The
court of appeals held that EPA need not provide in its corn
wet milling new source standards for the statistically ex-
pected “excursions” from the numerical values in the
10 The court concluded that the record supported a 30-consecutive-day
value of 25 pounds of TSS per “MSBu” (thousand standard bushels of
shelled corn) and a daily-maximum value of 75 pounds of TSS per
MSBu. (540 F.2d at 1340; Appendix A infra, at 19a.) These values
are 250 percent greater than those set initially by EPA and maintained
by the Agency as a result of the decision stemming from the first
remand.
9
standards, because in the court’s view the federally-issued
or State-issued discharge permit for a particular new source
could contain provisions allowing for excursions even
though the standards themselves did not do so. (540 F.2d
at 1338; Appendix A infra, at 14a-15a.) On the other hand,
the court of appeals did not consider or refer to possible
different pe-mit terms in addressing and rejecting the mill-
ing companies’ ciaiin that the new source standards were
invalid because EPA had failed to take into account higher
raw waste loads and resulting increased effluents at those
plants which would have a product mix including modified
starches rather than just sweeteners and syrups. (540
F.2d at 1336; Appendix A infra, at 12a. )
3. The Agency's recent amendment of the standards to
comply with the second decision of the court of appeals.
EPA did not conduct further administrative proceedings
after the second remand. Instead, the Agency adopted the
court's suggestion that it amend the originally-set TSS
values upwards to the values which in the court’s view had
some support in the record. See 41 Fed. Reg. 50823 (No-
vember 18, 1976), set out in Appendix E, infra.
REASONS FOR GRANTING THE WRIT
I. The Eighth Circuit’s Decision Rests Upon An As:
sumed Answer To The Question Whether EPA’s New
Source Standards Should Coatain A “Safety Valve”
Procedure.
The court of appeals did not address directly the issue
whether EPA’s new source standards should contain a
“safety valve procedure”.'' Its decision does, however,
touch upon the matter by implication. As noted supra, at
8, the court refused to hold that EPA had to provide in
its new source standards for the statistically expected ex-
cursions from the values in the standards, on the ground
11 The reference to a “safety valve procedure” stems from WAIT
Radio v. Federal Communications Commission, 135 U.S. App. D.C. 317,
418 F.2d 1153, 1157 (1969).
10
that a permit with terms to “remedy the problem” could be
issued for a particular new source.’? (540 F.2d at 1338;
Appendix A infra, at 14a-15a.) In the du Pont cases in this
Court, EPA has contended that its new source standards
are “ironclad” and that they must be applied by rote in
permits for new plants. Brief for the Administrator at 7-9
and 13, E. I. du Pont de Nemours & Co. v. Train, Nos. 75-
1473 and 75-1705. By asserting that its standards are “iron-
clad”, EPA thus would not allow the permit adjustment for
excursions upon which the court of appeals relied. In addi-
tion, the decision of the court was itself not consistent on
the matter of a “safety valve”. In the court’s disposition of
the issue arising because of variations in products at the
corn wet mills, the option of permit limitations differing
from the standards was not recognized. (540 F.2d at 1336;
Appendix A infra, at 12a.)
The decision of the court of appeals thus demonstrates
the close interrelationship between the effect to be accorded
the standards and the matters which must be reflected in
them lest they be arbitrary and capricious. Because this
Court has before it in the du Pont cases the issue which is
presented here, the corn wet milling petitioners suggest
that it would be appropriate for this Court to grant this
petition and to remand the matter summarily in light of the
Court's decision in the du Pont cases.'* Whichever way this
12 Permits could correct the deficiency in the standards by providing
that the maximum short-term pollutant limitations in the permit could
be exceeded on a specified number of occasions during a year, with the
number of allowable excursions determined on the basis of the statistical
premise for calculating the standards. See supra, at 6 n. 8.
EPA’s “national primary and secondary ambient air quality standards”
issued under Section 109 of the Clean Air Act, 42 U.S.C. § 1857c-4,
contain provisions for such “excursions”. See 40 C.F.R. § 50.9 (stan-
dard for photochemical oxidants—“maximum 1-hour concentration not
to be exceeded more than once per year” ).
13 Then, in light of this Court’s discussion in the du Pont decision,
the court of appeals could reassess its rulings respecting the second and
third questions presented here. While petitioners believe the court of
appeals could consequently order appropriate provisions to be incorpo-
rated in EPA’s standards, especially respecting excursions, this sug-
gested disposition would leave in existence the conflict among the
circuits over excursions.
11
Court resolves the “safety valve” issue in the du Pont cases,
a remand to the court of appeals in this case would seem to
be necessary. As discussed, the court here arguably adopted
by implication an inconsistent stance on the issue. It should
reconsider its ruling in light of this Court’s action in the
du Pont cases.
II. There Is A Conflict Among The Courts Of Appeals
Over Whether EPA Is Obliged To Provide In Its
Standards For Statistically Expected “Excursions”
From The Effluent Values Specified In The Standards.
EPA’s effluent regulations, whether they be new source
standards or “effluent limitations guidelines” express the
values for pollutant parameters as “never to be exceeded”
terms. See e.g., the standards at issue here, 40 C.F.R.
§ 406.15, reproduced infra, at 3e. Yet the statistical meth-
ods used to calculate the short-range values present in
the regulations do not by definition account for all the
values obtained by use of the requisite technology at well-
run representative plants. See supra, at 6 n.8 and 10
n.12. A very small but important set of expected values
(“excursions”) remain unaccounted for by the short-term
values in the regulations. A new source would be subject to
civil or criminal penalties when the excursions occurred,
unless the regulations or the plant’s permit exempted the
excursions. (See §§ 306(e), 309, 402(k), and 505. )
In FMC Corp. v. Train, 539 F.2d 973, 986 (4th Cir. 1976),
the Fourth Circuit considered EPA’s failure to provide for
excursions in the Agency’s new source standards and ef-
fluent limitations guidelines for the plastics and synthetic
materials category. The court opined that “[p]!ant owners
should not be subject to sanctions when they are operating
a proper treatment facility.” (Id., 539 F.2d at 986.) It con-
cluded that “EPA should provide an excursion provision
that will offset the expected . . . violations” (id. ), while ob-
serving that EPA had previously incorporated such provi-
sions in regulations issued under the Clean Air Act—
12
“Such excursions are provided for by the ambient
air standards established under the Clean Air Act,
40 C.F.R. §§ 50.4-50.10, and this Court sees no
reason oy appropriate excursion provisions
should not be incorporated in these water pollu-
tion regulations.”
(Id. )
See also Essex Chemical Corp. v. Ruckelshaus, 158 U.S.
App. D.C. 360, 486 F.2d 427, 432-433 (1973), cert. denied
sub nom. Appalachian Power Co. v. Environmental Pro-
tection Agency, 416 U.S. 969 (1974).
By way of contrast, the Tenth Circuit in American
Petroleum Institute v. Environmental Protection Agency,
540 F.2d 1023, 1035-1036 (10th Cir. 1976), refused to rule
that EPA had erred in not providing for excursions, while
Saying that there was “a theoretical chance that a plant
achieving the limitations on a long-term basis will exceed
the monthly and daily limits.” (Id., 540 F.2d at 1036.)
In the present case the Eighth Circuit reached a com-
promise on the issue by declaring that the standards did
not have to contain an “excursions” clause but that a permit
for a particular new source could “remedy the problem”.
(540 F.2d at 1338; Appendix A infra, at 14a-15a. )
These conflicts among the Fourth, Eighth, and Tenth
Circuits are especially troublesome because the issue in
conflict will arise both in the context of regulations and
permits and in the area of enforcement.'* The conflicts
justify the grant of certiorari to review the Eighth Circuit’s
judgment in this case.
14 As matters now stand, given EPA's failure to carry out the de-
cisions either of the Fourth or of Eighth Circuits, in those circuits a
permittee w__id have available an “excursions” defense to a charge of
violation cf a permit, notwithstanding the provisions of Section 509(b)
(2) of the Act, 33 U.S.C. § 1369(b)(2). (These provisions bar “review
in any civil or criminal proceeding for enforcement” of any action by
the Administrator which could have been the subject of review under
the jurisdictional grant provided by Section 509(b)(1), including, for
example, the Administrators promulgation of new source standards
under Section 306.) In the Tenth Circuit such a defense arguably
would not be available.
13
Ill. The Eighth Circuit’s Decision Errs In Approving
The Agency’s Failure To Make Any Provision In The
New Source Standards For Product-Mix Variations
And The Different Effluents Resulting From Manu-
facture of Disparate And Diverse Products At Corn
Wet Mills.
In the Administrator's decision of November 1975 not to
revise the new source standards for corn wet mills, the
Agency conceded that “product mix variations may indeed
have some influence on raw waste characteristics of corn
wet milling wastes.” See supra, at 7. Nonetheless, the
Agency says that it has to date found no method to corre-
late this factual circumstance to the standards. (40 Fed.
Reg. at 52018; Appendix D, infra, at 2d-3d.) The stan-
dards fix single values dependent upon quantity of raw
materials processed, without regard to the varying products
manufactured and the varying effluents resulting from the
different product mixes. The court of appeals approved this
approach, or rather, lack of approach, on the ground that
the Agency had not ignored the matter. (540 F.2d at 1336;
Appendix A, infra, at 12a.) The court erred; it did not fully
meet its obligation to determine “whether the decision was
based on a consideration of the relevant factors and
whether there has been a clear error of judgment.” Citizens
To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416
(1971).
A new corn wet milling plant manufacturing a product
such as a modified starch which generates an effluent sig-
nificantly greater than a plant producing corn syrups or
sweeteners should be subject to effluent requirements which
reflect “best available demonstrated control technology”
(§ 306(a)(1)) for its own operations, not those of the
syrup or sweetener plant.”
15 Section 306(b)(2) specifies that the Administrator “shall consider
the type of process employed (including whether batch or continuous )”
in adopting new source standards for an industry. In the corn wet
milling plants, physically separate and technologically different proces-
sing lines are used for corn syrups, corn sweeteners, modified starches,
and other classes of products.
14
In any event, the decision of the court of appeals should
be reassessed in light of this Court’s decision in the du Pont
cases respecting whether EPA’s new source standards are
“ironclad” or whether they should incorporate a “safety
valve procedure”.
CONCLUSION
A writ of certiorari should issue to review the judgment
and opinion of the Eighth Circuit. The second and third
questions presented by this petition are important and
deserve the Court’s attention.
Alternatively, because the first issue in this case is also
presented by the du Pont litigation presently pending
before this Court, and because the other two issues in this
case are Closely tied to this issue, this Court may deem it
appropriate to grant the petition and summarily to remand
this case to the Eighth Circuit for further proceedings to
be taken in accordance with this Court’s du Pont decision.
This suggested disposition would not resolve the present
conflict among the circuits respecting the issue arising
with statistically expected excursions from the values in
EPA’s standards. It would nonetheless offer the court of
appeals an opportunity to clarify the issues in light of the
du Pont case.
Respectfully submitted,
RoBERT C. BARNARD
CHARLES F. LETTOW
1250 Connecticut Avenue, N.W.
Washington, D. C. 20036
Attorneys for Petitioners
OF COUNSEL:
CLEARY, GOTTLIEB, STEEN & HAMILTON
1250 Connecticut Avenue, N.W.
Washington, D. C. 20036
JANUARY 14, 1977
la
APPENDIX A
Anited States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 74-1448
CPC INTERNATIONAL INC., ET AL.,
Petitioners,
Vv.
RUSSELL E. TRAIN, ET AL.,
Respondents.
Petition for Review of
‘Action of the Administrator
of the Environmental
Protection Agency.
Submitted: March 9, 1976
Filed: August 18, 1976
Before MATTHES, Senior Circuit Judge, HEANEY and
WEBSTER, Circuit Judges.
HEANEY, Circuit Judge.
The petitioners, representatives of the corn wet milling
industry, seek direct review of regulations promulgated by
the Environmental Protection Agency setting forth stand-
ards of effluent discharges for new plants in this industry
under §306 of the Federal Water Pollution Control Act
Amendments of 1972. 33 U.S.C. §1316.
2a
The new plant standards are before us for the second
time. In CPC International Inc. v. Train, 515 F.2d 1032,
1034 (8th Cir. 1975) (CPC I), we held that this Court had
jurisdiction to directly review the standards for new plants
under (509(b) of the Act. We also held that this Court did
not have such jurisdiction with respect to existing plant
guidelines, a position to which we continue to adhere. Id.
at 1036-1043.' We also held that there was not sufficient
1 Three other Circuits have reached a contrary interpretation. See
American Frozen Food Institute v. Train, No. 74-1464, at slip op. 5,
37-38 (D.C. Cir. May 11, 1976); American Iron & Steel Institute v.
E.P.A., 526 F.2d 1027, 1042 (3rd Cir. 1975); Amer. Meat Institute v.
Environ. Protect. Agcy., 526 F.2d 442, 452 (7th Cir. 1975). Two other
Circuits have decided that they need not decide the question of the
Administrator's power, and that “any action taken by the Administrator
under §304(b) should properly be considered to be pursuant to the
provisions of §301,” permitting such action to be directly reviewed
pursuant to §509(b). E. I. du Pont de Nemours and Company v. Train,
528 F.2d 1136, 1142 (4th Cir. 1975), cert. granted, 44 U.S.L.W. 3385
(U.S. April 20, 1976) (No. 75-978). Accord, American Petroleum In-
stitute v. Train, 526 F.2d 1343, 1346 (10th Cir. 1975).
The District of Columbia Circuit suggests that we “failed to see the
forest for the trees.” Americcn Frozen Food Institute v. Train, supra at
slip op. 37 n.5. We deny fwilty vision. The italicized quotations from
the legislative history in the American Frozen Food decision, id. at slip
op. 10-25, are ambiguous. For that reason, this Court, which was the
first to attempt to unravel the Gordian knot, felt it essential to probe the
legislative history more deeply and to go beyond the ambiguous passages
relied upon by the Court in American Frozen Food. As a result of our
study, we reached the conclusion that nonambiguous passages of the
legislative history and of the statute itself compelled an interpretation
of the Act which differed from that of the EPA. These nonambiguous
clues to the statute’s meaning are discussed at length in our decision
in CPC International Inc. v. Train, 515 F.2d 1032, 1038-1043 (8th Cir.
1975) (CPC I).
For example, one fundamental impediment to the EPA’s interpreta-
tion of the Act remains unanswered. Section 402(d)(2) expressly pro-
vides that the EPA may halt issuance of any state-issued permit if it
determines that the conditions of the permit do not comply with the
guidelines issued under §304(b). See id. at 1037 n.11, 1038 and 1038
n.14. The reference in this veto provision to the §304(b) guidelines and
the extensive debate which preceded the addition of §402(d)(2) to the
final draft of the statute are inconsistent with the EPA’s contention that
it has the power to issue effluent limitations for existing plants by
regulation under §301. The District of Columbia Circuit and the
Seventh Circuit ignore this language. The Third Circuit deals with the
language, see American Iron & Steel Institute v. E.P.A., supra at 1040-
1041, but its reasoning is unpersuasive.
3a
evidence in that record to support the new plant standards
promulgated by the EPA and remanded the matter to it
with instructions to either:
furnish support for the new source standards pre-
viously published, or establish new ones which
can be achieved with the best available demon-
strated control technology.
Id. at 1050 ( footnote omitted ).
We also instructed the EPA to update its projected cost
figures.
On remand, the EPA undertook a review and reconsid-
eration of the new plant standards. Following appropriate
Conclusory statements to the effect that our interpretation of the
EPA’s power “emasculates” the Act, American Frozen Food Institute v.
Train, supra at slip op. 36, are a distortion of reality. As we noted in
CPC International Inc. v. Train, supra at 1037 n.11, the guidelines
promulgated under §304(b) are to be as precise as possible. Coupled
with the EPA’s veto power over permits which fail to comply with their
requirements, the guidelines will achieve the goals which the EPA seeks
to achieve by means of effluent limitations promulgated under its pur-
ported §301 power. Under our ruling, the limitations written into in-
dividual permits for existing point sources should be substantially
similar to those written into permits if the EPA's theory of the Act were
to be adopted.
The only practical difference resulting from this Court's interpretation
of the statute is that the §304(b) guidelines for existing sources must
be reviewed first in the District Court, while the §306(b) standards of
perfomance for new plants—often based on the same scientific research
and conclusions—must be reviewed first in the Court of Appeals. This
practical anomoly is demonstrated here. Compare CPC International
Inc. v. Train, supra at 1046, 1046 n.29 (finding that the “1977 tech-
nology,” when employed in a new plant, would enable it to comply with
the 1977 guidelines) with Grain Processing Corporation v. Train, 407
F.Supp. 96 (S.D. Iowa 1976) (finding that the “1977 technology,” when
employed in an existing plant, cannot assure compliance with the 1977
guidelines). We acknowledge this practical difficulty. But the presence
of this anomoly does not justify the conclusion that the Act is “emascu-
lated;” nor does a court emasculate an enactment by enforcing it as
written. We cannot disregard the intention of Congress and rewrite the
statute simply because of the practical problem of initially reviewing
two closely related sets of regulations at two different levels in the
judicial system. We also acknowledge that judicial resources will be
wasted by requiring review at the District and Appellate Court levels.
The recent grant of certiorari by the Supreme Court in E. I. du Pont
de Nemours and Company v. Train, supra, is a hopeful sign that a
definitive resolution of these issues is forthcoming.
4a
administrative procedures, the EPA resubmitted the stand-
ards previously promulgated.
The petitioners contend that:
(1) the EPA failed to give a fair and reasoned considera-
tion of its new source standards and instead prematurely
and arbitrarily adopted its original standards;
(2) the EPA erred in determining that the 1977 guide-
lines can be met by new plants utilizing proposed 1977
technology;
(3) the EPA erred in holding that the addition of deep
bed filtration will enable industries to meet the proposed
new source standards; and
(4) the EPA erred in determining that the suggested
technology could be acquired within the cost figures pro-
jected by it and in determining that the industry could
afford to build new plants incorporating the technology
necessary to achieve the new source standards.
I. THE EPA ACTED PROPERLY ON REMAND.
We are not entirely satisfied with the record made by the
EPA on remand. Much of the data in the record is presented
without careful collation, evaluation and simplification.
Much of the statistical information is quantified in units of
measurement other than those used in the proposed stand-
ards, pounds per thousands of bushels, thus making it
difficult for us to determine whether the data supports the
EPA’s conclusion. Expert opinion is frequently unsup-
ported and little, if any, effort is made to make scientific
testimony understandable.
Nonetheless, we cannot say that the new source stand-
ards should be set aside in their entirety on the grounds
that the EPA prematurely and arbitrarily rubber stamped
the previously approved standard. It did substantially more
than this. It retained expert consultants to assist in the
decision-making process, it undertook a review of the
experience of other municipal and industria! users in the
United States and abroad, it undertook a review of the
5a
literature in the field, and it made a serious and a partially
successful effort to obtain all available information from
presently operated corn wet milling plants.
Il. THE RECORD SUPPORTS THE CONCLUSION
OF THE EPA THAT THE 1977 EXISTING
PLANT GUIDELINES CAN BE MET BY NEW
PLANTS UTILIZING THE PROPOSED 1977
TECHNOLOGY.
The petitioners, in effect, seek to relitigate issues de-
cided in our first opinion. In CPC I, we held that:
(1) the new source standards are identical to the 1983
guidelines for existing plants;
(2) the new source standards/1983 guidelines “are
predicated on the availability of the 1977 technology plus
the addition of deep bed filtration;”
(3) the EPA did not err “in determining that the 1977
technology, when employed in a new plant, would enable
it to comply with the 1977 guidelines;” and
(4) the EPA adequately considered contentions of the
industry pertaining to “shockloads,” “variability” and “ex-
cursions” in determining the 1977 existing plant stand-
ards. CPC International Inc. v. Train, supra at 1045, 1046
and 1046 n.30 (footnotes omitted ).
The petitioners suggest that the data presented initially
and on remand does not support the EPA’s conclusion that
the 1977 existing plant guidelines, upon which the final
new plant standards are based, can be met. They argue
that the EPA has failea to adequately consider the raw
wasteload of the corn wet milling industry, the variation
of the wasteloads according to the particular product pro-
duced, the temporary “shockloads” of waste created upon
shifts from one product process to another or the “excur-
sions” or high waste level concentration that occurs in this
industry from time to time.”
2 Since we determined in CPC I that the 1977 guidelines could be met
by new plants, the petitioners’ attempt to relitigate this issue would
ordinarily be barred by the doctrine of the law of the case. See United
6a
We have carefully reviewed the entire record and remain
convinced that new plants constructed with proper in-plant
controls and an adequate activated sludge or similar treat-
ment facility can meet the 1977 existing plant guidelines
of removing all but 50 pounds each of BOD; and TSS per
MSBu.* The record discloses that two existing plants with-
out all of the available technology proposed for use in a
treatment facility or appropriate in-plant controls have
met or nearly met the 1977 guidelines. At the American
Maize plant, the monthly figures of January through
March, 1975, are below the 1977 standards. At CPC-Corpus
Christi during the period of December, 1974 through April,
1975, the monthly BOD; effluent level is just above the
maximum thirty-day period 1977 guidelines. These plants
have achieved this level of effluent reduction even though
they have been inhibited in their efforts by space and
design limitations. New plants are being designed to avoid
such limitations.
We recognize that the District Court for the Southern
District of Iowa in Grain Processing Corporation v. Train,
407 F.Supp. 96 (S.D. Iowa 1976), held that the 1977 guide-
lines cannot be met by existing plants. That decision is
not before us here. We are concerned only with the stand-
ards for new plants. The District Court’s decision is on
appeal to this Court and will be considered in due course.
We note only that a new plant can incorporate in-plant
controls and surface condensers with moderate expense
States of America v. Burton A. Librach, No. 76-1060, slip op. at 8 (8th
Cir., June 17, 1976); Hawkes v. Internal Revenue Service, 507 F.2d 481,
482 n.1 (6th Cir. 1974); Thornton v. Charter, 109 F.2d 316, 320 (8th
Cir. 1940). However, after examining this augmented record, we deter-
mined that it would be helpful to expand upon and reassert our prior
decision as the ability of new plants to meet the 1977 guidelines is an
important intermediary step in ascertaining whether new plants can
meet the final proposed new plant standards.
3 BOD, is the five-day biochemical oxygen demand pollution factor,
explained more fully infra. TSS is the total suspended solids pollution
factor, explained more fully infra. MSBu expresses these pollutant
measurements in terms of pounds per thousand standard bushels of
corn processed. The 50-pound guideline refers to the maximum average
of daily values for a thirty consecutive day period, the guideline period
and measurement proposed by the EPA.
7a
and inconvenience while existing plants have more diffi-
culty in converting to this technology.
We affirm our decision in CPC I that the EPA did not act
arbitrarily or capriciously in concluding that the 1977
technology employed in a new plant would enable it to
meet the 1977 existing plant guidelines.
Ill. THE PROPOSED NEW PLANT STANDARDS
FOR BOD, CAN BE MET; THE PROPOSED
NEW PLANT STANDARDS FOR TSS CANNOT
BE MET.
Section 306(a)(1) of the Act, 33 U.S.C. §1316(a)(1),
states that the new source standards are to reflect:
| T |he greatest degree of effluent reduction which
the Administrator determines to be achievable
through application of the best available demon-
strated control technology, processes, operating
methods, or other alternatives, including, where
—— a standard permitting no discharge of
pollutants.
Our task is to determine whether the EPA’s decision is
“arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law.” 5 U.S.C. §706(2)(A); Citizens
to Preserve Overton Park v. Volpe, 401 U.S. 402, 416
(1971); CPC International Inc. v. Train, supra at 1044.
The EPA has proposed that a new plant in the corn wet
milling industry shall achieve an average of daily values
for thirty consecutive days that shall not exceed an effluent
level of 20 pounds of BOD; and 10 pounds of TSS per
MSBu. This standard is to be reached through the use of a
complete activated sludge system to reduce the wasteload
to 50 pounds each of BOD; and TSS per MSBu, the 1977
guidelines, and a subsequent reduction of 30 pounds of
BOD; and 40 pounds of TSS per MSBu through the addition
of a deep bed filtration system. The EPA asserts that the
experience of the Clinton corn plant treatment facility,
which includes the use of deep bed filtration, supports the
new source standards. It contends that deep bed filtration
is a demonstrated technology in the treatment of waste-
‘eve
8a
water in municipal and industrial plants and its use has
resulted in effluent discharges containing essentially no
suspended solids. It finally asserts that deep bed filtration
technology can be transferred to the corn wet milling in-
dustry with approximately the same successful rate of
BOD; and TSS effluent level reduction. The petitioners
deny these assertions.*
A. BOD,
We consider initially whether the conclusion of the EPA
that the 20-pound BOD; standard can be met, is arbitrary
and capricious.®
1. Clinton Corn Results.
On remand, data from the Clinton Corn plant became
available. Clinton Corn is a large corn wet milling plant
at which a new waste treatment facility has been con-
structed. It utilizes much of the EPA proposed technology,
including deep bed filtration. The Clinton treatment facility
began operations on January 1, 1974, and data for the pe-
riod from November, 1974 to September, 1975, was utilized
by the EPA in setting the proposed standards.
4 One of the principal difficulties in reviewing this record and that of
the EPA in setting a new plant standard, is the lack of any existing
plant within the industry that includes all of the proposed in-plant
controls and suggested treatment facilities. The need to be able to rely
on an exemplary existing plant or to create a pilot system to demon-
strate the efficacy and availability of the proposed technology is recog-
nized by the EPA. A newsletter published by the EPA and included in
the record of this case states:
Despite the widely varying opinions found in the waste water
filtration literature, a few areas of agreement are apparent.
One is the need to perform pilot plant studies in order to
properly design waste water filters.
J. Kreissel, “Granulor Media Filtration of Secondary Effluent” in News
of Environmental Research in Cincinnati (December 13, 1974).
5BOD, is a pollutant measurement of the five-day biochemical
oxygen demand. It reflects the oxygen-consuming capability of organic
matter which will be fulfilled as the matter in the wastewater decom-
poses. It is a common measurement employed in the field of water:
quality.
9a
The parties disagree as to the results achieved at
Clinton.“ The EPA concludes that a monthly average of
7.1 pounds per MSBu of BOD; for the eleven-month period
and a monthly average of 4.5 pounds for the last seven
months was achieved. The petitioners conclude that the
averages were 15.0 and 7.5 pounds, respectively. Even if
the petitioners’ higher figures are used, it appears that:
(1) the eleven-month average is less than the standard
set by the EPA;
(2) the seven-month average is at least 60% below the
standard set by the EPA;
(3) only one month in the last seven exceeded 50% of
the standard set by the EPA; and
(4) the treatment facility removed an average of 98%
of the BOD; in the wastewater.
Moreover, the record supports the EPA’s view that lower
effluent standards can be reached if all known in-plant
controls to prévent spills and to equalize the effect upon the
treatment facility if spills do occur are incorporated in the
new plant.
The petitioners assert, however, that because only 65%
of the wastewater flow generated at the Clinton plant goes
through the treatment facility, the Clinton results are unre-
liable. The wastewater by-passing the treatment facility is
generated from barometric cooling condensers and is dis-
charged directly into receiving waters without treatment.
The EPA suggested technology for cooling is surface con-
densers. This technology allows the cooling water to be
recycled. The resulting wastewater volume is substantially
reduced but it has higher concentrations of BOD;. This
waste must then be treated in the regular treatment facility.
6 The calculation to determine the amount of pollutant in terms of
pounds per thousand standard bushels of corn processed (MSBu) re-
quires several factors including the flow of water, actual grind data
and the concentration of the effluent. Exact grind data was not made
available for the Clinton plant. Both the EPA’s and the petitioners’
conclusion in terms of MSBu differ, at least partially, because of differ-
ent assumed grind levels.
~ nt ince ery
10a
The EPA projected model plant, discussed infra, has a
production capacity of 30,000 bushels and a proposed treat-
ment facility capable of handling a wasteflow of 1.0 mil-
lion gallons a day (mgd). The Clinton plant has a produc-
tion capacity of 120,000 bushels or four times that of the
model, but its present treatment facility is designed to treat
only 3.0 mgd. As Clinton changes over to surface con-
densers, its treatment facility will have to be enlarged
accordingly. There is no evidence in this record to suggest
that this additional waste volume cannot be treated in the
enlarged facility as effectively as the waste now being
treated at Clinton. For our purposes, the crucial factor is
that the Clinton treatment facility is effectively treating the
BOD; wasteload it is designed to treat at a level which is
consistent with the EPA proposed standards.
The petitioners also argue that the Clinton data should
not be used because its treatment plant includes a “double
Stage” treatment process before filtration while the EPA
model facility consists of a single stage. They argue that
even if the Clinton plant performance for BOD; removal
approaches that of the EPA standard, it does so only with
more extensive technology at a higher cost than the EPA
model facility.’
The EPA concedes that Clinton uses a double-stage pre-
treatment facility but properly notes that the raw waste
equalization basin at Clinton is not designed to hold the
raw wastes for the time required. It again calls attention to
the lack of good in-plant controls.
We are convinced that the record supports the EPA’s
conclusion that the performance of the Clinton plant dem-
onstrates that new plants designed and built to EPA stand-
ards can meet the BOD; standard of 20 pounds per MSBu.
2. EPA’s Model Plant.
In preparation of the standards, the EPA synthesized a
model corn wet milling plant and corresponding treatment
* The adequacy of the size and cost of the treatment facility proposed
by the EPA will be discussed in Section III, Part 2, infra, and Section
IV, infra, respectively.
lla
facility from data received from the corn wet milling indus-
try and from other industries that encounter similar
wastewater. The model contained most of the best tech-
nology and procedures presently used or practiced in the
industry. It is from this model and its estimated ability to
reduce the projected wasteloads that the EPA set the pro-
posed new plant standards.
The petitioners challenge two of the projections made by
the EPA in synthesizing its model plant. First, they assert
that the EPA erred in not considering the additional waste-
water flows of between 90 and 250 pounds of BOD: per
MSBu that result from the use of wet water scrubbers.
Second, they assert that the EPA erred in failing to accu-
rately account for the higher concentrations of BOD; that
result from the production of modified starches. These
errors, they assert, render the effluent-level reductions inac-
curate.
The petitioners do not dispute that the alleged additional
wastewater flows could not be effectively treated by the
proposed technology. They argue only that the capacity of
the model treatment plant may be insufficient to handle the
volumes or concentrations of this additional wastewater.
Our review of the record discloses that the petitioners’
conclusion on the increased wastewater generated by the
wet water scrubbers is based upon preliminary and con-
flicting data. The most persuasive of these inconclusive
estimates is that an additional flow of 90 pounds of BOD;
per MSBu may be created." As set forth above, the Clinton
treatment facility has consistently achieved a 98% BOD;
reduction over an eleven-month period during which the
influent has varied considerably in terms of concentration
and amount. If this additional 90 pounds were treated at
the Clinton facility, the seven months BOD: effluent aver-
ages of 4.5 of the EPA and 7.5 of the petitioners would be
increased to 6.3 and 9.3, respectively. Both of these figures
8 There is also evidence in the record that the wastewater from the
wet scrubbers could be recycled and reused in the production process
with a result that little of the wastewater would reach the treatment
facility directly.
fe
12a
remain well below the EPA proposed standard of 20 pounds
of BOD; per MSBu.
The record also discloses that the EPA did take into con-
sideration the increased wasteloads generated by the pro-
duction of modified starches. The EPA compiled data of
actual performance results from newer existing mills that
produce both conventional corn syrups and modified
starches and also the projections for new plants, submitted
by the industry, in order to determine the wastewater flow
and influent levels for the model plant. Moreover, it is
undisputed that the Clinton plant produces a variety of end
products including modified starches. Both the Clinton
wastewater load and influent levels of BOD; approximate
the projections set out for the EPA’s model plant.
Furthermore, the data relied upon by the petitioners to
show increased wasteloads because of modified starch pro-
duction must be contrasted with other data showing no
appreciable influent increase. As stated by a representative
of CPC in a report to the EPA, there were a number of
occasions when the production of modified starches in-
creased the wasteload substantially and:
about an equal number of times when there did
not seem to be any effect. No explanation has
been found for this problem.
Letter from R. L. Hap of CPC International to Dr. H. E.
Schwartz, Jr., June 25, 1975.
Based on the model plant data, we cannot say that the
EPA ignored the effects of additional waste produced by the
production of modified starches nor did it act in an arbi-
trary or capricious manner in calculating the effect of this
waste in preparing its model plant.
3. Variability and Excursions.
The petitioners also assert that the EPA’s standard for
the average maximum values for thirty consecutive days of
20 pounds of BOD; per MSBu fails to adequately account
for variability factors. They argue that if the EPA desires
to set short-term thirty-day standards based on long-term
————— eT
~ —_—r-—
13a
averages, that the EPA must ensure that miils not violating
the annual averages will also not violate the thirty-day
average and daily maximums. The petitioners argue that
the EPA considered variability factors only upon the ex-
pected results of its model plant and that the EPA failed to
adequately consider the variability factors realized at exist-
ing plants.
The record discloses that the EPA did adequately con-
sider variability. It took the long range effluent data from
the CPC—Pekin and American Maize plants and deter-
mined the 99% to the mean monthly variability factor to be
2.7 and 1.9, respectively. This range encompasses the 2.6
variability factor for the Clinton plant estimated by the
petitioners. Multiplying these factors upon the monthly
average for the last seven months at Clinton as increased
by additional effluent from the wet scrubbers, the range is
between 12 and 17 pounds of BOD; per MSBu utilizing the
EPA’s figures and between 17.7 and 25.1 pounds utilizing
the petitioners’ conclusions of the Clinton data. Ali but the
last projection is within the proposed BOD; standard.
Moreover, there is support for the EPA’s contention that
strict statistical computation of the variability factor for
new plants based upon existing plant results creates an arti-
ficially high number. New plants equipped with comple: -
in-plant controls and a properly designed and operating
treatment facility should be less prone to the variations of
influent created by the lack of similar facilities in existing
plants and, therefore, the variation factor in a new plant
should be lower.
There is also support in the record for the maximum
value for any single day of 60 pounds of BOD; per MSBu.
This single day allowance of three times the thirty-day
average provides sufficient flexibility for high effluent days.
Finally, the petitioners contend that even if the varia-
bility factors utilized by the EPA are accurate and provided
that the maximum day and thirty-day averages can be met,
the EPA has not included sufficient consideration for the
“excursions” above these levels that will occur in setting
these standards. They argue that the variability factors
2 Ne
14a
utilized account for 99% of all predictable performance
with the remaining one percent of the results from a plant
expected to exceed the value calculated as the 99% maxi-
mum. The petitioners assert that because the EPA has not
provided any variances for these excursions, effluent levels
may exceed the allowable maximum daily level several days
within a year despite the fact that the plant is meeting the
yearly average.
The record reflects that this complaint is not well
founded. The excursions in this industry are primarily the
result of inadequate facilities, including insufficiently-
sized aeration or retention basins and the failure to provide
dikes and other in-plant controls to reduce the effect of
in-plant spills. New plants, properly designed and con-
structed, should not experience this same difficulty. Dr.
Raymond C. Loehr, an expert in the treatment of high
strength organic wastes, has concluded:
No excursions are necessary. The variability
factors that are developed are based upon existing
data. There are many steps that industry can take
to reduce the variability and not exceed the limita-
tions. It is reasonable to expect that based upon
the use of better treatment technology and con-
trol, attention to treatment plant maintenance
and operations, and concern about in-plant waste
control, industry can reduce the existing variabil-
ity by at least 1%, the amount inferred by the use
of the 99/50 ratio, to obtain the limitations. In
fact it is reasonable to expect that such variability
can be reduced by perhaps 5% by means of the
variability controls identified earlier.
R. C. Loehr, EPA Memorandum on “Effluent Variability
Factors,” (June 26, 1975).
The record indicates that there remains the possibility
of a rare occasion when the daily effluent level may exceed
the maximum daily standard of 60 pounds because of inad-
vertent error or Act of God. The EPA has established the
policy of informally working with the plant that suffers
from such infrequent or isolated violations to attempt to
remedy the problem causing the violation without the
necessity of bringing any formal or court action. See EPA,
15a
“Guidelines for Water Pollution Enforcement,” 8 (July 23,
1974). If the effluent limitations in a federally-issued per-
mit prove to be unreasonable or cannot be met for cause
beyond the control of the permittee, the permit may be re-
vised. Id. See also {306(b)(1)(B), 33 U.S.C. {1316(b)(1)
(B).
The EPA has not acted arbitrarily or capriciously in its
consideration of variability or excursions.
4. Conclusion.
The EPA has set the new plant effluent standards for
BOD: at 20 pounds per MSBu as a maximum average daily
value for thirty consecutive days and 60 pounds per MSBu
as the daily maximum. The Clinton Corn plant treatment
facility contains much of the “end of the pipe” technology
proposed by the EPA. During the last seven months of
available operational data, the Clinton plant achieved a
thirty-day average BOD, effluent of 4.5 pounds, utilizing the
calculations of the EPA or 7.5 pounds if the calculations of
the petitioners are used. If these amounts were increased
because of additional waste flow from the wet scrubbers
and when a variability factor of hetween 1.9 and 2.7 is
applied, the results range from 12 to 17 pounds of BOD;
per MSBu utilizing the EPA’s calculations and 17.7 and
25.1 pounds if the calculations of the petitioners are used.
When these final totals are considered in the light of the
problems experienced in the Clinton treatment facility and
the lack of in-plant controls in the Clinton processing plant,
they provide adequate support for the EPA’s proposed
standard of 20 pounds of BOD; per MSBu as a thirty-day
average. We find, on the basis of this record, that the BOD;
standard set by the EPA is neither arbitrary nor capricious
and is in accordance with law.
B. TSS
We turn to a consideration of whether the conclusion of
the EPA that the 10-pound TSS standard can be met is
arbitrary and capricious.”
® TSS is the pollutant measurement of the total amount of suspended
solids, inorganic and organic, in the wastewater.
16a
1. Clinton Corn and Other Corn Wet Milling
Plant Results.
As in the BOD; measurements at the Clinton plant, there
is a disagreement in the pounds per MSBu figure for the
effluent level of TSS. The EPA concludes that a monthly
average of 17.6 pounds for the last eleven-month period and
an average of 16.0 pounds for the last seven months was
achieved. The petitioners conclude that the averages were
34.8 anc 25.6 pounds, respectively.
The EPA argues that data for the months of July, August
and September of 1975 supports the TSS standard of 10
pounds per MSBu. Considering the EPA’s conclusions of
the Clinton data and eliminating one usually high effluent
day, the following effluent levels were achieved:
1975 BOD; (Ibs/MSBu) TSS (Ibs/MSBu )
July 4.6 9.3
August 2.1 8.5
September 1.7 5.2
This data reveals:
(1) that the 10-pound standard would be exceeded in
every month when a variability factor of between 2.2 and
2.6 is applied to these results; and
(2) that the TSS levels are uniformly higher than BOD,
levels even when the treatment is achieving maximum per-
formance levels.
The EPA suggests that this second conclusion indicates
that the BOD, standard could be lowered. We find little
merit to this suggestion. When surface condenser wastes
and variability factors are given appropriate consideration,
the BOD; standard appears to be as low as can be con-
sistently achieved.
In each of the eleven months of data available from
Clinton, the TSS effluent levels have exceeded the cor-
1° This variability factor range is derived from long range data at CPC
—Pekin and American Maize. It encompases the 2.3 TSS variability
factor for the Clinton plant estimated by the petitioners.
17a
responding BOD: levels.'' Specifically, the TSS levels range
from 3.5 to 24.5 pounds higher than BOD; levels. In short,
the TSS standard proposed by the EPA finds no support
from the Clinton plant data. The effluent levels achieved at
other corn wet milling plants, namely CPC—Pekin and
American Maize, is equally unsupportive.
2. Effluent Level Reduction in Other Industries.
Recognizing the lack of support for its proposed TSS
standards from results within the corn wet milling indus-
try, the EPA points to the use of deep bed filtration in other
industries. It argues that these results support the proposed
TSS standards for the corn wet milling industry. In our
judgment, the results from other industries indicate that
deep bed filtration will remove suspended solids but not
with the efficiency or the consistency necessary to satisfy
the proposed TSS standard for this industry.
The studies relating to municipal treatment plants indi-
cate that deep bed filtration will remove an average of 70%
of the susperided solids in the wastewater. However, the
record also establishes that the removal rates range from a
low of 20% to a high.of 95% with no indication of con-
sistency. Moreover, the level of suspended solid influent in
most municipal treatment plants is considerably less than
that found in the corn wet milling industry.
The record indicates that the strength or concentration
of the influent wastewater substantially affects the success
of deep bed filtration. If the wastewater has been effec-
tively pretreated in a biological treatment system, deep bed
filtration will remove a substantial percentage of the re-
maining suspended solids. However, one cannot say that
a properly functioning system will reduce the TSS level
below that of the BOD; level. In the winery industry, for
example, treatment of heavily concentrated wastewaters
similar to those found in the corn wet milling industry
produce TSS levels that exceed the BOD: level by as much
11 This fact is recognized by the Illinois state standard which provides
for 20 mg/1 of BOD, and 25 mg/1 of TSS for corn wet milling plant
effluent.
18a
as 48 mg 1. Moreover, the deep bed filtration system there
appears to remove less than 40% of the suspended solids."*
Data from the brewery and edible oil industries is largely
unuseable because it is set forth in milligrams per liter and
because it is not clear whether deep bed filtration is used
or not in these industries. This data gives some support to
the finding that corn wet milling plants can meet the 1977
existing plant guidelines but little or no support that 1983
or new source standards can be met. Again, TSS levels are
often higher than BOD: levels.
The data from Morton Frozen Foods indicates only that
TSS levels are often higher than BOD; levels and that there
are wide variations in TSS levels between the minimum
and maximum days.
3. Expert Testimony.
The EPA did present testimony from an acknowledged
authority on filtration of wastewaters. Dr. Robert Bauman
stated that he “would expect” a new corn wet milling plant
utilizing complete pretreatment facilities and filtration sys-
tems to be able to meet the proposed new source standards.
However, Dr. Bauman’s report is replete with qualifications
and, standing alone, is insufficient grounds to support this
standard, particularly in light of the inability of any exist-
ing plant or pilot project to demonstrate the efficacy of this
technology to consistently meet the proposed standard.
4. Conclusion.
The decision of the EPA that new corn wet milling plants
can meet a TSS standard of 10 pounds per MSBu is an
arbitrary and capricious one.
There remains the question of what our response to this
inadequacy should be. Ordinarily, we would simply remand
and instruct the EPA to develop a new standard for TSS
12 Again, data from other industries has not been prepared in a man-
ner to make direct comparison with the proposed new standards pos-
sible. Much of the data is in milligrams per liter and in some instances,
the charts presented are unreadable.
19a
and retain jurisdiction to review that new standard in an
accelerated appellate proceeding. But there has been one
remand, and more than eighteen months have been lost in
achieving the national goal of cleansing our water. We,
thus, feel the need to adopt a more flexible approach, one
which will, hopefully, permit a new standard to be imple-
mented forthwith. We are convinced from this record that
a standard of 25 pounds of TSS per MSBu would not be an
arbitrary and capricious one. Results at the Clinton Corn
plant lend support to such a standard.'*
On remand, therefore, the EPA may adopt a new source
standard of a maximum average of daily effluent levels for
thirty consecutive days of 20 pounds of BOD: and 25
pounds of TSS per MSBu and a maximum daily effluent
level of 60 pounds of BOD: and 75 pounds of TSS per MSBu.
We urge it to do so.
The EPA retains the authority, however, to take addi-
tional evidence in support of a lower TSS standard. If it
adopts that course, we retain jurisdiction. We direct that
the administrative process be completed in sixty days. The
only question to be addressed on that limited remand would
be the TSS standard. Issues raised and answered in CPC I
or in this opinion should not be relitigated.
Ill. COSTS.
Section 306(b)(1)(B), 33 U.S.C. §1316(b)(1)(B) states
in part:
In establishing or revising Federal standards of
performance for new sources under this section,
the Administrator shall take into consideration
13In the five months when the treatment plant at Clinton was
operating most effectively, the TSS levels averaged approximately 5
pounds more than the BOD, levels. During these five months, the TSS
level, when multiplied by a variability factor of 2.6, averaged 25 pounds.
Although the seven-month average of 16.0 exceeds 25 pounds, when the
variability factor is considered, the record discloses that shockloads
and malfunction of the filtration equipment at Clinton affected the
TSS levels much more than it did the BOD, levels. There is support
for the conclusion that improvements in the management and opera-
tion of the treatment facility and the filter would enable Clinton to
consistently average 25 pounds of TSS per MSBu.
‘
20a
the cost of achieving such effluent reduction, and
any non-water quality environmental impact and
energy requirements.
In CPC I, we instructed the EPA to reconsider its pro-
jections on the cost of achieving the effluent reduction pro-
posed in its standards. We asked that operating and capital
costs be projected independently and that the cost compu-
tations be based on current economic data. We noted that
costs were of particular importance to this industry because
profit margins are usually low, raw material costs are vola-
tile and competitive substitutes sometimes make it difficult
to pass on increased costs to the consumer. CPC Interna-
tional Inc. v. Train, supra at 1050-1051.
The EPA states that it has responded to the instructions
of this Court. It asserts that its obligation under the Act
is to demonstrate that the costs to be incurred in meeting
the new source standard are reasonable. It asserts that
capital and operating costs meet this standard.
The petitioners assert that the Act requires a “cost-benefit
analysis” and that the EPA failed to make such an analysis;
that the technology proposed by the EPA to meet the new
source standards is insufficient to achieve the effluent
reduction necessary; that the capital and operating costs
for the necessary technology will impose an unreasonable
burden on the industry; and that calculation errors make
the economic analysis completed by the EPA inadequate.
A. A Cost-Benefit Analysis is Not Required; the Appro-
priate Test is One of Reasonableness.
The 1977 existing plant guidelines are to be determined
by the use of the “best practicable control technology cur-
rently available.” (301(b)(1)(A), 33 U.S.C. §1311(b)(1)
(A). The legislative history of the Act indicates that the
term “practicable” is to limit the use of available technology
only where the additional technology necessary to achieve
a marginal level of effluent reduction is wholly out of pro-
portion to the cost realized. A Legislative History of the
Water Pollution Control Act Amendments of 1972, 93rd
Cong., Ist Sess. (Comm. Print 1973), at 170 [hereinafter
a ~ eee ee
a mm
2la
cited as Leg. Hist.|; American Iron and Steel Institute v.
EPA., 526 F.2d 1027, 1051 (3rd Cir. 1975).'"' The 1983
existing plant guidelines, set by the application of the “best
available technology economically achievable,” ‘301(b)
(2)(A), 33 U.S.C. §1311(b)(2)(A), are to be governed by
a standard of reasonableness .;ithout the necessity of a
thorough cost-benefit analysis. Leg. Hist. at 170; Amer.
Meat Institute v. Environ. Protec. Agcy., 526 F.2d 442, 462-
463 (7th Cir. 1975).
The new source standards are to attain the “greatest
degree of effluent reduction” achievable through the use of
the “best available demonstrated control technology.” Sec-
tion 306(a)(1), 33 U.S.C. §1316(a)(1). This standard ex-
ceeds the effluent level reduction of that required in the
1977 existing plant guidelines for the corn wet milling
industry while the proposed 1983 existing plant guidelines
are the same as the new source standards. The legislative
history indicates that Congress felt that new plants could
14 The concurring opinion of Judge Adams sets forth the obligation
of the EPA clearly and succinctly:
Section 304(b)(1)(B) instructs the Administrator to con-
sider “the total cost of application of [the best practicable
control technology currently available] in relation to the efflu-
ent reduction benefits to be achieved from such applica-
tion .. .” when establishing guidelines for the 1977 effluent
limitations. The elements of the total cost of applying the
technology are not identified in the law itself. However, the
legislative history of the Act nay be used to support the notion
that the term “total costs of application” encompasses not only
the expense of erecting pollution control facilities but also the
“external cost of potential unemployment, dislocation, and
rural area development sustained by the community... .”
Having accounted for the total costs of applying the requi-
site technology, the Administrator must consider those costs
in relation to the benefits to be achieved from the application
of the technology. The Act does not mandate an exacting
quantitative comparison in the form of a technical benefit/cost
analysis. Nevertheless, from the remarks of Senator Muskie in
support of the conference bill it appears that, with respect to
the 1977 guidelines, the Act does require the Administrator to
make an analysis sufficient to indicate that “the additional
degree of effluent reduction is [not] wholly out of proportion
to the costs of achieving such marginal level of reduction... .”
American Iron and Steel Institute v. E.P.A., supra at 1075 (emphasis
added, footnotes omitted ).
22a
realize effluent level reductions at a lower cost than existing
sources because of the lower cost of constructing a new
plant in comparison to retrofitting an existing facility and
because technical alternatives may be made available for
new plants which would not be suited for existing plants.
Leg. Hist. at 172 and 797.
There is no language in {306 requiring a cost-benefit
analysis. Rather, the EPA is required only to take costs
under “consideration.” We conclude, therefore, that a cost-
benefit analysis is not required in determining the reason-
ableness of the cost of achieving the new source standards.
Accord, American Iron and Steel Institute v. E.P.A., supra
at 1059. What is required for new source standards is a
thorough study of initial and annual costs and an affirma-
tive conclusion that these costs can be reasonably borne by
the industry.
B. The Technology Proposed by the EPA is Sufficient;
the EPA’s Capital Cost Estimates are Accurate.
The petitioners’ argument that in-plant facilities, in addi-
tion to those proposed by the EPA, are necessary to meet
the new source standards does not have support in this
record. They suggest that additional evaporators costing
$4.2 million must be installed solely for the purpose of
reducing the volume of wastewater and to prevent over-
loading of the treatment facility. The record, however,
supports the EPA’s contention that evaporation is a com-
mon production process used in the industry without regard
to pollution controls. Evaporation is used in most corn wet
milling plants to concentrate the liquid corn syrup into
products which can be readily shipped without the need to
transport excess water. This process is also used to con-
centrate steepwater to recover the solids in the water for
animal feed. Indeed, the EPA model new plant projects an
estimated capital cost of $3 million for evaporation equip-
ment in the production process. The only support for
petitioners’ claim that additional evaporation equipment is
required is their own conclusory statement.
23a
The petitioners’ contention that additional entrainment
separators, costing $634,000, are necessary must also be
rejected. They have failed to support the need for this
technology. Moreover, they argue, in another section of
their brief, that the effectiveness of such separators has not
been documented.
The petitioners also argue that the EPA’s estimate of the
incremental cost of installing surface condensers of
$250,000 is too low. They claim that this cost will be $1
million. They argue that a new 30,000-bushel plant will
require six condensers rather than the three proposed by
the EPA and that the cost of each condenser is twice that
projected by the EPA.
The petitioners base their conclusion that six condensers
are needed on the experience of the CPC—Pekin plant. In
our view, the comparison is not appropriate. The CPC—
Pekin plant has a capacity of at least 60,000 bushels and
a present water flow much larger than the amount pro-
jected for the proposed model plant. There is also no sup-
port for the petitioners’ contention that each surface con-
denser will cost twice the amount projected by the EPA.
We also reject petitioners’ contention that the capital
costs of the treatment facility will significantly exceed those
estimated by the EPA. All parties agree that the basic bio-
logical facility, designed to treat a BOD: load of 400 pounds
per MSBu, would be approximately $3 million.
There is disagreement as to the cost of constructing the
filtration unit. The petitioners’ contention that the cost
would be about $100,000 more than that estimated by the
EPA " has strong support in the record."
15 The EPA’s estimated cost for filtration equipment of $160,000 is
not supported by the record, while the petitioners’ projection of $260,000
is. The petitioners’ estimate is based on a detailed consultant's report
as to the cost of filtration equipment for the treatment plant at CPC—
Pekin which treats a wasteload of 1.0 mgd, the amount projected for the
30,000-bushel model plant.
16 The petitioners’ argument that a “second stage” biological treat-
ment costing $2.1 million is required to ensure that a new plant will
meet the proposed standard based on the Clinton experience was re-
jected earlier. In fact, the only equipment used at Clinton that is not
24a
In summary, the record supports the conclusion of the
EPA that additional in-plant equipment, surface con-
densers, would have a capital cost of $250,000. The record
also supports the conclusion that a basic biological treat-
ment facility capable of handling 400 pounds of BOD; per
MSBu would have a capital cost of $3 million. An addi-
tional capital cost of $260,000 would be realized in pur-
chasing and installing the equipment needed for the filtra-
tion system.'* The record does not support the contentions
of the petitioners that additional equipment is necessary
to meet the proposed new standards.
C. The EPA’s Revised Operating Cost Estimates are Not
Arbitrary or Capricious.
The operating cost estimates include capital recovery
costs and operating and maintenance expense. The EPA
estimates an annual capital recovery cost of $402,000 and
an annual operating expense of $300,000. The petitioners
suggest that annual capital recovery costs will be $1,359,000
and annual operating expense will be $906,000.
The major differences in capital recovery expense re-
lates to petitioners’ contentions that technulogy in addition
to that suggested by the EPA is required and that the
capital cost of some of the equipment is underestimated
by the EPA. We have answered those contentions in an
earlier section of this opinion. On the basis of our earlier
discussions and assuming an annual capital recovery rate
of approximately 12% (a rate agreed to by both parties),
the annual capital recovery costs would be approximately
$414,000.
included in the model treatment plant is a biological-packed tower or
trickling filter. Evidence in this record suggests that such a facility, if
needed, would cost $150,000 and would allow a reduction of the size of
other equipment proposed in the model treatment facility.
17 The petitioners also estimate that $409,000 must be added for
filtration site preparation. This estimate includes a 35% contingency
cost and a 44% related site expense among others. The EPA suggests,
and our review of the record supports, the conclusion that this expense
is encompassed within the $3 million basic treatment facility cost.
25a
The parties agree that the operation and maintenance
expense for the surface condensers will be $40,000. The
EPA projects that similar expenses for the treatment
facility, including filtration, will be $260,000. The peti-
tioners project that these expenses will be $414,000
annually. The EPA’s estimates are based upon the actual
operating expense at the CPC—Corpus Christi plant from
January to May, 1974, while the petitioners’ estimate is
based on data from the CPC—Pekin plant during this same
time period. Both of these plants employed some of the
elements of the EPA’s proposed treatment facility, but
neither utilized a filtration system. Both plants experi-
enced higher operational costs than would be realized at
a new plant because the treatment facilities were added in
a piecemeal fashion and have been subject to numerous
malfunctions. The wastewater flow to the Pekin treatment
facility is 1.0 mgd, the amount proposed for the model
plant, while that at Corpus Christi is less.
While we think petitioners’ estimates to be more accu-
rate, we cannot say that EPA’s estimates are arbitrary and
capricious. We, accordingly, accept EPA’s finding that
annual operating and maintenance will be approximately
$300,000."*
In conclusion, the record supports the projection that
the total operating cost for water pollution control equip-
ment in a new 30,000-bushel corn wet milling plant will
be approximately $714,000, including $414,000 capital
recovery expense and $300,000 for actual operating and
maintenance expense.
D. Despite Calculation Errors by the EPA, the Cost of
Achieving the Effluent Reductions Required by the
New Source Standards is Not Unreasonable.
To determine the economic impact of meeting the new
source standards, the EPA hired a consultant to prepare an
18 Jt should be noted that the waste sludge that is created by the
biological treatment system can be centrifuged and concentrated for
use as animal feed. The Clinton plant presently recovers a portion of
its operating expense from this process.
26a
economic analysis. Utilizing the treatment facility pro-
posed by the EPA and historical cost data made available
by the industry, the consultant estimated that a new 30,000-
bushel plant would realize a return of investment of 17.1%
without controls and 15.8% with the proposed controls.”
He also forecasted a return on sales of 14.1% without con-
trols and 13.4% with controls. He estimated larger returns
on investment and sales for 60,000 and 90,000-bushel
plants. Based on his analysis, the EPA concluded that the
costs ne -- ~~ “reasonable” and set forth the proposed
new standards for comment interested parties
quired by law. - oy res
More than thirty days after the formal comment period
expired, a representative of the corn wet milling industry
informed the EPA that the consultant had erred in deter-
mining revenue utilizing a dry basis corn syrup price with
an estimation of the amount of product produced on a
liquid basis. The correct calculation requires a liquid corn
syrup price. The EPA’s consultant, after review, con-
ceded that he had erred. He admitted this error was sub-
stantial and suggested that estimated revenues should be
reduced by as much as 20% and after-tax income by as
much as 50% ”*.
This error has a major impact on the earlier projections.
A return on investment with this revision is now estimated
to be 6.9% without controls and about 5.8% with controls.
The return on sales with this revision is now calculated
to be 6.6% without and about 5.7% with controls.”!
Despite this reduction of the estimated economic via-
bility of a new corn wet milling plant with or without pro-
P 19 All conclusions by the consultant are expressed in after-tax income
gures.
20 An error of this magnitude reflects either a lack of com
petence or
diligence by the consultant and the EPA. Part of the blame must be
shared, however, by the industry for its procrastination in making the
original data available in a logical form and in its tardiness in com-
menting upon the consultant’s report.
21 An increase in the costs of control by 20% would further decrease
the return on investment by .3% ; an increase in cost of controls by 20%
would further decrease the return on sales by .1%.
27a
posed controls, the consultant concluded that all three
sized plants remain “economically viable in relation to
general food processing industry standards of perform-
ance.” Neither the consultant nor the EPA elaborated upon
this conclusion.
The petitioners have not aided the Court in this matter.
After raising the calculation error, they do not specifically
challenge, either in their briefs or at oral argument, the
conclusion of viability by the EPA and its consultant. They
state only that:
{a]ny further sensitivity adjustment to reflect
lower revenues, higher waste treatment plant
costs, or higher costs of capital, could reduce the
net present value to the point at which new corn
wet milling plants were not economically viable.
The only implication that can be drawn from this failure is
that the rate of 6.9% on invested capital is adequate, a
conclusion that we would find hard to accept or that the
actual rate of return might be higher than that and it was
better to let sleeping dogs lie.** No argument is made that
the relatively minor sensitivity adjustment which we have
made with respect to additional filtration capital cost of
$100,000 is sufficient to affect the economic viability of a
new plant.
Moreover, no argument is made that new plants without
controls are economically viable with an estimated after-
tax return on invested capital of 6.9% but are not viable
if the additional cost of controls reduces the return on in-
vested capital to approximately 5.7%.
Based on a careful review of a generally unsatisfactory
record, we reluctantly conclude that the EPA has not
abused its discretion or acted arbitrarily in asceriaining
that the cost of achieving the proposed effluent level reduc-
tion for new sources in this industry is reasonable.
22 There is evidence in the record that five new corn wet milling
plants are presently being constructed. These new plants will increase
the existing number by 30%.
?
i
28a
Vv. SUMMARY.
We hold that the new source standard of 20 pounds of
BOD; per MSBu as a maximum average of daily effluent
values for a thirty consecutive day period set forth by the
EPA is not arbitrary or capricious.
We hold that the new source standard of 10 pounds of
TSS per MSBu as a maximum average of daily effluent
values for a thirty consecutive day period set forth by the
EPA is arbitrary and capricious.
We hold that neither capital costs nor capital recovery
and operating costs have been shown to be arbitrary and
capricious.
We remand to the EPA with directions to it to revise the
TSS standard to 25 pounds per MSBu or to compile addi-
tional evidence to support a lower standard. If the EPA
decides to present a lower TSS standard, we retain juris-
diction and direct that the administrative process be com-
pleted within sixty days The only question to be addressed
on that limited remand would be the TSS standard. Issues
raised and answered in CPC I, or in this opinion, should
not be raised.
Costs shall be divided equally among the parties.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS,
EIGHTH CIRCUIT
29a
[JUDGMENT]
ORDER
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 74-1448
CPC INTERNATIONAL, INC., and
CORN REFINERS ASSOCIATION, INC.,
Petitioners,
vs.
RUSSELL E. TRAIN, as Administrator,
Environmental Protection Agency and
JOHN QUARLES, as Deputy Administrator,
Environmental Protection Agency,
Respondents.
FILED AUG. 18, 1976
3 September Term, 1975
ROBERT C. TUCKER, CLERK
Petition for Review of Action
of the Administrator of the
Environmental Protection Agency
This cause came on to be heard on petition for review of
action of the Administrator of the Environmental Protec-
tion Agency, appendix and briefs of the respective parties
and was argued by counsel.
On Consideration Whereof, it is now here ordered and
adjudged by this Court that this cause be and is hereby
remanded to the said Administrator of the Environmental
Protection Agency for proceedings consistent with the
opinion of this Court this day filed herein.
August 18, 1976
Order entered in accordance with the opinion:
RosBert C. TUCKER
Clerk, U.S. Court of Appeals, 8th Circuit.
lb
APPENDIX B
The pertinent provisions of the Federal Water Pollu-
tion Control Act, as amended, 33 U.S.C. §§ 1251 et seq.,
are as follows:
$1316 [306]. National standards of performance—
Definitions
(a) For purposes of this section:
(1) The term “standard of performance” means a
standard for the control of the discharge of pollutants
which reflects the greatest degree of effluent reduction
which the Administrator determines to be achievable
through application of the best available demonstrated
control technology, processes, operating methods, or other
alternatives, including, where practicable, a standard per-
mitting no discharge of pollutants.
(2) The term “new source” means any source, the con-
struction of which is commenced after the publication of
proposed regulations prescribing a standard of perform-
ance under this section which will be applicable to such
source, if such standard is thereafter promulgated in
accordance with this section.
(3) The term “source” means any building, structure,
facility, or installation from which there is or may be the
discharge of pollutants.
(4) The term “owner or operator” means any person
who owns, leases, operates, controls, or supervises a
source.
(5) The term “construction” means any placement,
assembly, or installation of facilities or equipment (in-
cluding contractual obligations to purchase such facilities
or equipment ) at the premises where such equipment will
be used, including preparation work at such premises.
Categories of sources; Federal standards of performance
for new sources
(b) (1) (A) The Administrator shall, within ninety days
after October 18, 1972, publish (and from time to time
2b
thereafter shall revise ) a list of categories of sources, which
shall, at the minimum, include:
pulp and paper mills;
paperboard, builders’ paper and board mills;
meat product and rendering processing;
dairy product processing;
grain mills;
canned and preserved fruits and vegetable processing;
canned and preserved seafood processing;
sugar processing;
textile mills;
cement manufacturing;
feedlots;
electroplating; ;
organic chemicals manufacturing;
inorganic chemicals manufacturing; :
plastic and synthetic materials manufacturing;
soap and detergent manufacturing;
fertilizer manufacturing;
troleum refining;
iron and steel manufacturing;
nonferrous metals manufacturing;
phosphate manufacturing;
steam electric powerplants;
ferroalloy manufacturing;
leather tanning and finishing; —
glass and asbestos manufacturing;
rubber processing; and
timber products processing.
(B) As soon as practicable, but in no case more than one
year, after a category of sources is included in a list under
subparagraph (A) of this paragraph, the Administrator
shall propose and publish regulations establishing Federal
standards of performance for new sources within such
category. The Administrator shall afford interested per-
sons an opportunity for written comment on such proposed
regulations. After considering such comments, he shall
promulgate, within one hundred and twenty days after
publication of such proposed regulations, such standards
with such adjustments as he deems appropriate. The Ad-
ministrator shall, from time to time, as technology and
alternatives change, revise such standards following the
procedure required by this subsection for promulgation of
3b
such standards. Standards of performance, or revisions
thereof, shall become effective upon promulgation. In
establishing or revising Federal standards of performance
for new sources under this section, the Administrator shall
take into consideration the cost of achieving effluent re-
duction, and any non-water quality environmental impact
and energy requirements.
(2) The Administrator may distinguish among classes,
types, and sizes within categories of new sources for the
purpose of establishing such standards and shall consider
the type of process employed (including whether batch
or continuous ).
(3) The provisions of this section shall apply to any
new source owned or operated by the United States.
State enforcement of standards of performance
(c) Each State may develop and submit to the Admin-
istrator a procedure under State law for applying and
enforcing standards of performance for new sources lo-
cated in such State. If the Administrator finds that the
procedure and the law of any State require the application
and enforcement of standards of performance to at least
the same extent as required by this section, such State is
authorized to apply and enforce such standards of per-
formance (except with respect to new sources owned or
operated by the United States).
Protection from more stringent standards
(d) Notwithstanding any other provision of this chap-
ter, any point source the construction of which is com-
menced after October 18, 1972, and which is so constructed
as to meet all applicable standards of performance shall
not be subject to any more stringent standard of perform-
ance during a ten-year period beginning on the date of
completion of such construction or during the period of
depreciation or amortization of such facility for the pur-
poses of section 167 or 169 (or both) of Title 26, whichever
period ends first.
4b
Illegality of operation of new sources in violation of
applicable standards of performance
(e) After the effective date of standards of performance
promulgated under this section, it shall be unlawful for
any owner or operator of any new source to operate such
source in violation of any standard of performance ap-
plicable to such source.
x x *
.
§ 1342 [402]. National pollutant discharge elimina-
tion system—Permits for discharge of pollu-
tants
(a) (1) Except as provided in sections 1328 and 1344 of
this title, the Administrator may, after opportunity for
public hearing, issue a permit for the discharge of any
pollutant, or combination of pollutants, notwithstanding
section 1311(a) of this title, upon condition that such dis-
charge will meet either all applicable requirements under
sections 1311, 1312, 1316, 1317, 1318, and 1343 of this
title, or prior to the taking of necessary implementing ac-
tions relating to all such requirements, such conditions as
the Administrator determines are necessary to carry out
the provisions of this chapter.
(2) The Administrator shall prescribe conditions for
such permits to assure compliance with the requirements
of paragraph (1) of this subsection, including conditions
on data and information collection, reporting, and such
other requirements as he deems appropriate.
(3) The permit program of the Administrator under
paragraph (1) of this subsection, and permits issued there-
under, shall be subject to the same terms, conditions, and
requirements as apply to a State permit program and per-
mits issued thereunder under subsection (b) of this section.
(4) All permits for discharges into the navigable waters
issued pursuant to section 407 of this title, shall be deemed
to be permits issued under this title, and permits issued
under this title shall be deemed to be permits issued under
section 407 of this title, and shall continue in force and
5b
effect for their term unless revoked, modified, or Luspended
in accordance with the provisions of this chapter.
(5) No permit for a discharge into the navigable waters
shall be issued under section 407 of this title after Octo-
ber 18, 1972. Each application for a permit under sec-
tion 407 of this title, pending on October 18, 1972, shall be
deemed to be an application for a permit under this section.
The Administrator shall authorize a State, which he deter-
mines has the capability of administering a permit pro-
gram which will carry out the objective of this chapter, to
issue permits for discharges into the navigable waters
within the jurisdiction of such State. The Administrator
may exercise the authority granted him by the preceding
sentence only during the period which begins on October
18, 1972, and ends either on the ninetieth day after the
date of the first promulgation of guidelines required by
section 1314(h) (2) of this title, or the date of approval by
the Administrator of a permit program for such State
under subsection (b) of this section, whichever date first
occurs, and no such authorization to a State shall extend
beyond the last day of such period. Each such permit shall
be subject to such conditions as the Administrator deter-
mines are necessary to carry out the provisions of this
chapter. No such permit shall issue if the Administrator
objects to such issuance.
State permit programs
(b) At any time after the promulgation of the guidelines
required by subsection (h) (2) of section 1314 of this title,
the Governor of each State desiring to administer its own
permit program for discharges into navigable waters
within its jurisdiction may submit to the Administrator a
full and complete description of the program it proposes to
establish and administer under State law or under an
interstate compact. In addition, such State shall submit a
statement from the attorney general (or the attorney for
those State water pollution control agencies which have
independent legal counsel ), or from the chief legal officer
in the case of an interstate agency, that the laws of such
6b
State, or the interstate compact, as the case may be, pro-
vide adequate authority to carry out the described program.
The Administrator shall approve each such submitted pro-
gram unless he determines that adequate authority does
not exist:
(1) To issue permits which—
(A) apply, and insure compliance with, any ap-
plicable requirements of sections 1311, 1312, 1316,
1317, and 1343 of this title;
(B) are for fixed terms not exceeding five years;
and
(C) can be terminated or modified for cause in-
cluding, but not limited to, the following:
(i) violation of any condition of the permit;
(ii) obtaining a permit by misrepresentation,
or failure to disclose fully all relevant facts;
(iii) change in any condition that requires
either a temporary or permanent reduction or
elimination of the permitted discharge;
(D) control the disposal of pollutants into wells;
(2) (A) To issue permits which apply, and insure com-
pliance with, all applicable requirements of section 1318 of
this title, or
(B) To inspect, monitor, enter, and require reports to at
least the same extent as required in section 1318 of this
title;
(3) To insure that the public, and any other State the
waters of which may be affected, receive notice of each
application for a permit and to provide an opportunity for
public hearing before a ruling on each such application;
(4) To insure that the Administrator receives notice of
each application (including a copy thereof) for a permit;
(5) To insure that any State (other than the permitting
State), whose waters may be affected by the issuance of a
7b
permit may submit written recommendations to the per-
mitting Siate (and the Administrator) with respect to any
permit application and, if any part of such written rec-
ommendations are not accepted by the permitting State,
that the permitting State will notify such affected State
(and the Administrator) in writing of its failure to so
accept such recommendations together with its reasons for
so doing;
(6) To insure that no permit will be issued if, in the
judgment of the Secretary of the Army acting through the
Chief of Engineers, after consultation with the Secretary
of the department in which the Coast Guard is operating,
anchorage and navigation of any of the navigable waters
would be substantially impaired thereby;
(7) To abate violations of the permit or the permit pro-
gram, including civil and criminal penalties and other
ways and means of enforcement;
(8) To insure that any permit for a discharge from a
publicly owned treatment works includes conditions to
require adequate notice to the permitting agency of (A)
new introductions into such works of pollutants from any
source which would be a new source as defined in section
1316 of this title if such source were discharging pollutants,
(B) new introductions of pollutants into such works from
a source which would be subject to section 1311 of this title
if it were discharging such pollutants, or (C) a substantial
change in volume or character of pollutants being intro-
duced into such works by a source introducing pollutants
into such works at the time of issuance of the permit. Such
notice shall include information on the quality and quan-
tity of effluent to be introduced into such treatment works
and any anticipated impact of such change in the quantity
or quality of effluent to be discharged from such publicly
owned treatment works; and
(9) To insure that any industrial user of any publicly
owned treatment works will comply with sections 1284(b),
1317, and 1318 of this title.
8b
Suspension of federal program upon submission of State
program; withdrawal of approval of State program
(c) (1) Not later than ninety days after the date on
which a State has submitted a program (or revision thereof)
pursuant to subsection (b) of this section, the Administra-
tor shall suspend the issuance of permits under subsection
(a) of this section as to those navigable waters subject to
such program unless he determines that the State permit
program does not meet the requirements of subsection (b)
of this section or does not conform to the guidelines issued
under section 1314(h) (2) of this title. If the Administrator
so determines, he shall notify the State of any revisions or
modifications necessary to conform to such requirements
or guidelines.
(2) Any State permit program under this section shall
at all times be in accordance with this section and guide-
lines promulgated pursuant to section 1314(h) (2) of this
title.
(3) Whenever the Administrator determines after pub-
lic hearing that a State is not administering a program
approved under this section in accordance with require-
ments of this section, he shall so notify the State and, if
appropriate corrective action is not taken within a reason-
able time, not to exceed ninety days, the Administrator
shall withdraw approval of such program. The Adminis-
trator shall not withdraw approval of any such program
unless he shall first have notified the State, and made
public, in writing, the reasons for such withdrawal.
Notification of Administrator
(d) (1) Each State shall transmit to the Administrator
a copy of each permit application received by such State
and provide notice to the Administrator of every action
related to the consideration of such permit application,
including each permit proposed to be issued by such State.
(2) No permit shall issue (A) if the Administrator
within ninety days of the date of his notification under
9b
subsection (b) (5) of this section objects in writing to the
issuance of such permit, or (B ) if the Administrator within
ninety days of the date of transmittal of the proposed per-
mit by the State objects in writing to the issuance of such
permit as being outside the guidelines and requirements of
this chapter.
(3) The Administrator may, as to any permit applica-
. fon, waive paragraph (2) of this subsection.
Waiver of notification requirement
(e) In accordance with guidelines promulgated pursu-
ant to subsection (h) (2) of section 1314 of this title, the
Administrator is authorized to waive the requirements of
subsection (d) of this section at the time he approves a
program pursuant to subsection (b) of this section for any
category (including any class, type, or size within such
category ) of point sources within the State submitting such
program.
Point source categories
(f) The Administrator shall promulgate regulations
establishing categories of point sources which he deter-
mines shall not be subject to the requirements of sub-
section (d) of this section in any State with a program
approved pursuant to subsection (b) of this section. The
Administrator may distinguish among classes, types, and
sizes within any category of point sources.
Other regulations for safe transportation, handling,
carriage, storage, and stowage of pollutants
(g) Any permit issued under this section for the dis-
charge of pollutants into the navigable waters from a ves-
sel or other floating craft shall be subject to any applicable
regulations promulgated by the Secretary of the depart-
ment in which the Coast Guard is operating, establishing
specifications for safe transportation, handling, carriage,
storage, and stowage of pollutants.
10b
Violation of permit conditions; restriction or prohibition
upon introduction of pollutant by source not previously
utilizing treatment works
(h) In the event any condition of a permit for dis-
charges from a treatment works (as defined in section 1292
of this title) which is publicly owned is violated, a State
with a program approved under subsection (b, of this
section or the Administrator, where no State program is
approved, may proceed in a court of competent jurisdiction
to restrict or prohibit the introduction of any pollutant into
such treatment works by a source not utilizing such treat-
ment works prior to the finding that such condition was
violated.
Federal enforcement not limited
(i) Nothing in this section shall be construed to limit
the authority of the Administrator to take action pursuant
to section 1319 of this title.
Public information
(j) A copy of each permit application and each permit
issued under this section shall be available to the public.
Such permit application or permit, or portion thereof, shall
further be available on request for the purposes of repre.
duction.
Compliance with permits
(k) Compliance with a permit issued pursuant to this
section shall be deemed compliance, for purposes of sec-
tions 1319 and 1365 of this title, with sections 1311, 1312,
1316, 1317, and 1343 of this title, except any standard
imposed under section 1317 of this title for a toxic pollu-
tant injurious to human health. Until December 31, 1974,
in any case where a permit for discharge has been applied
for pursuant to this section, but final administrative dis-
position of such application has not been made, such dis-
charge shall not be a violation of (1) section 1311, 1316,
or 1342 of this title, or (2) section 407 of this title, unless
1lb
the Administrator or other plaintiff proves that final ad-
ministrative disposition of such application has not been
made because of the failure of the applicant to furnish
information reasonably required or requested in order to
process the application. For the 180-day period beginning
on October 18, 1972, in the case of any point source dis-
charging any pollutant or combination of pollutants imme-
diately prior to such date of enactment which source is not
subject to section 407 of this title, the discharge by such
source shall not be a violation of this chapter if such a
source applies for a permit for discharge pursuant to this
section within such 180-day period.
Ic
APPENDIX C
Regulations Involved
“New Source STANDARDS” FOR THE CORN WET MILLING
SUBCATEGORY OF THE GRAIN MILLS POINT SOURCE
CATEGORY.
The rulemaking order promulgating the foregoing regu-
lations is found at 39 Fed. Reg. 10512 (March 20, 1974).
A portion of the preamble of the order and the text of the
standards is as follows:
Title 40—Protection of the Environment
CHAPTER I—ENVIRONMENTAL
PROTECTION AGENCY
Subchapter N—Effluent Guidelines and Standards
PART 406—GRAIN MILLS POINT SOURCE
CATEGORY
On December 4, 1973, notice was published in the FEp-
ERAL REGISTER (38 FR 33438), that the Environmental
Protection Agency (EPA or Agency ) was proposing effluent
limitations guidelines for existing sources and standards
of performance and pretreatment standards for new
sources within the corn wet milling, corn dry milling, nor-
mal wheat flour milling, bulgur wheat flour milling, normal
rice milling, and parboiled rice processing subcategories of
the grain mills category of point sources. ;
The purpose of this notice is to establish final effluent
limitations guidelines for existing sources and standards of
performance and pretreatment standards for new sources
in the grain mills category of point sources by amending
40 CFR Chapter I, Subchapter N, to add a new Part 406.
This final rulemaking is promulgated pursuant to sec-
tions 301, 304 (b) and (c), 306 (b) and (c) and 307 (c)
of the Federal Water Pollution Control Act, as amended,
(the Act ); 33 U.S.C. 1251, 1311, 1314 (b) and (c), 1316 (b)
and (c) and 1317 (c); 86 Stat. 816 et seq.; Pub. L. 92-500.
Regulations regarding cooling water intake structures for
2c
all categories of point sources under section 316(b) of the
Act will be promulgated in 40 CFR Part 402.
The legal basis, methodology and factual conclusions
which support promulgation of this regulation were set
forth in substantial detail in the notice of public review
procedures published August 6, 1973 (38 FR 21202), and
in the notice of proposed rulemaking for the corn wet
milling, corn dry milling, normal wheat flour milling,
bulgur wheat flour milling, normal rice milling, and par-
boiled rice processing subcategories. In addition, the regu-
lations as proposed were supported by two other docu-
ments: (1) The document entitled “Development Docu-
ment for Proposed Effluent Limitations Guidelines and New
Source Performance Standards for the Grain Processing
Segment of the Grain Mills Point Source Category” (De-
cember 1973) and (2) the document entitled “Economic
Analysis of Proposed Effluent Guidelines, Grain Milling
Industry” (August, 1973). Both of these documents were
made available to the public and circulated to interested
persons at approximately the time of publication of the
notice of proposed rulemaking.
* + *
(f) Final rulemaking. In consideration of the foregoing,
40 CFR Chapter I, subchapter N is hereby amended by
adding a new Part 406, Grain Mills Point Source Category,
to read as set forth below. This final regulation is pro-
mulgated as set forth below and shall be effective May 20,
1974.
Dated: March 12, 1974.
JOHN QUARLEs,
Acting Administrator.
Subpart A—Corn Wet Milling Subcategory
Sec.
406.10 Applicability; description of the corn wet milling
subcategory.
406.11 Specialized definitions.
3c
406.12 Effluent limitations guidelines representing the
degree of effluent reduction attainable by the
application of the best practicable control tech-
nology currently available.
406.13 Effluent limitations guidelines representing the de-
gree of effluent reduction attainable by the appli-
cation of the best available technology eco-
nomically achievable.
406.14 [Reserved]
406.15 Standards of performance for new sources.
406.16 Pretreatment standards for new sources.
* * *
§ 406.15 Standards of performance for new sources.
The following standards of performance establish the
quantity or quality of pollutants or pollutant properties,
controlled by this section, which may be discharged by a
new source subject to the provisions of this subpart:
Effluent limitations
Average of daily
values for 30
consecutive
Effluent Maximum for days shall not
characteristic any 1 day exceed—
Metric units (kilograms per 1,000 kg
of corn )
EES 1.08 0.36
a 54 18
eh Within the range 6.0 to 9.0.
English units (pounds per 1,000
stdbu of corn )
BOD5 60 20
, Nat ed aetna asa 30 10
iol ietdientiapeainmingocss Within the range 6.0 to 9.0.
* * *
ld
APPENDIX D
The Administrator's “Decision Not To Revise New
Sources Performance Standards” was published in the
Federal Register at 40 Fed. Reg. 52016 (November 7, 1975).
A portion of the text follows:
PART 406—GRAIN MILLS POINT
SOURCE CATEGORY
Decision Not To Revise New Sources
Performance Standards
On August 25, 1975, notice was published in the FEDERAL
REGISTER (39 FR 10512), announcing the availability of
documents relating to and to request comments on the
tentative decision of the Environmental Protection Agency
(EPA or Agency) not to revise standards of performate
for new sources in the Corn Wet Milling subcategory of the
Grain Mills Point Source Category.
The purpose of this further notice is to announce EPA’s
decision not to revise standards of performance for new
sources in the Corn Wet Milling subcategory of the Grain
Mills Point Source Category. On May 5, 1975, the U.S.
Court of Appeals for the Eighth Circuit remanded to EPA
the new source performance standards and the pretreat-
ment standards for new sources for the Corn Wet Milling
subcategory of the Grain Mills Point Source Category (40
CFR 406.15 and 406.16) promulgated by EPA under sec-
tion 306 and 307 of the Federal Water Pollution Control Act
Amendments of 1972. EPA has reviewed its new source
performance standards for these point sources pursuant to
the remand and has concluded that these standards should
not be revised.
* * *
Interested persons were invited to participate in this
evaluation by submitting written comments in triplicate. .. .
The EPA has considered carefully all of the comments
received and a discussion of these comments with the
Agency’s response thereto follows.
2d
(a) Summary of Comments. The following groups re-
sponded to the request for comments which was in the
notice of availability of supplemental documents: Corn
Products: CPC International, Inc., National Canners Asso-
ciation, Grain Processing Corporation, Anheuser-Busch,
Inc., CPC International, Inc., and The Hubinger Company.
Each of the comments received was carefully reviewed and
analyzed. The following is a summary of the significant
comments and EPA’s response to these comments.
* * *
(3) A common comment was made that the concept of
product mix as affecting waste load and technology was
not properly considered in formulation of the new source
performance standards.
EPA has acknowledged, and continues to acknowled¢e,
that product mix variations may indeed have some influ-
ence on raw waste characteristics of corn wet milling
wastes. However, no reliable and meaningful relationship
between product mix and waste flow characteristics has
been demonstrated to date either by EPA or industry.
EPA’s evaluation of industry-supplied data utilizing stand-
ard statistical approaches indicated no directly correlatable
relationships between raw waste load and other individual
factors such as plant age, plant size, product mix, etc.
Industry representatives have commented on several
instances that new plants to be constructed will likely con-
vert a large part of their grind into syrup, and this conclu-
sion is amply verified by present trends within the industry.
In any case, the new source performance standards would
be equally as applicable irrespective of product emphasis.
Waste load variation has been determined as not being
attributable directly to any one factor or condition alone in
a reliable and predictable manner. Obviously, any influ-
ence on waste load for this industry caused by various fac-
tors to any extent that it may exist is interrelated in a very
complex and presently undefinable manner.
The industry has yet to provide data or information to
responsibly disprove the considered conclusions of EPA.
3d
More importantly, evidence supports that any variations
in product mix as affecting raw waste load do not preclude
compliance of existing or new sources with present effluent
guidelines and new source performance standards. Manu-
facturing processes employed in the corn wet milling indus-
try are not separate and unique from other processes em-
ployed within the food processing industry as a whole.
Neither is.the inherent waste contribution variability and
any treatment difficulties experienced with the corn wet
milling industry a unique experience as compared to other
industries. Many other related industries (as cited in the
Supplemental Development Document) that produce a
variety of different products have demonstrated the capa-
bility to successfully employ biological treatment and other
treatment methods to accomplish high levels of pollutant
reduction.
-_ & *
(6) Several commenters indicate confusion as to the
interpretation and intent of EPA’s effluent variability analy-
sis of historical treatment data contained in the Supple-
mental Development Document and supportive record in
relation to its application to the new source performance
standard.
Effluent variability as reflected in the new source per-
formance standards are based solely on treatment technol-
ogy and variations anticipated for a well-designed, well-
operated treatment system as experienced within operating
biological treatment systems on an overall multi-industry
basis. EPA has never asserted that statistically derived
variability factors are a desirable or even appropriate
means for determining effluent guidelines and new source
performance standards for the corn wet milling industry.
Factors were calculated and are presented in the Supple-
mental Development Document only as an illustration that
the new source performance standard is reasonable and
attainable in relation to existing overall industry practice.
There obviously is no statistical data available with respect
to treatment systems for new sources. In this respect,
variability data for existing sources would not be entirely
4d
representative of and comparable with effluent variability
to be expected for new sources inasmuch as no present
corn wet milling plant is now completely “exemplary” in
terms of the established new source performance standard.
Upsets in most instances at existing plants (e.g. Clinton
Corn ) may be attributed to specific events or occurrences of
poor operation (e.g. spills) rather than product variability
changes or other production-related factors. It should be
emphasized that no existing plants incorporate full in-plant
controls or equalization that materially affect raw waste
load variability and sustained biological treatment per-
formance.
* a s
(c) Basis for decision not to revise new source perform-
ance standard. On the basis of the original and additional
investigative work performed, EPA finds no justification
for revision of the New Source Performance Standard for
the Corn Wet Milling Subcategory of the Grain Mills
Category on either technological or economic grounds.
Therefore, EPA has determined not to revise the standard,
and therefore, the New Source Performance Standard as
promulgated by the Agency for the Grain Mills Point
Source Category on March 20, 1974 (39 FR 10512) shall
remain applicable.
Dated: October 30, 1975.
RUSSELL E. TRAIN,
Administrator.
le
APPENDIX E
The Agency’s recent amendment to its new source
standards for the corn wet milling industry is found at
41 Fed. Reg. 50823 (November 18, 1976). The text of the
amendment and of the attendant rulemaking order is as
follows:
PART 406—GRAIN MILLS POINT SOURCE
CATEGORY
Subpart A—Corn Wet Milling Subcategory
NEw SourRCcE PERFORMANCE STANDARDS
Notice is hereby given that the Environmental Protec-
tion Agency (EPA) is amending 40 CFR 406.15, the new
source performance standards for the corn wet milling
subcategory (Subpart A) of the Grain Mills Point Source
Category, 40 CFR Part 406.
40 CFR Part 406 was promulgated on March 20, 1974,
(39 FR 10515) pursuant to section 306(b) of the Federal
Water Pollution Control Act as amended, 33 U.S.C.
1316(b), 86 Stat. 816 et seq., Pub. L. 92-500.
The change being made is to the limitation of the dis-
charge of total suspended solids (TSS) found in 4 406.15.
This amendment of the new source standards follows
the decision issued by the Court of Appeals for the Eighth
Circuit on August 18, 1976, in the case of CPC International
Inc., et al. v. Russell E. Train, et al., No. 74-1448. In the
opinion, the Eighth Circuit affirmed EPA’s new source per-
formance standards in all respects save one. The Court,
after reviewing available operating data from the biological
and multimedia filter system at the Clinton Corn Process-
ing Company in Clinton, Iowa, among other sources of
information, determined that although BOD; could be re-
moved to the 20 pounds per day level set by EPA, total
suspended solids (TSS) could not be removed to attain
a more stringent level of 10 pounds per day. The Court
made its own assessment of the data and determined that
2e
the appropriate limit should be 25 pounds per day of total
suspended solids on a monthly average. That assessment
is set forth below:
On remand therefore, the EPA may adopt a new
source standard of a maximum average of daily
effluent levels for thirty consecutive - sin of 20
pounds of BOD; and 25 pounds of TSS per MSBu
and a maximum daily effluent level of 60 pounds
of BOD; and 75 pounds of TSS per MSBu. We
urge it to do so.
We remand to the EPA with directions to it to
revise the TSS standard to 25 pounds per MSBu
or to compile additional evidence to support a
~ lower standard. If the EPA decides to present a
lower TSS standard we retain jurisdiction and
direct the administrative process be completed in
sixty days.
The issue of the appropriate suspended solids standards
has been subjected to protracted controversy and litigation.
Rather than gather additional evidence which might sup-
port a more stringent standard than the 25 pounds standard
and thereby protract the rulemaking even more, the Agency
has determined that the 25 pounds supported by the present
record is an appropriate standard. It is theretore in the
public interest to proceed with this alternative indicated
in the 8th Circuit Court’s opinion.
In view of the sixty day period for action set by the
Court and in view of the fact that no additional data are
being assessed as the basis for this amendment, the Agency
is dispensing with a notice of proposed rulemaking prior to
this amendment.
In accordance with the above opinion, the new source
standards for the corn wet milling subcategory of the grain
mills point source category (40 CFR 406.15) (Subpart A),
are amended as set forth below and are effective on Novem-
ber 18, 1976.
Dated: November 12, 1976.
JOHN QUARLES,
Acting Administrator.
3e
40 CFR Part 406 is amended by revisirig Subpart A,
§ 406.15 to read as follows:
§ 406.15 Standards of performance for new sources.
The following standards of performance establish the
quantity or quality of pollutants or pollutant properties,
controlled by this section, which may be discharged by a
new source subject to the provisions of this subpart:
Effluent limitations (Metric units—
kilograms per 1,000 kg of corn )
Average of daily
values for 30
Effluent Maximum for consecutive days
characteristic any 1 day shall not exceed
BOD;_____. 1.08 0.36
Si aiinteddinausthnithe. 1.35 45
* ab Ete, (1) @)
(English pt pon per 1,000
stdbu of corn )
BOD; __. fe 60 20
| Re cern of 75 25
~ Seeee a) (2)
* Within the range of 6.0 to 9.0.
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