Petitioners Brief — Alaska Dept. of Environmental Conservation v. EPA

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No.02-658~ {| ..i#

| APR 25 2003

IN THE

Supreme Court of the Anited States

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, ef al.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF FOR PETITIONER

GREGG D. RENKES 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

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lar statutory

f this Court and

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other federal courts of appeals establishing the d

Iding the EPA’s

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permi

made by the State of Alaska—which had been delegated

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flict with dec

.—in con

sdiction under the Act and

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

federal-state

§§ 7401 et seq

PARTIES TO THE PROCEEDING

Petitioner State of Alaska, Department of Environmental

Conservation, and Teck Cominco Alaska, Inc. were petition-

ers in the Ninth Circuit below. The United States Environ-

mental 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

Page

QUESTION PRESENTED ...............ccccccccccccsesscesceeseeeseees i

PARTIES TO THE PROCEEDING ...0000..0...cccccccccccceeees il

TABLE OF AUTHORITIES. ................ccccccccccseesseeseeseeees Vv

OPINIONS BELOW .0000......cccccccccccsccscesccseescesseeseeeceeeees l

nn cseiiicitinpiaienisasinstiancssenetansimannsetmauneesmaienanies 2

STATUTORY PROVISIONS INVOLVED................... 2

ee 3

STATEMENT OF THE CASE o.0......ccccccccccccccccccseeseeeeeees 5

SUMMARY OF ARGUMENT.............cccccccccccccceeeceecenees 17

Se ee 20

I. THE EPA HAS NO AUTHORITY UNDER

THE CAA TO INVALIDATE A STATE

BACT DETERMINATION THAT IS

BASED ON CONSIDERATION OF THE

STATUTORY FACTORS ...0......cccccccccscseeseeeeeeees 20

A. The Plain Language Of The CAA Makes

Clear That BACT Is A Determination

To Be Made By The States On A “Case-

EEE 21

B. The Legislative History Of The CAA

Confirms That BACT Is “Strictly A

State And Local Decision”’.................cccc0008. 30

TABLE OF CONTENTS—Continued

Page

C. The EPA’s Recourse In This Case Was

Not To Unilaterally Overturn The

State’s BACT Determination, But To

Challenge It Through The Available

RMaviaw PHOCEDS........000<.ccccssesesesessssesssssccesseees 34

Il. EVEN IF THE EPA MAY INVALIDATE

A STATE BACT DETERMINATION IN

SOME CASES, IT HAD NO AUTHORITY

TO DO SO HERE ............:ccccccsscesreeseeseneneesenenenees 39

CONCLUSION .........::cssccsssseccceesseseesenensneneneensnnnenenannnenes 49

STATUTORY AND REGULATORY ADDENDUM

— — —_

TABLE OF AUTHORITIES

Page

CASES:

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

aan NI aninceninchlabiatideeceretciaeactastateaatmrinaasiniiees passim

American Corn Growers Ass'n v. EPA,

A 8 ee 44

Barnhart v. Sigmon Coal Co., 534 U.S. 438

ITT scrsitesintanictecatechinndmeranaantatinmeeseeiiidalcaaasastalettametuabidete 25

Bering Straits Coastal Mgmt. Program v. Noah,

ee 36

General Motors Corp. v. EPA, 168 F.3d 1377

Saas TEE TU enineeerietienissinittniarsipchipaiesiiniasinettememmnigmanspaiiis 37

General Motors Corp. v. United States,

Ey SED ciciitinisistibssnicntiniamenentemetannmicnrne 5

Guardians Ass'n v. Civil Serv. Comm'n of the

City of New York, 463 U.S. 582 (1983).................. 20

Hodel v. Virginia Surface Mining & Reclama-

tion Ass ‘n, 452 U.S. 264 (1981) ...........ccceceeceeseeeeees 26

Jerome B. Grubart, Inc. v. Great Lakes Dredge

& Dock Co., $13 U.S. $27 (1995)...........cccceccceeeeees _ 36

Louisiana Public Serv. Comm'n v. FCC,

ee, Se areaicieeihiniceiicnrinintniinssininteniinmennnncens 21

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

Soir sietinsindeesiesiinintneasiaaabbansiaaaeantaniniebipbiiimemdaiahiennesate 3, 21, 28

Miners Advocacy Council, Inc. v. State of

Alaska, Dep't of Envtl. Conservation, 778 P.

2d 1126 (Alaska 1989), cert. denied, 493

SO Ca Uae ecistttinscieiathinheticsintianeniiententdsiiiniatenimess 37

TABLE OF AUTHORITIES—Continued

Page

CASES:

Motor Vehicle Mfrs. Ass'n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29 (1983) .......ccccccceceeeeeeees _ 42

National Ass'n of Cas. & Surety Agents v. Board

of Gov'rs of the Fed. Reserve Sys., 856 F.2d

282 (D.C. Cir. 1988), cert. denied, 490 U.S.

ED secnceiniuiiacinnsitaiaiiincininidingicibdammiuniniiiiesneieem 45

New York v. United States, 505 U.S. 144 (1992)......... 26

Noey v. Department of Envtl. Conservation,

rk Th), ee 37

Train v. Natural Resources Defense Council,

ng Gn i: Ge cctrentterenimccicmimenn 17, 26, 27, 29

Union Elec. Co. v. EPA, 427 U.S. 246 (1976)............. 27

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

ee Ce ccncrcsetineansnsiiniaanincmeninessmensiemmsenee 28, 35

Whitman v. American Trucking Ass‘ns,

Se Cs GG CE crencansennitintinitasticnemmmenmnssenne 28, 33

STATUTES:

Alaska National Interest Lands Conservation

Act, Pub. L. 96-487, § 1418, 94 Stat. 2371

FEI ccnsasenscevsscesnncenentennsstanennssnibenmentemmmmennenaceneaiens 8

Alaska Native Claims Settlement Act, 43 U.S.C.

Se BS C0 II cecenrnssesnsssscnsnsscsnessesnsasnsessemmemamasess 8

ET ee 36

EE eee 21

i 2

Vil

TABLE OF AUTHORITIES—Continued

STATUTES:

Clean Air Act, 42 U.S.C. §§ 7401 et seq.

SR nis Or INI icrninticeenteccinnteinsttenssiainasiansintiis

FR a aies Ot STITT icciiniatetsensticiisdesnniinsitsatataniiimnmeieineiats

42 U.S.C. § 7407(d)(1 (A)(ii) «........eccecceececeeeseeeseees

42 U.S.C. § 7407(d)(1 (Afi) «....2..eecceceeeeeeeeeeeees

es Er UII ichseseceerincsstcnnesticeneeninenteniaintainmandadennintags

Ne a eee

ae ee Oe SII ciocitcintncntnneseiicsnorerinmenmiseintans

ite Ae SI ciasinsidirrernercsicineninicianintinimasiaiaeenes

EEN en ene

RG OI if cercnieicinaalinancindtaniaeacen

eg ae Oe oii crtneinnnrinntenenaeieneseaiien

ek Or NE iristeniirinipnidieneicerenicennadsieenaiabiaasieneaions

ee ete Tt UTIIET Setsdcisiitnatinsiniasicniainettiiidinniatdanansisiniteile

Ene Tit UIT cinseierhicethiininciininitnraaanaietaceaiaials

arn SEE iidinsitdtihansninieitianeitiiapiaitaaielaratiimasiaiie

Sar nTITEis SU SPUD TDP Aseehiitnincethdehbnhieclandimaniibiarsncininapaieai

a rs Oe IPT iihiclinnenieiisistiitiaiintannemnetanandingmtsi

ee ee ee Miniiabiteaieiecisaciataindeitiniicentaptasinceiiniions

a OS 0 , es ee

Page

Vili

TABLE OF AUTHORITIES—Continued

Page

STATUTES:

Se 1 PPD cocencnscccnsnscscesentscnnenssesessscesses passim

GB UL B PS e aD crccncceccccsscsessontcsnecsenenssseseseenn 23

GB UBL. 6 POP cccccccnsscencsccsscessescscsenssceneee 2,3, 7,22

GB U BA. | POTS coceccccccccessevescsssssesccesocsveess 19, 25, 26

GB UAE. 6 Pari cccccnscncacscescssvcsserscsssssecessssevensses 34

GB ULB. 0 PO TEivecccceccccscccvccscccrscsrcesssesece 26

42 U.S.C. § 7475S(d (2M C)i)......ecrecccccesseescrreeeeeeees 26

GB PBL. F PIG cccrersnsecensesencenssscessnsenssscnssessssstmnenes 30

GB UE. © PO 8 conccesscseccssensscssssnsssvmanssasecen 4, 14, 18, 22

GD UE. © Pr te csccncscccenssessccnnssesecsesccesccscsmnasenes passim

GB UBL. © FOO PIII 8 Pcccccccccccsccccesscccsesescsssessesssocss 2, 15

RE TD, B GR cccnersesccsnntetsnsserssesinsscenmenssenaes 35

Abasian Bith. § 46.06 BaD cccccsessssscsscccscevscsosssecesesevsanesenes 35

Alaska Stat. § 46.14.990 (20) ......ccccccccseseseeeeeereseeeeeens 35

-REGULATIONS:

es I scictsininenscinineeinincintameieadiniitdabiamaitinns

GO CF BR. © Fb. BGG ccccccccsccsesccssccsssssscsensccesensesnenneneones 6

40 C.F.R. § 52.21(2)(i1) (1976) 000... ccccececeeeeeeeeeeeneeeees 32

te Bh Fi ccccscnnccccscsocsscvsscsrnsccespansccnseinsnvsnnnens 10

GC Bis © GR ID cccsevesecvncccsscccessosesenneseescessesssensenenacnse 9

GE FOG. TRAD, CED CIPO cccccsssccccscccsesccccsesessscesscessorscens 38

TABLE OF AUTHORITIES—Continued

Page

REGULATIONS:

18 Alaska Admin. Code § 15.240 .......ccccccceeeeeeees 37

18 Alaska Admin. Code § 15.270 ......cccccccceeeeeeeeeeeees 37

18 Alaska Admin. Code § 50.015(€)(2) ..........cccccccceeees 6

18 Alaska Admin. Code § 50.310(d)(3)...................66. 10

18 Alaska Admin. Code § 50.315(f) .0.........0.ccccccceeeeeees 35

18 Alaska Admin. Code § 50.990(13).........c:ccceeeeeeees 10

RULE:

le FI. Fa Ge sccctctncnssicctecrennieniceneseninenen 35

LEGISLATIVE MATERIALS:

H.R. Conf. Rep. No. 95-594 (1977) .....ccccccccceceeeeeeeeeees 32

Sees RN, Gee, See COUT FP crcccncescenssccseneveneanenesenensensn passim

Bs SD, Dees GEOR GPT OP eccnccnesecesnssncncscsscncesssiecsesseses passim

he BN TR, Ge CO cosencccsvessssencsecsncasssccsenennesovess 8

ADMINISTRATIVE PROCEEDING:

In re Inter-Power of New York, Inc., 5 E.A.D.

130 (EPA Envt’l App. Bd. 1994)... eee 45, 46-47

OTHER AUTHORITIES:

Mark Skok, Alaska's Red Dog Mine: Beating

the Odds, Minerals Today (June 1991) ..............06 8,9

Neal Fried & Brigitta Windisch-Cole, A Profile:

Northwest Arctic Borough, Alaska Eco-

nomic Trends, Vol. 19, No. 1 (Jan. 1999).............. 8,9

IN THE

Supreme Court of the Anited States

No. 02-658

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et ail.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF FOR PETITIONER

OPINIONS BELOW

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

814 and reproduced in the appendix to the petition for

certiorari (“Pet. 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 Pet. App. 17a.

The Ninth Circuit’s order requesting supplemental briefing is

reproduced at Pet. App. 24a. The orders of the United States

Environmental Protection Agency (“EPA’’) are reproduced at

Pet. App. 26a, 38a, and 5ia.

JURISDICTION

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

2002. Pet. App. la. The petition for certiorari was filed on

October 25, 2002, and was granted on February 24, 2003.

123 S. Ct. 1253. 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 re-

sults 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

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

emitting facility, which the permitting authority, on 4

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).]

These and other pertinent statutory and regulatory provi-

sions are reproduced in full in the addendum hereto.

INTRODUCTION

Described as an “experiment in federalism,” Michigan v.

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

omitted), the Clean Air Act (“CAA”) assigns to the States an

important—indeed primary—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 attainment

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 based on the

maximum degree of reduction of each [regulated] pollutant

*** which the permitting authority, on a case-by-case

basis, taking into account energy, environmental, and eco-

nomic 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 Pet. App. 3a.

The CAA by its terms thus 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 this case, the State of Alaska issued a permit for the

construction of a new electric generator at the Red Dog

Mine, located in Northwest Alaska some 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 spent eighteen months engaged in

the permitting process—with required public comment and

review—and prepared extensive technical analyses specifi-

cally considering alternative technologies and their associ-

ated “energy, environmental, and economic impacts and

other costs.” 42 U.S.C. § 7479(3). See J.A. 159-224. The

State considered but rejected an alternative technology—

Selective Catalytic Reduction (“SCR”)—primarily due to

cost considerations. J.A. 200-208. Nevertheless, the State’s

decision resulted in emissions levels that complied with all

standards promulgated by the EPA. Moreover, because the

operator of the mine had agreed to install Low NOx on other

generators not subject to BACT review, the State’s decision

was likely to result in /ower overall NOx emissions than if

the more costly SCR had been selected as BACT for the new

generator.

The EPA, however, “disagree[d]” with the State’s decision

to select Low NOx, rather than SCR, as BACT for the new

generator. J.A. 97, 118. Rather than challenge the State’s

decision through the available state review process, the EPA

issued a series of orders prohibiting the construction of the

generator. The EPA, however, had no authority to do so.

Because BACT is “key” to the States’ ability to “manage

their allowed internal growth” under the CAA, Alabama

Power Co. v. Costle, 636 F.2d 323, 364 (D.C. Cir. 1980),

Congress decided to make the determination of BACT

“strictly a State and local decision.” S. Rep. No. 95-127, at

31. Nothing in the Act gives the EPA the authority to

override a State’s discretionary judgment as to what consti-

tutes BACT for a particular source.

The EPA has the authority to issue orders to enforce any

“requirement” of the Act, see 42 U.S.C. §§ 7413(a)(5), 7477,

but the only pertinent “requirement” here is that the state-

issued permit contain a BACT limitation, set by “the permit-

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

energy, environmental, and economic impacts and other

costs.” /d. § 7479(3). There is no dispute that the permit at

issue here contains such a limitation, and no dispute that the

limitation was determined by the State after considering the

applicable factors. See J.A. 157-158; 200-211. The EPA

disagrees with the State’s determination in this particular

instance, and would set a different BACT limitation, but that

does not mean that the State in any sense violated a “re-

quirement” of the Act in issuing the permit with the BACT

limitation that it—‘the permitting authority”—had selected.

The EPA’s contrary view plainly usurps authority that the

CAA vests with the States, upsetting the balance of power

that Congress carefully sought to establish under the Act.

Because the Ninth Circuit beiow erred in sanctioning that

result, the judgment below should be reversed.

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(a) (“Each State shall

have the primary responsibility for assuring air quality within

the entire geographic area comprising such State”) (emphasis

added). Thus, while the CAA assigns the EPA the responsi-

bility for establishing national ambient air quality standards

(“NAAQS”) for certain pollutants, see id. § 7409, the Act

assigns the States the responsibility for implementing them.

See id. §§ 7407(a), 7410(a).

To this end, the CAA requires each State to adopt and

submit for the EPA’s approval a state implementation plan

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

the NAAQS. See id. § 7410(a). If a State does not have an

approved 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 federal plan. /d. § 7410(c)(3).

Areas of the country “that meet[] the [NAAQS] for a

[given] pollutant” (attainment areas) or for which insufficient

information exists to determine whether the NAAQS have

been met (unclassifiable areas) are known as “clean air”

areas. Jd. § 7407(d)(1)(A)(ii), (iii).!' The CAA establishes

maximum allowable increases (or increments) of certain

pollutants in such clean air areas. Jd. § 7473; see 40 C.F.R.

§ 51.166(c) (establishing increment for nitrogen dioxide). To

ensure in part that those increments are not exceeded, the Act

requires that each SIP contain emission limitations and such

other provisions as may be necessary “to prevent significant

deterioration of air quality” in clean air areas, including a

Prevention of Significant Deterioration (“PSD”) permit

program. Id. §§ 7410(a)(2)(C), 7471. The Act provides that

no “major emitting facility” may be constructed or modified

in a clean air area without a PSD permit. /d. § 7475(a)(1).

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]

| Clean air areas are divided into three categories: (1) class I

areas, which include certain national parks and wilderness areas,

(2) class II areas, which are intended to accommodate “moderate”

growth; and (3) class III areas, which are intended to accommodate

“intensive major industrial growth.” See 42 U.S.C. §§ 7472,

7474(a); H.R. Rep. No. 95-294, at 152-153 (1977). The Red Dog

Mine is located in a class I area; Alaska has no class III areas. See

18 Alaska Admin. Code § 50.015(c)(2).

;

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 * * *. [/d. § 7479(3)

(emphasis added). }

As the legislative history of the Act’s PSD provisions

makes clear, the determination of BACT is “key” to a State’s

ability to manage “growth” within its borders. S. Rep. No.

95-127, at 31 (1977). For this reason, Congress “place{d]

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

by-case judgment.” /d. (emphasis added). “It is recognized

that the phrase has broad flexibility in how it should and can

be interpreted, depending on site.” Jd. (emphasis added).

The “flexible approach” adopted 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.” Id. (emphasis

added). The determination of BACT is “strictly a State and

local decision”—“[f]lexibility and State judgment are [its]

foundations.” /d.

The Red Dog Mine. For generations, Inupiat Eskimos

hunting and fishing in the DeLong Mountains in Northwest

Alaska had been aware of orange- and red-stained creekbeds

in which fish could not survive. In the 1960s, a bush pilot

and part-time prospector by the name of Bob Baker noticed

striking discolorations in the hills and creekbeds of a wide

valley in the western DeLongs. Unable to land his plane on

the rocky tundra to investigate, Baker alerted the U/S.

Geological Survey. Exploration of the area eventually led to

the discovery of a wealth of zinc and lead deposits. Although

Baker died before the significance of his observations

became known, his faithful traveling companion—an Irish

Setter who often flew shotgun-—was immortalized by a

geologist who dubbed the creek Baker had spotted “Red

Dog” Creek. Mark Skok, Alaska’s Red Dog Mine: Beating

the Odds, Minerals Today, at 8 (June 1991).

In 1980, Congress set aside the Red Dog Creek area pursu-

ant to the Alaska Native Claims Settlement Act (“ANCSA”),

43 U.S.C. §§ 1601 ef seq., for selection by the Northwest

Arctic Native Association (“NANA”)}—a regional Native

corporation established pursuant to ANCSA for the benefit of

the Inupiat in Northwest Alaska. See Alaska National

Interest Lands Conservation Act, Pub. L. 96-487, § 1418, 94

Stat. 2371, 2501-02 (1980); S. Rep. No. 96-413, at 258-259

(1979). NANA decided to lease the land for mineral devel-

opment. In 1982, NANA entered into a partnership agree-

ment with Teck Cominco Alaska, Inc. (“Cominco”) to

develop and operate what would become the Red Dog Mine.

Skok, supra, at 8-9.

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

concentrate, is located about 100 miles north of the Arctic

Circle The remote and sparsely populated area is “one of

the * * * harsh[est] and [most] inaccessible regions on earth.”

Skok, supra, at 6. No roads connect its eleven communities

to each other or the outside world. From late May, when the

ice on the rivers breaks, until October, boats are the area’s

main mode of transportation. Neal Fried & Brigitta Win-

disch-Cole, A Profile: Northwest Arctic Borough, Alaska

Economic Trends, Vol. 19, No. 1, at 3 (Jan. 1999). “In the

winter, temperatures can drop to nearly ninety degrees below

2 Zinc is an anti-corrosive galvanizing agent used, among other

things, in the manufacture of steel items ranging from nails and

pipes to automobile bodies and bridge girders. Skok, supra, at 7.

zero (with average lows of about fifteen below), and the

region is enveloped in darkness both night and day.

Operating 365 days a year, 24 hours a day, the Red Dog

Mine is the largest private employer in the Northwest Arctic

Borough, an area roughly the size of the State of Indiana with

a population of about 7,000. J.A. 207. The vast majority of

the area's residents are Inupiat Eskimos whose ancestors

have inhabited the region for thousands of years. Fried &

Windisch-Cole, supra, at 4,7. The region offers only limited

year-round employment opportunities, particularly in the

— a the two years preceding Alaska’s permit

ecision, rough’s

in the State. J.A. . ite eileen

The partnership agreement between NANA and Cominco

provides for the training and employment of a local work-

force, with caps on annual production to ensure long-term

employment opportunities for the region. The agreement”

also provides for a committee of local Inupiat elders to

Oversee mining operations. The committee is authorized, for

instance, to close the mine’s road to protect migrating

caribou. Royalty payments to NANA and its Inupiat share-

holders—to be shared in part with all other Alaska Native

corporations—are expected to total about $1 billion over the

life of the mine. Skok, supra, at 7, 8-9. With nearly 600

workers, the mine’s payroll represents over a quarter of the

borough’s wage base. Prior to the mine’s opening, the

a wage in = borough was well below the state

> 4 year after its opening, the borough’s av

—— that of the State. Fried & Windloch Cote, sey

Alaska’s Permit Decision. The State of Alaska has been

designated an attainment or unclassifiable area with respect

to nitrogen dioxide, a regulated pollutant for which NAAQS

have been established. See 40 C.F.R. §§ 50.11, 81.302: Pet

App. 3a. Alaska’s SIP contains a PSD permit program,

by the EPA in 1983, which the State operates

re nm t of Environmental Conservation

(“ADEC”). See 40 C.F.R. § 52.96(a); Pet. App. 3a. Before a

PSD permit will be issued for the construction of a new

source within the State, Alaska’s SIP requires “a demonstra-

tion 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).’

Operating the Red Dog Mine in the harsh landscape of

Northwest Alaska is not without its challenges. For instance,

because no public utility serves the area in which the mine is

located, the mine must generate its own electricity. J.A. 135.

Currently, the mine is powered by six diesel-fired electric

generators, designated “MG-1” through “MG-6, which were

constructed pursuant to PSD permits issued by ADEC in

1988 and 1994. J.A. 166.

n April 1996, Cominco initiated a production rate incr: ase

cone andes to boost the mine’s output—and in he

process create nearly 100 new jobs. Because the PRI project

required the use of more electricity, Cominco in June 1998

submitted an application to ADEC for a new PSD permit,

requesting, among other things, permission to increase

emissions 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

NOx emissions by 30%—as BACT for the MG-5 generator.

J.A. 191. 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 BACT re-

view—as well as on a proposed new generator, “MG-17,

3 Alaska’s SIP likewise defines “best available control technol-

ogy” as “the emission limitation that represents the maximum

reduction achievable for each regulated air contaminant, taking

into account energy, environmental and economic impacts, and

other costs.” 18 Alaska Admin. Code § 50.990(13).

a ee ee ee, eee

which, like MG-5, would be subject to BACT review. See

J.A. 84.

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 seven generators to a

level at least comparable to, and probably even /ower than,

that which would result were another control alternative

evaluated during ADEC’s review process—SCR— installed

on only the MG-5 and MG-17 generators. J.A. 85-88.

ADEC published the draft PSD permit and preliminary TAR

for public comment and review.

The National Park Service filed comments, objecting to

what it called Cominco’s “unusual approach” and recom-

mending that ADEC instead require SCR for all the genera-

tors, even those not subject to BACT review. In July 1999,

after the close of the public comment period, see J.A. 248,

the EPA commented on Cominco’s application for the first

time. The EPA stated that it “disagree[d]” with ADEC’s

BACT determination and believed instead that “SCR [was]

BACT” for the MG-5 and MG-17 generators, J.A. 97—even

though SCR had never before been determined to be BACT

to reduce NOx emissions from a similar type of diesel-fired

electric generator. See J.A. 142. In September 1999, after

considering all public comment—including the EPA’s

belated input—ADEC issued a final draft permit and final

draft TAR concluding that SCR was not economically

feasible and that Low NOx was BACT for the MG-5 and

MG-17 generators. See Pet. App. 5a. ADEC’s final analysis,

unlike the preliminary report, did not rely on emissions

savings from the other generators in reaching this conclusion.

J.A. 111-112.

In response to the EPA’s continuing objections to ADEC’s

BACT determination, ADEC worked with the agency in an

effort to resolve their disagreement. J.A. 197. Although the

dispute over BACT for the MG-5 generator was resolved

when Cominco decided to restrict emission increases from

the generator so as to avoid triggering BACT review, the

parties could not agree on BACT for the proposed new

generator, MG-17. /d.

After a period of unsuccessful negotiations, ADEC on

December 10, 1999 issued the PSD permit and final TAR, in

which ADEC spent nearly ten pages explaining the basis of

its determination that Low NOx was BACT for the MG-17

generator. See J.A. 197-211. It is undisputed that ADEC’s

permit decision did not violate the NAAQS, the allowable

PSD increments, or any other applicable emissions standard.

Moreover, although not required by law to do so, ADEC

followed the EPA’s “top-down” approach—used in deter-

mining BACT by the EPA when it acts as the PSD permitting

authority in those States that do not administer a PSD pro-

gram.4 Under that approach, ADEC (1) identified all NOx

control technologies; (2) identified which technologies were

technically feasible; (3) ranked the technically feasible

control technologies in order of effectiveness; (4) considered

the “energy, environmental, and economic impacts and other

costs” of the technically feasible technologies, see 42 U.S.C.

§ 7479(3), and determined which to eliminate based on such

impacts; and (5) selected Low NOx as the most effective

technology not eliminated. See J.A. 197-211.

In specifically considering the “energy, environmental, and

economic impacts and other costs” associated with SCR,

ADEC discounted Cominco’s contention that requiring SCR

as BACT would have significant adverse environmental and

energy impacts. J.A. 200-203. ADEC concluded, however,

4 As even the EPA has acknowledged, “top-down analysis 1s

not a mandatory methodology.” EPA 9th Cir. Br. 12 (quotation

omitted). “Apart from the statutory criteria, neither EPA's

regulations nor Alaska’s SIP contains detailed procedures for

determining what technology is BACT for a particular source.” /d.

that SCR would have adverse economic impacts. To begin

with, the cost of SCR to reduce NOx emissions from the

MG-17 generator was “outside the range of costs being borne

by similar sources under recent BACT determinations,” J.A.

204-—indeed, more than twice as costly per ton of NOx

removed as the most expensive technology previously

determined by ADEC to be BACT to reduce NOx from

similar sources. J.A. 205-206. Because the mine generates

all its own power—and thus acts as its own electric utility—

ADEC also considered whether the costs of SCR for the MG-

17 generator would be excessive for a rural Alaska utility.

The cost of imposing SCR “would be equivalent to a 20%

increase in the electric rate of the facility,” which ADEC

concluded would be a “disproportionate cost increase” for a

utility and thus, by analogy, for a mine compelled to furnish

its own power. J.A. 206.

Recognizing the mine’s “unique and continuing impact” on

the regional economy of the Northwest Arctic Borough,

ADEC determined that in light of SCR’s “excessive eco-

nomic cost,” J.A. 208—$2.9 million in capital costs with

annual operating costs approaching $635,000—-SCR was not

economically feasible and that Low NOx was BACT for the

MG-17 generator. J.A. 208, 211. Yet because Cominco had

agreed to install Low NOx on ail its generators, ADEC’s

permit decision was expected to result in Jower overall NOx

emissions than would occur if SCR—the EPA’s preferred

technology—were installed on only the MG-17 generator.

See J.A. 85-87.

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

issuing the final PSD permit to Cominco, the EPA on De-

cember 10, 1999, issued a finding of noncompliance and

order to ADEC. Pet. App. 26a. According to the EPA, the

final draft permit designating Low NOx as BACT for the

MG-17 generator did not comply with the requirements of

the CAA or Alaska’s SIP relating to the construction or

modification of new or existing sources. Pet. App. 36a. The

EPA ordered ADEC to withhold issuance of the final PSD

permit—or, in the event that ADEC had already issued the

permit, to “retract or render it ineffective” —until ADEC

“satisfactorily document[ed] why SCR is not BACT for the

(MG-17] generator” or otherwise demonstrated that the

permit was in compliance with the CAA and Alaska’s SIP.

Pet. App. 36a-37a.

e EPA purported to issue its finding and order under

Perth 113¢aX5) and 167 of the CAA. Pet. App. 26a.

Section 113(a)(5) provides that whenever the Administrator

“finds that a State is not acting in compliance with any

requirement or prohibition of the [Act] relating to the con-

struction of new sources or the modification of existing

sources,” the Administrator “may issue an order prohibiting

the construction or modification of any major stationary

source in any area to which such requirement applies. : 42

U.S.C. § 7413(a)(5). Section 167 provides that the Adminis-

trator “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 [the PSD provisions]. Id.

§ 7477.

On February 8, 2000, the EPA reiterated its finding against

the State, J.A. 258, and issued an order to Cominco prohibit-

ing the construction of the MG-17 generator until Cominco

obtained a “valid” PSD permit from ADEC that complied

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

order. Pet. App. 49a. Subsequently, on March 7, 2000, the

EPA amended its February 8, 2000 order to allow Cominco

to perform certain preliminary seasonal construction activi-

ties. Pet. App. 62a-63a. The amended order reiterated that

Cominco was otherwise prohibited from commencing

construction of the MG-17 generator. Pet. App. 62a.°

5 On April 25, 2000, the EPA withdrew the “Order portion” of

the December 10, 1999 Finding of Noncompliance and Order

Nee

Proceedings Below. ADEC and Cominco subsequently

petitioned for review of the EPA’s finding of noncompliance

and orders in the Ninth Circuit. See Pet. App. la. ADEC

and Cominco argued that the EPA had no authority to issue

the findings and orders under either Section 113(a)(5) or

Section 167, because ADEC had not violated any “require-

ment” of the Act. To the contrary, they explained, ADEC

had properly exercised its authority under the Act to “deter-

min[e]” BACT on a “case-by-case basis,” after taking the

Statutory factors into account. 42 U.S.C. § 7479(3). ADEC

and Cominco also argued that, even if the EPA had the

Statutory authority to overturn a state BACT determination in

some instances, the EPA had acted arbitrarily and capri-

ciously in doing so here.

After initially rejecting the EPA’s contention that the court

lacked jurisdiction to consider the parties’ challenges because

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

under 42 U.S.C. § 7607(b)(1), Pet. App. 18a, the Ninth

Circuit held in favor of the EPA. The Ninth Circuit con-

cluded that “subjecting a facility to BACT” was a “require-

ment” under the Act, that “the EPA based its orders on the

finding that ADEC had not complied with the BACT re-

quirement,” and that the orders therefore were authorized by

Sections 113(a)(5) and 167. Pet. App. 9a.

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 “{njothing in the BACT

definition of Section 169(3) limits the EPA’s authority.” Pet.

App. lla. In its view, the Act places only “initial responsi-

against ADEC. Pet. App. 19a (quotation omitted). The EPA

specifically noted that it was withdrawing “only the Order por-

tion,” and that the “December 10, 1999 and February 8, 2000

Findings under Section [113(a)(5)] remain unchanged * * *.” Jd.

(quotation omitted).

bility with the state permitting authority” to determine

BACT. /d. (emphasis added). See also Pet. App. 9a (noting

that “ADEC, as the ‘permitting authority,’ made the initial

BACT decision”) (emphasis added). According to the court,

“the EPA has the u/timate authority” to decide what consti-

tutes BACT. Pet. App. 10a-11a (emphasis added).

The court then went on to hold that the EPA had not acted

arbitrarily or capriciously in invalidating ADEC’s permit

decision because—the court concluded—ADEC had failed to

provide “a reasoned justification for its elimination of SCR

as a control option.” Pet. App. 16a. First, the court con-

cluded, the final TAR revealed “no recent permit decisions

involving BACT determinations for diesel engines used as

primary power generators,” so ADEC could not determine

whether the costs of SCR were “disproportionately high”

compared to the costs of controls imposed in other recent

decisions. Pet. App. 14a. Second, the court concluded, the

final TAR revealed that the cost-effectiveness of SCR was

within the range of the cost-effectiveness “of recent NOx

control BACT decisions.” /d. Third, the court ruled,

ADEC’s determination that the costs of SCR would be

“ ‘disproportionate’ if imposed on a rural utility was

irrelevant, because “Cominco does not, in fact, buy power

from an electric utility.” /d. (quoting J.A. 206).

Finally, the court concluded that ADEC’s “ ‘foremost’ ”

consideration in selecting Low NOx as BACT—the “ ‘direct

cost of SCR technology and its relationship to retaining the

Mine’s world competitiveness as it relates to community

socioeconomic impacts,’” Pet. App. 15a (quoting J.A.

208)—was not “an accepted justification” for determining

BACT. Pet. App. 16a. In the court’s view, ADEC’s recogni-

tion of the mine’s importance to the precarious economy of

the Northwest Arctic Borough was “uncomfortably reminis-

cent of one of the very reasons Congress granted EPA

enforcement authority—to protect states from industry

pressure to issue ill-advised permits.” /d.

Fe ee RE

ET gate ee

SUMMARY OF ARGUMENT

|. |The CAA is based on a “division of responsibilities”

between the States and the federal government. Train v.

Natural Resources Defense Council, Inc., 421 U.S. 60, 79

(1975). Under this scheme of “cooperative federalism,” the

federal government is responsible for setting national stan-

dards to achieve and maintain clean air. The States are

charged with the responsibility of setting specific emissions

limitations for particular sources to ensure that the national

standards are met. In clean air areas, the federal government

determines the maximum allowable increases of emissions

for certain pollutants; the States decide how to allocate the

available increments among competing sources for economic

development and growth. Determining BACT for particular

sources is a key means by which the States weigh potentially

competing demands for pollution control and economic

development within the national limits set by Congress and

the EPA.

BACT is defined in the CAA as “an emission limitation

based on the maximum degree of reduction [of a regulated

pollutant] * * *, 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) (emphasis added).

By its terms, the Act squarely places the responsibility for

determining BACT with “the permitting authority”—i.e., the

State. By specifying that BACT is to be determined “on a

case-by-case basis” after considering “energy, environ-

mental, and economic impacts and other costs,” the Act

makes clear that the BACT decision reflects state policy

judgments about how to reconcile competing priorities in the

context of a particular permit. Deciding that a more stringent

and more costly control is “best” for a particular source may

reflect a judgment that the economic benefits of that particu-

lar expansion are worth consuming only so much of the

available increment; deciding that a less stringent and less

costly control is “best” for a different source may reflect a

different judgment about the value of that specific project.

Congress intended the State, in determining BACT, “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. Given the nature of these judgments, BACT “‘is

strictly a State and local decision.” /d.

The Ninth Circuit nevertheless held that the EPA had the

“ultimate authority” to decide what constituted BACT in this

case. Pet. App. lla. The court reasoned that because

Sections 113(a)(5) and 167 of the CAA give the EPA the

authority to enforce any “requirement” of the Act’s PSD

provisions, see 42 U.S.C. §§ 7413(a)(5), 7477, the EPA had

the authority to enforce “the BACT requirement” and thus

overturn Alaska’s permit decision. Pet. App. 9a. The flaw in

this reasoning is readily apparent. The only “BACT re-

quirement” pertinent here is that the state-issued permit

contain a BACT limitation determined by the State after

consideration of “energy, environmental, and economic

impacts and other costs.” 42 U.S.C. § 7479(3). It is undis-

puted that the permit issued by Alaska to Cominco contains

such a limitation, and that it was set by the State after consid-

eration of the applicable statutory factors. The EPA “dis-

agrees” with the State’s determination, J.A. 97, 118, and

prefers its own “control technology of choice,” J.A. 129, but

that does not mean that the State has failed to comply with

“the BACT requirement.”

Because BACT is a discretionary judgment, involving the

“case-by-case” prioritizing and weighing of potentially

competing impacts and costs, there is no single, objectively

“correct” BACT determination for any particular source. So

long as a State does not set a limitation that allows emissions

to exceed the national standards established by the federal

government, the EPA has no authority to overturn a state

— eer ee —

BACT determination that is based on consideration of the

applicable factors. Indeed, had Congress intended the EPA

to have the “ultimate authority” to decide what constitutes

BACT for a particular source, there would have been no need

for Congress to explicitly require EPA approval of state

BACT determinations in one specified instance not applica-

ble here. See 42 U.S.C. § 7475(a)(8).

None of this is to say that there is no cure for the problem

the EPA alleges—that the States might make “unreasoned”

BACT determinations. In fact, when it reviews proposed

state PSD permit programs, the EPA insists they provide

adequate administrative and judicial review provisions to

guard against just such a prospect. The EPA’s recourse in

this case was not to unilaterally overturn the State’s judg-

ment, but to challenge Alaska’s BACT determination

through the available state review process. Allowing the

EPA to bypass these procedures—as the Ninth Circuit below

did—leads to incongruous results. For instance, there is

nothing to prevent the EPA from invalidating a State’s

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

a permit has issued—undermining the certainty and finality

of the permitting process. Moreover, while the EPA should

be required to demonstrate that the State’s decision was

arbitrary or capricious, instead it is now the State that sup-

posedly must demonstrate that the EPA’s action was arbitrary

or capricious. The awkwardness of considering whether the

EPA was arbitrary or capricious in deciding that the State

was arbitrary or capricious should be the canary in the mine

shaft, signaling that something is very much amiss.

II. Even if this Court were to conclude that the EPA has

some authority to overturn a state BACT determination, the

EPA still had no authority to do so here. The EPA’s own

interpretation of its authority under the CAA is that it may

not interfere with a State’s BACT determination where the

State has provided a “reasoned justification” for its decision.

Alaska plainly did so here. After devoting eighteen months

to processing Cominco’s permit application, the State issued

a final TAR in which it explained the basis of its conclusion

that Low NOx was BACT for the MG-17 generator, includ-

ing its reasons for rejecting SCR—the EPA’s preferred

technology. ADEC concluded that the cost-effectiveness of

SCR was “outside the range of costs being borne by similar

sources under recent BACT determinations,” J.A. 204, and

that SCR would have a “disproportionate” cost impact upon a

rural Alaska utility, and thus by analogy upon a mine com-

pelled by site-specific conditions to supply its own power.

J.A. 206. Recognizing the “unique and continuing impact”

of the Red Dog Mine on the local economy of the Northwest

Arctic Borough, ADEC decided not to impose SCR’s “exces-

sive economic cost” on Cominco. J.A. 208.

At bottom, the EPA overturned the State’s decision not

because it believed that Alaska had failed to provide a

“reasoned justification” for its BACT determination, but

rather simply because the EPA preferred a different technol-

ogy—SCR. That much is clear from the EPA’s December

10, 1999 Finding of Noncompliance and Order itself, which

nowhere states that ADEC had not provided a “reasoned

justification” for its decision, but instead asserts, as a factual

matter, that “SCR is BACT” for the type of generator at

issue. Pet. App. 34a. In substituting its judgment for that of

Alaska, however, the EPA plainly usurped the State’s

prerogative to determine BACT “on a case-by-case basis.”

ARGUMENT

I. THE EPA HAS NO AUTHORITY UNDER THE

CAA TO INVALIDATE A STATE BACT DE-

TERMINATION THAT IS BASED ON CONSID-

ERATION OF THE STATUTORY FACTORS.

We begin with first principles. The EPA, a federal admin-

istrative agency, is “a creature of statute.” Guardians Ass'n

v. Civil Serv. Comm'n of the City of New York, 463 U.S. 582,

614 (1983) (O’Connor, J., concurring). As such, the EPA

“literally has no power to act * * * unless and until Congress

confers power upon it.” Louisiana Public Serv. Comm'n v.

FCC, 476 U.S. 355, 374 (1986) (emphasis added). Accord

Michigan v. EPA, 268 F.3d at 1081 (“if there is no statute

conferring authority, a federal agency has none”). Accord-

ingly, “{iJf EPA lacks authority [to take particular action]

under the Clean Air Act, then its action is plainly contrary to

law and cannot stand.” Michigan v. EPA, 268 F.3d at 1081.

See also 5 U.S.C. § 706(2)(C).

The Ninth Circuit held that the CAA gives the EPA the

“ultimate authority” to decide what constitutes BACT for a

particular source. Pet. App. lla. In its view, that conclusion

is “compel[led]” by the plain language and legislative history

of the Act. Pet. App. 7a. As we explain below, however, the

plain language and legislative history of the CAA make clear

that BACT is a determination to be made by the States, and

the EPA has absolutely no authority to second-guess a State’s

BACT determination that—like Alaska’s here—is based on

consideration of the statutory factors. Because the EPA thus

had no authority to invalidate Alaska’s permit decision in this

case, its action is “plainly contrary to law,” and the Ninth

Circuit decision below “cannot stand.” Michigan v. EPA,

268 F.3d at 1081.

A. The Plain Language Of The CAA Makes Clear

That BACT Is A Determination To Be Made By

The States On A “Case-By-Case Basis.”

1. The CAA provides that no major emitting facility

may be constructed or modified in a clean air area unless “the

proposed facility is subject to [BACT] for each pollutant

subject to regulation under [the Act] emitted from, or which

results from, such facility.” 42 U.S.C. § 7475(a)(4). BACT

is defined in the Act as “an emission limitation based on the

maximum degree of reduction of each pollutant subject to

regulation * * *, 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.” /d. § 7479(3) (emphasis added).

By its terms, the CAA squarely places the responsibility for

determining BACT with “the permitting authority”—.e., the

State. As the plain language of the statute makes clear, a

BACT determination is a discretionary judgment, involving

the “case-by-case” weighing of several factors—‘energy,

environmental, and economic impacts and other costs.” /d.

A BACT determination in any given case will thus depend

on how the State—“the permitting authority’—chooses to

weigh the pertinent factors. Accordingly, the Act not only

gives the States the authority to determine BACT for a

particular source, but gives them broad discretion to do so.

The Ninth Circuit nevertheless held in this case that the

EPA had the “ultimate authority” to invalidate Alaska’s

BACT determination. Pet. App. 11a. The court reasoned as

follows: (1) Sections 113(a)(5) and 167 of the CAA give the

EPA the authority to enforce any “requirement” of the Act,

see 42 U.S.C. §§ 7413(a)(5), 7477; (2) “subjecting a facility

to BACT” is a “requirement” of the Act, id. § 7475(a)(4);

(3) the EPA found that the State had not complied with “the

BACT requirement”; and (4) therefore, the EPA’s invalida-

tion of Alaska’s BACT determination was authorized “by the

plain language” of Sections 113(a)(5) and 167. Pet. App. 7a-

9a.

The court’s reasoning, however, is fundamentally flawed.

The only “BACT requirement” pertinent here is that a state-

issued PSD permit contain a BACT limitation, determined by

the State “on a case-by-case basis, taking into account

energy, environmental, and economic impacts and other

costs.” 42 U.S.C. § 7479(3). There is no dispute that the

permit issued by Alaska to Cominco contains such a limita-

tion, see J.A. 157-158, or that the limitation was set by the

State after considering the applicable factors. J.A. 200-211.

Thus, Alaska fully complied with “the BACT requirement,”

Pet. App. 9a, and the EPA had no authority under Section

113(a)(S5) or Section 167 to override its decision. The EPA

“disagrees” with Alaska’s decision, J.A. 97, 118, and regards

SCR as “the control technology of choice,” J.A. 129, but that

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

“requirement” of the Act.

There are many “requirements” in the Act, including in the

PSD provisions, that the EPA may enforce pursuant to

Sections 113(a(S) or 167. The CAA provides that a facil-

ity’s emissions may not exceed the NAAQS, PSD allowable

increments, or other applicable emission standards. See 42

U.S.C. § 7475(a(3). The provision defining BACT itself,

while specifying that BACT is determined by “the permitting

authority,” goes on to provide that “{iJn no event” may

application of BACT result in emissions exceeding any

performance standards promulgated by the EPA or any limits

on hazardous pollutants. See id. § 7479(3). Other require-

ments are that a PSD permit be issued in the first place; that

the proposed permit be subject to review and required

analysis; and that interested persons— including “representa-

tives of the Administrator’—be given an opportunity to

a written or oral presentations. See id. §§ 7475(a)(1),

Should a State violate any of these requirements or prohibi-

tions, the EPA may take appropriate action pursuant to

Sections 113(a)(5) or 167. Such objective requirements,

however, stand in sharp contrast to the determination of what

BACT is for a particular source. BACT is a discretionary

judgment based on the case-by-case weighing of the applica-

ble statutory factors. Accordingly, there is no single, objec-

tively “correct” BACT determination for any particular

source—no “technology of choice” that applies without

regard to case-specific policy judgments about how to

balance competing impacts and costs.

For example, one State—experiencing little economic

growth in the pertinent area and concerned about the impact

of increased costs on a critically important employer—may

select as BACT for that employer a less stringent and less

costly technology that results in emissions consuming nearly

all of (but not more than) the available increment for growth.

Another State—experiencing vigorous economic growth and

faced with many competing permit applications—may select

as BACT for those applications a more stringent and more

costly technology that limits the impact of any particular new

source on the increment available for development. A third

State—in which ecotourism rather than more industrial

development is the priority—may select as BACT an even

more stringent and more costly technology, effectively

blocking any industrial expansion. In each case the State

would have determined the maximum degree of pollution

reduction achievable for the facility in question, given the

priorities of the particular State and that State’s decision

about how to implement those priorities in the case of that

particular facility. See S. Rep. No. 95-127, at 31 (“flexible

approach” in determining BACT “allows the States * * * to

judge how much of the defined increment of significant

deterioration will be devoted to any major emitting facility”).

Determining the “best” control technology is like asking

different people to pick the “best” car. Mario Andretti may

select a Ferrari; a college student may choose a Volkswagen

Beetle; a family of six a mini-van. A Minnesotan’s choice

will doubtless have four-wheel drive; a Floridian’s might

well be a convertible. The choices would turn on how the

decisionmaker weighed competing priorities such as cost,

mileage, safety, cargo space, speed, handling, and so on.

Substituting one decisionmaker for another may yield a

different result, but not in any sense a more “correct” one.

So too here. Because there is no “correct” BACT determina-

tion for any particular source, the EPA cannot conclude that a

State failed to include the “correct” BACT limitation in a

PSD permit, the way the EPA can conclude, say, that the

State failed to require a PSD permit, that the State failed to

include a BACT limitation at all in a PSD permit, or that the

State issued a permit allowing emissions to exceed available

increments.

The Ninth Circuit’s erroneous conclusion proceeded from a

faulty premise—that the State is only the “initial” BACT

decisionmaker under the Act. See Pet. App. 11a (“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”) (emphasis added); Pet. App. 9a (“ADEC, as the

‘permitting authority,” made the initial BACT decision”)

(emphasis added). There is absolutely nothing in the CAA,

however, that supports that notion. The statute expressly

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

basis,” shall determine BACT for a particular source. 42

U.S.C. § 7479(3) (emphasis added). Except in one specified

instance—not applicable here—the Act nowhere requires the

EPA to approve a State’s BACT determination. See id.

§ 7475(aX(8).

Indeed, that one instance is the exception that proves the

rule—that Congress otherwise did not intend the EPA to

have the “ultimate authority” to determine BACT for particu-

lar sources. Pet. App. lla. Section 165(a)(8) of the Act

requires EPA approval of state BACT determinations for

sources “in a class III area, emissions from which would

cause or contribute to exceeding the maximum allowable

increments applicable in a class II area where no standard

under [42 U.S.C. § 7411] has been promulgated * * * for

such source category.” 42 U.S.C. § 7475(a)(8). Thus, when

Congress wanted to require EPA approval of a state BACT

determination, it did so explicitly. See, e.g., Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 452-453 (2002) (“Where

Congress wanted to provide for successor liability in the Coal

Act, it did so explicitly, as demonsirated by other sections in

the Act”’).°

2. Congress’s decision to make the States—and not the

EPA—the arbiters of BACT is consistent with its overall

approach under the CAA. Like numerous other federal

statutory schemes, the CAA is based on the principle of

“cooperative federalism.” See, e.g., New York v. United

States, 505 U.S. 144, 167-168 (1992) (citing examples).

Such statutory schemes “allow{] the States, within limits

established by federal minimum standards, to enact and

administer their own regulatory programs, structured to meet

their own particular needs.” Hodel vy. Virginia Surface

Mining & Reclamation Ass'n, 452 U.S. 264, 289 (1981)

(emphasis added).

In recognizing the Act’s “division of responsibilities” more

than twenty-five years ago, this Court observed that the EPA

“is plainly charged by the Act with the responsibility for

setting the national ambient air standards.” Train, 421 U.S.

at 79. 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

® Indeed, when Congress wanted to give the EPA any kind of

role at all in the PSD permitting process, it did so explicitly.

Section 165(a)(2), for instance, specifies that “interested persons”

who may submit comments on a proposed permit include “repre-

sentatives of the Administrator.” 42 U.S.C. § 7475(a)(2). Ina

similar vein, Section 165(d) provides the EPA with a role in

reviewing PSD permit applications to ensure that a proposed

facility's emissions will not adversely impact air quality in class I

areas. See id. § 7475(d)(2)(B). If the EPA files a notice alleging

the potential for such an impact, the State may not issue a PSD

permit unless the facility demonstrates that its emissions will not

cause or contribute to concentrations which exceed allowable

increments for class I areas. Jd. § 7475(d)(2)(C)i).

emission limitations which are necessary if the national

standards it has set are to be met.” /d. (emphases added).

As the Court explained, “[t]he Act gives the [EPA] 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.” /d. (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 if deems best suited to its particular situation.” Id.

(emphasis added). 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’’).

This basic division of responsibilities carried through to the

PSD program. In Alabama Power, supra, the seminal case

addressing the Act’s PSD provisions, the D.C. Circuit

acknowledged that the EPA “has the authority * * * to

prevent or to correct a violation of the increments.” 636 F.2d

at 361. The court emphasized, however, that “the agency is

without authority to dictate to the States their policy for

management of the consumption of allowable increments.”

Id.

Because Congress decided 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), it makes perfect sense that

Congress would vest the States with the sole discretion to

decide what constitutes BACT for a particular source. The

EPA may believe that maintaining ultimate veto power over

state BACT determinations is necessary to fulfill its over-

sight role under the CAA, see J.A. 148-149, 257, but Con-

gress clearly thought otherwise. As Judge Posner observed

in holding that the EPA could not bring an enforcement

action in the absence of statutory authority to do so, “[t}he

primary responsibility for the Act’s enforcement at the level

of the individual plant has been lodged in the states rather

than in the national EPA, so it would not be surprising if

Congress did not equip the EPA with a complete quiver of

enforcement arrows.” United States v. AM General Corp.,

34 F.3d 472, 475 (7th Cir. 1994). See also Michigan v. EPA,

268 F.3d at 1084 (“we have before had occasion to remind

EPA that its mission is not a roving commission to achieve

pure air’).

Moreover, even in clean air areas, Congress anticipated—

and desired—continued economic development and growth.

See 42 U.S.C. § 7470(3) (“insur[ing] that economic growth

will occur in a manner consistent with the preservation of

existing clean air resources” among the purposes of the PSD

provisions). Weighing the competing demands of economic

growth and pollution control entails considering the cost of

control. The EPA generally does not consider costs or the

impact on economic growth in setting national standards, but

the States do so in “deciding what emissions reductions will

be required for which sources.” Whitman v. American

Trucking Ass'ns, 531 U.S. 457, 470 (2001). See id. at 493

(Breyer, J., concurring) (“States may consider economic

costs when they select the particular control devices used to

meet the standards.’’).

By giving the States the authority to determine BACT “on

a case-by-case basis,” Congress ensured that the States would

be able to effectively “manage their allowed internal growth”

under the Act. Alabama Power Co., 636 F.2d at 364. The

flexible approach adopted by Congress—involving the

weighing of “energy, environmental, and economic impacts

and other costs’—allows state BACT determinations to

reflect policy judgments about how to balance economic

growth and pollution control in particular instances, while

complying with national standards. “[A]ssuming such com-

pliance, growth-management decisions were left by Congress

for resolution by the states.” /d.

This case amply illustrates the wisdom of Congress’s

choice. The Red Dog Mine is the largest private employer in

the Northwest Arctic Borough, where geography and the

harsh environment pose unique employment challenges, offer

few employment alternatives, and limit any concern about

other industrial development that might compete with the

mine for consumption of available increments. In making its

BACT determination for the MG-17 generator—an essential

component of Cominco’s PRI project, expected to generate

nearly 100 new jobs—the State of Alaska specifically

considered “energy, environmental, and economic impacts

and other costs.” 42 U.S.C. § 7479(3). See J.A. 200-211.

Recognizing the mine’s “unique and continuing impact” on

the economy of the borough, the State decided not to require

a control with an “excessive economic cost.” J.A. 208.

The EPA, operating out of its regional office in Seattle,

Washington, had different priorities, desiring to promote its

preferred “control technology of choice,” J.A. 129, rather

than limit the impact on the precarious economy of North-

west Alaska. The EPA thus overturned the State’s BACT

determination—even though the State’s permit decision not

only complied with the NAAQS and PSD increments but was

likely to result in Jower overall NOx emissions than if the

EPA’s preferred technology had been selected. If Alaska is

not allowed the flexibility to make a BACT determination

that is expected to result in cleaner air while taking into

account local conditions in a community situated far above

the Arctic Circle, it is difficult to imagine just what Congress

had in mind in its “division of responsibilities” in the CAA.

Train, 421 U.S. at 79.

B. The Legislative History Of The CAA Confirms

That BACT Is “Strictly A State And Local Deci-

sion.”

The legislative history of the CAA confirms that Congress

intended to vest the discretion to determine BACT for

particular sources in the States—and the States alone. The

Act’s PSD provisions were enacted as part of the Clean Air

Act Amendments of 1977. For nearly a decade, federal air

pollution control legislation had reflected a policy to prevent

the significant degradation of clean air. See H.R. Rep. No.

95-294, at 103. In amending the CAA in 1977, Congress

sought “to provide [a] clearer definition of [that] policy” and

“more specific congressional guidance as to how [that] policy

is to be implemented.” /d. See also S. Rep. No. 95-127, at

28.

To this end, Congress established maximum allowable

increments for certain pollutants in clean air areas, see 42

U.S.C. § 7473, and directed the EPA to establish increments

or similar measures for others, see id. § 7476. Congress also

established a preconstruction review and permitting process

for all “major emitting facilities.” See id. § 7475. The House

Committee Report explains that “(t]he purpose of the State

permit process is to provide that the allowable pollution

increments and appropriate emission limitation for each

source * * * will not be exceeded.” H.R. Rep. No. 95-294, at

145.

The PSD provisions enacted by Congress were intended to

strike a balance. Congress plainly sought to “protect clean

air areas from deteriorating.” S. Rep. No. 95-127, at 29. At

the same time, however, Congress wanted to “permit[] the

economic development necessary to achieve a steady im-

provement in our standard of living.” Jd. See also H.R. Rep.

No. 95-294, at 147 (legislation “[p]rotects clean air resources

while permitting both the economic development needed to

assure a safe and secure life for all Americans, and the

_ =.)

NE Be

~ 7 ee Re Te

domestic resource development essential for energy inde-

pendence”). As the House Committee Report explains,

“States and local governments (not Federal agencies) will

determine appropriate policy after considering the multiple

objectives of minimizing air pollution increases in clean air

regions and permitting stable, long-term, commercial,

industrial, and energy developments.” /d. at 146.’

To allow the States to determine “how much more pollu-

tion will be allowed in clean air areas,” id. at 147, Congress

gave the States broad flexibility to classify most regions

within their borders as class I (allowing “very small” in-

creases Over existing pollution), class II (allowing “moder-

ately large” increases over existing pollution), or class III

(allowing “large” increases over existing pollution). /d. at

142. See 42 U.S.C. §§ 7472, 7474. As the House Committee

Report explains, “[b]y choosing a classification for an area,

the State actually will be making a decision on the future

pollution increases that will be allowed in that area.” H.R.

Rep. No. 95-294, at 143.8

? The House Committee Report further elaborates:

The committee purposely chose not to dictate a Federal re-

sponse to balancing sometimes conflicting goals. It purposely

chose not to dictate what State and local decisions on air qual-

ity deterioration must be. Maximum flexibility and State dis-

cretion are the bases of the committee’s approach. The com-

mittee carefully balanced State and national interests by pro-

viding for a fair and open process in which State and local

governments and the people they represent will be free to

carry out the reasoned weighing of environmental and eco-

nomic goals and needs. [H.R. Rep. No. 95-294, at 146.]

8 In the 1977 amendments, Congress specifically “reject[ed]

the approach” taken by the EPA in its then-current regulations,

which would give the EPA “veto power over all State classifica-

tions which it deems ‘arbitrary and capricious.’ H.R. Rep. No.

95-294, at 148-149. The House Committee explained that “unlike

the administration’s regulations, the bill does not authorize EPA to

The “key” to managing economic growth, however, is

BACT. S. Rep. No. 95-127, at 31. For this reason, Congress

“place[d] this responsibility with the State, to be determined

in a case-by-case judgment.” Jd. (emphasis added).? The

Senate Committee Report explains that the term is intended

to have “broad flexibility in how it should and can be inter-

preted, depending on site,” and that “[t]he weight assigned to

[each of the statutory] factors is to be determined by the

State.” Id. (emphases added). The “flexible approach”

adopted 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.” Id. (emphasis added). In short, as the Senate

Committee Report emphasizes, BACT is “strictly a State and

local decision”—“[f]lexibility and State judgment are [its]

foundations.” /d.

disapprove any State redesignation decision on the ground that it is

‘arbitrary and capricious’ or that environmental, health, or other

factors should have been given more weight in the State’s deci-

sion.” Jd. at 150. Congress chose “to remove from the States the

threat of EPA ‘second-guessing’ the wisdom of every State

decision * * *.” Jd.

The EPA’s position in this case ascribes to the same Congress

that expressly overturned the EPA’s asserted authority to review

State classification decisions it deemed “arbitrary and capricious”

the unstated intent to subject the far more localized BACT deter-

minations to just such review.

% The BACT requirement was added by Senate amendment.

See S. Rep. No. 95-127, at 151; H.R. Conf. Rep. No 95-564, at 152

(1977). The EPA’s regulations at the time required that new or

modified sources be subject to BACT, as “specified by the Admin-

istrator,” for certain pollutants. 40 C.F.R. § 52.21(2)(ii) (1976)

(emphasis added). Recognizing the significance of this “key

decision,” Congress chose not to leave it in the hands of the EPA,

but instead squarely “place[d] this responsibility with the State.”

S. Rep. No. 95-127, at 31 (emphasis added).

= I OE GEOG Lm

The legislative history of the Act’s PSD provisions and of

BACT in particular thus makes abundantly clear that Con-

gress intended the States—‘not Federal agencies”—to

determine BACT, and that Congress intended the States to

have “broad flexibility” in doing so. H.R. Rep. No. 95-294,

at 146; S. Rep. No. 95-127, at 31. The Ninth Circuit below

nevertheless held that the legislative history of the CAA

“compel{led]” the conclusion that the EPA has the “ultimate

authority” to decide what constitutes BACT for a particular

source. Pet. App. 7a, lla. Yet instead of addressing the

most pertinent legislative history—i.e., that specifically

discussing BACT—the Ninth Circuit simply ignored it.

Moreover, nothing in the legislative history actually in-

voked by the court below even remotely supports its deci-

sion. The court cited both the 1970 amendment of the CAA,

which “directed the EPA to publish NAAQS and the states to

develop implementation plans to meet them,” and the 1977

amendment, establishing the PSD program “to prescribe

allowable levels of air quality degradation in clean air areas.”

Pet. App. 9a-10a. As discussed above, however, far from

demonstrating that Congress intended to give the EPA

“ultimate authority” over state BACT determinations, these

chapters of the Act’s history in fact suggest just the opposite.

They make clear that Congress envisioned a division of

responsibilities—in both the Act in general and the PSD

provisions in particular—under which Federal authorities set

minimum standards and the States weigh competing priori-

ties “when they select the particular control devices used to

meet the standards.” American Trucking, 531 U.S. at 493

(Breyer, J., concurring).

The Ninth Circuit also cited Congress’s enactment of Sec-

tion 113(a)(5) in 1990—some thirteen years after Congress

directed that BACT be determined by “the permitting author-

ity, on a case-by-case basis.” See Pet. App. 10a. The mere

enactment of Section 113(a)(5), however, provides ‘no

support for the Ninth Circuit’s decision. That provision

simply authorizes the EPA to enforce any “requirement” of

the Act’s PSD provisions. See 42 U.S.C. § 7413(a)(5). It

does not have anything to say about what those requirements

in fact are. There are many requirements in the PSD provi-

sions that the EPA may enforce—that a permit be required,

that the permit contain a BACT limitation, that allowed

emissions not exceed the NAAQS or available increments.

As explained, however, the only BACT “requirement”

pertinent here is that a state-issued PSD permit contain a

BACT limitation determined by the State “on a case-by-case

basis, taking into account energy, environmental, and eco-

nomic impacts and other costs.” Jd. § 7479(3). Section

113(a)(5) gives the EPA the authority to enforce that re-

quirement. But it by no means gives the EPA the authority to

do what it did here—invalidate a state permit decision simply

because the EPA would weigh the pertinent factors differ-

ently than the decisionmaker Congress chose to make the

BACT determination.

C. The EPA’s Recourse In This Case Was Not To

Unilaterally Overturn The State’s BACT Deter-

mination, But To Challenge It Through The

Available Review Process.

Importantly, none of this is to say that the EPA is without

recourse when it believes a State has failed to provide a

“reasoned justification” for its BACT determination. Pet.

App. 16a. As noted, before a PSD permit may issue, the

State must allow all interested parties, including “representa-

tives of the Administrator,” to submit comments on, among

other things, “control technology requirements.” 42 U.S.C.

§ 7475(a)(2). The EPA had ample opportunity to do so here.

As required by the Act, Alaska had “transmit[ed] to the

[EPA] a copy of [Cominco’s] permit application * * * and

provide[d] notice to the [EPA] of every action related to the

consideration of [the] permit.” Jd. § 7475(d).

2 EE Em EO

Under Alaska law, any “person” who participated in the

public comment process on a proposed permit may pursue an

administrative appeal of a permit decision, followed by

judicial review. See Alaska Stat. §§ 44.62.560, 46.14.200;

18 Alaska Admin. Code § 50.315(f); Alaska R. App. P.

601(b). The term “person” includes “an agency of the United

States.” Alaska Stat. § 46.14.990 (20). Thus, in this case,

the EPA was free to participate in the public comment

process on Cominco’s draft permit, and then, if it believed

that the State had failed to adequately justify its final permit

decision, challenge that decision through the State’s review

process.

Instead, the EPA elected to bypass these available proce-

dures and unilaterally overturn Alaska’s BACT determina-

tion. The Ninth Circuit below sanctioned that result, but the

consequences of its decision suggest that it is clearly not

right. To begin with, under the decision below, there is

nothing to prevent the EPA from invalidating a BACT

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

permit has been issued. By that time, both the State and the

source will have devoted a substantial amount of time and

resources to the permitting process, and the source may also

have already invested in costly technology approved by the

State. In this case, for instance, ADEC and Cominco spent

more than a year attempting to reach an agreement on BACT.

See J.A. 131. Requiring the EPA to pursue available state

administrative and judicial procedures—rather than allowing

the EPA free rein to override a state BACT determination at

any time—would bring certainty and finality to the permit-

ting process. See AM General, 34 F.3d at 474-475 (refusing

to allow the EPA to “mount a collateral attack” on a permit

where the EPA had the “alternative remedy” of an adminis-

trative appeal followed by judicial review). See also 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.”).

Congress specified in unambiguous terms that BACT was

to be determined by “the permitting authority”—ie., the

State. The Ninth Circuit’s decision that the State had only

“initial responsibility” while the EPA had “ultimate author-

ity” to make that determination, Pet. App. 10a-1 1a, intro-

duces disabling uncertainty and confusion into the allocation

of responsibility. See, e.g., Jerome B. Grubart, Inc. v. Great

Lakes Dredge & Dock Co., 513 U.S. 527, 547 (1995) (juris-

dictional rules should be clear and easy to apply). And the

asserted reason for compromising the bright-line rule in the

Act—the need to correct “unreasoned” state determina-

tions—is hardly compelling, given the availability of state

administrative and judicial review addressed to just that

possibility.

The Ninth Circuit’s decision—requiring the States to go

into federal court to challenge the EPA’s invalidation of a

BACT determination—also improperly shifts the burden of

persuasion from the EPA to the States, undermining the

deference to which a State’s decision is entitled. Had the

EPA challenged Alaska’s permit decision through the state

review process, the EPA would have had to demonstrate that

the State’s decision was arbitrary or capricious. See, e.g.,

Bering Straits Coastal Mgmt. Program v. Noah, 952 P.2d

737, 741 (Alaska 1998). Because the EPA chose instead to

unilaterally overturn the State’s judgment, suddenly the State

had to show that the EPA's action was arbitrary or capri-

cious. See 5 U.S.C. § 706(2)(A). The procedural sleight-of-

hand upheld by the Ninth Circuit also results in an awkward

and unwieldy inquiry—whether the EPA acted arbitrarily or

capriciously in deciding that the State had acted arbitrarily or

capriciously. See Pet. App. 13a-16a; Opp. 21 n.11 (noting

that “in enforcing a finding of noncompliance or order, EPA

may have to convince a district court that the permitting

authority arbitrarily or capriciously applied the BACT

requirement,” and that in cases like this one, the EPA “must

defend its finding of non-compliance under an arbitrary-or-

capricious standard of review”).

By allowing the EPA to short-circuit the state review proc-

ess in this po the Ninth Circuit also deprived sae a

opportunity to uately defend its permit decision.

the EPA te cue chabinatinn appeal of Alaska’s

BACT determination, the State and Cominco could have

presented evidence at an adjudicatory hearing in support of

the State’s decision. See 18 Alaska Admin. Code §§ 15.240,

15.270. That evidence would have been part of the adminis-

trative record on judicial review. See, e.g., Miners Advocacy

Council, Inc. v. State of Alaska, Dep't of Envil. Conserva-

tion, 778 P.2d 1126, 1138-40 (Alaska 1989), cert. denied,

493 U.S. 1077 (1990); Noey v. Department of Envil.

Conservation, 737 P.2d 796, 799, 801-806 (Alaska 1987).

Instead, the State’s BACT determination was reviewed by

the Ninth Circuit on an incomplete record. Even that court

had the sense that something was amiss, intimating at one

point its view that an enforcement action in district court, as

opposed to review in the court of appeals, would “provide a

preferable means of resolving the issues in this case, for the

parties in that context [would] be able to develop a full

record on pertinent issues.” Pet. App. 22a (emphasis added).

The federal administrative record consists of materials

“upon which the EPA relied in its determination that Selec-

tive Catalytic Reduction, and not Low NOx, is BACT for the

MG-17 generator.” Jd. (emphases added). That record may

not include all the materials upon which the State relied in

making its BACT determination, even though that informa-

tion is critical to a fair assessment of the State’s decision.

See, e.g., General Motors Corp. v. EPA, 168 F.3d 1377, 1382

(D.C. Cir. 1999) (“when a permit has been issued by a state

agency, it alone will have the information pertinent to an

attack upon the decisionmaking process that led to the

issuance of that permit”).

The EPA’s own view is “that existing law and regulations

require an opportunity for state judicial review under ap-

proved PSD SIPs by permit applicants and affected members

of the public.” 61 Fed. Reg. 1800, 1882 (1996). According

to the agency, the “opportunity for public review and com-

ment, as provided in the statute and regulations, is seriously

compromised where an affected member of the public is

unable to obtain judicial review of an alleged failure of the

State to abide by its PSD SIP permitting rules.” /d.

The EPA thus regards the state review process as the means

by which “interested persons” who have commented on a

proposed permit may vindicate their interests. 42 U.S.C.

§ 7475(a)(2). Under the CAA, such “interested persons”

include “representatives of the Administrator.” Jd. Thus,

even the EPA’s own view of the law suggests that the EPA’s

proper recourse in this case was to challenge Alaska’s permit

decision through the state review process, not quash it by

regulatory fiat.'°

'0 The EPA also has other remedies at its disposal to ensure

compliance with the Act's requirements. For instance, if the EPA

finds that violations of a SIP or permit program are so widespread

that they appear to be the result of lax enforcement by the State

the EPA may assume enforcement of the plan or program. See 42

U.S.C. § 7413(a)(2). Similarly, if the EPA finds that a State’s SIP

1s “substantially inadequate” to attain or maintain the NAAQS or

to comply with any other requirement of the Act, the EPA may call

for a SIP revision. /d. § 7410(k)\(5). The EPA has never taken

either of these actions against Alaska. The EPA’s objection is

limited to the particular BACT determination for this particular

=— Under the Act, such determinations about how to comply

with national standards at the source

on woe level are for the State, not the

Tl Mm, —

Il. EVEN IF THE EPA MAY INVALIDATE A STATE

BACT DETERMINATION IN SOME CASES, IT

HAD NO AUTHORITY TO DO SO HERE.

Even if this Court were to conclude that the EPA has some

authority to review a State’s BACT determination, the EPA

still had no authority to invalidate Alaska’s permit decision

in this case. The CAA directs only that the States take into

account “energy, environmental, and economic impacts and

other costs” in determining BACT “on a case-by-case basis.”

42 U.S.C. § 7479(3). The record in this case demonstrates

that ADEC carefully considered each of the applicable

factors and provided a reasoned explanation for its decision

that Low NOx was BACT for the MG-17 generator. The

EPA has stated that “if a state has met all procedural norms,

considered all available control technologies, and given a

reasoned justification of the basis for its decision, EPA has

no grounds on which to challenge a final substantive state

decision.” Pet. App. 12a (quoting 1993 EPA legal opinion)

(emphasis added and omitted). See Cert. Rec. 72-003. Thus,

under the EPA’s own view of its authority under the CAA,

the EPA had no basis to intervene and overturn Alaska’s

permit decision in this case.

Alaska’s BACT determination came after an cighteen-

month process during which ADEC (1) carefully reviewed

Cominco’s application; (2) worked closely with Cominco to

resolve permitting issues; (3) conducted independent research

and prepared extensive technical analyses; (4) solicited and ~

considered comments from interested members of the public,

including belated input from the EPA; and (5) worked

closely with the EPA in an attempt to resolve their disagree-

ment on BACT for the MG-17 generator. See J.A. 159-224.

In its final TAR, ADEC spent nearly ten pages explaining

the basis of its conclusion that Low NOx was BACT for the

MG-17 generator. J.A. 197-211. As even the EPA has

acknowledged, ADEC “provid{ed] a detailed accounting of

the process.” J.A. 286. Although not required to do so,

ADEC followed the EPA’s “top-down” approach, under

which ADEC identified all available NOx control technolo-

gies, ranking the technically feasible ones in descending

order of NOx removal. ADEC then specifically considered

“energy, environmental, and economic impacts and other

costs” associated with SCR. 42 U.S.C. § 7479(3). See J.A.

200-208. Although ADEC discounted Cominco’s claim that

energy or environmental impacts warranted eliminating SCR,

J.A. 200-203, ADEC determined that SCR would have

adverse economic impacts.

ADEC first concluded that the cost-effectiveness of SCR

was “outside the range of costs being borne by similar

sources under recent BACT determinations.” J.A. 204.

Rejecting Cominco’s higher cost estimates, ADEC estimated

the capital costs of SCR to be $2.9 million and annual

operating costs to be $635,000, translating into a cost-

effectiveness of $2,100 per ton of NOx removed. /d. ADEC

then examined an EPA clearinghouse database to determine

the range of costs for similar diesel-fired electric generators

in recent BACT determinations. Although there were “no

recent BACT determinations for diesel engines used as

primary power generation” listed, there were two 1996

BACT determinations for such sources that imposed controls

with a cost-effectiveness of $432 per ton of NOx removed.

J.A. 205. ADEC also reviewed its own recent BACT deter-

minations for similar diesel-fired electric generators, and

found that the cost-effectiveness of the controls imposed

ranged between $0 to $936 per ton of NOx removed. J.A.

205-206. Thus, the costs of SCR “on a cost-per-ton removal

basis” —$2,100 per ton of NOx removed—were “signifi-

cantly higher” than the costs of the controls imposed in

ADEC’s recent BACT decisions for such sources, J.A. 206-

207, and nearly twice as high as the $1,106 cost per ton of

Low NOx. See Cert. Rec. 45-029.

Next, because the Red Dog Mine generates all its own

power—and thus acts as its own electric utility—ADEC

considered whether the costs of SCR would be prohibitive

for a rural Alaska utility. ADEC estimated that the cost of

SCR was 3 cents per kilowatt-hour, and that the average cost

of electricity in rural Alaska was approximately 15 cents per

kilowatt-hour. Because the imposition of SCR “would be

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

facility,” ADEC concluded that the costs of SCR would be

“disproportionate” for a utility and thus, by analogy, for a

mine required by site-specific conditions to supply its own

power. J.A. 206.'!

Whatever the significance might be in other cases of SCR’s

relatively poor cost-effectiveness and its disproportionate

cost as control technology on a primary energy source,

ADEC concluded that such considerations warranted elimi-

nating SCR as BACT in the unique situation 0“ the Red Dog

Mine. J.A. 207-208. Cominco had represented that the costs

of SCR were “very significant, affecting Cominco’s cost of

production and competitiveness in world markets.” J.A. 204.

As ADEC noted, the Northwest Arctic Borough has “limited

permanent year-round job opportunities” and an “histori-

cal{ly] high unemployment rate.” J.A. 207. Indeed, in the

preceding two years, “the Borough’s unemployment rate

ha[d] been the highest in the State.” Jd. The Red Dog Mine,

however, has had “a dramatic [effect] [in] revers[ing} these

historic trends for this region of the State.” /d. Before the

mine opened, “borough wages were well below state average

wages.” /d. Now, the mine “provides high paying year

round employment.” /d. Its payroll represents “over a

quarter of the borough’s” wage base, and its relationships

'! Even though Cominco had not provided “detailed financial

information” concerning the impact of SCR on its operations,

ADEC could thus still conclude on a site-specific basis that the

cost of SCR was “excessive.” J.A. 207.

with contractors and vendors have further “boosted the

borough’s private sector economy.” /d.

In recognition of the “unique and continuing impact” of the

mine on the community of the Northwest Arctic Borough,

J.A. 208, ADEC chose to select Low NOx rather than SCR

as BACT. Yet because Cominco had agreed to install Low

NOx on ail its generators, ADEC’s decision was nevertheless

expected to result in Jower NOx emissions than if ADEC had

selected SCR as BACT for the MG-17 generator. !2

This Court has made clear that an agency’s explanation for

a particular decision is “satisfactory” so long as the agency

articulates a “rational connection between the facts found and

the choice made.” Motor Vehicle Mfrs. Ass'n v. State Farm

Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quotation

'2 Early in the permitting process, Cominco proposed to install

Low NOx on all its generators, not just the MG-5 and MG-17

generators subject to BACT review at the time. See supra at 10-

11. ADEC initially decided to accept Cominco’s proposal,

because it was likely to result in lower overall NOx emissions than

if SCR were installed on only the MG-5 and MG-17 generators.

J.A. 85-88. ADEC had conferred with the EPA and understood the

agency to agree with this emissions-netting approach. See J.A.

244; Affidavit of Michele Brown 4 9 (Mar. 13, 2000). The EPA,

however, later objected to ADEC’s emissions-netting approach,

even though the CAA directs the States to weigh “environmental”

impacts in determining BACT “on a case-by-case basis.” 42

U.S.C. § 7479(3). See J.A. 96-97.

In its final TAR, to accommodate the EPA’s objection, ADEC

did not rely on emissions savings in determining that Low NOx

was BACT, but instead went through the foregoing analysis. J.A.

199, 200-208. Nevertheless, because Cominco had agreed to

install Low NOx on all its generators if Low NOx were selected as

BACT on MG-17, the State’s permit decision was still likely to

result in lower NOx emissions—at a fraction of the cost of SCR.

J.A. 85-88.

Pee OO 4

omitted). ADEC’s explanation of its reasons for rejecting

SCR—that the costs of SCR were “excessive” both in terms

of cost effectiveness and in terms of impact on a primary

energy source, and that the unique situation of the Red Dog

Mine warranted eliminating SCR on that basis—easily passes

muster under that standard. Under the EPA’s own view of

the law, the EPA had no authority to disregard ADEC’s

“reasoned justification” and overturn the State’s judgment.

In insisting that SCR—not Low NOx—was BACT, the

EPA took issue with ADEC’s economic impact analysis,

asserting that, “in order to justify economic infeasibility,’

ADEC’s analysis “should have gone beyond a review of

cost-effectiveness to include an analysis of whether requiring

Cominco to install and operate [SCR] would have any

adverse economic impacts upon Cominco specifically.” J.A.

127 (emphasis added). In its zeal to impose its “technology

of choice,” however, the EPA overlooked that ADEC had

done just that in analogizing the mine to a rural Alaska

utility, concluding that SCR would have a “disproportionate

impact on such a utility, and thus on the mine as well. See

J.A. 116, 206."

In any event, the CAA requires only that the States con-

sider “energy, environmental, and economic impacts and

other costs” in determining BACT for particular sources. 42

U.S.C. § 7479(3). It does not direct them to weigh or apply

13 The EPA also noted that ADEC had found SCR “economi-

cally feasible” in its preliminary TAR. See J.A. 96. ADEC s

decision at that time to accept Cominco’s emissions-netting

proposal, however, had mooted any need to consider the impact of

SCR costs, and in fact ADEC in the preliminary TAR did not

analyze recent BACT decisions for similar sources or the site-

specific cost considerations of imposing SCR. See J.A. 235

(Cominco criticism of ADEC failure to analyze economic feasibil-

ity in preliminary TAR). The decision in the final TAR not to rely

on emissions savings necessitated such analysis and led to a more

informed weighing of economic impacts.

those factors in any particular manner. To the contrary,

Congress intended the States to have “broad flexibility” in

applying the statutory factors, and “[t]he weight assigned to

such factors is to be determined by the State.” S. Rep. No.

95-127, at 31 (emphasis added). ADEC’s decision to gauge

the economic impact of SCR in part by comparing its cost-

effectiveness to “the range of costs being borne by similar

sources under recent BACT determinations” was well within

its discretion, J.A. 204, as was ADEC’s decision to analogize

the mine’s primary power source to a rural Alaska utility.

The EPA accordingly had no authority to force the State to

consider “economic impacts” in a manner dictated by the

EPA. See American Corn Growers Ass'n v. EPA, 291 F.3d

1, 8-9 (D.C. Cir. 2002) (invalidating EPA rule requiring

States to consider one of several enumerated statutory factors

for determining best available retrofit technology (“BART”)

in a particular manner).

Moreover, the EPA’s approach in criticizing ADEC’s deci-

sion was itself contrary to the EPA’s own published guide-

lines. According to the agency’s New Source Review

Workshop Manual—upon which “EPA and state permitting

agencies widely rely,” EPA 9th Cir. Br. 13 n.4—“{iJn the

economic impact analysis, primary consideration should be

given to quantifying the cost of control and not the economic

situation of the individual source.” EPA, New Source

Review Workshop Manual: Prevention of Significant Dete-

rioration and Nonattainment Area Permitting (1990), at B.31

(Cert. Rec. 71-115) (emphasis added). See also id. (“the

economic impact of [control] alternatives on the particular

source under review should not be nearly as pertinent to the

BACT decision making process as the average and, where

appropriate, incremental cost effectiveness of the control

alternative”). Sources “should demonstrate to the satisfaction

of the permitting agency that costs of pollutant removal for

the control alternative are disproportionately high when

compared to the cost of control for that particular pollutant

and source in recent BACT determinations.” Id. at B.32

(Cert. Rec. 71-116) (emphasis added). The EPA’s Environ-

mental Appeals Board (which hears challenges to PSD

permits issued under the federal program) follows this

approach: “We accept that cost-effectiveness is determined

in most cases by showing that a control option * * * is either

within or outside the range of costs being borne by similar

sources under recent BACT determinations.” Jn re Inter-

Power of New York, Inc., 5 E.A.D. 130, 149 (EPA Envil.

App. Bd. 1994).

Applying the EPA’s own criteria, ADEC determined that

the cost of SCR on a per-ton-removal basis was nearly

double that of the most expensive technology imposed as

BACT to reduce NOx emissions from a similar type of

diesel-fired electric generator in recent BACT determina-

tions. J.A. 205-206. Indeed, although the EPA has main-

tained that the cost of SCR is “well within the range of costs

EPA has seen permitting authorities nationwide accept as

economically feasible for NOx control,” J.A. 150, the EPA

has never been able to cite an example where SCR has been

imposed as BACT to reduce NOx emissions from a similar

source. See J.A. 142 (“EPA has not required SCR as BACT

on a diesel-fired reciprocating engine in any case, nor has

any state”). The EPA’s inexplicable refusal to follow its own

guidelines in this case practically defines arbitrary and

capricious behavior. See National Ass'n of Cas. & Surety

Agents v. Board of Gov'rs of the Fed. Reserve Sys., 856 F.2d

282, 287 (D.C. Cir. 1988) (“It is, of course, a fundamental

precept of administrative law that agencies are under an

obligation to follow their own regulations, procedures, and

precedents, or provide a rational explanation for their depar-

ture.”) (quotation and alteration omitted), cert. denied, 490

U.S. 1090 (1989).

The EPA may have analyzed the cost-effectiveness data

differently than ADEC, and may not have found the utility

analogy as compelling as ADEC did. In addition, the EPA

may not have been as concerned as ADEC to avoid imposing

the higher costs of SCR on the only significant private sector

source of year-round employment for hundreds of miles

around. But the EPA cannot claim that ADEC’s decision

was “unreasoned.” Nor can the EPA assert that ADEC’s

determination in any way results in emissions exceeding

national standards or permitted increments. How to control

emissions within those standards, without exceeding avail-

able increments, was for the State to decide.

The Ninth Circuit nevertheless held that the EPA had not

acted arbitrarily or capriciously because, it concluded, ADEC

had. Pet. App. 13a-16a. First, the court stated that the final

TAR “reveals that there were no recent permit decisions

involving BACT determinations for diesel engines used as

primary power generators.” Pet. App. 14a. That is errone-

ous; the final TAR specifically notes “four recent BACT

determinations for diesel-electric generators used for primary

power production” that imposed BACT controls with a cost-

effectiveness ranging between $0 to $936 per ton of NOx

removed. J.A. 205-206.

Compounding its error, the court next stated that “the cost-

effectiveness of recent NOx control BACT decisions ranged

from $0 to $7,000 per ton of NOx removed,” and that the

cost-effectiveness of SCR in this case was “well within the

applicable range.” Pet. App. 14a. The figure the court relied

on, however, pertained to ADEC’s recent BACT determina-

tions for NOx control generally, not for NOx control for

similar sources—i.e., diesel-fired electric generators used for

primary power generation. See J.A. 205-206. As just

explained, the cost of controls for similar sources ranged

between $0 to $936 per ton of NOx removed, less than half

the estimated cost of SCR in this case—$2,100 per ton of

NOx removed. As noted, the EPA itself considers cost-

effectiveness in light of “the range of costs being borne by

similar sources under recent BACT determinations.” Jn re

Inter-Power of New York, Inc., 5 E.A.D. at 149 (emphasis

added).

The court also cast aside ADEC’s utility cost analysis,

noting that “Cominco does not, in fact, buy power from an

electric utility.” Pet. App. 14a. Of course, that 1s just the

point. The Red Dog Mine must supply its own electricity,

and thus acts as its own utility. Because, as ADEC con-

cluded, the costs of SCR would be “disproportionate” if

imposed on a rural Alaska utility, by analogy those costs

would be “disproportionate” if imposed on the mine. J.A.

206.

Lastly, the court turned to ADEC’s consideration of the

mine’s importance to the local economy. The court was

“uncomfortabl[{e]” with this consideration, holding that it was

not “an accepted justification” for rejecting SCR as BACT.

Pet. App. 16a. But the CAA specifically directs that States

consider “economic impacts” in determining BACT for a

particular source. 42 U.S.C. § 7479(3). That includes the

impact of a particular technology on “anticipated and desired

economic growth for the area.” S. Rep. No. 95-127, at 31

(emphasis added). In recognizing the mine’s importance to a

region where few industries compete for the available

increments, ADEC made precisely the sort of “growth-

management decision{]” that was “left by Congress for

resolution by the states.” Alabama Power, 636 F.2d at 364.

* * *

The EPA’s objection at the time it issued the orders in

question was not that Alaska had failed to adequately explain

its reasons for selecting Low NOx as BACT. Instead, the

EPA simply preferred a different choice—SCR. That is clear

from the EPA’s December 10, 1999 Finding of Noncompli-

ance and Order, which nowhere states that ADEC failed to

provide a “reasoned justification” for selecting Low NOx,

but instead simply asserts, in the “Findings of Fact” no less,

that “SCR is BACT for the Wartsila diesel generators.” Pet.

App. 30a (emphasis added), 34a. Far from appreciating that

the determination of BACT is a policy-laden discretionary

judgment to be made by someone else on a case-by-case

basis after prioritizing and weighing a non-exclusive list of

impacts and costs, 42 U.S.C. § 7479(3), the EPA view is that,

as a factual matter, SCR is the “control technology of

choice” and that “[o]nce a control technology has been

determined to be BACT on a particular type of source, i.e., an

internal combustion engine, generally, that control technol- .

ogy should be considered economically feasible.” J.A. 127,

129 (emphasis added). Indeed, despite Congress’s unambi-

guous intent that the BACT determination be “strictly a State

and local decision” made on a “case-by-case” basis “depend-

ing on site,” S. Rep. No. 95-127, at 31, and Congress’s

decision “not to dictate a Federal response to balancing

sometimes conflicting goals,” H.R. Rep. No. 95-294, at 146,

the EPA twice purported to justify its order substituting SCR

as BACT on the ground that the EPA had a “responsibility to

ensure national consistency.” J.A. 148, 303. When it came

to BACT, however, Congress had a different idea, and left

that determination—‘on a case-by-case basis”—to the States.

CONCLUSION

For the foregoing reasons, the judgment below should be

reversed.

Respectfully submitted,

Greocc D. RENKES JOHN G. ROBERTS, JR.*

Attorney General LORANE F. HEBERT

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

aT 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

t of Law

100 Cushman Street, Suite 400

Fairbanks, Alaska 99701

(907) 451-2811

* Counsel of Record Counsel for Petitioner

STATUTORY AND REGULATORY ADDENDUM

The Clean Air Act, 42 U.S.C. §§ 7401 et seq. provides, in

pertinent part:

§ 7401. Congressional findings and declaration of pur-

pose

(a) Findings

The Congress finds—

* * *

(3) that air pollution prevention (that is, the reduction or

elimination, through any measures, of the amount of

pollutants produced or created at the source) and air pollution

control at its source is the primary responsibility of States

and local governments;

(4) that Federal financial assistance and leadership is

essential for the development of cooperative Federal, State,

regional, and local programs to prevent and control air

pollution.

(b) Declaration

The purposes of this subchapter are—

(1) to protect and enhance the quality of the Nation’s air

resources so as to promote the public health and welfare and

the productive capacity of its population;

(3) to provide technical and financial assistance to State

and local governments in connection with the development

and execution of their air pollution prevention and control

programs, and

A primary goal of this chapter is to encourage or otherwise

promote reasonable Federal, State, and local governmental

actions, consistent with the provisions of this chapter, for

pollution prevention.

* = *

§ 7407. Air quality control regions

(a) Responsibility of each State for air quality; sub-

mission of implementation plan

Each State shall have the primary responsibility for assuring

air quality within the entire geographic area comprising such

State by submitting an implementation plan for such State

which will specify the manner in which national primary and

secondary ambient air quality standards will be achieved and

maintained within each air quality control region in such

State.

* * -

(d) Designations

(1) Designations generally

(A) Submission by Governors of initial designations

following promulgation of new or revised standards

By such date as the Administrator may reasonably require,

but not later than | year after promulgation of a new or

revised national ambient air quality standard for any pollutant

under section 7409 of this title, the Governor of each State

shall (and at any other time the Governor of a State deems

late the Governor may) submit to the Administrator a

list of all areas (or portions thereof) in the State, designating

as—

(i) nonattainment, any area that does not meet (or that

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

meet) the national primary or secondary ambient air quality

standard for the pollutant,

(ii) attainment, any area (other than an area identified

in clause (i)) that meets the national primary or secondary

ambient air quality standard for the pollutant, or

(iii) unclassifiable, any area that cannot be classified on

the basis of available information as meeting or not meeting the

national primary or secondary ambient air quality standard for

the pollutant.

The Administrator may not require the Governor to submit

the required list sooner than 120 days after promulgating a

new or revised national ambient air quality standard.

* * *

§ 7409. National primary and secondary ambient air

quality standards

(a) Promulgation

(1) The Administrator—

(A) within 30 days after December 31, 1970, shall publish

proposed regulations prescribing a national primary ambient air

quality standard and a national secondary ambient air quality

standard for each air pollutant for which air quality criteria have

been issued prior to such date; and

(B) after a reasonable time for interested persons to submit

written comments thereon (but no later than 90 days after the

initial publication of such proposed standards) shall by

regulation promulgate such proposed national primary and

secondary ambient air quality standards with such modifications

as he deems appropriate.

(2) With respect to any air pollutant for which air quality

criteria are issued after December 31, 1970, the Admin-

istrator shall publish, simultaneously with the issuance of

such criteria and information, proposed national primary and

secondary ambient air quality standards for any such

pollutant. The procedure provided for in paragraph (1)(B) of

this subsection shall apply to the promulgation of such

standards.

(b) Protection of public health and welfare

(1) National primary ambient air quality standards,

prescribed under subsection (a) of this section shall be

ambient air quality standards the attainment and maintenance

of which in the judgment of the Administrator, based on such

criteria and allowing an adequate margin of safety, are

requisite to protect the public health. Such primary standards

may be revised in the same manner as promulgated.

(2) Any national secondary ambient air quality standard

prescribed under subsection (a) of this section shall specify a

level of air quality the attainment and maintenance of which

in the judgment of the Administrator, based on such criteria,

is requisite to protect the public welfare from any known or

anticipated adverse effects associated with the presence of -

such air pollutant in the ambient air. Such secondary

standards may be revised in the same manner as promul-

gated.

nitrogen dioxide

The Administrator shall, not later than one year after

August 7, 1977, promulgate a national primary ambient air

quality standard for NO) concentrations over a period of not

more than 3 hours unless, based on the criteria issued under

section 7408(c) of this title, he finds that there is no

significant evidence that such a standard for such a period is

requisite to protect public health.

(d) Review and revision of criteria and standards;

independent scientific review committee; appointment;

advisory functions

(1) Not later than December 31, 1980, and at five-year

intervals thereafter, the Administrator shall complete a

thorough review of the criteria published under section 7408

of this title and the national ambient air quality standards

promulgated under this section and shall make such revisions

in such criteria and standards and promulgate such new

standards as may be appropriate in accordance with section

7408 of this title and subsection (b) of this section. The

Administrator may review and revise criteria or promulgate

new standards earlier or more frequently than required under

this paragraph.

* * *

§ 7410. State implementation plans for national primary

and secondary ambient air quality standards

(a) Adoption of plan by State; submission to Admin-

istrator; content of plan; revision; new sources; indirect

source review program; supplemental or intermittent

control systems

(1) Each State shall, after reasonable notice and public

hearings, adopt and submit to the Administrator, within

3 years (or such shorter period as the Administrator may

prescribe) after the promulgation of a national primary

ambient air quality standard (or any revision thereof) under

section 7409 of this title for any air pollutant, a plan which

provides for implementation, maintenance, and enforcement

of such primary standard in each air quality control region (or

portion thereof) within such State. In addition, such State

shall adopt and submit to the Administrator (either as a part

of a plan submitted under the preceding sentence or

separately) within 3 years (or such shorter period as the

Administrator may prescribe) after the promulgation of a

national ambient air quality secondary standard (or revision

thereof), a plan which provides for implementation,

maintenance, and enforcement of such secondary standard in

each air quality control region (or portion thereof) within

such State. Unless a separate public hearing is provided,

each State shall consider its plan implementing such

secondary standard at the hearing required by the first

sentence of this paragraph.

(2) Each implementation plan submitted by a State under

this chapter shall be adopted by the State after reasonable

notice and public hearing. Each such plan shall—

(A) include enforceable emission limitations and other

control measures, means, or techniques (including economic

incentives such as fees, marketable permits, and auctions of

emissions rights), as well as schedules and timetables for

compliance, as may be necessary or appropriate to meet the

applicable requirements of this chapter;

(B) provide for establishment and operation of appropriate

devices, methods, systems, and procedures necessary to—

(i) monitor, compile, and analyze data on ambient air

quality, and

(ii) upon request, make such data available to the

Administrator;

the measures described in subparagraph (A), and regulation of

the modification and construction of any stationary source

within the areas covered by the plan as necessary to assure that

national ambient air quality standards are achieved, including a

permit program as required in parts C and D of this subchapter;

(D) contain adequate provisions—

(i) prohibiting, consistent with the provisions of this

subchapter, any source or other type of emissions activity

within the State from emitting any air pollutant in amounts

which will—

(I) contribute significantly to nonattainment in, or

interfere with maintenance by, any other State with respect to

any such national primary or secondary ambient air quality

standard, or

(II) interfere with measures required to be

included in the applicable implementation plan for any other

State under part C of this subchapter to prevent significant

deterioration of air quality or to protect visibility,

(ii) insuring compliance with the applicable require-

ments of sections 7426 and 7415 of this title (relating to

interstate and international pollution abatement),

(E) provide (i) nécessary assurances that the State (or,

except where the Administrator deems inappropriate, the

general purpose local government or governments, or a regional

agency designated by the State or general purpose local

governments for such purpose) will have adequate personnel,

funding, and authority under State (and, as appropniate, local)

law to carry out such implementation plan (and is not prohibited

by any provision of Federal or State law from carrying out such

implementation plan or portion thereof), (ii) requirements that

the State comply with the requirements respecting State boards

under section 7428 of this title, and (ili) necessary assurances

that, where the State has relied on a local or regional

government, agency, or instrumentality for the implementation

of any plan provision, the State has responsibility for ensuring

adequate implementation of such plan provision,

(F) require, as may be prescribed by the Administrator—

(i) the installation, maintenance, and replacement of

equipment, and the implementation of other necessary steps, by

owners or operators of stationary sources to monitor emissions

from such sources,

(ii) periodic reports on the nature and amounts of

emissions and emissions-related data from such sources, and

(iii) correlation of such reports by the State agency

with any emission limitations or standards established pursuant

to this chapter, which reports shall be available at reasonable

times for public inspection;

(G) provide for authority comparable to that in section

7603 of this title and adequate contingency plans to implement

such authority;

(H) provide for revision of such plan—

(i) from time to time as may be necessary to take

account of revisions of such national primary or secondary

ambient air quality standard or the availability of improved or

more expeditious methods of attaining such standard, and

(ii) except as provided in paragraph (3)(C), whenever

the Administrator finds on the basis of information available to

the Administrator that the plan is substantially inadequate to

attain the national ambient air quality standard which it

implements or to otherwise comply with any additional

requirements established under this chapter;

(I) in the case of a plan or plan revision for an area

designated as a nonattainment area, meet the applicable require-

ments of part D of this subchapter (relating to nonattainment

areas);

(J) meet the applicable requirements of section 7421 of

this title (relating to consultation), section 7427 of this title

(relating to public notification), and part C of this subchapter

(relating to prevention of significant deterioration of air quality

and visibility protection);

(K) provide for—

(i) the performance of such air quality modeling as the

Administrator may prescribe for the purpose of predicting the

effect on ambient air quality of any emissions of any air

pollutant for which the Administrator has established a national

ambient air quality standard, and

(ii) the submission, upon request, of data related to

such air quality modeling to the Administrator;

(L) require the owner or operator of each major stationary

source to pay to the permitting authority, as a condition of any

permit required under this chapter, a fee sufficient to cover—

(i) the reasonable costs of reviewing and acting upon

any application for such a permit, and

(ii) if the owner or operator receives a permit for such

source, the reasonable costs of implementing and enforcing the

terms and conditions of any such permit (not including any

court costs or other costs associated with any enforcement

action),

until such fee requirement is superseded with respect to such

sources by the Administrator’s approval of a fee program under

subchapter V of this chapter; and

(M) provide for consultation and participation by local

political subdivisions affected by the plan.

* * *

proposed regulations setting forth implementation plan;

transportation regulations study and report; parking

surcharge; suspension authority; plan implementation

(1) The Administrator shall promulgate a Federal imple-

mentation plan at any time within 2 years after the

Administrator—

(A) finds that a State has failed to make a required

submission or finds that the plan or plan revision submitted by

the State does not satisfy the minimum criteria established

under subsection (k)(1)(A) of this section, or

(B) disapproves a State implementation plan submission in

whole or in part,

10a

unless the State corrects the deficiency, and the Administrator

approves the plan or plan revision, before the Administrator

promulgates such Federal implementation plan.

* *x *

(j) Technological systems of continuous emission reduc-

tion on new or modified stationary sources; compliance

with performance standards

As a condition for issuance of any permit required under

this subchapter, the owner or operator of each new or

modified stationary source which is required to obtain such a

permit must show to the satisfaction of the permitting

authority that the - technological system of continuous

emission reduction which is to be used will enable such

source to comply with the standards of performance which

are to apply to such source and that the construction or

modification and operation of such source will be in

compliance with all other requirements of this chapter.

(k) Environmental Protection Agency action on plan

submissions

(1) Completeness of plan submissions

(A) Completeness criteria

Within 9 months after November 15, 1990, the Administrator

shall promulgate minimum criteria that any plan submission

must meet before the Administrator is required to act on such

submission under this subsection. The criteria shall be limited

to the information necessary to enable the Administrator to

determine whether the plan submission complies with the

provisions of this chapter.

(B) Completeness finding

Within 60 days of the Administrator’s receipt of a plan or plan

revision, but no later than 6 months after the date, if any, by

which a State is required to submit the plan or revision, the

lla

Administrator shall determine whether the minimum critena

established pursuant to subparagraph (A) have been met. Any

plan or plan revision that a State submits to the Administrator,

and that has not been determined by the Administrator (by the

date 6 months after receipt of the submission) to have failed to

meet the minimum criteria established pursuant to subparagraph

(A), shall on that date be deemed by operation of law to meet

such minimum criteria.

Where the Administrator determines that a plan submission (or

part thereof) does not meet the minimum criteria established

pursuant to subparagraph (A), the State shall be treated as not

having made the submission (or, in the Administrator’s

discretion, part thereof).

(2) Deadline for action —

Within 12 months of a determination by the Administrator (or a

determination deemed by operation of law) under paragraph (1)

that a State has submitted a plan or plan revision (or, in the

Administrator’s discretion, part thereof) that meets the

minimum criteria established pursuant to paragraph (1), if

applicable (or, if those criteria are not applicable, within 12

months of submission of the plan or revision), the Administrator

shall act on the submission in accordance with paragraph (3).

(3) Full and partial approval and disapproval

In the case of any submittal on which the Administrator is

required to act under paragraph (2), the Administrator shall

approve such submittal as a whole if it meets all of the

applicable requirements of this chapter. If a portion of the plan

revision meets all the applicable requirements of this chapter,

the Administrator may approve the plan revision in part and

disapprove the plan revision in part. The plan revision shall not

be treated as meeting the requirements of this chapter until the

Administrator approves the entire plan revision as complying

with the applicable requirements of this chapter.

12a

(4) Conditional approval

The Administrator may approve a plan revision based on a

commitment of the State to adopt specific enforceable measures

by a date certain, but not later than 1 year after the date of

approval of the plan revision. Any such conditional approval

shall be treated as a disapproval if the State fails to comply with

such commitment.

(5) Calls for plan revisions

Whenever the Administrator finds that the applicable imple-

mentation plan for any area is substantially inadequate to attain

or maintain the relevant national ambient air quality standard, to

mitigate adequately the interstate pollutant transport described

in section 7506a of this title or section 751 1c of this title, or to

otherwise comply with any requirement of this chapter, the

Administrator shall require the State to revise the plan as

necessary to correct such inadequacies. The Administrator shall

notify the State of the inadequacies, and may establish

reasonable deadlines (not to exceed 18 months after the date of

such notice) for the submission of such plan revisions. Such

findings and notice shall be public. Any finding under this

paragraph shall, to the extent the Administrator deems

appropriate, subject the State to the requirements of this chapter

to which the State was subject when it developed and submitted

the plan for which such finding was made, except that the

Administrator may adjust any dates applicable under such

requirements as appropriate (except that the Administrator may

not adjust any attainment date prescribed under part D of this

subchapter, unless such date has elapsed).

(6) Corrections

Whenever the Administrator determines that the Admin-

istrator’s action approving, disapproving, or promulgating any

plan or plan revision (or part thereof), area designation,

redesignation, classification, or reclassification was in error, the

Administrator may in the same manner as the approval,

13a

disapproval, or promulgation revise such action as appropriate

without requiring any further submission from the State. Such

determination and the basis thereof shall be provided to the

State and public. —

* ~ *

§ 7411. Standards of performance for new stationary

sources

(a) Definitions

For purposes of this section:

* - *

(4) The term “modification” means any physical change

in, or change in the method of operation of, a stationary

source which increases the amount of any air pollutant

emitted by such source or which results in the emission of

any air pollutant not previously emitted.

+. * *

§ 7413. Federal enforcement

(a) In general

* * *

(2) State failure to enforce SIP or permit program

Whenever, on the basis of information available to the

Administrator, the Administrator finds that violations of an

applicable implementation plan or an approved permit

program under subchapter V of this chapter are so

widespread that such violations appear to result from a

failure of the State in which the plan or permit program

applies to enforce the plan or permit program effectively, the

Administrator shall so notify the State. In the case of a

permit program, the notice shall be made in accordance with

subchapter V of this chapter. If the Administrator finds such

l4a

failure extends beyond the 30th day after such notice

(90 days in the case of such permit program), the

Administrator shall give public notice of such finding.

During the period beginning with such public notice and

ending when such State satisfies the Administrator that it will

enforce such plan or permit program (hereafter referred to in

this section as “period of federally assumed enforcement’’),

the Administrator may enforce any requirement or

prohibition of such plan or permit program with respect to

any person by—

(A) issuing an order requiring such person to comply with

such requirement or prohibition,

(B) issuing an administrative penalty order in accordance

with subsection (d) of this section, or

section (b) of this section.

* * *

(5) Failure to comply with new source requirements

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

modification of any major stationary source in any area to

which such requirement applies;'

(B) issue an administrative penalty order in accordance

with subsection (d) of this section, or

' So in original. The semicolon probably should be a comma.

lSa s

Nothing in this subsection shall preclude the United States from

commencing a criminal action under subsection (c) of this

section at any time for any such violation.

x * ”

§ 7471. Plan requirements

In accordance with the policy of section 7401(b)(1) of this title,

each applicable implementation plan shall contain emission

limitations and such other measures as may be necessary, as

determined under regulations promulgated under this part, to

prevent significant deterioration of air quality in each region

(or portion thereof) designated pursuant to section 7407 of this

title as attainment or unclassifiable.

x * *

§ 7475. Preconstruction requirements

(a) Major emitting facilities on which construction is

commenced

No major emitting facility on which construction is commenced

after August 7, 1977, may be constructed in any area to which

this part applies unless—

(1) a permit has been issued for such proposed facility in

accordance with this part setting forth emission limitations

for such facility which conform to the requirements of this

part,

(2) the proposed permit has been subject to a review in

accordance with this section, the required analysis has been

conducted in accordance with regulations promulgated by the

Administrator, and a public hearing has been held with

opportunity for interested persons including representatives

of the Administrator to appear and submit written or oral

presentations on the air quality impact of such source,

alternatives thereto, control technology requirements, and

other appropriate considerations;

loa

(3) the owner or operator of such facility demonstrates,

as required pursuant to section 7410(j) of this title, that

emissions from construction or operation of such facility will

not cause, or contribute to, air pollution in excess of any (A)

maximum allowable increase or maximum allowable

concentration for any pollutant in any area to which this part

applies more than one time per year, (B) national ambient air

quality standard in any air quality control region, or (C) any

other applicable emission standard or standard of

performance under this chapter;

(4) the proposed facility is subject to the best available

control technology for each pollutant subject to regulation

under this chapter emitted from, or which results from, such

facility;

(5) the provisions of subsection (d) of this section with

respect to protection of class I areas have been complied with

for such facility;

(6) there has been an analysis of any air quality impacts

projected for the area as a result of growth associated with

such facility;

(7) the person who owns or operates, or proposes to own

or operate, a major emitting facility for which a permit is

required under this part agrees to conduct such monitoring as

may be necessary to determine the effect which emissions

from any such facility may have, or is having, on air quality

in any area which may be affected by emissions from such

source; and

(8) in the case of a source which proposes to construct in

a class III 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 has been promulgated subsequent to

August 7, 1977, for such source category, the Administrator

17a

has approved the determination of best available technology

as set forth in the permit.

(b) Exception

The demonstration pertaining to maximum allowable increases

required under subsection (a)(3) of this section shall not apply

to maximum allowable increases for class II areas in the case of

an expansion or modification of a major emitting facility which

is in existence on August 7, 1977, whose allowable emissions

of air pollutants, after compliance with subsection (a)(4) of this

sectioii, will be less than fifty tons per year and for which the

owner or operator of such facility demonstrates that emissions

of particulate matter and sulfur oxides will not cause or

contribute to ambient air quality levels in excess of the national

secondary ambient air quality standard for either of such

pollutants.

Any completed permit application under section 7410 of

this title for a major emitting facility in any area to which this

part applies shall be granted or denied not later than one year

after the date of filing of such completed application.

(d) Action taken on permit applications; notice; adverse

impact on air quality related values; variance; emission

limitations

(1) Each State shall transmit to the Administrator a copy

of each permit application relating to a major emitting

facility received by such State and provide notice to the

Administrator of every action related to the consideration of

such permit.

(2A) The Administrator shall provide notice of the

permit application to the Federal Land Manager and the

Federal official charged with direct responsibility for

management of any lands within a class | area which may be

affected by emissions from the proposed facility.

18a

(B) The Federal Land Manager and the Federal official

charged with direct responsibility for management of such lands

shall have an affirmative responsibility to protect the air quality

related values (including visibility) of any such lands within a

class I area and to consider, in consultation with the

Administrator, whether a proposed major emitting facility will

have an adverse impact on such values.

(C)(i) In any case where the Federal official charged with

direct responsibility for management of any lands within a

class I area or the Federal Land Manager of such lands, or the

Administrator, or the Governor of an adjacent State containing

such a class I area files a notice alleging that emissions from a

proposed major emitting facility may cause or contribute to a

change in the air quality in such area and identifying the

potential adverse impact of such change, a permit shall not be

issued unless the owner or operator of such facility

demonstrates that emissions of particulate matter and sulfur

dioxide will not cause or contribute to concentrations which

exceed the maximum allowable increases for a class I area.

* * *x

(e) Analysis; continuous air quality monitoring data;

regulations; model adjustments

(1) The review provided for in subsection (a) of this

section shall be preceded by an analysis in accordance with

regulations of the Administrator, promulgated under this

subsection, which may be conducted by the State (or any

general purpose unit of local government) or by the major

emitting facility applying for such permit, of the ambient air

quality at the proposed site and in areas which may be

affected by emissions from such facility for each pollutant

subject to regulation under this chapter which will be emitted

from such facility.

19a

§ 7477. Enforcement

The Administrator shall, and a State may, 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 this part, or which is proposed to be

constructed in any area designated pursuant to section 7407(d)

of this title as attainment or unclassifiable and which is not

subject to an implementation plan which meets the

requirements of this part.

* * *

§ 7479. Definitions

For purposes of this part—

(1) The term “major emitting facility” means any of the

following stationary sources of air pollutants which emit, or

have the potential to emit, one hundred tons per year or more

of any air pollutant from the following types of stationary

sources: fossil-fuel fired steam electric plants of more than

two hundred and fifty million British thermal units per hour

heat input, coal cleaning plants (thermal dryers), kraft pulp

mills, Portland Cement plants, primary zinc smelters, iron

and steel mill plants, primary aluminum ore reduction plants,

primary copper smelters, municipal incinerators capable of

charging more than fifty tons of refuse per day, hydrofluoric,

sulfuric, and nitric acid plants, petroleum refineries, lime

plants, phosphate rock processing plants, coke oven batteries,

sulfur recovery plants, carbon black plants (furnace process),

primary lead smelters, fuel conversion plants, sintering

plants, secondary metal production facilities, chemical

process plants, fossil-fuel boilers of more than two hundred

and fifty million British thermal units per hour heat input,

petroleum storage and transfer facilities with a capacity

exceeding three hundred thousand barrels, taconite ore

processing facilities, glass fiber processing plants, charcoal

20a

production facilities. Such term also includes any other

source with the potential to emit two hundred and fifty tons

per year or more of any air pollutant. This term shall not

include new or modified facilities which are nonprofit health

or education institutions which have been exempted by the

State. -

* * *

(2)(C) The term “construction” when used in connection

with any source or facility, includes the modification (as

defined in section 7411(a) of this title) of any source or

facility.

(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 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 through application of production processes

and available methods, systems, and techniques, including

fuel cleaning, clean fuels, or treatment or innovative fuel

combustion techniques for control of each such pollutant. In

no event shall application of “best available control

technology” result in emissions of any pollutants which will

exceed the emissions allowed by any applicable standard

established pursuant to section 7411 or 7412 of this title.

Emissions from any source utilizing clean fuels, or any other

means, to comply with this paragraph shall not be allowed to

increase above levels that would have been required under

this paragraph as it existed prior to November 15, 1990.

2la

Selected Provision of Title 40 of the Code

of Federal Regulations, Part 52:

PART 52—PROTECTION OF THE ENVIRONMENT

Subpart C—Alaska

§ 52.96. Significant deterioration of air quality.

(a) The State of Alaska Department of Environmental

Conservation Air Quality Control Regulations as in effect on

June 2, 1988 (specifically 18 AAC 50.020, 50.021, 50.300,

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

and the State air quality control plan as in effect on June 2,

1988 (specifically, Section 1.B. AIR QUALITY CONTROL

REGIONS, Section I.C. ATTAINMENT/NONATTAIN-

MENT DESIGNATIONS, Section I.D. PREVENTION OF

SIGNIFICANT DETERIORATION DESIGNATIONS, Sec-

tion IV.F. FACILITY REVIEW PROCEDURES, Section

IV.G APPLICATION REVIEW AND PERMIT DEVELOP-

MENT, Section [IV.H PERMIT ISSUANCE REQUIRE-

MENTS, Appendix IV.1. PSD area Classification and

Reclassification, and Appendix V ADEC Ambient Analysis

Procedures), are approved as meeting the requirements of

part C for preventing significant deterioration of air quality.

* * *

22a

Selected Provisions of Chapter 50

of the Alaska Administrative Code

(1997)

CHAPTER 50—AIR QUALITY CONTROL

18 AAC 50.310. Construction permits: application.

* * *

(d) Prevention of Significant Deterioration Information. For

a new facility classified under 18 AAC 50.300(c) or a

modification classified under 18 AAC 50.300(h)(3) or (4), a

construction permit application must include the following

additional information for each air contaminant with an

expected actual emissions increase greater than or equal to a

quantity listed in 18 AAC 50.300(h)(3):

* * *

(3) a demonstration that the proposed limitation repre-

sents the best available control technology for each air

contaminant and for each new or modified source;

- ” *

18 AA.C 50.990. Definitions.

* 7 *

(13) “best available control technology” means the

emission limitation that represents the maximum reduction

achievab!e for each regulated air contaminant, taking into

account energy, environmental and economic impacts, and

other costs; the resulting emissions must comply with

applicable state and federal emission standards; best

available control technology includes, for example, design

features, equipment specifications, and work practices;

PUBLISHER'S NOTE:

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