Amicus Brief — Alabama Power Co. v. Sierra Club

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia

MOTION FOR LEAVE TO FILE A BRIEF AMICUS

CURIAE OF THE NATIONAL COAL ASSOCIATION AND

BRIEF OF AMICUS CURIAE NATIONAL COAL

ASSOCIATION IN SUPPORT OF PETITIONERS

se PE tg

€ i, Mi

pr

No, 83-1429

In THE

Supreme Court of the Bnited States

Octoser Term, 1983

ALABAMA Power Co., ef ai.

Petitioners,

Vv.

Srerra Cus, ef al,

Respondents.

On Petition for Writ of Certiorari

to the United States Court of Appeals

for the District of Columbia

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI

The National Coal Association (NCA) respectfully moves,

pursuant to Rule 36 of the Rules of the Supreme Court of the

United States, for leave to file the attached brief amicus curiae

in support of the Petition for Writ of Certiorari of Alabama

Power Company, ef al, in the above-captioned case. This

motion has been made necessary by the refusal of Respondents

Sierra Club, NRDC, and the states that participated below on

their behalf to consent to the filing of this brief.

NCA is a trade association whose members own or operate

more than 50 percent of the nation's coal producing capacity.

Operation of coal mines and associated facilities owned by

NCA members results in emissions of several regulated pollut-

*

2

ants to the atmosphere. In addition, NCA members supply coal

to many industries, including the electric utility industry.

The D.C. Circuit’s opinion directly and adversely affects

the interests of NCA members. First, the opinion orders EPA

to develop a definition of good engineering practice (“GEP”’)

stack height different from the historical definition that has

been used by EPA and regulated industry since the early 1970s.

This decision will limit industrial growth in many areas of the

country, especially those with mountainous or hilly terrain,

where many NCA member companies are located. As a result,

the activities of NCA members will be directly affected by this

decision.

Second, the decision will require electric utilities to modify

or even breach long-term coal supply contracts to meet new,

more stringent emission limitations which will result from the

lower court’s requirement that such sources conduct atmo-

spheric modeling based upon stringent, false stack height

assumptions. This will disrupt coal markets and could gener-

ally discourage the use of coal as a source of energy. The

operations of NCA member companies will be adversely

affected through these constraints placed upon the burning of

coal by electric utilities.

A key objective of the 1977 Clean Air Act Amendments is

“to encourage and facilitate the increased use of coal... .”

H.R. Rep. No. 294, 95th Cong., Ist Sess. 192 (1977). The

impacts of the lower court’s decision on coal markets and on the

operations of NCA member companies, and the inconsistency

of the lower court’s decision with the congressional objectives

concerning the use of this nation’s coal reserves, will not be

adequately addressed by the parties to the case.

3

NCA'’s attached brief provides more detail concerning its

interest in the disposition of this case as well as arguments in

support of Petitioners’ Writ of Certiorari. Accordingly, NCA

respectfully moves for leave to file this brief amicus curiae.

May 30, 1984

Respectfully submitted,

Ropert F. STAUFFER

(Counsel of Record )

General Counsel

National Coal Association

1130 17th Street, N.W.

9th Floor

Washington, D.C. 20006

(202) 463-2625

Counsel for Amicus Curiae

National Coal Association

TABLE OF CONTENTS

Pogo

TABLE OF AUTHORITIES .......ccccccccssccsssscssssccesessssen ii

INTEREST OF NATIONAL COAL ASSOCI-

°C eR RRP 1

STATEMENT OF THE CASE 0... .ccccccssscssssossvesesssseees 3

I cir, eee ee 6

EAE et EELS 10

ij

TABLE OF AUTHORITIES

CASES:

Motor Vehicle Manufacturers Ass'n v. Ruckelshaus, °

719 F.2d 1159 (D.C. Cis. 1983) ..cccccoccoccocscosccrscssees

Sierra Club v. Costle, 719 F.2d 436 (D.C. Cir. 1983)

STATUTE:

= Air Act, 42 U.S.C. § 7401, et seg. (Supp. V

1981)

§ pty 1), 42 U.S.C. § 7401(b)(1) (Supp. V

PUI ccndnccacenstehltibisinticciditibintaneséutditnadaddatimmiadianseniaihs

§ 110, 42 U.S.C. § 7410 (Supp. V 1981) .............

§ 110(a)(2)(A), (B), (J), 42 U.S.C. § 7410

(a)(2)(A), (B), (J) (Supp. V 1981) ..............

§ 123, 42 U.S.C. § 7423 (Supp. V 1981) .............

a (c), 42 U.S.C. § 7423(a), (c) (Supp.

CEE EEE EEE EERE EEE EEE EEE EERE EEE OR EE EE EEE HEHE EEE HOES

FEDERAL lene

38 Fed. Reg. 25697, ef seg. (1973) cccccccccccerseseeeeeeeeeees

Fe PORE CEPTS) cscrtenenntimnnen

41 Fed. Reg. 7450, ef seq. (1976) .cccccccccccccceesscerereeees

44 Fed. Reg. 2608, ef seq. (1979) occcccccccccccceeeseeeeeeeerees

44 Fed. Reg. 40359, ef 86g. (1979) cccccccccccceccseeeeeeeenees

46 Fed. Reg. 24596, ef seq. (1981) ..cccccccccccecececeeeeeeeee

46 Fed. Reg. 49814, ef seq. (1981) cccccccccccccecereecceenees

46 Fed. Reg. 49616 ( 1981) ....cccccrccccccccceseccosesecessesesseees

47 Fed. Reg. 5864, ef seq. (1982) ..cccccccccccserseeeeeereeeens

LEGISLATIVE History:

H.R. Rep. No. 294, 95th Cong., Ist Sess. (1977),

reprinted in, The Enviroamental Policy Division of

po Poa ayy yw oy = of the Clean Air

Fi

Vn ee Bo aNO &

IN THE

Supreme Court of the Anited States

OcToBer TERM, 1983

ALABAMA PowER CoO., ef ai.,

Petitioners,

Vv.

Srerra CLus, ef ai.,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia

BRIEF OF AMICUS CURIAE NATIONAL COAL

ASSOCIATION IN SUPPORT OF PETITIONERS

This brief is submitted by the National Coal Association

(NCA) in support of the Petitioners. For the reasons stated in

the Petition for Certiorari of Alabama Power Co., et ai. and for

the additional reasons stated herein, NCA urges the Court to

grant certiorari and reverse the judgment of the United States

Court of Appeals for the District of Columbia Circuit. Pursuant

to Rule 36 of the rules of this Court, a motion for leave to file

this amicus brief has been filed with the Court.

INTEREST OF NATIONAL COAL ASSOCIATION

The membership of the National Coal Association consists

primarily of coal producing and sales companies, whose oper-

ations comprise more than one-half of the commercial coal

production in the United States. In addition, the Association

numbers among its membership equipment manufacturers,

2

railroads, coal exporters, and other related industries. Coal

mines and related facilities owned or operated by NCA mem-

bers are located throughout the United States.

Under § 110 of the Clean Air Act (CAA), 42 U.S.C.

§ 7410 (Supp. V 1981), states must develop implementation

plans that contain emission limitations for individual sources

which ensure that emissions from these sources will not cause or

contribute to ground level pollution concentrations that exceed

the National Ambient Air Quality Standards (“ambient stan-

dards”) or Prevention of Significant Deterioration (“PSD”)

increments. 42 U.S.C. §§ 7410(a)(2)(A), (B), (J), 7475

(Supp. V 1981). Since the early 1970s, emission limitations in

state implementation plans (“SIP”) have been set to reflect

ambient concentrations that will be produced if emissions from

a source are released to the atmosphere through a “good

engineering practice” (“GEP”’) stack. “GEP stack height” is

an established engineering and regulatory principle, used in

EPA guidelines as early as 1973 and written into the Clean Air

Act by Congress in 1977 as § 123, 42 U.S.C. § 7423 (Supp. V

1981).' ,

While facilities operated by NCA members are not directly

subject to the “GEP stack height” provisions of the Clean Air

Act since they do not have large stacks, such facilities are often

located in the vicinity of industrial sources with large stacks.

Accordingly, emission limitations for these NCA member facil-

ities must be set assuming that emissions from surrounding

facilities are released through GEP stacks. If GEP stack height

credit rules are changed for surrounding facilities, therefore,

emission limitations for these NCA member facilities may also

be affected. Moreover, new development of coal reserves near

facilities with large stacks could be precluded under the lower

court’s decision if sources subject to these rules are required to

assume a GEP stack height that will result in predictions that

PSD increments are entirely consumed or that ambient concen-

' See EPA 1973 Stack Height Guidelines, 38 Fed. Reg. 25697, et seg.

(1973), which appear in relevant part in Appendix to Petition for a Writ of

Certiorari filed by Petitioners Alabama Power Co., ef ai at 103a-105a

(hereinafter “App.”); see also 41 Fed. Reg. 7450, et seg. (1976).

3

trations are at the level of the ambient standards. See Petition

for Certiorari of Alabama Power Co., et al., at 27 n.59; Sierra

Club v. EPA, 719 F.2d 436, 446-450 (D.C. Cir. 1983), App.

19a-20a, 24a-27a.

A large portion of the coal produced by NCA members is

consumed by the electric utility industry. The contractual

relationships between NCA members and electric utilities are

dictated in large part by federal environmental regulations,

which require, inter alia, that utilities buy coal that can be

burned in compliance with emission limitations established

under the Clean Air Act. Since GEP stack height credit rules

will influence the stringency of power plant emission limita-

tions, changes in these rules will affect existing contracts

between coal companies and utilities.

NCA’s membership will be substantially and adversely

affected by the opinion of the Court of Appeals for the District

of Columbia Circuit in Sierra Club v. EPA, 719 F.2d 436 (D.C.

Cir. 1983), App. la-69a. This decision changes the ground

rules concerning “GEP stack height” credit that have been

applied by EPA and the states for over a decade in formulating

emission limitations, and that have served as the basis for

contracts between coal companies and utilities. By rejecting the

traditional engineering standard that has long applied to con-

struction of stacks, and instead requiring that “EPA must be

more stringent” than this long-established standard, id. at 450,

App. 28a, the D.C. Circuit’s decision will undermine existing

State air quality programs and existing contractual relation-

ships. Accordingly, it is critical that the Court accept this case

for review.

STATEMENT OF THE CASE

Section 123 of the Clean Air Act provides that when states

set emission limitations for sources constructed after 1970, they

shall not allow credit for dispersion of pollution associated with

stack height in excess of GEP stack height. In other words, if a

4

source builds a stack higher than GEP height, it must assume in

setting its emission limitation that its emissions are released at

the level of the shorter GEP stack, which results in higher

ground levei concentrations than occur in reality. Section 123

requires EPA to define “GEP stack height” by regulation. CAA

§ 123(a),(c), 42 U.S.C. § 7423(a), (c) (Supp. V 1981).

The term “GEP stack height” has a long engineering

history. An engineering rule (a stack must equal at least 2.5

times the height of the source) has traditionally been applied to

ensure that atmospheric turbulence (called “downwash”)

created by nearby structures and terrain will not drive an

undispersed plume directly to the ground.? Downwash can

cause nuisance conditions or ambient standard violations. This

engineering rule was adopted by EPA in its 1973 guidelines on

stack height. 38 Fed. Reg. 25697, et seg. (1973), App. 103a-

105a. NCA members have relied upon this longstanding GEP

rule in developing Clean Air Act compliance strategies, and in

- contracting with utilities for the supply of coal.

In January 1979, EPA proposed rules defining “GEP stack

height” that departed from this traditional engineering rule. 44

Fed. Reg. 2608, et seg. (1979). By changing the ground rules

that sources and states had used in developing compliance

strategies, these proposals would have imposed tremendous

burdens on the coal industry. See infra pp. 7-9.

In response to strong criticisms from industry and states,

EPA began rethinking these rules in 1979-81, and reproposed

its GEP rules in October 1981. See 44 Fed. Reg. 40359, et seq.

(1979); 46 Fed. Reg. 24596, et seg. (1981); 46 Fed. Reg.

49814, et seg. (1981). The final regulations, issued in early

1982, defined the term “GEP stack height” and related techni-

cal terms (i.e., “excessive concentrations,” “nearby structurcs,”

“nearby terrain obstacles”) in a manner consistent with the

2 See EPA Guideline for Determination of Good Engineering Practice

Stack Height (Technical Support Document for the Stack Height Regu-

lations), EPA-450/4-80-023 at 7-9 (July 1981), in Joint Appendix, Sierra

Club v. EPA, at 1080-82 (hereinafter “J.A.”).

5

1973 guidelines and historical engineering practice. 47 Fed.

Reg. 5864, et seg. (1982), App. 80a-102a. EPA also devel-

oped a technical atmospheric modeling rule (called the “plume

impaction rule”) to ensure that its definition of “GEP stack

height” would be applied consistently both in areas of flat and

mountainous terrain. Jd. at 5866-67, 5869, App. 90a-94a, 100a.

By adopting the historical approach to GEP, EPA’s rules

would only have required revision of emission limitations at

sources that had built stacks taller than could be justified from

an engineering standpoint, in order to gain an unfair emissions

control advantage. In other words, for sources designing stacks

in accordance with traditional engineering principles used by

EPA and the states since 1973, the final EPA rules would have

given full stack height credit. At such sources, EPA’s final rules

would not have required reformulation of compliance strategies

based upon false stack height assumptions. In addition, con-

tractual commitments that had been made based on historical

engineering and regulatory GEP principles would have been

honored.

In October 1983, the D.C. Circuit set aside virtually every

important portion of this regulatory program, and suggested

that EPA reformulate its rules in a manner more burdensome

than even the 1979 proposals that EPA had rejected. Sierra

Club v. EPA, 719 F.2d 436 (D.C. Cir. 1983), App. la-69a. The

court refused to accept EPA’s reliance on the historical engi-

neering formula to define the technical terms “GEP” and

“excessive concentrations.” Rather, it suggested that EPA de-

fine “GEP stack height” credit at a level that would cause

atmospheric models to predict pollutant concentrations just

below the ambient standards or PSD increments. See supra pp.

2-3. As a result, a different GEP stack height could be required

for every pollutant for which an ambient standard exists (since

allowable pollution levels and different background concéntra-

tions exist for different pollutants), and GEP stack height could

change over time as background pollutant concentrations

change.

The court also imposed serious constraints on industrial

6

activity in hilly and mountainous terrain by setting an arbitrary

distance limit on EPA’s definition of “nearby terrain obstacles,”

and by setting aside EPA’s technical “plume impaction” rule.

Id. at 445-46, 452-56, App. 15a-19a, 3la-39a.

ARGUMENT

Section 101(b)(1) of the Act states that the purpose of the

Act is “to protect and enhance the quality of the Nation’s air

resources so as to promote the public health and welfare and the

productive capacity of its population.” CAA § 101(b)(1), 42

U.S.C. §7401(b)(1) (Supp. V 1981) (emphasis added). In

other words, Congress contemplated that action taken to pro-

tect and enhance air quality would promote each of the three

objectives of the Act (public health, welfare, and productive

capacity). In implementing the Clean Air Act, EPA has specif-

ically recognized that these objectives require a “balancing of

the social and economic considerations with the environmental

implications” of a rule. 39 Fed. Reg. 31000 (1974).

Congress identified the continued use and development of

this nation’s coal resources as a key ingredient to furthering the

productive capacity of the nation. Thus, when § 123 was added

to the Act in 1977, the House Committee on Interstate and

Foreign Commerce noted that “(t]he committee has de-

signed... the entire bill, to encourage and facilitate the in-

creased use of coal... .” 3 Furthermore, the Conference agree-

ment that resulted in the 1977 Amendments was described by

the House Committee as reflecting an effort to further “the

basic purposes of . . . the act, such as maximizing the use of

locally available fuels.” ¢ The court below wholly ignored this

legislative intent in setting aside EPA’s rules. It did so even

though EPA specifically confronted the effects of § 123 rules on

coal reserves during the rulemaking and fashioned final rules

that were consistent with the congressional purpose to facilitate

coal use.

2 H.R. Rep. No. 294, 95th Cong., Ist Sess. 192 (1977), reprinted in The

Environmental Policy Division of the Congressional Research Service of the

Library of Congress, A Legislative History of the Clean Air Act Amendments

of 1977 (1978) at 2659 (hereinafter referred to as “1977 Legis. Hist.” ).

“H.R. Rep. No. 564, 95th Cong., Ist Sess., 1977 Legis. Hist. at 510.

7

In a regulatory analysis of the stack height credit rules

proposed in 1979, EPA recognized that its initial stack height

proposals

will cause a shift in the type of coal demanded by the

affected utilities. Some utilities will switch to a lower

sulfur coal to comply with the regulation, while other

power plants, required to install FGD systems, may

be able to use a higher sulfur coal with the FGD

system.5

Among other things, this analysis showed substantial shifts in

coal production in EPA Regions III, [V, V, and VII.®

EPA addressed these serious, adverse impacts of the initial

§ 123 proposals by reproposing and then promulgating rules

which were much more in line with traditional engineering and

regulatory practice. In its final regulatory impact analysis,

therefore, EPA concluded that the “effect on the coal market

{of these final rules] is . . . less than previously predicted.” ”

NCA is concerned that the D.C. Circuit’s decision, by

changing the longstanding ground rules that have been used in

formulating SIPs, will create needless economic burdens, ad-

ministrative complexity, and confusion, contrary to the basic

purposes of the Act.

First, as noted above, EPA’s regulatory analysis of the

1979 proposal revealed that substantial, adverse impacts on

coal markets would result from that proposal. Significantly,

none of these EPA analyses took into account the additional

burdens that would have been placed on sources in hilly and

mountainous terrain by the 1979 proposal’s failure to address

the highly technical “plume impaction” issue. Accordingly,

these analyses were criticized during the rulemaking as signifi-

5 EEA, Inc., Cost and Economic Impact Analysis of the Proposed Stack

Heights Regulation at 19 ( August 15, 1980).

© See id. at 19-20, 22-23. These regions include the Appalachian and

South-Central states, the Midwest, and some Western states. These potential

impacts were also alluded to by EPA in reproposing stack height rules in

1981. 46 Fed. Reg. 49816 (1981).

? Impact Assessment Report for the Stack Heights Regulations at 19

(April 1981).

8

cantly understating the shifts in demand for and production of

coal that would have resulted under the 1979 proposal.® Thus

the lower court’s decision, by rejecting the traditional GEP

standard and EPA’s plume impaction rule, could cause even

more severe disruption of coal markets than was predicted in

1979.

Second, besides causing shifts in demand among coal

producing regions and among coals of varying sulfur content,

the lower court’s decision would discourage the use of coal

generally in favor of alternative sources of power. For exam-

ple, many utilities have located plants in hilly and mountainous

areas of the country in order to be close to inexpensive supplies

of coal. The lower court, however, has interpreted § 123 so that

it “discriminates harshly” against industrial activity in such

areas of the country. 719 F.2d at 455, App. 38a. If, as the court

has found in its decision on “plume impaction,” plants in

rugged terrain areas must meet emission limitations that are

based upon artificial predictions of plume impaction, existing

coal-fired plants in such areas could be rendered prohibitively

expensive to operate. In addition, this decision could force the

siting of new plants in flat terrain areas, increasing fuel

transportation costs and thus mening coal less attractive for

these sources.

Third, the lower court’s holding on “excessive concentra-

tions” could require GEP stack height credit to be set at a level

that would cause predictions of ambient concentrations just

below the level of ambient standards or PSD increments. See

supra pp. 2-3. If this were to occur, it could limit the

production, preparation, or processing of coal at any facility

located in the vicinity of a power plant subject to these rules,

since the power plant would have been predicted to consume all

available air quality resources. Moreover, the lower court’s

holding would eliminate any predictability as to the long-term

coal needs of utilities, since GEP stack height and hence

required emission levels would shift as background concentra-

tions and atmospheric modeling assumptions change.

® See, ¢.g., Comments of Ohio EPA, J.A. 1048.

9

Finally, none of these costs would further any demon-

strated public health or welfare objective, since SIP revisions

would be based not upon actual ambient concentrations that

have public health and welfare implications, but upon artificial

ambient concentrations predicted using false atmospheric

modeling assumptions.

In sum, while Congress in amending the Act in 1977

intended to facilitate the burning of coal generally and to avoid

any drastic shifts in the demand for and production of coal, the

lower court’s decision compels results contrary to these basic

congressional objectives. The court’s decision would greatly

expand the role of false stack height assumptions in air quality

regulation at the expense of this nation’s coal reserves. EPA

received comments on these issues, and took those comments

into account in formulating rules that reflect traditional engi-

neering and regulatory principles as well as the basic purposes

of the Act. The lower court should have deferred to EPA’s

resolution of such complex, technical issues, as it has done in

the past when EPA has interpreted the term “good engineering

practice” under another section of the Clean Air Act.®

The final rules are, by the lower court’s own admission,

consistent with longstanding engineering and regulatory prac-

tice and with what Congress “probably had in mind.” Jd. at

457, App. 42a-43a. By rejecting these rules and requiring EPA

to rewrite its § 123 program in accordance with the court’s

independent conclusions as to what Congress may have in-

tended, and contrary to what Congress clearly intended with

respect to the Clean Air Act’s impact on coal production, the

D.C. Circuit has exceeded its authority as a reviewing court.

Accordingly, certiorari should be granted and the decision of

the D.C. Circuit reversed.

® See Motor Vehicle Manufacturers Ass'n v. Ruckelshaus, 719 F.2d 1159,

1167 (D.C. Cir. 1983).

10

CONCLUSION

For the reasons stated above, the petition for certiorari

filed by Alabama Power Co., et ai, should be granted.

Respectfully submitted,

ROBERT F. STAUFFER

(Counsel of Record )

General Counsel

National Coal Association

1130 17th Street, N.W.

9th Floor

Washington, D.C. 20006

(202) 463-2625

Counsel for Amicus Curiae

National Coal Association

May 30, 1984