Petition for Writ of Certiorari — Alaska Dept. of Environmental Conservation v. EPA

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Supreme Court. US

FILED

No. 02- 02 658 ocr 25 2002

OFFICE OF THE CLERK

IN THE

Supreme Court of the Gnited States

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ef al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

BRUCE M. BOTELHO JOHN G. ROBERTS, JR.*

Attorney General LORANE F. HEBERT

STATE OF ALASKA HOGAN & HARTSON L.L.P.

Department of Law 555 Thirteenth Street, N.W.

P.O. Box 110300 Washington, D.C. 20004

Juneau, Alaska 99811 (202) 637-5810

(907) 465-3600

CAMERON M. LEONARD

Assistant Attorney General

STATE OF ALASKA

Department of Law

100 Cushman Street, Suite 400

Fairbanks, Alaska 99701

(907) 451-2811

* Counsel of Record Counsel for Petitioner

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D. C. 20001

QUESTION PRESENTED

Whether the Ninth Circuit erred in upholding the EPA’s

assertion of authority to second-guess a permitting decision

made by the State of Alaska—which had been delegated

permitting authority under the Clean Air Act, 42 U.S.C.

§§ 7401 et seqg.—in conflict with decisions of this Court and

other federal courts of appeals establishing the division of

federal-state jurisdiction under the Act and similar statutory

programs.

(i)

PARTIES TO THE PROCEEDING

_ The State of Alaska, Department of Environmental Con-

servation, and Teck Cominco Alaska, Inc. were petitioners in

the Ninth Circuit below. The United States Environmental

Protection Agency (“EPA”), and Carol M. Browner and

Chuck Clarke in their official capacities as Administrator of

the EPA and Regional Administrator of the EPA’s Region

10, respectively, were originally named as respondents

below. Ms. Browner and Mr. Clarke have since been suc-

ceeded by Christie Whitman and L. John Iani, respectively.

ill

TABLE OF CONTENTS

QUESTION PRESENTED ...........ccccsscseeseeseeeserseeeseneenes

PARTIES TO THE PROCEEDING .............ccccececeeeeeeees

TABLE OF AUTHORITIEG............ccccccccesseeseeeeeeeeneeneees

REASONS FOR GRANTING THE WRIT..................-..

I. THE NINTH CIRCUIT’S DECISION

CONFLICTS WITH DECISIONS OF THIS

COURT AND OTHER FEDERAL

COURTS OF APPEALS ON THE

ALLOCATION OF FEDERAL-STATE

II. THE CONFLICT OVER FEDERAL -

STATE AUTHORITY IS A RECURRING

ISSUE OF NATIONAL IMPORTANCE ...........

IY cesencesenscnssscnenseccscrsseevssnsessensceseesssesssecosseees

Page

TABLE OF CONTENTS—Continued

APPENDICES

Appendix A:

Appendix B:

Opinion of the United States

Court of Appeals for the Ninth

Circuit (July 30, 2002)...........0000000

Opinion of the United States

Court of Appeals for the Ninth

Circuit (Mar. 27, 2001)...........0cce00e0

: Order of the United States Court

of Appeals for the Ninth Circuit

: EPA Finding of Noncompliance

and Order (Dec. 10, 1999)................

Page

TABLE OF AUTHORITIES

Page

CASES:

Alabama Power Co. v. Costle, 636 F.2d 323

IEE ME TE ccnsseneneennsniiennenemmmeneemenn 16, 17, 19-20

American Corn Growers Ass'n v. EPA, 291

soo, 4 | 15, 16

Bethlehem Steel Corp. v. Gorsuch, 742 F.2d

0. De 18, 19

Florida Power & Light Co. v. Costle, 650 F.2d

een 17, 18, 19

General Motors Corp. v. United States, 496

ee 4-5

Michigan v. EPA, 268 F.3d 1075 (D.C. Cir.

ee Eee 3

New York v. United States, 505 U.S. 144 (1992).......... 22

Russello v. United States, 464 U.S. 16 (1983)............. 14

Train v. Natural Resources Defense Council,

Rig Ge Ces Gi acter, passim

Union Elec. Co. v. EPA, 427 U.S. 246 (1976)............. 15

United States v. AM General Corp., 34 F.3d 472

eR 19

Virginia v. EPA, 108 F.3d 1397 (D.C. Cir.),

modified, 116 F.3d 499 (1997) ........ccccccccseeeesneeeees 16, 17

Whitman v. American Trucking Ass ‘ns, 531 U.S.

SF Ge cccrcmenntmmenineeinemmnts 11

TABLE OF AUTHORITIES—Continued

Page

STATUTES:

16 U.S.C. §§ 3101 ef SG. ..ccccccccssssscccsssssssesessssssceseeeeee 22

8 ERIS AC ee 2

29 U.S.C. §§ 651 ef 8G. cccccccsccssscsssssssssssvessseesesssssseceees 22

33 U.S.C. §§ 1251 ef 8G. coccccccssscccsssssssssssesssesssssssseceees 22

re 22

42 U.S.C. §§ 7401 ef $€q. .ccccsccccsssccvsssssssscesssssssecesseeee 2

42 U.S.C. § 7401 (a)(3) .aassccccccccsssssssssvcvssesseesesessssssssee 5

FEE Ee a 5

42 U.S.C. § 7407(d)(1(A)(Gi) -cccccscccccccecsccccsssssseceeeeceen 5

iar iar tities 5

TES eae Ee 5

42 U.S.C. § 7410(a)(2)(C).ecccccccscssvvccecescsscessssssseeceecenes 5

EN Aa a ce 5

42 U.S.C. § 7410(C)(3) voccccccccsccosssssvsssseesesseessssssueeeeeeene 5

i iiitticntinceictntitecs 14

cr 10

a ne eR 5

TEE AT ANE Seed 5

irs ciincicncatniiidaiioeneneainanees 5

42 U.S.C. § 7475(a)ccccccccccccessssssssssssssssssseesseesessssssuvcceee 5

42 U.S.C. § 7475(a)(2) cevvecccccvvcesccssvessessssessessseesessnecesen 19

vii

TABLE OF AUTHORITIES—Continued

Page

STATUTES:

42 U.S.C. § 7475(a)(3) .cccvececccsccesccsscesssssucsessuecessneesesness 13

42 U.S.C. § 7475(a)(4) .ccccccccccvecsscsssessssssecsessseeeessees 2, 3, 6, 11

ee Oe Pr airerrcrerncnisnernsnemnenssnmmntnenmesine 14

ee Oe BN tniisineteneininnicenensenennnmennenmnennnnes 10

a ae passim

42 U.S.C. § T491(D) 2A) .....cececccscseceesesceseeeeneeneeeenees 15, 21

Se ae 0 eR ccrcceneRreninnmncmetinmmnnnnion 15, 21

Se Oe He itetetncnntinmmniinnmens 21

i 0 Se citcternccinicenenscncncmincientenenmeenensen 21

42 U.S.C. § T6O7(D)(1) .cscccecccsscesscsssvecsscsssecsssssueessssvecen 2,15

BULB, 6 FEI ccccccscccnccscsscesesccnsssescssssscssees 21

es Oe Pe PD cirrrecerinicnsensccrenenineinnesmmntiioanes 6

Alaska Stat. § 46.14.200............. euiusienapusenstonenenseninitettsions 19

18 Alaska Admin. Code § 50.310(d)(3) .............cccc000 6

18 Alaska Admin. Code § 50.315 .........cccccccccceseeeeseenees 19

LEGISLATIVE MATERIAL:

a eS CPO entnenereneenaniennnnmennnens passim

IN THE

Supreme Court of the Anited States

No. 02-

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ef al.,

Respondents.

Petition for a Writ of Certiorari to the

United States Court of Ay peals

for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioner State of Alaska, Department of Environmental

Conservation (“ADEC”) respectfully petitions this Court for

a writ of certiorari to review the judgment of the United

States Court of Appeals for the Ninth Circuit in this case.

OPINIONS BELOW

The opinion of the Ninth Circuit is reported at 298 F.3d

814 and reproduced in the appendix hereto (“App.”) at la.

The Ninth Circuit’s prior opinion concluding that it had

jurisdiction over this case is reported at 244 F.3d 748 and

reproduced at App. 17a. The Ninth Circuit’s order request-

ing supplemental briefing is reproduced at App. 24a. The

orders of the United States Environmental Protection Agency

(“EPA”) are reproduced at App. 26a, 38a, and 51a.

JURISDICTION

The judgment of the Ninth Circuit was entered on July 30,

2002. App. la. The jurisdiction of the Ninth Circuit was

based on 42 U.S.C. § 7607(b)(1). The jurisdiction of this

Court is invoked under 28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 165(a)(4) of the Clean Air Act (“CAA”), 42 U.S.C.

§§ 7401 et seq., provides, in pertinent part:

(a) Major emitting facilities on which construction is

commenced. No major emitting facility on which con-

struction is commenced after August 7, 1977, may be

constructed in any area to which this part applies

unless—

(4) the proposed facility is subject to the best avail-

able control technology for each pollutant subject to

regulation under this Act emitted from, or which results

from, such facility * * *. [42 U.S.C. § 7475(a)(4).]

Section 169(3) of the CAA provides, in pertinent part:

(3) The term “best available control technology” means

an emission limitation based on the maximum degree of

reduction of each pollutant subject to regulation under

[the Act] emitted from or which results from any major

emitting facility, which the permitting authority, on a

case-by-case basis, taking into account energy, envi-

ronmental, and economic impacts and other costs, de-

termines is achievable for such facility * * *. [42

U.S.C. § 7479(3).]

INTRODUCTION

This case raises important and recurring issues concerning

the ability of the States to exercise their statutory authority

under the Clear Air Act (“CAA”)—one of the Nation’s most

significant and far-reaching environmental statutes. De-

scribed as an “experiment in federalism,” Michigan v. EPA,

268 F.3d 1075, 1078 (D.C. Cir. 2001) (quotation omitted),

the CAA assigns to the States an important—indeed pri-

mary—tole in air pollution prevention and control. One of

the States’ principal responsibilities under the Act is to

prevent the degradation of air quality in those areas where

national clean air standards have been attained. To this end,

the CAA prohibits the construction or modification of a

“major emitting facility” in any “clean air” area unless the

facility is subject to the “best available control technology,”

or “BACT.” 42 U.S.C. § 7475(a)(4). BACT is defined in the

CAA as “an emission limitation * * * which the permitting

authority, on a case-by-case basis, taking into account

energy, environmental, and economic impacts and other

costs, determines is achievable for such facility * * *.” Jd.

§ 7479(3) (emphasis added). The “permitting authority” in

this case—and in most cases arising under this provision—is

the State. See App. 3a.

The CAA thus by its terms gives the States the authority to

determine BACT for a particular source, and allows the

States broad discretion in making that determination. This is

confirmed by the Act’s legislative history: “The decision

regarding the actual implementation of best available tech-

nology is a key one, and the committee places this responsi-

bility with the State, to be determined in a case-by-case

judgment. It is recognized that the phrase has broad flexibil-

ity in how it should and can be interpreted, depending on

site.” S. Rep. No. 95-127, at 31 (1977) (emphases added).

In 1999, the State of Alaska issued a permit for the con-

struction of a new electric generator at the Red Dog Mine in

—_—

Northwest Alaska, 100 miles north of the Arctic Circle. In

accordance with the CAA and the State’s own regulations,

the State determined that a particular technology—“Low

NOx”—was BACT to control nitrogen oxide emissions from

the new generator. In making that determination, the State

expressly took into consideration “energy, environmental,

and economic impacts and other costs.” 42 U.S.C.

§ 7479(3).

Under the guise of exercising its enforcement authority

under the CAA, the EPA issued a series of orders prohibiting

the construction of the generator because the federal agency

disagreed with the State’s determination that Low NOx was

BACT for the new generator. In seeking to override the

State’s BACT determination in this manner, the EPA usurped

authority that the CAA clearly delegates to the States,

upsetting the balance of power that Congress carefully sought

to create under the Act. In conflict with decisions of this

Court and other federal courts of appeals, the Ninth Circuit

sanctioned that result.

The Ninth Circuit’s decision poses a grave threat to the

ability of the States to exercise the statutory authority vested

in them by Congress to make BACT and other important

discretionary decisions under the Act. The question pre-

sented is a recurring one of national importance, arising not

only under the CAA but a broad range of other federal

-Statutes with similar shared authority between the States and

federal government. This Court should grant certiorari to

resolve the conflict engendered by the Ninth Circuit’s

decision, and to preserve the delicate balance of power that

Congress established under the CAA and similar statutes.

STATEMENT OF THE CASE

Statutory and Regulatory Background. The CAA estab-

lishes “a comprehensive national program that ma{kes] the

States and the Federal Government partners in the struggle

against air pollution.” General Motors Corp. v. United

States, 496 U.S. 530, 532 (1990). At the same time, the

CAA recognizes that “air pollution prevention * * * and air

pollution control at its source is the primary responsibility of

States and local governments.” 42 U.S.C. § 7401(a)(3)

(emphasis added); see also id. § 7407 (“Each State shall have

the primary responsibility for assuring air quality within the

entire geographic area comprising such State”). Thus, while

the CAA assigns to the EPA the responsibility for establish-

ing national ambient air quality standards (“NAAQS”), see

id. § 7409, the Act gives the States the responsibility for

implementing those standards. See id. §§ 7407, 7410.

To this end, the CAA requires the States to adopt and sub-

mit for the EPA’s approval a state implementation plan

(“SIP”) that provides for attainment and maintenance of the

NAAQS. See id. § 7410. If a State does not have an ap-

proved SIP in place, the Act requires the EPA to adopt and

implement a federal implementation plan. See id. § 7410(c).

The EPA may delegate to a State the authority to implement

and enforce any part of such a plan. Jd. § 7410(c)(3).

The CAA requires that each SIP contain emission limita-

tions and such other provisions as may be necessary “to

prevent significant deterioration of air quality” in “attain-

ment” areas. Jd. § 7471. An “attainment”—or “clean air”—

area is one “that meets the [NAAQS] for [a given] pollutant.”

Id. § 7407(d)(1)(A)ii). The Act establishes maximum

allowable increases (or increments) of certain pollutants in

clean air areas. Jd. § 7473. To ensure that such increments

are not exceeded, the Act also establishes a preconstruction

review process that must be followed before the construction

or modification of a “major emitting facility” in a clean air

area. Id. § 7475. As part of that process, the Act requires

that each SIP contain a Prevention of Significant Deteriora-

tion (“PSD”) permit program, and provides that no major

emitting facility may be constructed in a clean air area

without a PSD permit. Jd. §§ 7410(a)(2)(C), 7475(a).

The Act also provides that no major emitting facility may

be constructed or modified unless “the proposed facility is

subject to the best available control technology [or “BACT”]

for each pollutant subject to regulation under [the Act]

emitted from, or which results from, such facility.” /d.

§ 7475(a)(4). BACT is defined as

an emission limitation based on the maximum degree of

reduction of each pollutant subject to regulation under

[the Act] emitted from or which results from any major

emitting facility, which the permitting authority, on a

case-by-case basis, taking into account energy, environ-

mental, and economic impacts and other costs, deter-

mines is achievable for such facility * * *. [Jd. § 7479(3)

(emphasis added). }

Factual Background. The State of Alaska is a clean air

area with respect to nitrogen dioxide, a regulated pollutant

under the Act. Under Alaska’s SIP, approved by the EPA in

1983, the State operates a PSD permit program through its

Department of Environmental Conservation (“ADEC”).

Before a PSD permit will be issued for the construction of a

new source within the State, the Alaska SIP requires “a

demonstration that [a] proposed limitation represents the best

available control technology for each air contaminant and for

[the] source.” 18 Alaska Admin. Code § 50.310(d)(3).

The Red Dog Mine, the world’s largest source of zinc

concentrate, is located in the harsh landscape of Northwest

Alaska, about 100 miles north of the Arctic Circle. The mine

is operated by Teck Cominco Alaska, Inc. (“Cominco”) in

partnership with the Northwest Arctic Native Association

(“NANA”)! on lands owned by NANA. Operating 365 days

' NANA is a regional corporation established by Congress

pursuant to the Alaska Native Claims Settlement Act, 43 U.S.C.

§§ 1601 et seg. NANA is the regional corporation organized for

the benefit of the Inupiat Eskimos residing in Northwest Alaska.

a year, the mine is the largest private employer in the North-

west Arctic Borough, a vast and isolated area with an histori-

cally high unemployment rate. Due to its remote location,

the mine requires an independent, on-site power source. The

mine is currently powered by six diesel-fired electric genera-

tors, designated “MG-1’ through “MG-6,” which were

constructed pursuant to PSD permits issued by ADEC in

1988 and 1994.

In April 1996, Cominco initiated a project to boost the

mine’s output—and in the process create nearly 100 new

jobs. Because the project required the use of more electric-

ity, Cominco in June 1998 submitted an application to ADEC

for a new PSD permit, requesting permission to increase the

amount of nitrogen oxide (“NOx”), a precursor to nitrogen

dioxide, from its MG-5 generator. Cominco’s application

proposed the use of “Low NOx”—a process that reduces the

amount of NOx that would otherwise be released into the

environment—as BACT for the MG-5 generator. In April

1999, Cominco amended its application, proposing to install

Low NOx on all six of its existing generators—including the

five not subject to a new BACT determination—as well as on

a proposed new generator, “MG-17,” which—like MG-5—

was also subject to BACT.

In May 1999, ADEC issued a draft PSD Permit and a pre-

liminary Technical Analysis Report (“TAR”) in which it

accepted Cominco’s amended proposal because it would

reduce total NOx emissions from the Red Dog Mine to a

level comparable to or lower than that which would result

were another control alternative evaluated during ADEC’s

review process—Selective Catalytic Reduction (“SCR”)}—

installed on only the MG-5 and MG-17 generators. See App.

4a. ADEC published the draft PSD Permit and preliminary

TAR for public comment and review.

In July 1999, after the close of the public comment period,

the EPA commented on Cominco’s application for the first

time, expressing its view that SCR was BACT for the MG-5

and MG-17 generators—even though SCR had never before

been determined to be BACT to reduce NOx emissions from

a similar diesel-fired electric generator. In September 1999,

after considering all public comment—including the EPA’s

belated input—ADEC issued a final draft permit and a final

draft TAR concluding that Low NOx was BACT for the MG-

5 and MG-17 generators. In response to the EPA’s continu-

ing objections, ADEC worked with the federal agency in an

effort to resolve their differences. Although the dispute over

BACT for the MG-S5 generator was resolved when Cominco

decided to restrict emission increases from the generator to

avoid BACT review, the parties could not agree on BACT

for the proposed new generator, MG-17.

After a period of unsuccessful negotiations, ADEC on

December 10, 1999 issued the PSD Permit and a final TAR,

in which ADEC spent nearly ten pages explaining the basis

of its carefully considered determination that Low NOx was

BACT for the MG-17 generator. See PER 044-053.2 In

making that determination, ADEC considered the “energy,

environmental, and economic impacts and other costs”

associated with other technologies, including SCR. 42

U.S.C. § 7479(3). Moreover, although not required to do so,

ADEC followed the EPA’s “top-down” approach—used by

the EPA when it acts as the PSD permitting authority in those

circumstances where a State does not have a PSD program—

in determining BACT.2 Under that approach, ADEC

(1) identified all NOx control technologies; (2) identified

which technologies were technically feasible; (3) ranked the

feasible control technologies in order of effectiveness; (4)

considered the energy, environmental, and economic impacts

of the feasible technologies and determined which to elimi-

2 Petitioners’ Combined Excerpts of Record below are cited as

“PER.”

> As the EPA acknowledges, “top-down analysis is not a man-

datory methodology.” EPA 9th Cir. Br. 12 (quotation omitted).

nate based on such impacts; and (5) selected Low NOx as the

most effective technology not eliminated.

In considering the “energy, environmental, and economic

impacts and other costs” associated with SCR, ADEC

discounted Cominco’s contention that requiring SCR would

have adverse environmental and energy impacts. ADEC

concluded, however, that SCR would have an adverse

economic impact because, among other things, the “exces-

sive economic cost” of SCR—$2.9 million in capital costs

and annual operating costs approaching $635,000—could

adversely affect the mine’s “world competitiveness,” with

attendant adverse consequences for the precarious economy

of the Northwest Arctic Borough. PER 051. Accordingly,

ADEC determined that SCR was not economically feasible.

Yet because Cominco had agreed to install Low NOx on ail

its generators—not just the MG-17 generator subject to

ADEC’s BACT determination—ADEC’s permit decision

was expected to reduce NOx emissions to a level comparable

to or Jower than that which would result if SCR were in-

stalled on only the MG-17 generator. See App. 4a.

The EPA’s Orders. In an attempt to prevent ADEC from

issuing the PSD Permit to Cominco, the EPA on December

10, 1999 issued a Finding of Noncompliance and Order to

ADE. App. 26a. According to the EPA, ADEC’s issuance

of the final draft permit would not be in compliance with the

requirements of the CAA or Alaska’s SIP relating to the

construction or modification of new or existing sources.

App. 36a. The EPA thus ordered ADEC to withhold issu-

ance of Cominco’s permit designating Low NOx as BACT

until ADEC demonstrated to the EPA’s satisfaction that SCR

was not BACT for the MG-17 generator or that the issuance

of the permit was otherwise in compliance with the CAA and

Alaska’s SIP. /d.

The EPA purported to issue its Finding and Order under

Section 113(a)(5) of the CAA, which provides that whenever

the Administrator “finds that a State is not acting in compli-

ance with any requirement or prohibition of the [Act] relating

to the construction of new sources or the modification of

existing sources,” the Administrator “may issue an order

prohibiting the constructicn «r modification of any major

stationary source in any ava to which such requirement

applies.” 42 U.S.C. § 7413(a)(5). The EPA also relied on

Section 167 of the CAA, which provides that the Administra-

tor “shall * * * take such measures, including issuance of an

order, or seeking injunctive relief, as necessary to prevent the

construction or modification of a major emitting facility

which does not conform to the requirements of [the CAA’s

PSD program].” Jd. § 7477. The Finding and Order did not

identify the specific “requirement” of the Act with which

ADEC supposedly had failed to comply, and the Act itself

specifies that “the permitting authority, on a case-by-case

basis,” is to determine what constitutes BACT for a particular

facility. Id. § 7479(3).

Because ADEC had already issued Cominco’s permit, the

EPA—on February 8, 2000— issued an Administrative Order

to Cominco prohibiting the construction of the MG-17

generator until Cominco “demonstrated to the EPA’s satis-

faction compliance with [the CAA]” and obtained a “valid”

PSD permit from ADEC for the MG-17 generator that

complied with the CAA and the EPA’s December 10, 1999

Finding and Order. App. 49a. Subsequently, on March 7,

2000, the EPA amended its February 8, 2000 order to allow

Cominco to perform certain construction activities during the

short Alaska summer. App. 62a-63a. The Amended Admin-

istrative Order reiterated that Cominco was otherwise prohib-

ned ftom commencing construction of the MG-17 generator.

App. 62a.

Proceedings Below. ADEC and Cuntans subsequently

filed petitions for review in the Ninth Circuit challenging the

EPA's authority to issue the December 10, 1999 Finding of

Noncompliance and Order, the February 8, 2000 Administra-

tive Order, and the March 7, 2000 Amended Administrative

Order. App. la. ADEC and Cominco argued that the EPA

had no authority to issue the orders under either Section

113(aX(5) or Section 167 because ADEC had not failed to

comply with a “requirement” of the Act. To the contrary,

they explained, ADEC had properly exercised its authority

under the Act to make BACT determinations on a “case-by-

case basis.” 42 U.S.C. § 7479(3).

Before issuing its decision, the Ninth Circuit twice sought

supplemental briefing from the parties. Shortly after oral

argument, after initially rejecting the EPA’s contention that

the court lacked jurisdiction to consider the petitions because

the EPA’s orders did not constitute “final agency action,” the

Ninth Circuit requested further briefing “assessing the

impact, if any,” of this Court’s recent decision in Whitman v.

American Trucking Ass'ns, 531 U.S. 457 (2001). App. 23a.

Later, the court requested additional briefing on “whether it

is the state of Alaska (through ADEC) or the EPA that bears

the ultimate legal authority and responsibility under the

Clean Air Act to determine whether an individual [PSD]

permit issued by Alaska pursuant to its State Implementation

Plan (SIP) meets the requirements of the Clean Air Act or the

SIP.” App. 25a.

In the end, the Ninth Circuit upheld the EPA’s orders. The

court observed that applicants for PSD permits “must fulfill

the ‘preconstruction requirement’ that a ‘proposed facility

[be] subject to the best available control technology for each

pollutant subject to regulation."” App. 8a (quoting 42

U.S.C. § 7475(a)(4)) (alteration in original). Thus, the court

concluded, “subjecting a facility to BACT is both a ‘require-

ment * * * of the chapter relating to the construction of new

sources or the modification of existing sources,’ under

Section 113(a)(5), and a ‘requirement{] of this part’ under

Section 167.” /d. (alterations in original). “Because the EPA

based its orders on the finding that ADEC had not complied

with the BACT requirement,” the court held, “the orders

were authorized by the plain language of Section 113(a)(5),

as ‘order[s] prohibiting the construction or modification of

any major stationary source in any area to which such

requirement applies,’ and of Section 167, as orders ‘neces-

sary to prevent the construction or modification of a major

emitting facility which does not conform to the requirements

of this part.” App. 9a.

The Ninth Circuit further held that the CAA’s legislative

history also compelled the conclusion that “the EPA has the

ultimate authority to decide whether the state has complied

with the BACT requirements of the Act and the state SIP.”

App. 10a-1la. As support for that conclusion, the court cited

the 1970 amendment of the Act authorizing the EPA to

publish NAAQs and delegating to the States the responsibil-

ity for implementing those standards; the 1977 amendment of

the Act adding the Aci’s PSD provisions; and the 1990

amendment of Section 113(a)(5) allowing the EPA to take

action when a State fails to comply with “any requirement or

prohibition” relating to new or modified sources. See App.

9a-10a. The Ninth Circuit did not address the legislative

history most directly on point—that making clear that “{tJhe

decision regarding the actual implementation of best avail-

able technology is a key one, and the committee places this

responsibility with the State, to be determined in a case-by-

case judgment.” S. Rep. No. 95-127, at 31 (1977) (emphasis

added). See ADEC 9th Cir Br. 34 (citing legislative history).

Addressing ADEC and Cominco’s contention that the EPA

lacked the authority to veto ADEC’s discretionary judgment

based on its difference of opinion as to which technology was

BACT, the Ninth Circuit stated that “neither Section

113(aX5) nor Section 167 contains any exemption for

requirements that involve the state’s exercise of discretion,”

and that “[njothing in the BACT definition of Section 169(3)

limits the EPA’s authority.” App. lla. The court then went

on to hold that the EPA’s issuance of the orders was not

arbitrary or capricious.

REASONS FOR GRANTING THE WRIT

I. THE NINTH CIRCUIT’S DECISION CONFLICTS

WITH DECISIONS OF THIS COURT AND

OTHER FEDERAL COURTS OF APPEALS ON

THE ALLOCATION OF FEDERAL-STATE AU-

THORITY.

The Ninth Circuit held in this case that “the EPA has the

ultimate authority to decide whether [a] state has complied

with the BACT requirements of the Act.” App. 10a-1la.

The CAA, however, squarely places the responsibility for

determining BACT with the States, and gives them broad

discretion to do so. See 42 U.S.C. § 7479(3) (defining BACT

as “an emission limitation * * * which the permitting author-

ity, on a case-by-case basis, taking into account energy,

environmental, and economic impacts and other costs,

determines is achievable for such facility”) (emphasis

added); see also S. Rep. No. 95-127, at 31 (“The weight

assigned to such factors is to be determined by the State.”).

Because a BACT determination is a discretionary judgment,

involving the case-by-case weighing of a variety of factors,

there is no single, objectively “correct” BACT determination

for any particular source. The fact that a State weighs the

pertinent factors differently than the EPA in any particular

case does not mean that the State has in any sense violated a

requirement of the Act, authorizing the EPA io intervene and

overturn the State’s judgment.

The CAA does provide that a facility’s emissions may not

exceed the NAAQS or PSD allowable increments, see 42

U.S.C. § 7475(a)(3), and that the application of BACT may

not result in emissions that exceed other standards estab-

lished under the Act, see id. § 7479(3). As long as a State

observes those statutory parameters—and it is undisputed

that Alaska did so here—the only BACT “requirement”

imposed by the Act is that a State take into account “energy,

environmental, and economic impacts and other costs” in

determining BACT. If a State takes such factors into consid-

eration—as Alaska plainly did here—the EPA has no author-

ity to override a BACT determination with which it may

disagree.‘ The Ninth Circuit’s holding to the contrary is thus

not only deeply flawed, but fails to square with decisions of

this Court and other federal courts of appeals that have

recognized and respected the balance of power between the

States and the federal government that Congress established

under the Act.

1. More than twenty-five years ago, this Court recog-

nized the CAA’s “division of responsibilities” between the

States and the federal government in Train v. Natural

Resources Defense Council, Inc., 421 U.S. 60, 79 (1975). In

Train, the Court observed that the EPA “is plainly charged

by the Act with the responsibility for setting the national

ambient air standards.” But “{jjust as plainly,” the Court

emphasized, the EPA “is relegated by the Act to a secondary

role in the process of determining and enforcing the specific,

source-by-source emission limitations which are necessary if

the national standards it has set are to be met.” Jd. (emphasis

added). As the Court explained, “[t]he Act gives the [EPA]

4 The only circumstance—not applicable here—in which the

EPA’s approval of BACT is required is “in the case of a source

which proposes to construct in a class [II area, emissions from

which would cause or contribute to exceeding the maximum

allowable increments applicable in a class II area and where no

standard under section 7411 of this title [42 U.S.C. § 7411] has

been promulgated subsequent to August 7, 1977, for such source

category.” 42 U.S.C. § 7475(a)(8). This narrow exception proves

the rule—that Congress otherwise did not intend the EPA to be the

“ultimate authority” with respect to a State’s BACT determination.

App. lla. See Russello v. United States, 464 U.S. 16, 23 (1983)

(where “Congress includes particular language in one section of a

statute but omits it in another section of the same Act, it is gener-

ally presumed that Congress acts intentionally and purposely in the

disparate inclusion or exclusion”).

no authority to question the wisdom of a State’s choices of

emission limitations if they are part of a plan which satisfies

the [Act’s] standards.” Jd. (emphasis added). “(S]o long as

the ultimate effect of a State’s choice of emission limitations

is compliance with the national standards for ambient air, the

State is at liberty to adopt whatever mix of emission limita-

tions it deems best suited to its particular situation.” /d. See

also Union Elec. Co. v. EPA, 427 U.S. 246, 269 (1976)

(“Congress plainly left with the States, so long as the national

standards were met, the power to determine which sources

would be burdened by regulation and to what extent”).

2. Unlike the Ninth Circuit below, other federal courts

of appeals have respected the “division of responsibilities”

set out in the CAA and have firmly rebuffed attempts by the

EPA to usurp authority that Congress has clearly reserved for

the States. Not surprisingly, the Ninth Circuit’s decision

conflicts in this regard with numerous decisions of the D.C.

Circuit—the court vested with exclusive jurisdiction over

petitions for review of the EPA’s promulgation of national

standards, rules, and regulations under the CAA. See 42

U.S.C. § 7607(b)\(1).

For instance, the Ninth Circuit’s decision conflicts with the

D.C. Circuit’s recent decision in American Corn Growers

Ass'n v. EPA, 291 F.3d 1 (D.C. Cir. 2002), a case involving

the States’ authority to make determinations very much like

the BACT determination at issue here. American Corn

Growers involved the States’ authority to determine the best

available retrofit technology (“BART”) for certain stationary

sources under the Act. The Act requires the States to deter-

mine BART for particular sources and provides that in

determining BART each State “shall” take into consideration

five enumerated statutory factors. See 42 U.S.C.

§§ 7491(b)(2)(A), (gX(2). The EPA promulgated a rule

requiring the States to consider one of the factors on a

regional, rather than source-by-source, basis. See 291 F.3d at

6. The D.C. Circuit invalidated the rule, holding that it was

“inconsistent with the Act’s provisions giving the states

broad authority over BART determinations.” /d. at 8. By

dictating that the States make BART determinations in a

particular manner, the EPA had impermissibly “constrain[ed]

authority Congress conferred on the states.” /d. at 9.

Just so here. The CAA gives the States broad authority to

make BACT determinations for particular sources. By

substituting its judgment for the State of Alaska’s in this

case, the EPA plainly “infringe[d] on [the State’s] authority

under the Act.” /d. at 9. The Ninth Circuit’s decision

sanctioning that result cannot be reconciled with American

Corn Growers.

The Ninth Circuit’s decision also conflicts with the D.C.

Circuit’s decision in Alabama Power Co. v. Costle, 636 F.2d

323 (D.C. Cir. 1980), the seminal case addressing the CAA’s

PSD provisions. Amid various challenges to the EPA’s

initial regulations implementing those provisions, the court

addressed the contention that the EPA should be required to

promulgate guidelines “detailing the manner in which States

may permit consumption of the available increments” of

certain pollutants in clean air areas. Jd. at 363-364. The

court made clear that although the EPA may prevent or

correct violations of the increment limitations under the Act,

“the agency is without authority to dictate to the States their

policy for management of the consumption of allowable

increments.” Jd. at 361. Those limitations must be observed,

the Court held, “but assuming such compliance, growth-

management decisions were left by Congress for resolution

by the states.” Jd. at 364.

: In the same vein is the D.C. Circuit’s more recent decision

in Virginia v. EPA, 108 F.3d 1397 (D.C. Cir.), modified on

other grounds, 116 F.3d 499 (1997). There, the D.C. Circuit

invalidated an EPA regulation requiring certain States to

adopt particular motor vehicle emissions standards. Relying

on this Court’s decision in Train, the D.C. Circuit held that

“Congress did not give EPA authority to choose the control

measures or mix of measures states would put in their

implementation plans.” Jd. at 1410. In sharp contrast to the

D.C. Circuit’s decisions in Alabama Power and Virginia v.

EPA, the Ninth Circuit’s decision permits the EPA to “dictate

to the States” a matter plainly within their discretion—what

constitutes BACT with respect to a particular facility.

3. The conflict between the decision below and the

decisions of the D.C. Circuit alone provides a compelling

basis for review. But the conflict created by the decision

below is by no means limited to the D.C. Circuit. For

instance, in Florida Power & Light Co. v. Costle, 650 F.2d

579 (1981), the Fifth Circuit rebuffed the EPA’s attempt to

require the State of Florida to include a particular provision

in its SIP. Florida had submitted a proposed SIP revision to

the EPA to allow a particular source to increase its emissions

limitations beyond those in Florida’s EPA-approved SIP.

The EPA approved the SIP revision, but imposed a two-year

limit on the increase. Relying on 7rain, the Fifth Circuit held

that the EPA’s action was clearly “beyond the Congressional

mandate.” /d. at 589. Under the CAA, the court explained,

States “‘imay obtain approval of their developing policy

choices as to the most practicable and desirable methods of

restricting total emissions to a level which is consistent with

the national ambient air standards.’” Jd. at 587 (quoting

Train, 421 U.S. at 80). “The great flexibility accorded the

states,” the court went on, “is further illustrated by the

sharply contrasting, narrow role to be played by EPA.” Id.

So long as a proposed SIP revision meets the criteria set out

in the Act, the EPA has no authority to “ ‘assume control of a

State’s emission limitations mix once its initial plan is

approved.’” Jd. (quoting Train, 421 U.S. at 80). By at-

tempting to do just that, the EPA had “usurp[ed] state initia-

tive in the environmental realm,” thereby “disrupt[ing] the

balance of state and federal responsibilities that undergird the

efficacy of the Clean Air Act.” Jd. at 589.

The Seventh Circuit’s decision in Bethlehem Steel Corp. v.

Gorsuch, 742 F.2d 1028 (7th Cir. 1984) (Posner, J.), is to the

same effect. There, too, the court refused to allow the EPA

to tread upon the States’ authority under the CAA and upset

the Act’s “division of responsibilities.” Train, 421 U.S. at

79. The EPA had issued an order partially approving a

proposed SIP revision submitted by the State of Michigan.

The effect of the “partial approval,” however, was to render

the proposed SIP revision more stringent than it was as

submitted. The Seventh Circuit held that the EPA could not,

“in the guise of partial approval,” make Michigan’s SIP

stricter than the State intended. /d. at 1036. If the EPA

wished to impose tougher standards, it was required to follow

the Act’s procedures for doing so—namely by promulgating

its own regulation in accordance with the Act’s criteria. See

id. at 1035. Under the CAA, the court explained, “{t}he

federal government through the EPA determines the ends—

the standards of air quality—but Congress has given the

States the initiative and a broad responsibility regarding the

means to achieve those ends.” Jd. at 1036. In short, the

CAA “creates a partnership between the states and the

federal government,” and the EPA “may not run roughshod

over the procedural prerogatives that the Act has reserved to

the states.” Jd.

The Ninth Circuit’s decision allowing the EPA to “usurp

state initiative in the environmental realm,” Florida Power &

Light Co., 650 F.2d at 589, is squarely at odds with these

decisions. Moreover, as the Seventh Circuit’s decision in

Bethlehem Steel makes clear, when the EPA prefers that a

State take a particular action, the EPA must follow proper

procedures. As ADEC explained below, the proper recourse

for the EPA in this case was not to veto the State’s discre-

tionary judgment by regulatory fiat, but rather to participate

in the public comment process on Cominco’s draft permit

and then, if it still disagreed with the State’s action after that

process, challenge ADEC’s BACT determination through the

State’s administrative review process. See ADEC 9th Cir.

Br. 53-56; PER 390-391. See also 42 U.S.C. § 7475(a)(2)

(requiring opportunity for interested persons “including

representatives of the Administrator” to submit comments on

“control technology requirements” before PSD permit may

be issued). Alaska’s laws and SIP permit any party that

participated in the public comment process to pursue an

administrative appeal of a permit decision, followed by

judicial review. See 18 Alaska Admin. Code § 50.315;

Alaska Stat. § 46.14.200. |

Contrary to Bethlehem Steel, the Ninth Circuit permitted

the EPA to bypass those channels and “run roughshod” over

the State’s prerogatives under the Act. 742 F.2d at 1036.

The Ninth Circuit’s decision is particularly intolerable as it

essentially gives the EPA free rein to invalidate a BACT

determination at any time—months, even years, after a

permit has been issued and a source has invested in the

technology approved by the State. Cf United States v. AM

General Corp., 34 F.3d 472, 474-475 (7th Cir. 1994) (hold-

ing that the EPA could not “mount a collateral attack” on a

permit as many as five years after it was issued where the

EPA had the “alternative remedy” of a state administrative

appeal followed by judicial review). The conflict between

the decision below and Bethlehem Steel in this regard further

underscores the need for this Court’s review.

Il. THE CONFLICT OVER FEDERAL-STATE

AUTHORITY IS A RECURRING ISSUE OF

NATIONAL IMPORTANCE.

Although the conflict engendered by the Ninth Circuit’s

decision alone warrants certiorari, the need for this Court’s

review is heightened by the important and recurring nature of

the question presented. Congress gave the States “great

flexibility” to achieve the goals of the CAA, Florida Power

& Light, 650 F.2d at 587, including the preservation of air

quality in clean air areas. As the D.C. Circuit explained in

Alabama Power, “[i]n the allocation of responsibilities made

by Congress” with respect to preventing the significant

deterioration of air quality, “maximum limitations have been

set.” 636 F.2d 364. “These must be observed by the states,

but assuming such compliance, growth-management deci-

sions were left by Congress for resolution by the states.” /d.

A State’s authority to determine BACT for a particular

source is “key” to its ability to “manage [its] allowed internal

growth” under the CAA. /d. at 364. The “flexible approach”

chosen by Congress “enables [a] State to consider the size of

the plant, the increment of air quality which will be absorbed

by any particular major emitting facility, and such other

considerations as anticipated and desired economic growth

for the area.” S. Rep. No. 95-127, at 31 (emphasis added).

Congress’s decision to make BACT “strictly a State and local

decision,” id., makes sense, as it is the States—not the

EPA—that are most sensitive to particular local needs and

concerns. .

The Act’s requirement that BACT be determined on a

“case-by-case,” facility-specific basis, 42 U.S.C. § 7479(3),

highlights the importance of such local considerations. In

this case, for instance, the State of Alaska, taking into

account the requisite statutory factors, made a permitting

decision that would not only result in cleaner air, but more

jobs for a struggling community situated 100 miles north of

the Arctic Circle, where geography and the harsh environ-

ment pose unique employment challenges and offer few

employment alternatives. In reaching its decision, the State

considered various site-specific conditions, as well as “the

importance of the mine to the regional economy of the

Northwest Arctic Borough.” PER 387. See id. 386-387.

The Ninth Circuit, based more than 2000 miles away in

California, was “uncomfortabl[{e]” with the State’s considera-

tion of the mine’s importance to the local economy. App.

16a. But the statute specifically directs that the States

consider “economic impacts” in determining BACT. 42

U.S.C. § 7479(3). See S. Rep. No. 95-127, at 31. Allowing

the EPA to dictate BACT to the States means allowing the

EPA to “assume control” of the States’ “developing policy

choices as to the most practicable and desirable methods of

restricting total emissions to a level consistent with” the

limitations set out in the Act. Train, 421 U.S. at 80. It also

means longer delays in the permitting process while the EPA

wrangles with the States over their decisions. That is plainly

not what Congress intended. See S. Rep. No. 95-127, at 32

(“Nothing could be more detrimental to the intent of [the

PSD] section and the integrity of [the] act than to have the

process encumbered by bureaucratic delay.”’).

The Ninth Circuit’s decision not only vitiates the States’

authority to determine BACT under the CAA, but also -

threatens the ability of the States to make numerous similar

kinds of discretionary decisions under the Act. As noted

above, for instance, the Act authorizes the States to deter-

mine the best available retrofit technology (“BART”) for

particular sources by weighing various statutory factors. See

42 U.S.C. § 7491(b)(2)(A); id. § 7491(g)(2). The Act also

authorizes the States, in consultation with the EPA, to

exclude from the definition of “small business stationary

sources” under the Act’s operating permit provisions any

category of sources that “the State determines to have

sufficient technical and financial capabilities to meet the

requirements of [the] Act.” Jd. § 7661f(c)(3)(B). In non-

attainment areas, the Act authorizes the States to determine

the lowest achievable emissions rate (“LAER”) for new and

modified major stationary sources. See id. §§ 7501(3),

7503(a)(2). Under the Ninth Circuit’s holding, the EPA

would be free to override these sorts of determinations any

time it disagrees with a State’s decision.

The potential effect of the Ninth Circuit decision is even

more far-reaching. In addition to the CAA, numerous other

statutes embody the principle of “cooperative federalism.”

See, e.g., New York v. United States, 505 U.S. 144, 167-168

(1992) (noting “numerous federal statutory schemes” of this

nature, including the Clean Water Act, 33 U.S.C. §§ 1251 et

seq., the Occupational Safety and Health Act, 29 U.S.C.

§§ 651 et seg., the Resource Conservation and Recovery Act,

42 U.S.C. §§ 6901 et seq., and the Alaska National Interest

Lands Conservation Act, 16 U.S.C. §§ 3101 et seqg.). Those

statutes also establish regulatory regimes based on shared

federal-state responsibility, whereby the federal government

sets standards and the States—if they opt to undertake the

responsibility—are given broad flexibility in implementing

those standards. Such programs “offer States the choice of

regulating * * * activity according to federal standards,”

which promotes underlying values of federalism because

“state governments remain responsive to the local elector-

ate’s preferences; state officials remain accountable to the

people.” New York v. United States, 50S U.S. at 167-168.

The Ninth Circuit decision, by transferring from the State to

the EPA core discretionary authority under one of the leading

“cooperative federalism” statutory regimes, threatens to

undermine the balance of power struck by Congress and

accepted by the States when they assumed the responsibilities

offered under the Act. This Court should not allow such a

troubling decision to stand unreviewed.

CONCLUSION

For the foregoing reasons, the petition for a writ of certio-

rari should be granted, and the judgment reversed.

Respectfully submitted,

BRUCE M. BOTELHO JOHN G. ROBERTS, JR.*

Attorney General LORANE F. HEBERT

STATE OF ALASKA HOGAN & HARTSON L.L.P.

+t of Law 555 Thirteenth Street, N.W.

P.O. Box 110300 Washington, D.C. 20004

Juneau, Alaska 99811 (202) 637-5810

(907) 465-3600

CAMERON M. LEONARD

Assistant Attorney General

STATE OF ALASKA

oe of Law ~-

100 Cushman Street, Suite 400

Fairbanks, Alaska 99701

(907) 451-2811

* Counsel of Record Counsel for Petitioner

APPENDICES

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Nos. 00-70166, 00-70169, 00-70175 and 00-70301.

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

TECK COMINCO ALASKA INCORPORATED,

Petiti

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

TECK COMINCO ALASKA INCORPORATED,

Petitioner,

Vv.

——

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

TECK COMINCO ALASKA INCORPORATED,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

CAROL M. BROWNER, ADMINISTRATOR, AND CHUCK

CLARKE, REGIONAL ADMINISTRATOR, REGION 10, OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

Argued and Submitted Feb. 13, 2001.

Submission Vacated March 27, 2001.

Resubmitted July 30, 2002.

- Filed July 30, 2002.

Before: REINHARDT, WARDLAW, and GOULD, Circuit

Judges.

WARDLAW, Circuit Judge.

The Alaska Department of Environmental Conservation

(“ADEC”) and Teck Cominco Alaska, Inc. (“Cominco”)

petition for review of three enforcement orders entered by the

United States Environmental Protection Agency (“EPA”),

which effectively invalidated a Prevention of Significant

Deterioration (“PSD”) permit issued by ADEC to Cominco.

Petitioners challenge the EPA’s authority to issue these

orders, and that the EPA abused its discretion in

ing that "ADE *s Best Available Control Technology

(“BACT”) determination did not comply with the require-

ments of the Clean Air Act and Alaska’s State Implementa-

tion Plan (“SIP”). We find that the EPA acted within its

authority and, further, that it did not abuse its discretion.

I. Background

The Clean Air Act (“the Act”), 42 U.S.C. §§ 7401-76714q,

establishes a program for controlling and improving the

nation’s air —_ through a system of shared federal and

state responsibility. The Act requires states to submit for the

EPA’s approval a state implementation plan that provides for

attainment and maintenance of the national ambient air

quality standards (“NAAQS”) promulgated by the EPA. 42

U.S.C. § 7410.

The Act’s Prevention of Significant Deterioration program

controls the level of degradation in “clean air areas” of the

nation by requiring a pollutant-emitting source to obtain a

it before construction. See 42 U.S.C. §§ 7470-7492. In

implementing the PSD program and permitting process,

States can either operate within the federal PSD program, in

which the EPA is the PSD permit issuer, or include a PSD

program within their own EPA-approved state implementa-

tion plan. 42 U.S.C. §§ 7410(a)(2)(C), 7471.

Alaska is a “clean air area” under the Act-——that is, its air

quality regions are cleaner than the national standards with

respect to ozone and nitrogen dioxide. Under Alaska’s State

Implementation Plan, which the EPA accepted as meeting the

Act’s requirements in 1983, Alaska, through the Alaska

Department of Environmental Conservation, is the PSD

permit issuer. See Approval and Promulgation of

Implementation Plans; Alaska, 48 Fed. Reg. 30623 (July 5,

1983), as amended at 56 Fed. Reg. 19284 (April 26, 1991).

For new and modified sources, the Alaska SIP requires “a

demonstration that the proposed [emissions control]

limitation represents the best available control technology”

before ADEC will issue a permit. Alaska Admin. Code tit.

18, § 50.310(d)(3) (1997).

Cominco operates the Red Dog Mine facility (“the Mine”),

a major producer of zinc concentrates, in partnership with the

Northwest Arctic Native Association, an Alaska corporation.

The Mine is approximately 100 miles north of the Arctic

Circle and about five miles west of the Noatak National

Preserve. The closest residential communities are the native

villages of Kivalina and Noatak.

- Due to its remote location, the Mine requires an independ-

ent, on-site power source. The current power supply for the

Mine consists of six diesel-fired Wartsila 5000-watt genera-

tors, labeled “MG-1” through “MG-6,” which were con-

structed under a 1988 PSD permit. In April 1996, Cominco

began its Production Rate Increase (“PRI”) project to boost

the Mine’s output of zinc and zinc concentrates. Cominco

determined it needed more electricity at the Mine to power

the additional mining equipment.

In June 1998, Cominco submitted an application to ADEC

for a new PSD permit, requesting permission to increase the

amount of nitrogen oxides (“NOx”), a regulated air pollutant,

from its MG-5 generator. Cominco’s application proposed

the use of “Low NOx” as BACT for MG-5. Low NOx is a

process that uses high-combustion air temperatures to better

atomize toxic particles, thereby reducing the amount of NOx

released into the environment. A review by ADEC, however,

reached the contrary conclusion that Selective Catalytic

Reduction (“SCR”), a process in which exhaust is injected

with ammonia or urea and then combined with a catalyst,

was BACT for MG-S.

Cominco responded by amending its application in April

1999. As an alternative to installing SCR on MG-5,

Cominco volunteered to install the less costly Low NOx

technology on all six of its existing generators, including

those not subject to BACT standards, and on a proposed

seventh generator, “MG-17.”

In its May 4, 1999 Preliminary Technical Analysis Report,

ADEC accepted Cominco’s proposal because it would reduce

the total NOx output from the Mine to a level comparable to

that which would result were SCR installed in only the MG-5

and MG-17 generators.

In July 1999, the EPA entered the discussion over

Cominco’s application at the urging of the National Park

Service, which had expressed concern that the “[n]itrogen

oxide emissions . . . could affect vegetation at Cape Krusen-

stern National Monument and Noatak National Preserve.”” In

a letter to ADEC, the EPA stated that SCR was tlic best

available control technology for the MG-5 and MG-17

generators, and that “the PSD program does not allow the

imposition of a limit that is less stringent than BACT even if

the equivalent emission reductions are obtained by imposing

new controls on other emission units.”

On September 3, 1999, ADEC issued a Final Technical

Analysis Report and permit decision, concluding that SCR

was not economically feasible and that Low NOx was instead

BACT. The EPA responded with a review of ADEC’s

report, asserting that ADEC’s cost-effectiveness estimate for

SCR was “well within the range that the EPA considers

reasonable,” and that Cominco had not adequately demon-

strated why SCR was economically infeasible.

ADEC, Cominco, and the EPA met to discuss the pending

PSD permit, agreeing to install Low NOx on MG-1, MG-3,

MG-4, and MG-5, but without agreeing on BACT for MG-

17.

After further unsuccessful negotiations, the EPA issued a

“Finding of Noncompliance Order” on December 10, 1999,

stating that ADEC’s authorization of Cominco’s construction

and installation of new equipment was not in compliance

with the Clean Air Act and the Alaska SIP. Pursuant to

Sections 113(a)(5) and 167 of the Act, 42 U.S.C. §§

7413(a)(S5) and 7477, the EPA ordered ADEC to withhold

issuance of Cominco’s PSD permit.

Later that same day, however, in disregard of the EPA’s

order, ADEC issued the PSD permit along with a second

Final Technical Analysis Report.

On February 8, 2000, the EPA sent a letter to ADEC with a

formal finding that the December 10, 1999 report and PSD

permit failed to comply with federal and state PSD require-

ments. On the same day, the EPA issued a second order to

Cominco preventing the company from beginning construc-

tion on the MG-17 generator until Cominco had demon-

strated to the EP,’,’s satisfaction compliance with the Act and

the SIP.

The EPA’s third order, dated March 7, 2000, modified the

February 8, 2000 order to allow Cominco to engage in

summer-dependent construction activities.

On April 25, 2000, the EPA withdrew its December 10,

1999 order prohibiting ADEC from issuing the permit. In an

accompanying letter, however, the EPA emphasized that its

findings of noncompliance in the December 10, 1999 and

February 8, 2000 orders remained unchanged.

ADEC and Cominco petition this court for review of the

December 10, 1999 Finding of Noncompliance and Order;

the February 8, 2000 Administrative Order; and the March 7,

2000 Amended Administrative Order. Petitioners claim that

the EPA exceeded its authority by issuing enforcement orders

invalidating ADEC’s issuance of Cominco’s PSD permit,

and that ADEC acted within its discretion when making its

BACT determination.

II. Procedural History on Appeal and Jurisdiction

_ The EPA initially challenged our subject matter jurisdiction

in a motion to dismiss, which we denied without prejudice,

and again in conjunction with the merits of the appeal. In an

order dated March 27, 2001, Alaska v. United States EPA,

244 F.3d 748 (9th Cir. 2001), we determined that we have

jurisdiction pursuant to Section 307(b)(1) of the Clean Air

Act because the EPA’s Administrative Orders to ADEC and

Cominco constitute final agency action. 42 U.S.C. §

7607(b)(1) (granting jurisdiction to review final actions of

the Administrator). Applying the test in Bennett v. Spear,

520 U.S. 154 (1997), we held that the EPA’s actions were

final for the purposes of llate review because the EPA’s

findings represented its “ position on the factual circum-

stances,” the orders had determined the rights and obligations

of the parties, and legal consequences would follow if

Cominco chose to disregard the orders and commence

construction. Alaska, 244 F.3d at 750.

To address Petitioners’ contention that the record was

incomplete, we also directed the EPA to submit a complete

administrative record, withdraw its orders, or file an action in

district court. The EPA submitted a declaration that the

record was, in fact, complete. On August 3, 2001, we

directed Petitioners to respond to the EPA’s declaration. In

their responses, all the parties effectively agreed that the

record as it stood was adequate to resolve the issues on

appeal.

On February 28, 2002, in light of the parties’ agreement as

to the completeness of the record, we requested supplemental

briefing on the question of the EPA’s authority to issue the

orders. Having resolved these preliminary disputes, we now

turn to the merits of the appeal.

III. Authority of the EPA

We agree with the EPA that the plain text, structure, and

history of the Act compel the conclusion that the administra-

tive orders fell within the EPA’s enforcement and oversight

authority.

Under the traditional method of statutory construction, the

interpretation of a statute “begin{s] with the plain meaning of

its language.” Jn re Bonner Mall Partnership, 2 F.3d 899,

908 (9th Cir. 1993). “Our task is to give effect to the will of

Congress, and where its will has been expressed in reasona-

bly plain terms, that language must ordinarily be regarded as

conclusive.” Griffin v. Oceanic Contractors, Inc., 458 U.S.

564, 570 (1982) (internal quotation marks omitted).

The EPA’s enforcement powers are outlined in Section

113(aX(5), 42 U.S.C. § 7413(a)(5), and Section 167, 42

U.S.C. § 7477, of the Act.

Section 113(a)(5) provides:

Whenever, on the basis of any available information, the

Administrator finds that a State is not acting in compliance

with any requirement or prohibition of the chapter relating

to the construction of new sources or the modification of

existing sources, the Administrator may—

(A) issue an order prohibiting the construction or modi-

fication of any major stationary source in any area to

which such requirement applies;

(B) issue an administrative penalty order in accordance

with [42 U.S.C. § 7413(d)], or

42 U.S.C. § 7413(a)(5). The referenced “chapter” includes

the PSD permit program in “Part C—Prevention of Signifi-

cant Deterioration of Air Quality.” See 42 U.S.C. § 7475;

H.R. Rep. No. 101-490(I), pt. 10, at 391 (1990) (Section

113(a)(5) “authorizes enforcement actions where a State is

not acting in compliance with any requirement of Part C or

Part D of Title I.”).

Under Section 167, the Administrator “shall ... take such

measures, including issuance of an order, or seeking injunc-

tive relief, as necessary to prevent the construction or modifi-

cation of a major emitting facility which does not conform to

the requirements of this part... .” 42 U.S.C. § 7477. “This

part” refers to Part C, which establishes the PSD program.

The PSD program is implemented through a permitting

system for new and modified “major emitting facilities” in

clean air areas. 42 U.S.C. §§ 7475, 7479(1). To receive a

permit, the applicant must fulfill the “preconstruction re-

quirement” that a “proposed facility [be] subject to the best

available control technology for each pollutant subject to

regulation. ...” 42 U.S.C. § 7475(a)(4). Thus, subjecting a

facility to BACT is both a “requirement... of the chapter

relating to the construction of new sources or the modifica-

tion of existing sources” under Section 113(a)(5), and a

“requirement{[ ] of this part” under Section 167. See S. Rep.

No. 95-127, at 12 (1977), reprinted in 3 A Legislative History

of the Clean Air Act Amendments of 1977, at 1386 (Comm.

Print 1978) (“[T]here is a national requirement that each new

major facility to be located in a clean air area install the best

available control technology.”’).

BACT is defined in Section 169(3) as

an emission limitation based on the maximum degree of

reduction of each pollutant subject to regulation under this

chapter emitted from or which results from any major

emitting facility, which the permitting authority, on a case-

by-case basis, taking into account energy, environmental,

and economic impacts and other costs, determines is

achievable for such facility. . . .

42 U.S.C. § 7479(3). Here, ADEC, as the “permitting

authority,” made the initial BACT decision. Because the

EPA based its orders on the finding that ADEC had not

complied with the BACT requirement, the orders were

authorized by the plain language of Section 113(a)(5), as

“order[s] prohibiting the construction or modification of any

major stationary source in any area to which such require-

ment applies,” and of Section 167, as orders “necessary to

prevent the construction or modification of a major emitting

facility which does not conform to the requirements of this

part.”

The structure and legislative history of the Act further

support the EPA’s authority to issue the enforcement orders.

Since the original Clean Air Act of 1963, state and local

governments have had “primary responsibility” for “the

prevention and control of air pollution at its source.” Train v.

NRDC, 421 U.S. 60, 64 (1975); 42 U.S.C. § 7401(a)(3).

Following disappointing state response to air pollution

concerns, Congress has consistently increased over time

federal authority in pollution control.

In 1970, Congress amended the Act, Pub. L. 91-604, 84

Stat. 1676, “in order to assure that the requirements of the act

would be met if the State failed to adopt, implement, or

enforce the necessary measures.” S. Rep. No. 95-127, at 326

(1977), reprinted in 1977 U.S.C.C.A.N. 1077, 1405; see

Train, 421 U.S. at 64. Fundamentally restructuring the Act

“to create an aggressive federally-orchestrated program for

air pollution control,” the amendments directed the EPA to

publish NAAQS and the states to develop implementation

plans to meet them. William V. Luneburg, Clean Air Act

Implementation and the Impact of Whitman v. American

——

10a

Trucking Associations, Inc., 63 U. Pitt. L. Rev. 1, 5 (2001);

42 U.S.C. § 7410(a)(1).

In 1977, when it became clear that many areas of the coun-

try would not attain the NAAQS by the 1970 Amendments’

statutory deadline, Congress extended the deadline and

amended the Act, dividing the country into nonattainment

areas and clean air areas, and establishing the Prevention of

Significant Deterioration program to prescribe allowable

levels of air quality degradation in clean air areas. Douglas

R. Williams, Cooperative Federalism and the Clean Air Act:

A Defense of Minimum Federal Standards, 20 St. Louis U.

Pub. L. Rev. 67, 76 (2001). Congress recognized that the

states experienced internal industry “pressure... to relax

their standards with the threat of industrial relocation in

other, more permissive States.” S. Rep. No. 95-127, at 136-

37 (1977), reprinted in 1977 U.S.C.C.A.N. 1077, 1215.

Overarching federal leadership provided “protection for

States exercising their right to maintain clean air.” Jd.

The 1990 Amendments strengthened the EPA’s enforce-

ment authority in cases where states fail to enforce SIPs or

permit requirements. See H.R. Rep. No. 101-952, at 348,

358 (1990), reprinted in 1990 U.S.C.C.A.N. 3385, 3731,

3741. Amendments to Section 113(a)(5) extended enforce-

ment authority to include not only failure to comply with

state implementation plan provisions, but also a state’s

failure to comply with “any requirement or prohibition” of

the Act relating to new or modified sources. H.R. Rep. No.

10t-490(1), pt. 10, at 391.

Thus, although the state has discretion to make BACT

determinations as the permitting authority, the Act provides

for EPA enforcement when the state issues a permit based on

an improper determination. See H.R. Rep. 95-564, at 152

(1977), reprinted in 3 A Legislative History of the Clean Air

Act Amendments of 1977, at 533 (Comm. Print 1978) (“The

Administrator shall issue orders and seek other action to

prevent the issuance of an improper permit.”). Therefore,

based upon the plain language and the legislative history of

the Act and amendments to it, we hold that the EPA has the

lla

ultimate authority to decide whether the state has complied

with the BACT requirements of the Act and the state SIP.

ADEC and Cominco contend that the EPA exceeded its

authority in issuing the three administrative orders predicated

on a finding that ADEC’s BACT determination was inade-

quately justified. They argue that because Section 169(3)

gives ADEC, the “permitting authority,” discretion to deter-

mine BACT, the EPA lacked authority to veto ADEC’s

judgment based on a mere difference of opinion as to which

technology was BACT.

This argument is without merit because neither Section

113(a)(5) nor Section 167 contains any exemption for

requirements that involve the state’s exercise of discretion.

Nothing in the BACT definition of Section 169(3) limits the

EPA’s authority. It does not follow from the placement of

initial responsibility with the state permitting authority that

its decision is thereby insulated from the oversight and

enforcement authority assigned to the EPA in other sections

of the statute.

Petitioners further contend that the EPA’s authority extends

only to determining whether ADEC satisfied what they term

“objective requirements” listed in the Act and the SIP.

However, it is not clear what Petitioners mean by “objective

requirements,” as opposed to, presumably, discretionary

requirements. Instead of defining such requirements, Peti-

tioners offer a non-exhaustive list, including: the require-

ment of a PSD permit, the inclusion of a BACT determina-

tion in the permit, compliance with federally set limits on

emissions, and consideration of energy, environmental,

economic, and other costs. Whereas failure to comply with

any of the foregoing objective requirements would justify the

EPA’s issuance of enforcement orders under Sections

113(a)(5) and 167, Petitioners argue, the state’s BACT

determination itself is not subject to EPA approval or veto.

In support of this distinction, Petitioners cite United States

v. Solar Turbines, Inc., 732 F. Supp. 535 (M.D. Pa. 1989), in

which the district court analyzed whether a source’s actions

constituted a violation of the Act:

eee eee

l2a

[A] violation is to be assessed against objective stan-

dards, namely the source’s failure to apply for a permit or

receive a permit prior to construction; failure to supply

information requested of it by the issuing authority, or

failure to comply with specific quantifiable air quality

standards or restrictions on emission levels.

Id. 539. However, this case sheds no light on Petitioners’

argument because it examined the requirements that a source

must meet under the Act. Here, the question presented is

what requirements the state must meet.

In a move that seems to undermine their position, Petition-

ers also quote a Legal Opinion by the EPA’s Office of

General Counsel to define what they mean by “objective

requirements:”

[I}n the case of a decision applying best available control

technology (BACT) under Section 165(a)(4) for PSD, if a

state has met all procedural norms, considered all avail-

able control technologies, and given a reasoned justifica-

tion of the basis for its decision, EPA has no grounds on _

which to challenge a final substantive state decision that

does not violate such objective standards.

(emphasis added).

As the emphasized portion demonstrates, this Opinion

actually supports the EPA’s authority to determine the

reasonableness or adequacy of the state’s justification for its

decision, which is exactly what the EPA did here. The cover

letter to the December 10, 1999 Finding of Noncompliance

and Order stated the EPA’s belief that:

ADEC’s own analysis supports the determination that

BACT is selective catalytic reduction (SCR)... ADEC’s

decision in the proposed permit therefore is both arbitrary

and erroneous.... [T]he State’s record reflects that the

cost-effectiveness and the collateral issues of energy, en-

vironmental, or economic impacts, and other costs, do not

justify failure to select SCR as BACT in this case.

l3a

Whatever Petitioners mean by “objective requirements,” they

must concede that the provision of a reasoned justification is

one of them. We conclude, therefore, that the EPA had the

authority to issue findings and orders on the ground that the

State failed to provide an adequate justification for its BACT

decision.

IV. Validity of the Orders

Petitioners alternatively argue that the EPA erred in finding

that ADEC was not in compliance because ADEC’s BACT

determination fulfilled all requirements of the Act. The EPA

maintains that ADEC’s determination that Low NOx was

BACT was “nothing short of incomprehensible, unreasoned,

Under the Act, we may reverse a final action by the EPA if

it is “arbitrary, capricious, an abuse of discretion, or other-

wise not in accordance with law.” 42 USC. §

7607(d)(9)(A); Exxon Mobil Corp. v. United States EPA, 217

F.3d 1246, 1248 (9th Cir. 2000). Upon review of the admin-

istrative record, we conclude that EPA did not act arbi-

trarily or iciously in issuing its Findings of Noncompli-

ance and prohibiting construction of the MG-17

generator until ADEC produced a valid PSD permit.

A common approach to determining BACT is the “top-

down” method, which ADEC to apply. Under this

method, as detailed in the EPA’s New Source Review Work-

shop Manual (1990), the applicant ranks all available control

technologies in descending order of control effectiveness.

The most stringent technology is BACT unless the applicant

can show that it is not technically feasible, or if y,

environmental, or economic i ts justify a conclusion

it is not achievable. Citizens for Clean Air v. United States

EPA, 959 F.2d 839, 845-46 (9th Cir. 1992). If the top choice

is eliminated, then the next most stringent alternative is

considered, and so on. The most effective control option not

eliminated is BACT. /d.

Although the top-down h is not mandated by the

Act, if a state purports to follow this method, it should do so

l4a

in a reasoned and justified manner. ADEC’s December 10

Technical Analysis Report rejected SCR because it would

have adverse economic impacts on the Red Dog Mine. The

report states that there are several situations in which a

permitting authority can reject a control option for economic

considerations: (1) when the applicant, i.e., Cominco, shows

that the costs of the control are disproportionately high

compared to the cost of control in recent permit decisions; (2)

when the cost-effectiveness of the control is outside the range

of costs being borne by similar sources in recent BACT

determinations; and (3) when the applicant shows the cost of

ee option will cause adverse economic impact to the

acility.

ADEC’s report demonstrates, however, that none of these

situations were present. As to the first situation, the report

reveals that there were no recent permit decisions involving

BACT determinations for diesel engines used as primary

power generators.

As to the second, the cost-effectiveness of recent NOx

control BACT decisions ranged from $0 to $7,000 per ton of

NOx removed. According to ADEC’s estimate, the cost-

effectiveness of SCR was $2,100 per ton of NOx removed, a

cost well within the applicable range.

Finally, ADEC attempted to determine whether the costs of

SCR would be excessive by analogizing the costs of the MG-

17 generator to the costs of other electric utilities. ADEC

began with the assumption that SCR for MG-17 would cost 3

cents per kilowatt-hour. It reasoned that if Cominco “did not

have a powerhouse, it would probably buy power from a

rural Alaska utility. From a cursory review, it appears that

the average cost of electricity in rural-Alaska is approxi-

mately 15¢ per kilowatt hour.” Because a 3¢ increase would

“be equivalent to a 20% increase in the electric rate of the

facility,” ADEC concluded that “this is a disproportionate

cost increase when viewed as an electric utility.

This rationale is unfounded, however, because Cominco

does not, in fact, buy power from an electric utility. There-

fore, the use of the 15¢ figure is not justified. ADEC itself

1Sa

acknowledges the flimsiness of its own hypothetical in the

report:

Another perhaps better way to determine if the cost of

BACT is excessive, is for the applicant to present detailed

financial information showing its effect on the operation.

However, the applicant did not present this information.

Therefore, no judgment can be made as to the impact of a

$2.1 million control cost on the operation, profitability,

and competitiveness of the Red Dog Mine.

ADEC’s report demonstrates that Cominco failed to show

that any of the situations in which a control option can be

rejected for cost considerations was applicable. Rather than

concluding, logically, that Cominco had failed to show that

SCR could be eliminated, ADEC instead invented its own

reason for the economic infeasibility of SCR. ADEC de-

scribed the Mine’s “dramatic” reversal of unemployment

rates in its borough:

Before the Mine opened in 1990, borough wages were

well below state average wages. ... The Mine now pro-

vides high paying year round employment. .

Cominco’s contractors, vendors, and wages have boosted

the borough’s private sector economy. ... With govern-

ment support and endorsement of Cominco’s operations,

including the Production Rate Increase Project, the Red

Dog Mine will continue to influence and benefit the resi-

dents and economy of this region.

ADEC concluded that it had chosen, as the “foremost

consideration to judge economic impacts of SCR,” the

“direct cost of SCR technology and its relationship to

retaining the Mine’s world competitiveness as it relates to

community socioeconomic impacts.” To “support

Cominco’s [PRI Project]... and its contributions to the

region,” ADEC rejected SCR “based on excessive economic

cost—$2.9 million capital cost, with annualized costs

approaching $635,000.” The report fails to explain how the

costs of SCR would affect the Mine’s world competitiveness

or why the capital cost is excessive.

l6a

ADEC’s apparent motivation for the elimination of SCR—

appreciation for Cominco’s contribution to the local econ-

omy—is not an accepted justification in the top-down

approach. Worse still, it is uncomfortably reminiscent of one

of the very reasons Congress granted EPA enforcement

authority—to protect states from industry pressure to issue

ill-advised permits. See S. Rep. No. 95-127, at 136.

Because ADEC’s report shows that (1) Cominco failed to

meet its burden of demonstrating that SCR was economically

infeasible; and (2) ADEC failed to provide a reasoned

justification for its elimination of SCR as a control option,

the EPA did not act arbitrarily and capriciously in concluding

that ADEC abused its discretion by making an internally

inconsistent and unreasonable BACT determination. The

petition for review is therefore

DENIED.

17a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Nos. 00-70166, 00-70301, 00-70169, 00-70175.

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION, COMINCO ALASKA, INC., AN ALASKA

CORPORATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

CHRISTIE WHITMAN,” ITS ADMINISTRATOR, AND CHUCK

CLARKE, REGIONAL ADMINISTRATOR, REGION 10, OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Responients.

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION, COMINCO ALASKA, INC., AN ALASKA

CORPORATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

CHRISTIE WHITMAN, ITS ADMINISTRATOR, AND CHUCK

CLARKE, REGIONAL ADMINISTRATOR, REGION 10, OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

* Pursuant to Fed. R. App. P. 43(c), Christie Whitman is auto-

matically substituted as a party respondent for Carol Browner.

De a OO ee

18a

Argued and Submitted Feb. 13, 2001

Filed March 27, 2001

Before: REINHARDT, WARDLAW and GOULD, Circuit

Judges.

ORDER

The Alaska Department of Environmental Conservation

(“ADEC”) and Cominco Alaska, Inc. (“Cominco”) petition

this Court for review of three enforcement orders (the

“Orders”) entered by the United States Environmental

Protection Agency (“EPA”), which effectively invalidated an

air quality construction permit issued by ADEC for the

construction of a power generator at Cominco’s Alaskan

mining facility located about 100 miles above the Arctic

Circle. Petitioners challenge the EPA’s authority to invali-

date the permit under federal and state law. The EPA asserts

that it has the authority to regulate such construction under

the Clean Air Act (“CAA” or the “Act”’) and further claims

that this Court lacks subject matter jurisdiction to consider

ADEC’s and Cominco’s petitions because the Orders are not

“final agency action” subject to review in the United States

Courts of Appeal.

We first consider the question of our jurisdiction to review

the Orders. The parties agree that we have jurisdiction, if at

all, pursuant to section 307(b)(1) of the CAA, 42 U.S.C. §

7607(b)(1), which gives the Court jurisdiction over “any...

final action taken, by the Administrator.” The EPA argues

that none of the Orders constitutes final agency action and

thus none is reviewable.

Each of the Orders is predicated on the EPA’s position that

the Best Available Control Technology (“BACT”) for the

proposed new Wartsila generator MG-17 at Cominco’s Red

Dog Mine facility is Selective Catalytic Reduction as op-

19a

posed to Low NOx emission reduction, a less costly technol-

ogy proposed by Cominco and approved by ADEC. In its

“Finding of Noncompliance and Order” dated December 10,

1999, the EPA found that the Low NOx emission control for

MG-17 does not comply with the CAA or the Alaska State

Implementation Plan (“SIP”) for the CAA. Pursuant to 42

U.S.C. §§ 7413(a)(S) and 7477, the EPA ordered ADEC to

withhold issuance of its proposed Prevention of Significant

Deterioration (“PSD”) permit for Cominco. Concluding that

Low NOx was the appropriate BACT for the MG-17 genera-

tor, ADEC, shortly after receiving the December 10, 1999

Order, issued the final PSD permit. In a second order

directed to Cominco dated February 8, 2000, finding it

“necessary to prevent any further construction or modifica-

tion at the Red Dog mine facility,” the EPA prohibited

Cominco from commencing any and all construction or

modification activities at the Red Dog Mine facility associ-

ated with the Wartsila generator MG-17. The EPA’s third

order, dated March 7, 2000, modified the February 8, 2000

Order to accommodate the unique weather-related construc-

tion limitations present at the Red Dog Mine site and allowed

certain preliminary summer construction activities. On April

25, 2000, the EPA withdrew its December 10, 1999 Order

directed to ADEC, in light of ADEC’s issuance of the

construction permit after it received the order, noting that

“the Order does not impose any continuing prohibitions or

obligations to ADEC.” In an accompanying letter, however,

the EPA Deputy Regional Administrator stated:

EPA still believes that the final PSD permit issued to

Cominco is not in compliance with th~ Clean Air Act or

the Alaska SIP. Region 10 is withdrawing only the Order

portion of the December 10, 1999 document. Thus, the

December 10, 1999 and February 8, 2000 Findings under

Section [7413(a)(5)] remain unchanged, as does the

March 7, 2000 Order issued to Cominco.

ADEC and Cominco petitioned for review of the Orders.

Respondents, the EPA, Christie Whitman, and Chuck Clarke,

Regional Administrator, Region 10, move to dismiss the

petitions for lack of subject matter jurisdiction. The EPA

20a

asserts that the Administrative Orders issued to Cominco and

ADEC do not constitute the “final action of the Administra-

tor.” In Bennett v. Spear, 520 U.S. 154 (1997), recently

reaffirmed in Whitman v. American Trucking Ass‘ns, Inc.,

531 U.S. 457 (2001), the Supreme Court explained that two

conditions must be satisfied in order for agency action to be

“final” for purposes of appellate review: the action must

mark the “consummation” of the agency’s decision-making

process, and it must “be one by which rights or obligations

have been determined, or from which legal consequences

will flow.” Bennett, 520 U.S. at 177-78 (citation and quota-

tions omitted).

Like the Supreme Court in Bennett and American Trucking,

we have little trouble concluding, especially in light of the

representations as to the EPA’s position made in oral argu-

ment by its counsel, that both Bennett conditions are met

here. The EPA argues that the Orders are not a “final ac-

tion,” although the findings in the Orders are its “last word”

on its position as to Selective Catalytic Reduction as BACT

for MG-17 and Cominco is in legal jeopardy if it fails to

comply with the Orders. The EPA contends that because it

has not actually commenced an enforcement action, the

Orders are not subject to review. There is, however, no

question that the EPA asserted its final position on the factual

circumstances upon which the Orders are predicated: It is

EPA’s position that if Cominco builds the MG-17 generator

using Low NOx it would be in violation of the Act, the

Alaskan SIP, and its Orders. The EPA’s position is unalter-

able; according to counsel, it would change only if the

circumstances surrounding the construction of MG-17

change.

The “rights or obligations” of the parties have been deter-

mined by these Orders. As paragraph No. 49 of the Findings

of Fact in the February 8 Order states, the EPA found it

“necessary” to issue the Order to “prevent any further

construction or modification at the Red Dog mine facility.”

The EPA is right: The effect of the February 8 Order is to

halt construction at Cominco’s Red Dog Mine facility at a

considerable cost of both time and money to Cominco.

2la

Moreover, “legal consequences will flow,” if Cominco

chooses to disregard the Order and go forward with construc-

tion. As the EPA wrote in its Motion to Dismiss the Petition

for Lack of Subject Matter Jurisdiction, “EPA could ask, and

the district court could assess, penalties both for Cominco’s

alleged violation of the Act’s PSD requirements and for any

alleged violation of the order.” At argument EPA counsel

explained that the language “could” referred only to its

decision to seek enforcement of its Orders and a district

court’s decision to enforce them. Thus the “could” language

did not refer to a tentative conclusion as to the merits by the

EPA, or to any ongoing EPA proceedings in that regard; it

referred simply to whether the EPA would commence

judicial proceedings to remedy what it views irretrievably as

a violation of the Act. Under EPA’s construction of its

Orders, if it decides to institute such proceedings, Cominco

and its employees would be subject to criminal and civil

penalties for the violation of its Orders, as well as for the

violation of the CAA.

Finally, our review will not benefit from further factual

development of the record, as the principal issue before us is

a legal question—whether it is the state, through ADEC, or

the EPA which bears the ultimate responsibility and authority

to decide what emissions reductions will be required from

which sources, see 42 U.S.C. §§ 7410(a), 7411, and whether

the EPA acted in an arbitrary and capricious manner in

issuing the Orders based on the record before it at the time it

made its decision that the use of Low NOx on MG-17 would

violate the Act and the PSD provisions of the SIP.

Having determined that the Orders are final and that we

have jurisdiction, we do not consider the merits at this time

because in order to do so we require, as explained below, the

submission of an appropriate administrative record as well as

further briefing. Also, because the EPA argued to this Court

that the Orders were not “final” and that it had not yet

determined whether to seek enforcement in the district court,

it seems appropriate to provide the Agency with a fair

opportunity either to commence such an enforcement pro-

ceeding, as contemplated by 42 U.S.C. § 7413(b), or to

22a

withdraw the Orders, before we proceed further with the

petition for review. Thus, we express no view as to (a)

whether the EPA has the authority under the CAA to invali-

date the ADEC permit, or (b) if so, whether the EPA acted

arbitrarily and capriciously in issuing the Orders. Accord-

ingly, we order as follows:

Within 60 days of this order, the EPA may either (1) sub-

mit a complete administrative record which will allow this

Court to review the justifications for the EPA’s decisions to

issue the Orders before us; (2) withdraw the Orders that are

the subjects of these petitions; or (3) file an enforcement

action, pursuant to 42 U.S.C. § 7413(b), in the appropriate

United States District Court.'

With respect to the first option, the record we would be

called upon to review, should we decide that the EPA has the

authority to overrule ADEC, is that upon which the EPA

relied in its determination that Selective Catalytic Reduction,

and not Low NOx, is the BACT for the MG-17. See 5

U.S.C. § 706; Ober v. EPA, 84 F.3d 304, 313-15 (9th Cir.

1996); see also Florida Power & Light. Co. v. Lorion, 470

U.S. 729, 743-44 (1985) (“The task of the reviewing court is

to apply the appropriate APA standard of review, 5 U.S.C. §

706, to the agency decision based on the record the agency

presents to the reviewing court.”); Harrison v. PPG Indus.,

Inc., 446 U.S. 578, 597 (1980) (requiring a “meaningful

record to review,” which “fully comports with the traditional

role of appellate courts in reviewing agency decisions that

are based on development of factual issues by means of an

administrative record”). To the extent necessary to provide a

full and complete administrative record of the basis for the

agency’s final decision and the Orders, the EPA must _

duce not only documentary evidence but also affidavits of the

Administrator or her delegates as needed to permit review.

See Camp v. Pitts, 411 U.S. 138, 142-43 (1973); Citizens to

' An enforcement action in the appropriate United States Dis-

trict Court in our view may ge a preferable means of resolv-

ng the issues in this case, for the parties in that context will be

able to develop a full record on pertinent issues.

23a

Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420-21

(1971) (holding that “since the bare record may not disclose

the factors that were considered or the Secretary’s construc-

tion of the evidence it may be necessary . . . to require some

explanation in order to determine if the Secretary acted

within the scope of his authority and if the Secretary’s action

was justifiable under the applicable standard”), overruled on

unrelated grounds by Califano v. Sanders, 430 U.S. 99, 105

1977). Communications setting forth and evaluating alterna-

tives to the Orders must also be included.

Should the EPA opt to submit the administrative record

rather than to pursue an enforcement action or to withdraw its

Orders, petitioners and respondents are ordered to file, within

21 days of such submission, supplemental briefs, not to

exceed 15 pages, assessing the impact, if any, of Whitman v.

American Trucking Ass‘ns, Inc., 531 U.S. 457 (2001), on the

question whether it is the EPA or ADEC which has the

ultimate authority to make BACT determinations.

The parties shall provide notice of the status of these pro-

ceedings to this Court within 60 days hereof. Submission of

this matter is hereby vacated until further notice by this

Court.

IT IS SO ORDERED.

Re 8 oe BOOS ek

24a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Nos. 00-70166, 00-70169, 00-70175 and 00-70301

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

COMINCO ALASKA INC .» AN ALASKA CORPORATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

COMINCO ALASKA INC., AN ALASKA CORPORATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

25a

COMINCO ALASKA INC., AN ALASKA CORPORATION,

Petitioner,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY;

CAROL M. BROWNER, ADMINISTRATOR, AND CHUCK

CLARKE, REGIONAL ADMINISTRATOR, REGION 10, OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondents.

Filed Feb. 28, 2002

A. ey REINHARDT, WARDLAW and GOULD, Circuit

Judges.

ORDER

Having considered the recent submissions of the ies

agreeing to the factual record on appeal and the briefs filed

beginning in June 2000 (almost two years ago), we have

determined that supplemental briefing would be of assistance

in the determination of the cause. Therefore, it is ORDERED

that each side file a supplemental brief not to exceed twenty-

five pages within twenty-eight days of the date hereof on the

following question: whether it is the state of Alaska (through

ADEC) or the EPA that bears the ultimate legal authority and

responsibility under the Clean Air Act to determine whether

an individual Prevention of Significant Deterioration permit

issued by Alaska pursuant to its State Implementation Plan

(SIP) meets the requirements of the Clean Air Act or the SIP.

If any pay desires additional oral argument in this matter,

it file a request, along with a brief statement of the

reasons it believes additional argument is necessary.

It is so ( RDERED.

26a

APPENDIX D

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

In the Matter of: )

)

State of Alaska Department ) Docket No. CAA-10-99-0263

of Environmental )

Conservation, ) FINDING OF

NONCOMPLIANCE and

ORDER

113(a)(5) and 167 of the

Clean Air Act.

)

Proceeding under Sections )

) (42U.S.C. §§ 7413 and 7477)

)

I. FINDING OF NONCOMPLIANCE and ORDER

1. This Finding of Noncompliance and Order is issued by

the Regional Administrator, Region 10, United States Envi-

ronmental Protection Agency (EPA), to the State of Alaska,

Department of Environmental Conservation (ADEC),

pursuant to Sections 1 13(a)(5) and 167 of the Clean Air Act

(CAA or Act), 42 U.S.C. §§ 7413(a)(5) and 7477.

ant The oy of the Administrator of EPA to issue

ena to Section 1 13(a)(5) and Section

167 of the Anat 42 C. §§ 7413(a)(5) and 7477, has been

delegated to the Regional Administrator. The Regional

Administrator has consulted with the Assistant Administrator

for the Office of Enforcement and Compliance Assurance

RS Se ES ey See ie Ae.

Il. STATUTORY AND REGULATORY AUTHORITY

3. The Administrator of EPA, t to Section 109 of

the Act, 42 U.S.C. § 7409, promulgated National Primary

and Secondary Ambient Air Quality Standards (NAAQS) for

LE LI ET ELL EE IL LE CT I a A Ut tReet tac Mle YER! ee gr

SO rm | am

27a

certain criteria pollutants, including nitrogen dioxide (NO2).

40 C.F.R. §§ 50.4 to 50.12.

4. Pursuant to Section 107(d) of the Act, 42 U.S.C. §

7407(d), the Administrator promulgates lists of attainment

status designations _= each air quality control region

(AQCR) in ev These lists contain the attainment

status of each A R for each of the criteria pollutants. The

attainment status desi for the Alaska AQCRs appear

at 40 C.F.R. § 81.302.

5. Cominco Alaska, Inc. (Cominco) owns and operates

the Red Dog mine facility, a surface zinc and lead ore mining

operation, which is located in the Northern Alaska Interstate

AQCR and is in an area that is in attainment or unclassifiable

with respect to the NAAQS. 40 C.F.R. § 81.302.

6. Part C of the Act, 42 U.S.C. §§ 7470-7492, requires

the Administrator to promulgate regulations for prevention of

significant deterioration (PSD) of air quality in areas desig-

nated in accordance with Section 107(d) of the Act, 42

U.S.C. § 7407(d), as in attainment or unclassifiable.

7. Pursuant to Sections 110 and 165(e)(3) of the Act, 42

U.S.C. hae awe 7410 and 7471(e)(3), EPA promulgated two sets of

largely identical regulations for preventing the significant

of air quality in areas where the existing air

cular isteneraetaaieaiameate In States without

a PSD program and in those States where EPA has de

authority to administer the federal PSD program to the State

the federal PSD regulations at 40 C.F.R. § 51.21 have been

into the various State Implementation Plans

(SIPs) of such States. in the remaining Sas, © EPA has

approved as part of the SIP a State imple-

mented directly by the State, as meeting de toaniemnenth of

Part C of the Act and the PSD regulations at 40 CFR §

51.166.

8. EPA has approved 18 AAC 50.020, 50.021, 50.300,

50.400, 50.510, 50.520, 50.530, 50.600, 50.620, and 50.900,

as in effect on June 2, 1988, as a revision to the Alaska SIP

and as meeting the requirements of Part C of the Act and the

ee a ere

28a

PSD regulations at 40 C.F.R. § 51.166 for preventing the

significant deterioration of air quality. See 40 C.F.R. §

52.96(a). (48 Fed. Reg. 30626, July 5, 1983, and subsequent

amendments.) References in this document to Alaska

statutory or regulatory provisions are to the current SIP-

approved versions of the statute or regulation.

9. Section 165 of the Act, 42 U.S.C. § 7475, prohibits the

construction of a major emitting facility in any area subject to

the requirements of Part C of the Act and the PSD regula-

tions unless, among other things, a permit has been issued for

the proposed facility in accordance with Part C of the Act

which sets forth emission limitations that a | to the

requirements of Part C, and the facility is sub - to

best available control technology (BACT) for each po fhutent

subject to regulation under Title I of the Act that is emitted

from or which results from such facility.

10. “Ambient air” is defined at Alaska Statutes

46.14.99(2)( 1993) as “that portion of the atmosphere, exter-

nal to buildings, to which the general public has access.”

11. “Actual emissions” as defined in 18 AAC

50.900(1)(1991) means “for each air contaminant, the™

average rate in tons per year that a facility actually emitted

the most recent two years of normal operation; the

during

department will, in its discretion, consider facility-specific

allowable emissions to be actual emissions of an air contami-

nant.”

12. “Construct” as defined in 18 AAC 50.900(13)(1991)

means “to make a change or a series of changes in operation

or any physical changes or additions to a source which

increase the actual emissions of an air pollutant.”

13. “Allowable emissions” as defined in 18 AAC

50.900(4)1991) means “the calculated emission rate of a

source or facility using the maximum rated capacity and

enforceable limitations and conditions on emissions and

operations.”

14. “Modify” as defined in 18 AAC 50.900(28)(1991)

means “to make a change or a series of changes in operation

29a

or any physical changes or additions to a source which

increase the actual emissions of an air pollutant.”

15. 18 AAC 50.300(a)(1991) states that no person may

construct, modify, reconstruct, operate, or cause the opera-

tion of a facility meeting the criteria in that subsection

without a hry from ADEC. The list of facilities covered

by 18 AAC 50.300(a) includes a facility which has allowable

emissions of more than 250 tons per of a lated air

contaminant and which is modified hee i August 7, 1980, or

after the date of the most recent permit issued to the facility

under 18 AAC 50.400(c)(3), causing an increase in actual

emissions equal to or exceeding any of the thresholds identi-

fied in that subsection.

16. A permit application for a facility subject to 18 AAC

50.300(a)(5) or (6) must include, among other things, a

detailed demonstration that the expected maximum emissions

from the facility will not cause or contribute to a violation of

an ambient air standard or allowable increment in 18 AAC

50.020(b).

17. 18 AAC 50.400(c)\(3)(A)(1991) states that ADEC will

issue a permit only if the applicant shows that, for a facility

subject to 18 AAC 50.300(a)(5) or (6), BACT for controlling

emissions of each regulated pollutant will be installed for

each new or modified source.

18. 18 AAC 50.900(9)(1991) defines “best available con-

trol technology” as an emission limitation which represents

the maximum reduction achievable for each regulated air

pollutant taking into account energy, environmental, and

19. Section 113(a\(5) of the Act, 42 U.S.C. § 7413(a)(5)

provides:

Whenever, on the basis of ary-available information, the

Administrator finds that a State is not acting in compli-

ance with any requirement or prohibition of the [Act] re-

lating to the construction of new sources or the modifica-

tion of existing sources, the Administrator may—

ew se eee

30a

(A) issue an order prohibiting the construction or

modification of any major stationary source in any area to

which such requirement applies;

(B) issue an administrative penalty order in accor-

dance with subsection (d) of this section; or

section.

Nothing in this subsection shall preclude the United

States from commencing a criminal action under subsec-

tion (c) of this section at any time for any such violation.

20. Section 167 of the Act, 42 U.S.C. § 7477, provides

that the Administrator shall take such measures, including

issuance of an order, as necessary to prevent the construction

or modification of a major emitting facility which does not

conform to the requirements of Part C of the Act.

21. Section 169(1) of the Act, 42 U.S.C. § 7479(1), de-

fines a major emitting facility, in pertinent part, as a station-

ary source which emits or has the potential to emit 250 tons

per year or more of any air pollutant.

22. A State does not conform to the requirements of Part C

of the Act if, among other things, it allows a major emitting

facility to commence construction or modification prior to

receipt of a PSD permit or issues a PSD permit to a facility

without subjecting the facility to BACT for each pollutant

subject to regulation under Title I of the Act that is emitted

from or which results from such facility.

23. A major emitting facility does not conform to the

requirements of Part C if, among other things, it commences

construction or modification prior to receipt of a PSD it

or if the facility is not subject to BACT for each pollutant

subject to + under Title I of the Act that is emitted

from or which results from such facility.

Ill. FINDINGS OF FACT

24. On June 17, 1988, ADEC issued a PSD permit, Permit

No. 8732-AA001;-that authorized the construction of the Red

a ee

3la

Dog mine facility, including the installation of five Wartsila

diesel generators (MG-1, MG-2, MG-3, MG-4, and MG-5).

25. ADEC revised and replaced the June 1988 PSD permit

on several occasions, including a revision dated July 27,

1994, Permit No. 9332-AA003, which: (a) removed from the

permit a NOx BACT limit of 750 parts per million volume

dried (ppmvd) that applied to the five Wartsila diesel genera-

tors, and substituted a limit of 109,660,000 kilowatt hours

per continuous 365-day period (kW-hr/yr) for MG-1, MG-3,

MG-4, and MG-5, (b) removed the stand-by limits on MG-2

and permitted it to full-time, and (c) authoriz~d the

installation and full-time operation of a sixth Wartsila diesel

generator (MG-6).

26. The Red Dog mine facility currently operates under

the terms and conditions of Permit No. 9332-AA003, as

amended December 4, 1996.

27. On March 27, 1996, prior to receiving an amended

PSD permit, Cominco requested that ADEC allow Cominco

to make on-site preparations for changes to the facility that

would allow for production increases. On April 2, 1996,

ADEC granted Cominco a waiver to allow the company to

conduct specified procurement and construction activities on

the condition that Cominco prepare and submit a request for

a permit amendment concurrent with the activities.

28. Between April 1996 and May 1998, Cominco con-

structed a new gyratory crusher at the Red Dog mine facility

without a permit.

29. On June 29, 1998, Cominco submitted a PSD permit

application to ADEC for what it referred to as a “production

rate increase project” that was expected to increase the

mine’s ore ing rate from approximately 2,200,000

tons per year to 3,500,900 tons per year and to increase the

production of zinc and lead concentrate from 854,000 tons

per year to 1,400,000 tons per year. Cominco submitted a

supplement to the application to ADEC on April 6, 1999. As

part of the production rate increase project, Cominco re-

quested that ADEC, among other things, remove the air

32a

quality operating restrictions on the four Wartsila diesel

generators that were installed in 1988 and which still had

operational limits on them (MG-1, MG-3, MG-4, MG-5),

“add” a seventh Wartsila diesel generator (MG-17), “add”

the new gyratory crusher that Cominco had already installed,

and approve the addition of other equipment and changes

necessary to support the production rate increase project.

30. On May 4, 1999, ADEC issued a preliminary PSD

permit (preliminary draft PSD permit) for the production rate

increase project for review and public comment. The pre-

liminary draft PSD permit proposed to remove the opera-

tional cap of 109,660,000 kW-hr/year that applied to Wartsila

diesel generators MG-1, MG-3, MG-4, and MG-S, to “add”

the seventh Wartsila diesel generator (MG-17), to “add” the

new gyrator crusher, and to approve the addition of other

equipment and changes that Cominco requested in its PSD

permit application for the production rate increase project.

31. ADEC prepared a preliminary technical analysis report

(Preliminary Technical Report) to accompany the prelimi-

nary draft PSD permit. The Preliminary Technical Report

stated that the production rate increase project is expected to

increase actual NOx emissions by up to 1,100 tons per year;

carbon monoxide (CO) emissions by 90 tons per year;

particulate matter (PM) emissions by 35 tons per year, PM

emissions less than 10 micrometers in diameter Yoo) 10) by

35 tons per year; volatile organic compound ( emis-

sions by 59 tons per year; and lead (Pb) emissions by 0.046

tons per year. The proposed production rate increase project

is expected to reduce sulfur dioxide (SO2) emissions by 37

tons per year.

32. In the preliminary draft PSD permit and Preliminary

Technical Report, ADEC concluded that, of the seven

Wartsila diesel generators, only MG-5 and MG-17 were

subject to PSD requirements and therefore required BACT.

EPA regulations require that technical and economic feasibil-

ity be considered when determining BACT. In the Prelimi-

nary Technical Report ADEC determined that Selective

Catalytic Reduction (SCR) is a technically and economically

feasible emission control technology for the Wartsila genera-

)

33a

tors and that SCR could result in reductions of 712 tons per

year of NOx for each Wartsila diesel generator. The Pre-

liminary Technical Report also concluded that installation of

low NOx controls would result in reductions of only 273 tons

per year of NOx for each Wartsila diesel generator. The

Preliminary Technical Report then concluded that BACT for

MG-5 _ MG-17 was an emission hunt based on low NOx

controls.

33. The Red Dog mine facility was at the time of construc-

tion and continues to be a “major emitting facility” under

Section 169(1) of the Act, 42 U.S.C. § 7479(1).

34. The Red Dog mine facility was at the time of construc-

tion and continues to be a facility with allowable emissions,

as defined in 18 AAC 50.900(4), of at least 250 tons per year

of a regulated air contaminant. The Red Dog mine facility 1s

therefore a “facility,” as listed in 18 AAC 50.300(a)(6).

35. The production rate increase project will “modify,” as

that term is defined in 18 AAC 50.900(28), the Red Dog

mine facility.

36. The production rate inci.ase project will increase

actual emissions of NOx, PM, PM-10, and VOC from the

Red Dog mine facility by more than the thresholds identified

in 18 AAC 50.300(a)(6)(C) and will occur after 1980 and

after the date of the most recent permit issued for the Red

Dog mine under 18 AAC 50.400(c)(3). The Red Dog mine

facility and production rate increase project are therefore a

“facility,” as listed in 18 AAC 50.300(a)(6)(C).

37. The public comment period on the preliminary draft

PSD permit for the production rate increase project ended on

June 2, 1999.

38. On June 2, 1999, the United States Department of the

Interior, National Park Service (NPS), submitted comments

on the preliminary draft PSD permit for the production rate

increase project. The NPS comments raised several concerns

with the preliminary draft PSD permit, including the follow-

ing:

34a

a. ADEC failed to subject four of the Wartsila diesel

generators (MG-1 and MG-3 through MG-5) to PSD, includ-

ing BACT. These generators are part of the production rate

increase project because the preliminary draft PSD permit

would remove an operating restriction on these generators.

b. ADEC failed to require SCR on the two Wartsila die-

sel generators which ADEC acknowledges are subject to

BACT (MG-5 and MG-1I7). SCR is BACT for the Wartsila

diesel generators.

39. By letter dated July 29, 1999, EPA informed ADEC

that it agreed with NPS’s comments and had concluded that:

a. The Wartsila diesel generators MG-1 and MG-3

through MG-S5 are subject to PSD, including BACT, because

these generators are part of the production rate increase

project since the preliminary draft PSD permit would remove

the existing operating restriction on these generators.

b. Based on ADEC’s preliminary Technical Report that

accompanied the preliminary draft PSD permit, SCR is

BACT for the Wartsila diesel generators MG-1, MG-3,

MG-4, MG-5, and MG-17.

40. On September 3, 1999, ADEC provided to EPA a final

draft permit No. 9932-AC005 for the Cominco Red Dog

mine facility. The final draft permit was accompanied by a

Final Technical Analysis Report (Final Technical Report)

and Response to Comment document.

41. The Final Technical Report concluded that an emis-

sion rate achievable with low NOx controls to be BACT on

Wartsila diesel generators MG-5 and MG-17. The final draft

PSD permit includes an emission rate limit of 121.3 Ib/hour

on MG-5 and MG-17 based on low NOx controls.

42. The final draft PSD permit does not require the instal-

lation of BACT on MG-1, MG-3, and MG-4, but instead only

proposes to reinstate the same limit on total annual emissions

from MG-1, MG-3, and MG-4 which previously applied to

total annual emissions from MG-1 through MG-S5. This limit

is listed in the final draft PSD permit as:

35a

P ©. 2259 tons NOx/year from MG-1, MG-3, and MG-

(2) 750 ppm NOx corrected to 7% oxygen from each

unit.

43. Neither the Final Technical Report nor the final draft

PSD permit clearly identify or delineate the ambient air

boundary for the Cominco Red Dog mine facility.

44. The Public Control Access Plan in final draft PSD

permit Section 19 provides that public access to the mine site

ambient air boundary is limited by sign postings placed along

corridors of potential public access, specifically, at the main

entrance to the operation on the southern boundary along the

haul road, along Red Dog Creek, and at three sites around the

boundary where the terrain may possibly accommodate

public access.

45. On September 15, 1999, EPA notified ADEC by letter

that the final draft PSD permit was deficient and that issu-

ance of the permit as proposed in the September 3,1999, final

draft PSD permit would not comply with the Clean Air Act

or the Alaska SIP requirements relating to the construction or

modification of new sources or modification of existing

sources, if issued as drafted.

IV. FINDING OF NONCOMPLIANCE

46. Based on investigation and analysis of all relevant

facts and documentation provided by Cominco and ADEC,

pursuant to Section 113(a)(5) of the Clean Air Act, 42 U.S.C.

§ 7413(a)(5), EPA finds that:

a. The April 2, 1996, ADEC authorization of Cominco’s

construction and installation of new equipment, including the

new gyratory crusher, at the Red Dog mine facility prior to

Cominco’s receipt of a PSD permit allowing construction of

such equipment did not comply with the requirements or

prohibitions of the Clean Air Act and/or the Alaska SIP

relating to the construction or modification of new sources or

the modification of existing sources.

36a

b. Neither the preliminary draft PSD permit nor the final

draft PSD permit complies with the requirements or prohibi-

tions of the Clean Air Act or the Alaska SIP relating to the

construction or modification of new sources or the modifica-

tion of existing sources. Furthermore, issuance of a final

PSD permit as proposed in the preliminary draft PSD permit

or final draft PSD permit would not be in compliance with

requirements or prohibitions of the Clean Air Act and/or the

Alaska SIP relating to the construction or modification of

new sources or the modification of existing sources.

c. The construction or major modification of the Red

Dog mine facility without a valid PSD permit violates

Section 165(a) of the Act, 42 U.S.C. § 7475(a). Conse-

quently, the issuance of this Order, pursuant to Section 167

of the Act, 42 U.S.C. § 7477, is necessary to prevent any

further construction or modification at the Red Dog mine

facility.

V. ORDER

47. Based on investigation and analysis of all relevant

facts, including any good faith efforts to comply, and pursu-

ant to Section 167 of the Act, 42 U.S.C. § 7477, effective

immediately upon issuance:

a. ADEC is prohibited from issuing a PSD permit to

Cominco’s Red Dog mine facility allowing the construction

or modification of the facility and designating low NOx

controls (or less effective controls) as BACT for Wartsila

diesel generator MG-17, unless ADEC satisfactorily docu-

ments why SCR is not BACT for the Wartsila diesel genera-

tor at the Red Dog mine facility, or ADEC has demonstrated

that the PSD permit is in compliance with the prevention of

significant deterioration provisions of Part C of the Act, 42

U.S.C. §§ 7470-7492, and the Alaska SIP relating to the

construction or modification of new sources or the modifica-

tion of existing sources. In either case, ADEC must first

obtain EPA’s written concurrence on this determination.

b. Prior to issuance of a PSD permit to Cominco for

Wartsila diesel generators MG-1, MG-3, MG-4, or MG-5,

37a

ADEC is ordered to either include emission limits for MG-1,

MG-3, MG-4, and MG-S that reflect the previous “bubble”

limits and result in no increase in actual or allowable emis-

sions from these engines, include NOx emission limits based

on SCR, or satisfactorily document why SCR is not BACT

for the Wartsila diesel generators at tne Red Dog mine

facility and to obtain EPA’s written concurrence of this

determination.

c. In the event ADEC has already issued or released the

permit, ADEC is ordered to retract or render it ineffective

until such time as EPA provides written concurrence that the

permit is in compliance with the prevention of significant

deterioration provisions of Part C of the Act, 42 U.S.C.

§§ 7470-7492, and the Alaska SIP relating to the construc-

tion or modification of new sources or the modification of

existing sources.

48. Such documentation shall be submitted by certified

mail with return receipt requested to:

Douglas E. Hardesty

Office of Air Quality

U.S. Environmental Protection Agency

1200 Sixth Ave, OAQ-107

Seattle, WA 98101

Issued this 10 day of Dec , 1999.

/s/

Chuck Clarke

Regional Administrator

Region 10

38a

APPENDIX E

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

In the Matter of: )

Cominco Alaska, Inc., ) Docket No. CAA-10-2000-0035

)

Proceeding under Sections ) ADMINISTRATIVE ORDER

113(a)(5) and 167 of the )

Clean Air Act. ) (42 U.S.C. §§ 7413(aXS)

) and 7477)

I. MINISTRATIV

1. This Administrative Order is issued by the Regional

Administrator, Region 10, United States Environmental

Protection Agency (EPA), to Cominco Alaska, Inc.,

(Cominco) pursuant to Sections 113(a(5) and 167 of the

Clean Air Act (CAA or Act), 42 U.S.C. §§ 7413(a)(5S) and

7477.

2. The authority of the Administrator of EPA to issue

orders pursuant to Sections 113(a)(5) and 167 of the Act, 42

U.S.C. §§ 7413(a)(5) and 7477, has been delegated to the

Regional Administrator. The Regional Administrator con-

sulted with the Assistant Administrator for the Office of

Enforcement and Compliance Assurance or his designee

pursuant to the delegation of authority from the Administra-

tor prior to issuing this Administrative Order.

Il. STATUTORY AND REGULATORY AUTHORITY

3. The Administrator of EPA, pursuant to Section 109 of

the Act, 42 U.S.C. § 7409, National Primary

and Secondary Ambient Air Quality S (NAAQS) for

certain criteria pollutants, including nitrogen dioxide (NO2).

40 C.F.R. §§ 50.4 to 50.12.

39a

4. Pursuant to Section 107(d) of the Act, 42 U.S.C. §

7407(d), the Administrator promulgates lists of attainment

Status designations for each air quality control region

(AQCR) in every State. These lists contain the attainment

status of each AQCR for each of the criteria pollutants. The

attainment status designations for the Alaska AQCRs appear

at 40 C.F.R. § 81.302.

5. Cominco Alaska, Inc. (Cominco) owns and operates

the Red Dog mine facility, a surface zinc and lead ore mining

operation, which is located in the Northern Alaska Interstate

AQCR which has been designated as in attainment or unclas-

sifiable with respect to the NAAQS. 40 C.F.R. § 81.302.

6. Part C of the Act, 42 U.S.C. §§ 7470-7492, requires

the Administrator to promulgate regulations for prevention of

significant deterioration (PSD) of air quality in areas desig-

nated in accordance with Section 107(d) of the Act, 42

U.S.C. § 7407(d), as in attainment or unclassifiable.

7. Pursuant to Sections 110 and 165(e)(3) of the Act, 42

U.S.C. §§ 7410 and 7471(e)(3), EPA promulgated two sets of

largely identical regulations for preventing the significant

ion of air quality in areas where the existing air

quality is better than the ambient standards. In States without

a PSD program and in those States where EPA has delegated

authority to administer the federal PSD program to the State,

the federal PSD regulations at 40 C.F.R. § 51.21 have been

incorporated into the various State Implementation Plans

(SIPs) of such States. In the remaining States, EPA has

approved, as part of the SIP, a State PSD program as meeting

the requirements of Part C of the Act and the PSD regula-

tions at 40 C.F.R. § 51.166.

8. EPA has approved 18 AAC 50.020, 50.021, 50.300,

50.400, 50.510, 50.520, 50.530, 50.600, 50.620, and 50.900,

as in effect on June 2, 1988, as a revision to the Alaska SIP

and as meeting the requirements of Part C of the Act and the

PSD regulations at 40 C.F.R. § 51.166 for preventing the

significant deterioration of air quality. See 40 C.F.R. §

52.96(a). (48 Fed. Reg. 30626, July 5, 1983, and subsequent

amendments.) References in this document to Alaska

40a

statutory or regulatory provisions are to the current SIP-

approved versions of the statute or regulation.

9. Section 165 of the Act, 42 U.S.C. § 7475, prohibits the

construction of a major emitting facility in any area subject to

the requirements of Part C of the Act and the PSD regula-

tions unless, among other things, a permit has been issued for

the proposed facility in accordance with Part C of the Act

which sets forth emission limitations that conform to the

requirements of Part C, and the facility is subject to

best available control techno (BACT) for each pollutant

subject to lation under Title I of the Act that is emitted

from or which results from such facility.

10. “Actual emissions” as defined in 18 AAC

$0.900(1)( 1991) means “for each air contaminant, the average

rate in tons per year that a facility actually emitted during the

most recent two years of operation; the department

will, in its discretion, consider facility-specific allowable

emissions to be actual emissions of an air contaminant.”

11. “Construct” as defined in 18 AAC 50.900(13\(1991)

means “to make a change or a series of changes in operation

or any physical changes or additions to a source which

increase the actual emissions of an air pollutant.”

12. “Allowable emissions” as defined in 18 AAC

50.900(4)(1991) means “the calculated emission rate of a

source or facility using the maximum rated capacity and

enforceable limitations and conditions on emissions and

operations.”

13. “Modify” as defined in 18 AAC 50.900(28\1991)

means “to make a change or a series of changes in operation

14. “Best available control technology” is defined in 18

AAC 5$0.900(9\ 1991) as an emission limitation which

represents the maximum reduction achievable for each

regulated air pollutant taking into account energy, environ-

mental, and economic impact, and other costs.

4la

15. 18 AAC 50.300(a1991) states that no person may

construct, modify, reconstruct, operate, or cause the opera-

tion of a facility meeting the criteria in that subsection

without a permit from the State of Alaska Department of

Environmental Conservation (ADEC). The list of facilities

covered by 18 AAC 50.300(a) includes a facility which has

allowable emissions of more than 250 tons year of a

segulated sir contaminant and which is modified after Av-

gust 7, 1980, or after the date of the most recent permit

issued to the facility under 18 AAC 50.400(c)(3), causing an

increase in actual emissions equal to or exceeding any of the

thresholds identified in that subsection. —

16. A permit application for a facility subject to 18 AAC

50.300(a)(S) or (6) must include, among other things, a

detailed demonstration that the expected maximum emissions

from the facility will not cause or contribute to a violation of

ee ee 18 AAC

_ 17. 18 AAC 50.400(cK3A)(1991) states that ADEC will

issue a permit only if the applicant shows that, for a facility

subject to 18 AAC 50.300(a)(S) or (6), BACT for controlling

emissions of each regulated pollutant will be installed for

each new or modified source.

18. Section 113(aX5) of the Act, 42 U.S.C. § 7

a t, § 7413(aX(5)

Whenever, on the basis of any available information, the

Administrator finds that a State is not acting in compli-

ance with any requirement or prohibition of the [Act] re-

lating to the construction of new sources or the modi

tion of existing sources, the Administrator may—

Lo eng pater aapene- phen mypencenyd

oe on

fication < y major stationary source in any area to

(B) issue an administrative penalty order i ordanc

with subsection (d) of this section; or — '

42a

tion. -

Nothing in this subsection shall preclude the United

States from commencing a criminal action under subsec-

tion (c) of this section at any time for any such violation.

19. Section 167 of the Act, 42 U.S.C. § 7477, provides

that the Administrator shall take such measures, including

issuance of an order, as necessary to prevent the construction

or modification of a major emitting facility which does not

conform to the requirements of Part C of the Act.

20. Section 169(1) of the Act, 42 U.S.C. § 7479(1), de-

fines a major emitting facility, in pertinent part, as a station-

ary source which emits or has the potential to emit 250 tons

per year or more of any air pollutant.

21. A State does not conform to the requirements of Part C

of the Act if, among other things, it allows a major emitting

facility to commence construction or modification prior to

receipt of a PSD permit or issues a PSD permit to a fz -ility

without subjecting the facility to BACT for each poll. iant

subject to regulation under Title I of the Act that is emitted

from or which results from such facility.

22. A major emitting facility does no~ conform-to the

requirements of Part C if, among other things, it commences

construction or modification prior to receipt of a PSD permit

that subjects the facility to BACT for each pollutant subject

to regulation under Title I of the Act that is emitted from or

which results from such facility.

Ill. FINDINGS OF FACT

23. On June 17, 1988, ADEC issued a PSD permit, Permit

No. 8732-AA001, that authorized the construction of the Red

Dog mine facility, including the installation of five Wartsila

diesel generators (MG-1, MG-2, MG-3, MG-4, and MG-S5).

24. ADEC revised and replaced the June 1988 PSD permit

on several occasions, including a revision dated July 27,

1994, Permit No. 9332-AA003, which: (a) removed from the

43a

permit a NOx BACT limit of 750 parts per million volume

dried (ppmvd) that applied to the five Wartsila diesel genera-

tors, and substituted a limit of 109,660,000 kilowatt hours

per continuous 365-day period (kW-hr/yr) for MG-1, MG-3,

MG-4, and MG-S, (b) removed the stand-by limits on MG-2

and permitted it to operate full-time, and (c) authorized the

installation and full-time operation of a sixth Wartsila diesel

generator (MG-6).

25. On March 27, 1996, prior to receiving an amended

PSD permit, Cominco requested that ADEC allow Cominco

to make on-site preparations for changes to the facility that

would allow for production increases. On April 2, 1996,

ADEC granted Cominco a waiver to allow the company to

conduct specified procurement and construction activities on

the condition that Cominco prepare and submit a request for

a permit amendment concurrent with the activities.

26. Between April 1996 and May 1998, Cominco con-

structed a new gyratory crusher at the Red Dog mine facility

without authorization under a valid PSD permit.

27. On June 29, 1998, Cominco submitted a PSD permit

application to ADEC for what it referred to as a “production

rate increase project” that was expected to increase the

mine’s ore processing rate from approximately 2,200,000

tons per year to 3,500,000 tons per year and to increase the

ion of zinc and lead concentrate from 854,000 tons

per year to 1,400,000 tons per year. Cominco submitted a

supplement to the application to ADEC on April 6, 1999. As

part of the production rate increase project, Cominco re-

quested that ADEC, among other things, remove the air

quality operating restrictions on the four Wartsila diesel

generators that were installed in 1988 and which still had

operational limits on them (MG-1, MG-3, MG-4, MG-5),

“add” a seventh Wartsila diesel generator (MG-17), “add”

the new gyratory crusher that Cominco had already installed,

and approve the addition of other equipment and changes

necessary to support the production rate increase project.

28. On May 4, 1999, ADEC issued a preliminary PSD

permit (preliminary draft PSD permit) for the production rate

44a

increase project for review and public comment. The pre-

liminary draft PSD permit proposed to remove the opera-

tional cap of 109,660,000 kW-hr/year that applied to Wartsila

diesel generators MG-1, MG-3, MG-4, MG-5, to “add”

the seventh Wartsila diesel generator (MG-17), to “add” the

new gyrator crusher, and to approve the addition of other

equipment and changes that Cominco requested in its PSD

permit application for the production rate increase project.

29. ADEC prepared a preliminary technical analysis report

(Preliminary Technical — to accompany the prelimi-

nary draft PSD permit. Preliminary Technical Report

stated that the production rate increase project is expected to

increase actual NOx emissions by up to 1,100 tons per year;

carbon monoxide (CO) emissions by 90 tons per year;

particulate matter (PM) emissions by 35 tons per year; PM

emissions less than 10 micrometers in diameter (PM-10) by

35 tons per year; volatile organic compound (VOC) emis-

sions by 59 tons per year; and lead (Pb) emissions by 0.046

tons per year. The proposed production rate increase project

is expected to reduce sulfur dioxide (SO2) emissions by 37

tons per year.

30. In the preliminary draft PSD permit and Preliminary

Technical Report, ADEC concluded that of the seven Wart-

sila diesel generators, only MG-5 and MG-17 were subject to

PSD requirements and therefore required BACT. EPA

regulations require that technical and economic feasibility be

considered when determining BACT. In the Preliminary

Technical Report ADEC determined that Selective Catalytic

Reduction (SCR) is a technically and economically feasible

emission control technology for the Wartsila generators and

that SCR could result in Seductions of 712 tens per your of

NOx for each Wartsila diesel generator. The Preliminary

Technical also concluded that installation of low NOx

controls w result in reductions of only 273 tons per year

of NOx for each Wartsila diesel generator. The Preliminary

Technical Report then concluded that BACT for MG-5 and

MG-17 was an emission limit based on low NOx controls.

45a

_31. The Red Dog mine facility was at the time of construc-

tion and continues to be a “major emitting facility” under

Section 169(1) of the Act, 42 U.S.C. § 7479(1).

_32. The Red Dog mine facility was at the time of construc-

tion and continues to be a facility with allowable emissions,

as defined in 18 AAC 50.900(4), of at least 250 tons per year

of a regulated air contaminant. The Red Dog mine facility is

therefore a “facility,” as that term is defined in 18 AAC

50.300(a)(6).

33. The production rate increase project will “modify,” as

that term is defined in 18 AAC 50.900(28), the Red Dog

mine facility.

34. The production rate increase project will increase

actual emissions of NOx, PM, PM-10, and VOC from the

Red Dog mine facility by more than the thresholds identified

in 18 AAC 50.300(a)(6)(C) and will occur after 1980 and

after the date of the most recent valid permit issued for the

Red Dog mine under 18 AAC 50.400(c)(3). Therefore the

Red Dog mine facility is a “facility,” as listed in 18 AAC

50.300(a)(6)(C).

35. The public comment period on the preliminary draft

Soe Ee one preennanen cane RD gD ene Om

une 2,

36. On June 2, 1999, the United States Department of the

Interior, National Park Service (NPS), submitted comments

on the prelimi draft PSD permit for the production rate

with the preliminary draft PSD permit, including the follow-

ing:

a. ADEC failed to subject four of the Wartsila diesel

(MG-1 and MG-3 through MG-5) to PSD, includ-

ing BACT. These generators are part of the production rate

increase project because the preliminary draft PSD permit

would remove an operating restriction on these generators.

b. ADEC failed to require SCR on the two Wartsila die-

sel generators which ADEC acknowledged are subject to

46a

BACT (MG-5 and MG-17). SCR is BACT for the Wartsila

diesel generators.

37. By letter dated July 29, 1999, EPA informed ADEC

that it agreed with NPS’s comments and had concluded that:

a. The Wartsila diesel generators MG-1 and MG-3

through MG-S are subject to PSD, including BACT, because

these generators are part of the production rate increase

project since the preliminary draft PSD permit would remove

the existing operating restriction on these generators.

b. Based on ADEC’s preliminary Technical Report that

accompanied the preliminary draft PSD permit, SCR is

BACT for the Wartsila diesel generators MG-1, MG-3, MG-

4, MG-S, and MG-17.

38. On September 3, 1999, ADEC provided to EPA a final

draft permit No. 9932-AC005 for the Cominco Red Dog

mine facility. The final draft permit was accompanied by a

Final Technical Analysis Report (Final Technical Report)

and Response to Comment document.

39. The Final Technical Report concluded that an emis-

sion rate achievable with low NOx controls to be BACT on

Wartsila diesel generators MG-5 and MG-17. The final draft

PSD permit included an emission rate limit of 121.3 Ib/hour

on MG-5 and MG-17 based on low NOx controls.

40. The final draft PSD permit did not require the installa-

tion of BACT on MG-1, MG-3, and MG-4, but instead only

proposed to reinstate the same limit on total annual emissions

from MG-1, MG-3, and MG-4 which previously applied to

total annual emissions from MG-1! through MG-5. This limit

was listed in the final draft PSD permit as:

(1) 2259 tons NOx/year from MG-1, MG-3, and MG-

4; and

(2) 750 ppm NOx corrected to 7% oxygen from each

unit.

41. On September 15, 1999, EPA notified ADEC by letter

that the final draft PSD permit was deficient and that issu-

Sen

47a

ance of the permit as proposed in the September 3, 1999,

final draft PSD permit would not comply with the Clean Air

Act or the Alaska SIP requirements relating to the construc-

tion or modification of new sources or modification of

existing sources, if issued as drafted. Additional letters were

sent to ADEC on September 28, 1999, and November 10,

1999, further explaining EPA’s concerns with the final draft

permit.

42. On December 10, 1999, pursuant to the authority of

Sections 113(a)(5) and 167 of the Act, 42 US.C. §§

7413(a)(5) and 7477, EPA issued a Finding of Noncompli-

ance and Order, Docket No. CAA-10-99-0263, to ADEC

(ADEC 113/167 Order). On the same day, the ADEC

113/167 Order was sent by fax and overnight certified mail

return receipt requested to Michele Brown, ADEC Commis-

sioner, and faxed to Tom Chapple, ADEC, Director, Division

of Air and Water Quality. A copy of the ADEC 113/167

Order was faxed to Doug Horswill, Vice President for

Environmental and Corporate Affairs, Cominco, and sent

overnight certified mail return receipt requested to John

Keys, General Manager, Cominco.

43. The ADEC 113/167 Order provides at paragraph 46a

that:

The Apnl 2, 1996, ADEC authorization of Cominco’s

construction and installation of new equipment, including

the new gyratory crusher, at the Red Dog mine facility

prior to Cominco’s receipt of a PSD permit allowing con-

struction of such equipment did not comply with the re-

quirements or prohibitions of the Clean Air Act and/or

the Alaska SIP relating to the construction or modifica-

tion of new sources or the modification of existing

sources.

44. The ADEC 113/167 Order provides, in part, at para-

graph 47 that “effective immediately upon issuance:

a. ADEC is prohibited from issuing a PSD permit to

Cominco’s Red Dog mine facility allowing the construction

or modification of the facility and designating low NOx

48a

controls (or less effective controls) as BACT for Wartsila

diesel generator MG-17, unless ADEC satisfactorily docu-

ments why SCR is not BACT for the Wartsila diesel genera-

tor at the Red Dog mine facility, or ADEC has demonstrated

that the PSD permit is in compliance with the prevention of

significant deterioration provisions of Part C of the Act, 42

U.S.C. §§ 7470-7492, and the Alaska SIP relating to the

construction or modification of new sources or the modifica-

tion of existing sources. In either case, ADEC must first

obtain EPA’s written concurrence on this determination.

c. In the event ADEC has already issued or released the

permit, ADEC is ordered to retract or render it ineffective

until such time as EPA provides written concurrence that the

permit is in compliance with the prevention of significant

deterioration provisions of Part C of the Act, 42 U.S.C. §§

7470-7492, and the Alaska SIP relating to the construction or

modification of new sources or the modification of existing

sources.

45. Shortly after receiving the ADEC 113/167 Order,

ADEC issued Air Quality Construction Permit No. 9932-

AC005 for the Cominco Red Dog Mine on December 10,

1999 (final permit). The final permit was accompanied by a

Final Technical Analysis Report dated December 10, 1999

(12/10/99 Technical Report).

46. The 12/10/99 Technical Report states at page 49 that

“The Department [ADEC] finds an emission limit achievable

with low NOx controls to be BACT on diesel generator MG-

17. A vendor-guaranteed emission rate of 121.3 Ib/hour is

representative of the NOx reduction expected of the Low

NOx controls selected as BACT.”

47. Section 4, Best Available Control Technology (BACT)

for Oxides of Nitrogen (NOx), Condition 20.1 of the final

permit requires Wartsila diesel generator MG-17 to limit

NOx emissions to no greater than 121.3 Ib/hour averaged

over any three hours.

49a

48. On February 8, 2000, EPA notified ADEC pursuant to

Section 113(a)(S) of the Act, 42 U.S.C. § 7413(a)(5) that

Permit No. 9932-AC005, issued to Cominco on December

10, 1999, fails to comply with Pact C of the Act, 42 U.S.C. §

7470-7492, the implementing regulations and Alaska SIP,

and that the State is not in compliance with Part C of the Act.

49. The issuance of this Order, pursuant to Sections

113(ay(5) and 167 of the Act, 42 U.S.C. §§ 7413(a)(5) and

7477, is necessary to prevent any further construction or

modification at the Red Dog mine facility.

V. ORDER

50. Based on investigation and analysis of relevant facts,

and pursuant to Sections 113(a)(5) and 167 of the Act, 42

U.S.C. §§ 7413(a)(5) and 7477:

a. Cominco is prohibited from commencing any and all

construction or modification activities at the Red Dog mine

facility associated with the Wartsila diesel generator MG-17

until Cominco has demonstrated to EPA’s satisfaction

compliance with Part C of the Act and 40 C.F.R. Part 51, and

obtains a valid PSD permit from ADEC for the Wartsila

generator MG-17 that complies with the Act and with the

December 10, 1999 Finding and Order.

__ b. Cominco is specifically allowed to continue construc-

tion or operation of other portions of the Red Dog mine

facility as authorized by ADEC Permit No. 9932-AC005.

c. Cominco shall submit, no later than five (5) days after

the effective date of this Order, certification that Cominco

has complied with the prohibition in the paragraph 50a above

and will continue to comply with paragraph 50a of this Order

will Cominco demonstrates to EPA’s satisfaction compliance

with Part C of the Act and 40 C.F.R. Part 51, Subpart I and

the Alaska SIP. Such certification shall be submitted by

certified mail with return receipt requested to:

50a

Douglas E. Hardesty

Office of Air Quality

U.S. Environmental Protection Agency

1200 Sixth Ave, OAQ-107

Seattle, WA 98101

50. Cominco has the opportunity to confer with EPA

concerning this Order. Any request for a conference should

be made to Mr. Hardesty, Chief, Federal and Delegated Aur

Programs Unit, within 10 days of issuance of this Order. He

may be reached at (206) 553-6641. Such a conference shall

occur no later than March 16, 2000.

Issued this 8th day of Feb. , 2000.

/s/

Chuck Findley ae

Deputy Regional Administrator

Sla

APPENDIX F

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

In the Matter of: ) AMENDED

Cominco Alaska, Inc., ) ADMINISTRATIVE ORDER

)

Proceeding under Sections ) Docket No. CAA-10-2000-0035

113(aX(5) and 167 ofthe )

Clean Air Act. ) (42 U.S.C. §§ 7413(a)(5)

) and 7477)

I. AMENDED ADMINISTRATIVE ORDER

1. This Amended Administrative Order is issued by the

Regional Administrator, Region 10, United States Environ-

mental Protection Agency (EPA), to Cominco Alaska, Inc.,

(Cominco) pursuant to Sections 113(a)(5) and 167 of the

Clean Air Act (CAA or Act), 42 U.S.C. §§ 7413(a)(5) and

7477.

2. The authority of the Administrator of EPA to issue

orders pursuant to Sections 113(a)(5) and 167 of the Act, 42

U.S.C. §§ 7413(a)(5) and 7477, has been delegated to the

Regional Administrator. The Regional Administrator con-

sulted with the Assistant Administrator for the Office of

Enforcement and Compliance Assurance or his designee

pursuant to the delegation of authority from the Administra-

tor prior to issuing this Amended Administrative Order.

Il. STATUTORY AND REGULATORY AUTHORITY

3. The Administrator of EPA, pursuant to Section 109 of

the Act, 42 U.S.C. § 7409, promulgated National Primary

and Secondary Ambient Air Quality Standards (NAAQS) for

certain criteria pollutants, including nitrogen dioxide (NO2).

40 C.F.R. §§ 50.4 to 50.12.

52a

4. Pursuant to Section 107(d) of the Act, 42 U.S.C. §

7407(d), the Administrator promulgates lists of attainment

status designations for each quality control region (AQCR) in

every State. These lists contain the attainment status of each

AQCR for each of the criteria pollutants. The attainment

status designations for the Alaska AQCRs appear at 40

C.F.R. § 81.302.

5. Cominco Alaska, Inc. (Cominco) owns and operates

the Red Dog mine facility, a surface zinc and lead ore mining

operation, which is located in the Northern Alaska Interstate

AQCR which has been designated as in attainment or unclas-

sifiable with respect to the NAAQS. 40 C.F.R § 81.302.

6. Part C of the Act, 42 U.S.C. §§ 7470-7492, requires

the Administrator to promulgate regulations for prevention of

significant deterioration (PSD) of air quality in areas desig-

nated in accordance with Section 107(d) of the Act, 42

U.S.C. § 7407(d), as in attainment or unclassifiable.

7. Pursuant to Sections 110 and 165(e)(3) of the Act, 42

U.S.C. §§ 7410 and 7471(e)(3), EPA promulgated two sets of

largely identical regulations for preventing the significant

deterioration of air quality in areas where the existing air

quality is better than the ambient standards. In States without

a PSD program and in those States where EPA has delegated

authority to administer the federal PSD program to the State,

the federal PSD regulations at 40 C.F.R. § 51.21 have been

incorporated into the various State Implementation Plans

(SIPs) of such States. In the remaining States, EPA has

approved, as part of the SIP, a State PSD program as meeting

the requirements of Part C of the Act and the PSD regula-

tions at 40 C.F.R. § 51.166.

8. EPA has approved 18 AAC 50.020, 50.021, 50.300,

50.400, 50.510, 50.520, 50.530, 50.600, 50.620, and 50.900,

as in effect on June 2, 1988, as a revision to the Alaska SIP

and as meeting the requirements of Part C of the Act and the

PSD regulations at 40 C.F.R. § 51.166 for preventing the

significant deterioration of air quality. See 40 C.F.R §

52.96(a). (48 Fed. Reg. 30626, July 5, 1983, and subsequent

amendments.) References in this document to Alaska

53a

Statutory or regulatory provisions are to the current SIP-

approved versions of the statute or regulation.

9. Section 165 of the Act, 42 U.S.C. § 7475, prohibits the

construction of a major emitting facility in any area subject to

the requirements of Part C of the Act and the PSD regula-

tions unless, among other things, a permit has been issued for

the proposed facility in accordance with Part C of the Act

which sets forth emission limitations that conform to the

requirements of Part C, and the proposed facility is subject to

best available control technology (BACT) for each pollutant

subject to regulation under Title I of the Act that is emitted

from or which results from such facility.

10. “Actual emissions” as defined in 18 AAC

50.900(1)(1991) means “for each air contaminant, the

average rate in tons per year that a facility actually emitted

during the most recent two years of normal operation; the

department will, in its discretion, consider facility-specific

allowable emissions to be actual emissions of an air contami-

nant.”

11. “Construct” as defined in 18 AAC 50.900(13)(1991)

means “to make a change or a series of changes in operation

or any physical changes or additions to a source which

increase the actual emissions of an air pollutant.”

12. “Allowable emissions” as defined in 18 AAC

50.900(4)(1991) means “the calculated emission rate of a

source or facility using the maximum rated capacity and

enforceable limitations and conditions on emissions and

operations.”

13. “Modify” as defined in 18 AAC 50.900(28)(1991)

means “to make a change or a series of changes in operation

or any physical changes or additions to a source which

increase the actual emissions of an air pollutant.”

14. “Best available control technology” is defined in 18

AAC 50.900(9\1991) as an emission limitation which

the maximum reduction achievable for each

regulated air pollutant taking into account energy, environ-

mental, and economic impacts, and other costs.

54a

15. 18 AAC 50.300(a)(1991) states that no person may

construct, modify, reconstruct, operate, or cause the opera-

tion of a facility meeting the criteria in that subsection

without a permit from the State of Alaska, Department of

Environmental Conservation (ADEC). The list of facilities

covered by 18 AAC 50.300(a) includes a facility which has

allowable emissions of more than 250 tons per year of a

regulated air contaminant and which is modified after August

7, 1980, or after the date of the most recent permit issued to

the facility under 18 AAC 50.400(c)(3), causing an increase

in actual emissions equal to or exceeding any of the thresh-

olds identified in that subsection.

16. A permit application for a facility subject to 18 AAC

50.300(a)(5) or (6) must include, among other things, a

detailed demonstration that the expected maximum emissions

from the facility will not cause or contribute to a violation of

an ambient air standard or allowable increment in 18 AAC

50.020(b).

17. 18 AAC 50.400(c\(3A)(1991) states that ADEC will

issue a permit only if the applicant shows that, for a facility

subject to 18 AAC 50.300(a)(5) or (6), BACT for controlling

emissions of each regulated pollutant will be installed for

each new or modified source.

18. Section 113(a)(5) of the Act, 42 U.S.C. § 7413(a)(5)

provides:

Whenever, on the basis of any available information, the

Administrator finds that a State is not acting in compli-

ance with any requirement or prohibition of the [Act] re-

lating to the construction of new sources or the modifica-

tion of existing sources, the Administrator may—

(A) issue an order prohibiting the construction or

modification of any major stationary source in any area to

which such requirement applies;

(B) issue an administrative penalty order in accor-

dance with subsection (d) of this section; or

55a

section.

Nothing in this subsection shall preclude the United

States commencing a criminal action under subsec-

tion (c) of this section at any time for any such violation.

19. Section 167 of the Act, 42 U.S.C. § 7477, provides

that the Administrator shall take such measures, including

issuance of an order, as necessary to prevent the construction

or modification of a major emitting facility which does not

conform to the requirements of Part C of the Act.

20. Section 169(1) of the Act, 42 U.S.C. § 7479(1), de-

fines a major emitting facility, in pertinent part, as a station-

ary source which emits or has the potential to emit 250 tons

per year or more of any air pollutant.

21. A State does not conform to the requirements of Part C

of the Act if, among other things, it allows a major emitting

facility to commence construction or modification prior to

receipt of a PSD permit or issues a PSD permit to a facility

without subjecting the facility to BACT for each pollutant

subject to ation under Title I of the Act that is emitted

from or which results from such facility.

22. A major emitting facility does not conform to the

requirements of Part C if, among other things, it commences

construction or modification prior to receipt of a PSD permit

that subjects the facility to BACT for each pollutant subject

to ation under Title I of the Act that is emitted from or

which results from such facility.

Ill. FINDINGS OF FACT

23. On June 17, 1988, ADEC issued a PSD permit, Permit

No. 8732-AA001, that authorized the construction of the Red

Dog mine facility, including the installation of five Wartsila

diesel generators (MG-1, MG-2, MG-3, MG-4, and MG-5).

24. ADEC revised and replaced the June 1988 PSD permit

on several occasions, including a revision dated July 27,

1994, Permit No. 9332-AA003, which: (a) removed from the

56a

permit a NOx BACT limit of 750 parts per million volume

dried (ppmvd) that applied to the five Wartsila diesel genera-

tors, and substituted a limit of 109,660,000 kilowatt hours

per continuous 365-day period (kW-hr/yr) for MG-1, MG-3,

MG-4, and MG-S5, (b) removed the stand-by limits on MG-2

and permitted it to operate full-time, and (c) authorized the

installation and full-time operation of a sixth Wartsila diesel

generator (MG-6).

25. On March 27, 1996, prior to receiving an amended

PSD permit, Cominco requested that ADEC allow Cominco

to make on-site preparations for changes to the facility that

would allow for production increases. On April 2, 1996,

ADEC granted Cominco a waiver to allow the company to

conduct specified procurement and construction activities on

the condition that Cominco prepare and submit a request for

a permit amendment concurrent with the activities.

26. Between April 1996 and May 1998, Cominco con-

structed a new gyratory crusher at the Red Dog mine facility

without authorization under a valid PSD permit.

27. On June 29, 1998, Cominco submitted a PSD permit

application to ADEC for what it referred to as a “production

rate increase project” that was expected to increase the

mine’s ore processing rate from approximately 2,200,000

tons per year to 3,500,000 tons per year and to increase the

production of zinc and lead concentrate from 854,000 tons

per year to 1,400,000 tons per year. Cominco submitted a

supplement to the application to ADEC on April 6, 1999. As

part of the production rate increase project, Cominco re-

quested that ADEC, among other things, remove the air

quality operating restrictions on the four Wartsila diesel

generators that were installed in 1988 and which still had

operational limits on them (MG-1, MG-3, MG-4, MG-5),

“add” a seventh Wartsila diesel generator (MG-17), “add”

the new gyratory crusher that Cominco had already installed,

and approve the addition of other equipment and changes

necessary to support the production rate increase project.

28. On May 4, 1999, ADEC issued a preliminary PSD

permit (preliminary draft PSD permit) for the production raie

S7a

increase project for review and public comment. The pre-

liminary draft PSD permit proposed to remove the opera-

tional cap of 109,660,000 kW-hr/year that applied to Wartsila

diesel generators MG-1, MG-3, MG-4, MG-S5, to “add”

the seventh Wartsila diesel generator (MG-17), to “add” the

new gyrator crusher, and to approve the addition of other

equipment and changes that Cominco requested in its PSD

permit application for the production rate increase project.

29. ADEC prepared a preliminary technical analysis report

(Preliminary Technical Report) to accompany the prelimi-

nary draft PSD permit. The Preliminary Technical Report

stated that the production rate increase project is expected to

increase actual NOx emissions by up to 1,100 tons per year;

carbon monoxide (CO) emissions by 90 tons per year;

particulate matter (PM) emissions by 35 tons per year; PM

emissions less than 10 micrometers in diameter (PM-10) by

35 tons per year; volatile organic compound (VOC) emis-

sions by 59 tons per year; and lead (Pb) emissions by 0.046

tons per year. The proposed production rate increase project

is expected to reduce sulfur dioxide (SO2) emissions by 37

tons per year.

30. In the preliminary draft PSD permit and Preliminary

Technical Report, ADEC concluded that, of the seven

Wartsila diesel generators, only MG-5 and MG-17 were

subject to PSD requirements and therefore required BACT.

EPA regulations require that technical and economic feasibil-

ity be considered when determining BACT. In the Prelimi-

nary Technical Report ADEC determined that Selective

Catalytic Reduction (SCR) is a technically and economically

feasible emission control technology for the Wartsila genera-

tors and that SCR could result in reductions of 712 tons per

year of NOx for each Wartsila diesel generator. The Pre-

liminary Technical Report also concluded that installation of

low NOx controls would result in reductions of only 273 tons

per year of NOx for each Wartsila diesel generator. The

Preliminary Technical Report then concluded that BACT for

MG-5 = MG-17 was an emission limit based on low NOx

controls.

58a

31. The Red Dog mine facility was at the time of construc-

tion and continues to be a “major emitting facility” under

Section 169(1) of the Act, 42 U.S.C. § 7479(1).

32. The Red Dog mine facility was at the time of construc-

tion and continues to be a facility with allowable emissions,

as defined in 18 AAC 50.900(4), of at least 250 tons per year

of a regulated air contaminant. The Red Dog mine facility is

therefore a “facility,” as that term is defined in 18 AAC

50.300(a)(6).

33. The production rate increase project will “modify,” as

that term is defined in 18 AAC 50.900(28), the Red Dog

mine facility.

34. The production rate increase project will increase

actual emissions of NOx, PM, PM-10, and VOC from the

Red Dog mine facility by more than the thresholds identified

in 18 AAC 50.300(a)(6)(C) and will occur after 1980 and

after the date of the most recent valid permit issued for the

Red Dog mine under 18 AAC 50.400(c)(3). Therefore the

Red Dog mine facility is a “facility,” as listed in 18 AAC

50.300(a)(6)(C).

35. The public comment period on the preliminary draft

PSD permit for the production rate increase project ended on

June 2, 1999.

36. On June 2, 1999, the United States Department of the

Interior, National Park Service (NPS), submitted comments

on the preliminary draft PSD permit for the production rate

increase project. The NPS comments raised several concerns

with the preliminary draft PSD permit, including the follow-

ing:

a. ADEC failed to subject four of the Wartsila diesel

(MG-1 and MG-3 through MG-5) to PSD, includ-

ing BACT. These generators are part of the production rate

increase project because the preliminary draft PSD permit

would remove an operating restriction on these generators.

b. ADEC failed to require SCR on the two Wartsila die-

sel generators which ADEC acknowledged are subject to

59a

BACT (MG-S5 and MG-17). SCR is BACT for the Wartsila

diesel generators.

37. By letter dated July 29, 1999, EPA informed ADEC

that it agreed with NPS’s comments and had concluded that:

a. The Wartsila diese! generators MG-1 and MG-3

through MG-S are subject to PSD, including BACT, because

these generators are part of the production rate increase

project since the preliminary draft PSD permit would remove

the existing operating restriction on these generators.

b. Based on ADEC’s preliminary Technical Report that

accompanied the preliminary draft PSD permit, SCR is

BACT for the Wartsila diesel generators MG-1, MG-3, MG-

4, MG-S, and MG-17.

38. On September 3, 1999, ADEC provided to EPA a final

draft permit No. 9932-AC005 for the Cominco Red Dog

mine facility. The final draft permit was accompanied by a

Final Technical Analysis Report (Final Technical Report)

and Response to Comment document.

39. The Final Technical Report concluded that an emis-

sion rate achievable with low NOx controls to be BACT on

Wartsila diesel rs MG-5 and MG-17. The final draft

PSD permit included an emission rate limit of 121.3 lb/hour

on MG-5 and MG-17 based on low NOx controls.

40. The final draft PSD permit did not require the installa-

tion of BACT on MG-1, MG-3, and MG-4, but instead only

proposed to reinstate the same limit on total annual emissions

from MG-1, MG-3, and MG-4 which previously applied to

total annual emissions from MG-1 through MG-S. This limit

was listed in the final draft PSD permit as:

(1) 2259 tons NOx/year from MG-1, MG-3, and MG-

4; and

(2) 750 ppm NOx corrected to 7% oxygen from each

unit.

41. On September 15, 1999, EPA notified ADEC by letier

that the final draft PSD permit was deficient and that issu-

60a

ance of the permit as proposed in the September 3, 1999,

final draft PSD permit would not comply with the Clean Air

‘Act or the Alaska SIP requirements relating to the construc-

tion or modification of new sources or modification of

existing sources, if issued as drafted. Additional letters were

sent to ADEC on September 28, 1999, and November 10,

1999, further explaining EPA’s concerns with the final draft

permit.

42. On December 10, 1999, pursuant to the authority of

Sections 113(a)(5) and 167 of the Act, 42 U.S.C. §§

7413(a)(S) and 7477, EPA issued a Finding of Noncompli-

ance and Order, Docket No. CAA-10-99-0263, to ADEC

(ADEC 113/167 Order). On the same day, the ADEC

113/167 Order was sent by fax and overnight certified mail

return receipt requested to Michele Brown, ADEC Commis-

sioner, and faxed to Tom Chapple, ADEC, Director, Division

of Air and Water Quality. A copy of the ADEC 113/167

Order was faxed to Doug Horswill, Vice President for

Environmental and Corporate Affairs, Cominco, and sent

overnight certified mail return receipt requested to John

Keys, General Manager, Cominco.

43. The ADEC 113/167 Order provides at paragraph 46a

that:

The April 2, 1996, ADEC authorization of Cominco’s

construction and installation of new equipment, including

the new gyratory crusher, at the Red Dog mine facility

prior to Cominco’s receipt of a PSD permit allowing con-

struction of such equipment did not comply with the re-

quirements or prohibitions of the Clean Air Act and/or

the Alaska SIP relating to the construction or modifica-

tion of new sources or the modification of existing

sources.

44. The ADEC 113/167 Order provides, in part, at para-

graph 47 that “effective immediately upon issuance:

a. ADEC is prohibited from issuing a PSD permit to

Cominco’s Red Dog mine facility allowing the construction

or modification of the facility and designating low NOx

6la

controls (or less effective controls) as BACT for Wartsila

diesel generator MG-17, unless ADEC satisfactorily docu-

ments why SCR is not BACT for the Wartsila diesel genera-

tor at the Red Dog mine faciiity, or ADEC has demonstrated

that the PSD permit is in compliance with the prevention of

significant deterioration provisions of Part C of the Act,

42 U.S.C. §§ 7470-7492, and the Alaska SIP relating to the

construction or modification of new sources or the modifica-

tion of existing sources. In either case, ADEC must first

obtain EPA’s written concurrence on this determination.

* * *

c. In the event ADEC has already issued or released the

permit, ADEC is ordered to retract or render it ineffective

until such time as EPA provides written concurrence that the

permit is in compliance with the prevention of significant

deterioration provisions of Part C of the Act, 42 U.S.C. §§

7470-7492, and the Alaska SIP relating to the construction or

modification of new sources or the modification of existing

sources.

45. Shortly after receiving the ADEC 113/167 Order,

ADEC issued Air Quality- Construction Permit No. 9932-

AC005 for the Cominco Red Dog Mine on December 10,

1999 (final permit). The final permit was accompanied by a

Final Technical Analysis Report dated December 10, 1999

(12/10/99 Technical Report).

46. The 12/10/99 Technical Report states at page 49 that

“The Department [ADEC] finds an emission limit achievable

with low NOx controls to be BACT on diesel generator

MG-17. A vendor-guaranteed emission rate of 121.3 lb/hour

is representative of the NOx reduction expected of the Low

NOx controls selected as BACT.”

47. Section 4, Best Available Control Technology (BACT)

for Oxides of Nitrogen (NOx), Condition 20.1 of the final

permit requires Wartsila diesel generator MG-17 to limit

NOx emissions to no greater than 121.3 lb/hour averaged

over any three hours.

62a

48. On February 8, 2000, EPA notified ADEC pursuant to

Section 113(a)(5) of the Act, 42 U.S.C. § 7413(a)(5) that

Permit No. 9932-AC005, issued to Cominco on December

10, 1999, fails to comply with Part C of the Act, 42 U.S.C. §

7470-7492,

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