Amicus Curiae Brief — Alaska Dept. of Environmental Conservation v. EPA

Ors

Sepreme Court, U.S.

No. 02-658 | FRrEED

Supreme Court of the United States

STATE OF ALASKA, DEPARTMENT

OF ENVIRONMENTAL CONSERVATION,

Petitioner,

V.

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY, et al.,

Respondents.

S

On Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

o

BRIEF AMICUS CURIAE OF THE CENTER FOR

ENERGY AND ECONOMIC DEVELOPMENT IN

SUPPORT OF PETITIONER STATE OF ALASKA

¢

PAUL M. SEBY*

ADAM T. DEVOE

*Counsel of Record

FRIEDLOB, SANDERSON, PAULSON

& TOURTILLOTT, LLC

1775 Sherman Street, 21st Floor

Denver, Colorado 80203

Telephone: (303) 571-1400

Attorneys for Amicus Curiae

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831 y

in » . ?

TABLE OF CONTENTS

IDENTITY AND INTERESTS OF AMICUS CURIAE....

; OPINIONS BELOW, JURISDICTION, STATUTORY

PROVISIONS INVOLVED AND STATEMENT OF

REASONS FOR OVERTURNING THE NINTH CIR-

I.

THE NINTH CIRCUIT'S DECISION POSES A

GRAVE THREAT TO THE ABILITY OF THE

STATES TO ADDRESS A REAL AND GROW-

ING NATIONAL ENERGY CRISIS.................

THE NINTH CIRCUITS DECISION CRE-

ATES AN UNNECESSARY AND UNREA-

SONABLE PERMITTING OBSTACLE FOR

FUTURE ELECTRICAL GENERATION PRO-

THE NINTH CIRCUIT'S DECISION USURPS

THE ROLE CONGRESS GAVE TO THE

STATES IN PERMITTING NEW ELECTRIC

GENERATION FACILITIES UNDER THE

THE NINTH CIRCUITS FLAWED DECI-

SION RESTS ON NON-BINDING FEDERAL

POLICY DIRECTIVES THAT UNLAWFULLY

CONSTRAIN CLEAR STATE AUTHORITY .....

SSD cesnecessesnsemnessecencunesoumnsenusensomnensnenensonens

14

17

ij

TABLE OF AUTHORITIES

Page

CASES'

Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir.

FETE Le nen 5

Alabama Power v. Costle, 606 F.2d 1068 (D.C. Cir.

TESTE ee ee 13

Alaska DEC v. EPA, 298 F.3d 814 (9th Cir.

I aaah nreleneninnnariemionenmnnbonentanen 11, 14, 16

Alaska Prof’! Hunters Ass’n v. FAA, 177 F.3d 1030

Aone 15

Bethlehem v. Gorsuch, 742 F.2d 1028 (7th Cir. 1977)....... 12

Caruso v. Blockbuster-Sony Music Entertainment

Center, 174 F.3d 166 (3d Cir. 1999)..........ccccseseeeeeeeeees 15

Florida Power & Light Co. v. Costle, 650 F.2d 579

I sid ciasinretnetsinencnimponinemnaonenesnnenise 5

Northern Plains Resource Council v. EPA, 645 F.2d

a asd rertntrigmtnnonerennennnennnenes 13

Pacific Gas & Electric Co. v. State Energy Resources

Conservation and Development Commission, 461

EE 10

Paralyzed Veterans of America v. D. C. Arena L.P.

117 F.3d 579 (D.C. Cir. 1997) ...........ccccccccssrrscsesesesssssoeees 15

Sayles Hydro Associates v. Maughan, 985 F.2d 451

eT 10

Sur Contra La Contaminacion v. EPA, et al., 202

SE NIE GIIIIED cccccencsccvnscsesevsceveeececseccoesenesssssseees 13

Syncor Int'l Corp. v. Shalala, 127 F.3d 90 (D.C. Cir.

ESE Te 15

TABLE OF AUTHORITIES —-Continued

Page

Train v. Natural Resources Defense Council, 421

eee 6, 11, 12

United States Tel. Ass’n v. FCC, 28 F.3d 1232 (D.C.

EE eee eae 15

Virginia v. EPA, 108 F.3d 1397 (D.C. Cir. 1997)................ 12

CONSTITUTIONAL PROVISIONS AND STATUTES

a 10

TE ee 11

ET LL a a 3

ac 16

nD 11

ee 6

I 15

Sen. Rep. No. 127, 9th Cong., 1st Sess. 31 (1977)

reprinted in 3 1977 Legis. Hist. at 1405.................... 3, 16

NS ee 6

ae 8, 13

EE ee 11, 12

§ 553 of the Federal Administrative Procedure Act

EEL eae nee 15

REGULATIONS

I 3

ee 2

iv

TABLE OF AUTHORITIES — Continued

Page

MISCELLANEOUS

National Energy Policy, Report of the National

Energy Policy Development Group (May 2001)......... 5, 10

Sis, A Bite MO ew

1

IDENTITY AND INTERESTS OF AMICUS CURIAE

Pursuant to Supreme Court Rule 37, The Center for

Energy and Economic Development (CEED) submits this

brief Amicus Curiae in support of Petitioner State of

Alaska. Written consent to the filing of this brief has been

granted by counsel for all parties, copies of which have

been filed with the Clerk of the Court.’

Amicus, CEED, is a non-profit organization formed by

the nation’s coal-producing companies, railroads, a num-

ber of electric utilities, Equipment manufacturers, and

related organizations for the purpose of educating the

public, including public-sector decision-makers, about the

benefits of affordable, reliable, and environmentally

compatible coal-fueled electricity. Amicus CEED members

are engaged in socially valuable work. That is, they

provide essential goods and services that improve and

maintain the high quality of life enjoyed in this country.

As demonstrated herein, the implications of Peti-

tioner’s case far transcend its individual situation and

create problems of nationwide magnitude. Moreover,

Amicus believes that the ruling of the Ninth Circuit is

inconsistent with a clearly-stated legislative act of Con-

gress and is also at odds with the precedents of this Court

that recognize the state-federal relationship under the

federal Clean Air Act (CAA). Further, under the rule of the

* The parties have consented to the filing of this brief. Counsel for

a party did not author this brief in whole or in part. No person or

entity, other than Amicus Curiae, its members, or its counsel made a

monetary contribution to the preparation and submission of this brief.

2

Ninth Circuit, tremendous uncertainty has been unneces-

sarily injected into the permitting process for new electri-

cal generation facilities. Amicus believes that this

uncertainty will unduly interfere with public and private

efforts necessary for meeting the current and growing

demand for such facilities.

¢

OPINIONS BELOW, JURISDICTION,

STATUTORY PROVISIONS INVOLVED

AND STATEMENT OF THE CASE

Amicus CEED hereby adopts Petitioner’s statement

and description of the opinions below, jurisdiction, statutes

involved, and statement of the case. In addition, Amicus

wishes to succinctly state the statutory scheme involved in

this case and its relation to the State of Alaska. New

Source Review (NSR) is the federal CAA permitting

program that regulates the construction of major new

stationary sources and major modifications to existing

stationary sources. EPA’s NSR regulations require such

sources to perform health and visibility/air quality impact

analyses, install stringent air pollution control equipment, _

and obtain permits for new construction at major stationary

sources. NSR consists of more than one distinct sub-

program: Prevention of Significant Deterioration (PSD) is for

areas in attainment with health-based National Ambient Air

Quality Standards (NAAQS); Non-attainment NSR (NNSR)

is for those that are not in attainment with NAAQS.

The current PSD program is set forth in two sets of

regulations. One set is 40 CFR § 52.21, which is part of the

federal PSD program that applies as part of a federal imple-

mentation plan (FIP) for states that do not have an approved

PSD program meeting the regulatory requirements of 40

3

CFR § 51.166 —- the other set of regulations containing

minimum standards for PSD provisions in State Imple-

mentation Plans (SIPs). In this and most cases, Alaska has

an EPA approved PSD SIP program which delegates

authority to the State of Alaska to perform health and

visibility and air quality impact analyses, require installa-

tion of air pollution control equipment, and issue permits

under the State administered PSD program.

Among the PSD requirements Congress imposed in the

CAA is that the State require application of Best Available

Control Technology (BACT) to any major modification at a

major emitting facility subject to the PSD program. 42

U.S.C. § 7475(aX4). The CAA mandates that BACT limits

are to be determined on a case-by-case basis by the permit-

ting authority. As Congress explained, in making this “key

decision [BACT] . . . the State is to take into account energy,

environmental, and economic impacts and other costs of the

application of best available control technology. The weight

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

Sen. Rep. No. 127, 9th Cong., 1st Sess. 31 (1977) reprinted in

3 1977 Legis. Hist. at 1405 (emphasis added).

¢

* See also 1977 Legis. Hist. at 729 (emphasis added) (“One objec-

tion which has been raised to requiring the use of the best available

control technology is that a technology demonstrated to be applicable in

one area of the country is not applicable at a new facility in another

area because of difference[s] in feedstock material, plant configuration

or other reasons. For this and other reasons, the committee voted to

permit emission limits based on best available technology on a case-by-

case judgment at the State level. This flexibility should allow such

differences to be accommodated and still maximize the use of improved

technology.”) (emphasis added).

4

SUMMARY OF ARGUMENT

The Ninth Circuit’s decision, allowing EPA to usurp

the authority that the federal CAA clearly delegates to the

States, poses a grave threat to the ability of the States to

make Best Available Control Technology (BACT) and other

important discretionary decisions under the CAA. Under

both the express statutory provisions involved in this case

and the structure of the federal CAA, EPA's actions repre-

sent an invasion of the prerogatives left to the States in

fashioning individual CAA “Prevention of Significant

Deterioration” (PSD) permits. As such, the Ninth Circuit’s

decision upholding EPA’s desire for “national consistency”

is antithetical to the express statutory text and framework

created by Congress.

Both the Clinton and Bush administrations have

determined that more than 1,000 new electricity genera-

tion facilities are needed in this country in order to meet

future demands. The problems presented by this case

involve issues of national importance and cal] into ques-

tion the ability of the States to make decisions entrusted

to them by Congress to, among other things, ensure both

clean air and adequate energy supplies for their citizens.

This Court should reverse the Ninth Circuit’s decision in

order to resolve the conflict created by this ruling and to

restore greater certainty to a process that is critical to

balancing environmental protection with meeting the

demand for additional future energy development.

¢

5

REASONS FOR OVERTURNING

THE NINTH CIRCUIT’S DECISION

I. THE NINTH CIRCUIT’S DECISION POSES A

GRAVE THREAT TO THE ABILITY OF THE

STATES TO ADDRESS A REAL AND GROWING

NATIONAL ENERGY CRISIS

The Bush Administration has determined that, “Over

the next ten years, demand for electric power is expected

to increase by about 25 percent, and more than 200,000

megawatts of new capacity will be required.” National

Energy Policy, Report of the National Energy Policy Devel-

opment Group (May 2001). These current and future

energy and production needs will be local, regional, and

national. Recognizing these needs, Congress gave the

States “great flexibility” to achieve the goals of the CAA,

Florida Power & Light Co. v. Costle, 650 F.2d 579, 587 (5th

Cir. 1981), including the ability to allow economic devel-

opment (which, of course, includes power generation)

within the tandem duty of preserving air quality in clean

air areas. As the D.C. Circuit explained in Alabama Power

v. Costle, 636 F.2d 323 (D.C. Cir. 1979), “[I]n the allocation

of responsibilities made by Congress” with respect to

preventing the significant deterioration of air quality,

“maximum limitations have been set.” Jd. at 364. “These

must be observed by the states, but assuming such com-

pliance, growth-management decisions were left by Con-

gress for resolution by the states.” Id.

A State’s authority to determine BACT for a particular

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

internal growth” under the CAA. Id. at 364. The “flexible

approach” chosen by Congress “enables [a] State to con-

sider the size of the plant, the increment of air quality

which will be absorbed by any particular major emitting

6

facility, and such other considerations as anticipated and

desired economic growth for the area.” S. Rep. No. 95-127,

at 31 (emphasis added). Congress’ decision to make BACT

“strictly a State and local decision,” id., makes sense, as it

is the States — not the EPA — that are most sensitive to

particular local needs and concerns. Further, that Con-

gress required BACT to be determined on a “case-by-case,”

facility-specific basis, 42 U.S.C. § 7479(3), highlights the

importance of such local considerations.

Amicus submits that the Ninth Circuit’s decision,

allowing EPA to dictate BACT to the States, would allow

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

choices as to the most practicable and desirable methods of

restricting total emissions to a level consistent with” the

limitations set out in the CAA. Train v. Natural Resources

Defense Council, 421 U.S. 60, 80 (1975). As such, the

import of the Ninth Circuit’s decision is plainly not what

Congress intended. See S. Rep. No. 95-127, at 32 (“Nothing

could be more detrimental to the intent of [the PSD]

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

process encumbered by bureaucratic delay.”).

The Ninth Circuit’s determination directly threatens

the ability of the States to effectively and efficiently permit

facilities that will provide the much needed power genera-

tion, in the next ten to twenty years.’ By threatening the

* Contrary to EPA’s actions in this case, the avowed intent of the

Bush administration is to simplify the PSD permitting process and

allow facilities to more quickly, reasonably, and efficiently make process

changes that respond to marketplace needs and demands. EPA finalized

NSR/PSD reforms on December 19, 2002, that are aimed at allowing

“sources more flexibility to respond to rapidly changing markets and to

plan for future investment in pollution control technologies.” Available at

(Continued on following page)

Sa SUED OPP a er Ln

-

——— —- ~~ oo —

7

States’ ability to make BACT determinations, and other

discretionary state determinations under the CAA, the

bureaucratic delays sought to be avoided when authorizing

the CAA will become inherent in energy project dev lop-

ment. These bureaucratic delays will have an unnecessary

chilling effect on public and private incentives needed for

developing such projects — thereby delaying or prohibiting

the resolution of critical energy deficiencies. Where, as

here, EPA can override the decision of a State permitting

authority at any time, even after the public comment

period has closed, the permittee has no reason to believe

that the permit issued by the state agency has any real

meaning or allows construction of the permitted project.

As such, the CAA’s PSD permitting process will become an

untenable obstacle to the states in their efforts to address

current and growing energy demands.

II. THE NINTH CIRCUIT’S DECISION CREATES

AN UNNECESSARY AND UNREASONABLE

PERMITTING OBSTACLE FOR FUTURE ELEC-

TRICAL GENERATION PROJECTS

In order to achieve the environmental protection and

economic development goals of the CAA, the process of

obtaining a PSD permit can be a very involved process and

require the investment of substantial resources. Further,

from a practical standpoint, Amicus members’ experiences

http://www.epa.gov/air/nsr-review/. “The changes are intended to

provide greater regulatory certainty, administrative flexibility, and

permit streamlining, while ensuring the current level of environmental

protection and benefit derived from the program and, in certain

respects, resulting in greater environmental protection.” Jd.

8

in obtaining PSD permits, which are required to be ob-

tained by an “applicant” pursuant to CAA § 165 before env

construction of a project can begin, involve a minimum

time period of 18 months and can often last as long as

three years.

Amicus CEED members’ experience is that the process

of obtaining a PSD permit includes complex air impacts

modeling, which typically requires specialized outside

engineers and consultants to create. The permitting

process also includes engineering calculation and estima-

tion of emissions, review of the modeling results and

impacts on ambient air quality, engineering studies and

proposals from the permit applicant and equipment

vendors (both production equipment and air control

equipment), meetings with the permitting agencies’

engineers and technical experts, and an extensive public

notice and comment administrative process. As such, the

CAA PSD process is expensive, time-consuming, and

_ challenging.

Under the Ninth Circuit’s decision, even after more

than 18 months of planning, engineering, meeting, and

discussing the proposed permit with the State regulatory

agency and the public, the EPA may step in (as EPA did in

this case by not participating in the State’s administrative

process) and demand a different result than that accepted

by the State. The practical and logistical effect of EPA’s

late participation and delayed action would be to require

the permittee to essentially start the process all over

again. When a different type of control equipment is

required than that originally proposed, engineered, stud-

ied, and modeled by a permit applicant, it is not merely a

matter of changing a few words in a permit application.

The permit applicant must instead essentially begin anew

9

with engineering and studying the control equipment

demanded by EPA, run a new air quality impacts model,

amend the permit and reopen the comment period, and

negotiate finalization of the permit with the state permit-

ting authority. Thus, the EPA actions endorsed by the

Ninth Circuit have imposed numerous practical burdens

that were neither accounted for nor considered by the

Ninth Circuit.

As the Ninth Circuit has, itself, previously observed in

a case concerning the licensing of a small electrical gen-

eration facility:

The hardship is the process itself. Process

costs money. If a federal licensee must spend

years attempting to satisfy an elaborate, shifting

array of state procedural requirements, then he

must borrow a fortune to pay lawyers, econo-

mists, accountants, archeologists, historians, en-

gineers, recreational consultants, environmental

consultants, biologists and others, with no reve-

nue, no near-term prospect of revenue, and no

certainty that there ever will be revenue. Mean-

while, politics, laws, interest rates, construction

costs, and costs of alternatives change. Undue

process may impose cost and uncertainty suffi-

cient to thwart the federal determination that a

power plant should proceed. As the Supreme

Court explained in an analogous context, “to re-

quire the industry to proceed without knowing

whether the state regulation is valid would im-

pose a palpable and considerable hardship on the

utilities, and may ultimately work harm on the

citizens of California.” Pacific Gas, 461 U.S. at

201-202, 103 S.Ct. at 1721.

10

See Sayles Hydro Associates v. Maughan, 985 F.2d 451,

454 (9th Cir. 1993).

As recognized previously by the Ninth Circuit in the

Sayles case and, more importantly, by this Court in Pacific

Gas,‘ the addition of undue process, particularly when

directly at odds with the process sanctioned by Congress,

greatly hamstrings the ability to meet current and future

energy demands. Such additional undue process would

only confound the recent finding made by the Bush Ad-

ministration:

A fundamental imbalance between supply and

demand defines our nation’s energy crisis. ... [if

energy production increases at the same rate as

during the last decade our projected energy needs

will far outstrip expected levels of production.

See National Energy Policy, Report of the National

Energy Policy Development Group (May 2001), p. viii.”

Il. THE NINTH CIRCUIT'S DECISION USURPS

THE ROLE CONGRESS GAVE TO THE STATES

IN PERMITTING NEW ELECTRIC GENERA-

TION FACILITIES UNDER THE CLEAN AIR ACT

Congress declared in the federal CAA that “Air pollu-

tion prevention and air pollution control at its source is

the primary responsibility of States and local govern-

ments.” 42 U.S.C. §7401(3). Despite Congress’ clear

* Pacific Gas & Electric Co. v. State Energy Resources Conservation

and Development Commission, 461 U.S. 201 (1983).

* Available at http://www.energy.gov/HQPress/releases0 1/maypr/

energy_policy.htm.

——— <e~e— e - e --

11

emphasis on state primacy, the Ninth Circuit has held that

“the EPA has the ultimate authority to decide whether [a]

state has complied with the [Best Available Control Tech-

nology] BACT requirements of the Act.” Alaska DEC uv.

EPA, 298 F.3d 814, 820 (9th Cir. 2002). Amicus submits

that the Ninth Circuit’s flawed decision merits prompt

reversal because that Court failed to recognize that EPA’s

authority under the CAA is limited to acting when a State

has failed to comply with requirements or prohibitions of

the CAA and the requirements to make a BACT determi-

nation — a function much different than “ultimate review

authority” over discretionary permitting determinations

made by the State. See 42 U.S.C. § 7413 and § 7477.

Further, the Ninth Circuit’s flawed decision stands in

sharp conflict with decisions of this Court and the lower

Courts concerning federal and state division of responsi-

bilities under the CAA. For example, the Supreme Court,

in Train v. Natural Resources Defense Council, 421 U.S. 60

(1975), addressed whether states could use CAA

§ 110(a)(3) to seek revisions of State Implementation Plans

(SIPs) for the purpose of easing limitations on a single

pollution source. This Court held that a state could do that

so long as the revised plan would enable the state to attain

and maintain national ambient air quality standards

(NAAQS). See Train, 421 U.S. at 78. In interpreting CAA

§ 110, this Court stated:

[T]he Act gives the agency [EPA] no authority to

question the wisdom of a state’s choices of emis-

sions limitations if they are part of a plan which

satisfies the standards of Section 110(a)(2), and

the agency may devise and promulgate a specific

plan of its own only if a state fails to submit an im-

plementation plan which satisfies those standards.

Section 110(c). Thus, so long as the ultimate effect

12

of a state’s choice of emission limitations is com-

pliance with the national standards for ambient

air, the state is at liberty to adopt whatever mix of

emission limitations it deems best suited to its

particular situation.

Train, supra, 421 U.S. at 79 (emphasis added).

Similarly, in recognition of the primacy of the states’

role under the CAA, the Gircuit Courts have rebuffed

efforts by EPA to mandate specific emission limitations in

SIPs. In Virginia v. EPA, 108 F.3d 1397 (D.C. Cir. 1997),

the D.C. Circuit specifically determined that EPA lacked

the authority under CAA § 110 to condition approval of a

SIP on the state’s adoption of a particular control measure.

Further, in Bethlehem v. Gorsuch, 742 F.2d 1028, 1036 (7th

Cir. 1977), the Seventh Circuit rejected an EPA effort to

only partially approve a SIP, thereby rendering the state

plan more stringent than the state intended, stating:

[T]he Clean Air Act creates a partnership be-

tween the states and the federal government.

The state proposes, though the EPA disposes.

The federal government, through the EPA, de-

termines the ends — the standards of air quality

— but Congress has given the states the initiative

and a broad responsibility regarding the means

to achieve those ends through the state imple-

mentation plans and timetables of compli-

ance.... The Clean Air Act is an experiment in

federalism, and the EPA may not run roughshod

over the procedural prerogatives that the Act has

reserved to the states, ... especially when, as in

this case, the agency is overriding state policy.

The federal Courts of Appeals have consistently en-

dorsed the statutory requirement that BACT be determined

through a flexible balancing process by the permitting

———

13

authority. The U.S. Court of Appeals for the District of

Columbia Circuit has pointed out, for example, that

“BACT is defined, in general, as a level of control technol-

ogy appropriate to the facts and circumstances of the

particular applicant.” Alabama Power v. Costle, 606 F.2d

1068, 1085 (D.C. Cir. 1979) (emphasis added). Previously,

the U.S. Court of Appeals for the Ninth Circuit observed

that “the BACT determination is ... source specific.”

Northern Plains Resource Council v. EPA, 645 F.2d 1349,

1359 (9th Cir. 1981) (emphasis added). Further, the Ninth

Circuit also previously correctly concluded that, while a

particular control technology may be BACT for one plant,

the permitting authority “might decide that for [another]

. facility ... [that technology is] inappropriate for

economic or energy or environmental reasons.” Jd. (em-

phasis added). See also, Sur Contra La Contaminacion v.

EPA, et al., 202 F.3d 443, 447 (1st Cir. 2000). Unlike the

present decision of the Ninth Circuit, other court decisions -

confirm what the language of the CAA makes plain: a

BACT determination must be made on a case-by-case

basis by the State after taking into account energy, envi-

ronmental, and economic impacts and other costs. Uni-

formity is not mandated by the BACT provisions;

flexibility is.

Despite EPA’s objections to the contrary, Alaska did all

that was required and more by reviewing the Red Dog

Mine application and emission reduction proposals in

accordance with the statutory requirements. Alaska’s

determination was based on a reasoned review of the

environmental and economic impacts and consideration of

all of the CAA § 165 statutory BACT factors. Ironically, the

BACT determination made by Alaska also had a greater

14

net environmental and human health benefit than that

required by EPA.

IV. THE NINTH CIRCUIT’S FLAWED DECISION

RESTS ON NON-BINDING FEDERAL POLICY

DIRECTIVES THAT UNLAWFULLY CONSTRAIN

CLEAR STATE AUTHORITY

While the Ninth Circuit expressly upheld EPA’s order

- vetoing the Alaska-issued PSD permit, Amicus wishes to

underscore that this case also demonstrates how state

authority and discretion in the permitting of new facilities

is subject to increasing erosion. State authority is being

usurped by the alarming trend of EPA and the federal land

management agencies (e.g., National Park Service, U.S.

Forest Service) using “guidance documents” that seek

those agencies’ roles in the CAA permitting process at the

expense of the states.

The Ninth Circuit correctly observed that Alaska was

not bound by EPA guidance documents that have not been

subjected to full public notice and comment under the

Administrative Procedure Act. Nonetheless, the Ninth

Circuit justified its decision to uphold EPA’s Orders based

on its determination that the low NOx control technology

selected was not appropriate under EPA’s more than ten-

year old “draft” guidance document setting forth the “top-

down BACT approach.” Alaska DEC v. EPA, at 10. How-

ever, nowhere in the CAA and implementing regulations is

there any reference to the “most stringent technology” or

the “top-down BACT” approach that the Ninth Circuit

relied on in upholding the EPA orders. Notably, the Ninth

Circuit did not (and could not) cite any statute, regulation,

or case law that imposes a legal obligation on an applicant

or permitting authority that requires the “top down”

15

approach for interpreting and/or applying the statutory

BACT factors.*

Contrary to the Ninth Circuit’s decision, nowhere in

the CAA is there any suggestion that certain of the BACT

criteria — energy, environmental, and economic impacts

and other costs — should be emphasized over others.

Further, nowhere in the CAA or implementing regulations

is there any indication that BACT limits must be the

lowest emission limits that are technically and economi-

cally feasible (or technically and economically infeasible,

as in this case) for a similar source or source category.

Indeed, such an interpretation of the CAA would essen-

tially make BACT limits equivalent to the statutorily

distinct “lowest achievable emission rate” limits which

Congress has imposed only on new or modified sources

locating in nonattainment areas. See 42 U.S.C. § 7501(3).

Further, nowhere in the CAA or Alaska SIP is there any

* While the Ninth Circuit erroneously relied upon EPA’s draft 1990

NSR Manual, the Court should have instead recognized that an agency

policy or guidance, unlike a rule, “does not seek to impose, elaborate or

interpret a legal norm” and cannot bind an agency (or the State in this

case) to a “particular legal policy position.” See Syncor Int’ Corp. v.

Shalala, 127 F.3d 90, 94 (D.C. Cir. 1997). United States Tel. Ass’n v.

FCC, 28 F.3d 1232, 1234 (D.C. Cir. 1994). The Ninth Circuit’s decision is

thus inconsistent with federal jurisprudence recognizing that when

agencies apply guidance in a direct and substantive fashion, federal

courts have uniformly set those administrative actions aside and

required federal agencies to comply with the notice and comment

requirements of §553 of the federal Administrative Procedure Act

(APA). See Paralyzed Veterans of America v. D. C. Arena L.P,, 117 F.3d

579, 586 (D.C. Cir. 1997) (quoting Shalala v. Guernsey Memorial Hosp.,

514 U.S. 987, 100 (1995). See also, Alaska Prof’! Hunters Ass'n v. FAA,

177 F.3d 1030, 1034 (D.C. Cir. 1999); Caruso v. Blockbuster-Sony Music

Entertainment Center, 174 F.3d 166, 176-178 (3d Cir. 1999).

16

presumption that some technology is BACT simply be-

cause it has been determined to be BACT for a given type

of emission source in another location or for another

industry. Congress recognized‘ that the balancing test is

mandatory simply because site-specific considerations will

warrant emphasis on different considerations. 1977 Legis.

Hist., at 729.

The State of Alaska was required to and did “transmit

to the Administrator [EPA] a copy of each permit applica-

tion relating to a major emitting facility received by such

State and provide notice to the Administrator of every

action related to consideration of such permit.” See 42

U.S.C. § 7475(d). The Ninth Circuit stated that “In July

1999, the EPA entered the discussion over Cominco’s

application at the urging of the National Parks Service,

which had expressed concern that the ‘nitrogen oxide

emissions . . . could affect vegetation at Cape Krusenstern

National Monument and Noatak National Preserve.’”

Alaska DEC, at 817. Notably, the speculative comments

from the National Park Service (NPS), and the EPA

subsequent involvement in the permitting action, came

after the close of the public comment period on the pro-

posed permit for the Red Dog Mine.

Under the CAA, FLMs are required to protect the air

quality related values of any lands within a Class I area

and to consider whether a major emitting facility will have

an adverse impact on such values. See 42 U.S.C.

§ 7475(d\2B). However, the CAA neither mandates nor

carves out a role for FLMs in Class II areas. The Cape

Krusenstern National Monument and the Noatak Na-

tional Preserve are not mandatory Class I areas and have

not been designated Class I areas under the review and

recommendation authority of the NPS. Despite EPA and

17

the NPS’s late entry into the State of Alaska’s administra-

tive process, the Ninth Circuit gave full credence to the

administrative alternatives of EPA and the NPS based

upon purported authority contained in agency guidance

documents but not regulatory provisions.

¢

CONCLUSION

Amicus submits that the Ninth Circuit’s opinion is

bad law, is injurious to the present and future public

welfare, has no place in federal jurisprudence, and should

be set aside.

Respectfully submitted,

PAUL M. SEByY*

ADAM T. DEVOE

*Counsel of Record

FRIEDLOB, SANDERSON, PAULSON

& TOURTILLOTT, LLC

1775 Sherman Street,

Suite 2100

Denver, Colorado 80203

Telephone: (303) 571-1400

Attorneys for Amicus Curiae