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

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No. 02-658 LOFFICE OF THE CLERK |

IN THE

Supreme Court of the United States

STATE OF ALASKA, DEPARTMENT OF ENVIRONMENTAL

CONSERVATION,

Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

ET. AL.,

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

BRIEF OF AMICUS CURIAE

NORTHWEST ENVIRONMENTAL DEFENSE CENTER

IN SUPPORT OF RESPONDENTS

DONALD B. POTTER*

DONALD B. POTTER, P.C.

522 S.W. Fifth Avenue

Suite 1110

Portland, OR 97204

(503) 223-2612

*Counsel of Record Counsel for Amicus Curiae

i

TABLE OF CONTENTS

| Page

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INTERST OF AMICUS CURIAE.............cccccccsosscssscessssssceees ]

SUMMARY OF ARGUMENT ..............:cccccsscssssssssssssercseenees l

Fee cnccninsiesiesseiinivibinnaninissesiiineiaiitiiiiiapiaaiiiaiialinaiciaiaiiniaaaas 3

I. THE TEXT AND STRUCTURE OF THE CLEAN

AIR ACT GIVE THE EPA AUTHORITY TO

ISSUE ORDERS PROHIBITING CONSTRUCTION

OF A FACILITY WHICH DOES NOT CONFORM

TO THE REQUIREMENTS OF THE PSD

A. The plain language of the Clean Air Act

gives EPA authority to oversee the PSD

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B. EPA's oversight authority extends to a

BACT determination. .............c.s0cc000000000+ 4

C. EPA correctly exercised its oversight

authority in determining that ADEC’s

BACT analysis was deficient.................. 8

D. The remedy for any shortcoming in

EPA’s exercise of authority is to remand

the case to the Ninth Circuit...............00+. 9

ii

II. THE POLICIES OF FEDERALISM AND

PRACTICAL EXPERIENCE SUPPORT EPA’;

CLEAN AIR ACT OVERSIGHT AUTHORIT) 1}

A. The Clean Air Act can only work with

strong EPA oversight; any atten, to

curtail that oversight would only riwerse

the current progress towards atlyining

the goals of the ACt........:c.s0ccceeeeeees 1]

B. If it is true that the country is in nyoq of

increased energy capability, tha fact

only argues more strongly for fp,

oversight Of the ACt............0000000e00 15

C. Past experience, public health ayq

public interest indicate that poral]

oversight authority is necessary if the

goals and purposes of the Act aré 4 he

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TABLE OF AUTHORITIES

Cases .

American Trucking Ass'ns, Inc. v. U.S.E.P.A., 283 F.34 355

(D.C. Cat 200G) ...nccccccvorecsssororecocsececsosencesesescsovonenonsee: 16

Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837

ili

FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120

Eee 5,9

New York v. United States, 505 U.S. 144 (1992) .......cccccce 12

Skidmore v. Swift & Co., 323 U.S. 134 (1944) ......ccccccceeeees 10

United States v. Mead Corporation, 533 U.S. 218 (2001)...10

Whitman v. American Trucking Ass ‘ns, 531 U.S. 457

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Statutes

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En 6

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EL. a ET 7

LS ae eR 5,7,9

eel 7

EA aca ee 6

ESTA LES a eatiial

TS 7

TTT a TET 4,6,8

al 4

Rules

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Se re Bs GID GE cccececonccccnccccncsccssccecessssscecoseccseotees 10

66 Fed. Reg. 61286 (2001).............ccccccccceccsccesscocssscecessececeees 10

iv

Regulations

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Legislative Materials

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ae 14

Other Authorities

Adler, Jonathan H., The Green Aspects of Printz: the Revival

of Federalism and Its Implications for Environmental

Law, 6 Geo. Mason L. Rev. 573 (1998)...........cccess000s 12,13

Benedick, Richard Ozone Diplomacy 2 (1998).............. 16,17

Dickey, Jefferson H., M.D., No Room to Breathe: Health

Effects of Criteria Air Pollutants from Power Plants

EPA’s Final Report to Congress on Benefits and Costs of the

Gan 4 Gh, FES e cress 18

EPA’s New Source Review Workshop Manual (1990)........ 10

Johnson, Dr. Barry L., Testimony before the Senate

Environment and Public Works Committee, March 12,

Sarnoff, Joshua D., The Continuing Imperative (but only

from a National Perspective) for Federal Environmental

Protection, 7 Duke Envtl. L. & Pol’y F. 225 (1997) ....... 13

Texas Air Quality Study 2000.............0ccccseccccsessssesessesesseesees 17

Williams, Douglas R., Cooperative Federalism and the

Clean Air Act: a Defense of Minimum Federal Standards,

20 St. Louis U. Pub. L. Rev. 67 (2001)............. 12,13,14,15

~

l

INTEREST OF AMICUS CURIAE

The Northwest Environmental Defense Center (NEDC

or Amicus) is an independent, non-profit organization

working to protect the environment and natural resources of

the Pacific Northwest.’ NEDC’s work includes providing

legal support to individuals and grassroots organizations with

environmental concerns, and engaging in litigation

independently or in conjunction with other environmental

organizations to ensure that the Nation’s environmental laws

are properly enforced.

As part of our mission, NEDC seeks to maintain or

restore healthy air, water, and ecosystems on behalf of our

members who live primarily in the Pacific Northwest, but

who also reside in other parts of the country. We believe that

the Environmental Protection Agency (EPA or

Administrator) plays a vital role in enforcing the Nation’s

environmental laws, thus moving us closer to achieving our

goal of a healthy environment.

SUMMARY OF ARGUMENT

The enforcement authority given to EPA under the

Clean Air Act (CAA, or Act) allows EPA to oversee best

achievable control technology (BACT) determinations made

by the States under the Prevention of Significant

Deterioration (PSD) program. Using the principles of

Statutory interpretation in the opinion below, the Ninth

Circuit held that EPA had correctly exercised this authority

' Counsel for the parties have consented to the filing of this amicus curiae

brief, and the letters of consent are being filed with this brief. Pursuant

to Supreme Court Rule 37.6, Amicus states that no counsel for a party

has authored this brief in whole or in part. No person or entity other than

amicus or its members has made a monetary contribution to the

preparation and submission of this brief.

2

in its issuance of an order preventing new construction at

Cominco’s Red Dog Mine. EPA issued its order in spite of

the fact that the Alaska Department of Environmental

Conservation (ADEC, State, or Alaska) had issued a permit

for the construction to go forward under the State’s PSD

program. EPA objected to the issuance of the permit on the

basis that the State had not offered a reasoned justification

for its determination that Low NOx was BACT for the

facility rather than Selective Catalytic Reduction (SCR).

The statutory provision which gives the State the

authority to make a BACT determination does not operate in

isolation, but must be read in conjunction with the rest of the

Act. In looking at the CAA as a whole, and particularly at

the PSD provisions, a great deal of authority is given to EPA

to implement guidelines under the PSD program and to

ensure that the guidelines are properly carried out. Various

provisions of the Act allow for EPA’s input at the individual

permit level. As the BACT determination is a major factor

in the implementation of the PSD program, it would be

anomalous for EPA to have so much PSD authority, but have

no right to oversee a State’s BACT analysis.

If EPA has erred at all, it is perhaps in not having

promulgated its guidelines in the form of a final rule. If this

is the case, then the remedy is for EPA to undertake formal

rulemaking.

The principles of cooperative federalism outline the

proper roles of the States and EPA in implementing the

regulatory scheme of the CAA. A State, if it chooses, has

the primary responsibility to implement the PSD program

within its borders. EPA’s role is to ensure that the State’s

implementation of the program is in accord with the policies

and purposes mandated by the Act.

3

Although the State may be in a better position to

evaluate the unique factors involved in a particular permit

decision, the State is also subject to conflicts of interest

which may cloud its judgment. EPA’s distance from the

situation can serve to make it more objective in its

technological and scientific determinations. Furthermore,

EPA’s central position allows it to serve as a clearinghouse

for the huge amounts of information that must be assembled

and disseminated.

Past performance of the States under the Act led

Congress to give EPA increasing authority in the successive

amendments to the Act. In view of the continuing

revelations about the health effects of the pollutants

regulated by the CAA, the evolving science and technology,

and the Nation’s failure to achieve the goals and purposes of

the Act, a strong oversight role for EPA is essential.

ARGUMENT

1. THE TEXT AND STRUCTURE OF THE CLEAN AIR

ACT GIVE THE EPA AUTHORITY TO ISSUE

ORDERS PROHIBITING CONSTRUCTION OF A

FACILITY WHICH DOES NOT CONFORM TO

THE REQUIREMENTS OF THE PSD PROGRAM.

A. The plain language of the Clean Air Act gives EPA

authority to oversee the PSD program.

Section 113(a)(5) of the CAA gives EPA authority to

enforce the provisions of the PSD program. 42 U.S.C. §

7413(a(5). Section 167 of the Act goes even further and

mandates that the Administrator take some measures to

prevent construction or modification of a major emitting

4

facility which does not meet the requirements of the PSD

program.’ 42 U.S.C. § 7477.

The present dispute revolves around whether this

authority extends to a determination of BACT for a

particular facility, and, if so, in what manner the authority

should be exercised. In light of the ambiguity in the CAA

provisions, EPA, the agency charged with administering the

Act, is entitled to deference in its interpretation of the statute.

See Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842-

843 (1984).

B. EPA’s oversight authority extends to a BACT

determination.

The Ninth Circuit, in the opinion below, held that EPA

had the ultimate authority in resolving a question of State

compliance with BACT requirements, based on the plain

language and legislative history of the Act. Pet. App. la,

et.seq.

The statute provides roles for both the State and EPA in

a determination of what constitutes BACT for a facility. At

first glan e, the CAA might appear to give all authority for

determining BACT to the State in its definition of the term.

42 U.S.C. § 7479(3). That definition specifies tha: 83ACT is

an emission limitation which the “permitting authority, on a

case-by-case basis ... determines is achievable for such

facility ...... Jd. However, the canons of statutory

construction and this Court’s opinions dictate that statutory

? Petitioner and Respondent have ably and amply analyzed these

provisions and the relevant caselaw. In keeping with Rule 37.1, Amicus

attempts to avoid completely or state in concise form those arguments

already addressed by the parties. Amicus apologizes for any inadvertent

duplication of arguments or analysis.

5

language is not viewed in isolation. The Court has

summarized its prior holdings on this subject as follows:

The words of a statute must be read in their context and

with a view to their place in the overall statutory

scheme. A court must therefore interpret the statute as

a symmetrical and coherent regulatory scheme and fit,

if possible, all parts into an harmonious whole.

FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120,

133 (2000) (internal citations and quotations omitted). It is

true, as Petitioner claims, that the Act clearly gives the

permitting authority primary responsibility for determining

what constitutes BACT at a particular facility for each

regulated pollutant. 42 U.S.C. § 7475(a)(4). But primary

responsibility does not mean sole responsibility, or even

ultimate responsibility.

An analogy may serve to illustrate how the State can be

deemed to have the primary responsibility, while EPA

retains the ultimate oversight authority. The situation is

similar to a public corporation run by a Chief Executive

Officer (CEO) and overseen by a Board of Directors. The

CEO has the primary responsibility for day to day operations

and reporting to the Board. The Board sets policy, and

makes and oversees the major business and financial

decisions. As long as there are no problems, the Board does

not get involved in the day to day operations. However, if

the CEO begins to operate contrary to corporate policy,

thereby overstepping his or her boundaries, the Board will

step in to take control and put things back on track.

Certain provisions of the Act give authority to the State,

while others give authority to EPA, thus defining the roles of

each. Under the CAA, the permitting authority, usually a

State, but sometimes the federal government, a local agency,

or a tribe, serves in the role of the CEO. The EPA fills the

6

role of the Board. As long as the permitting authority is

operating in harmony with the Act and its implementing

regulations, then EPA has no cause to object. However,

when the permitting authority contravenes one of the Act’s

provisions, EPA may, indeed must, step in to correct the

error. According to the statute: “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 ....”

42 U.S.C. § 7477. (See also discussion of cooperative

federalism, infra.)

In this case, the permitting authority is the State of

ADEC, because Alaska’s State Implementation Plan (SIP)

contains a PSD permit program, approved by EPA in 1983.

40 C.F.R. § 52.96(a). Therefore, ADEC does indeed have

primary responsibility for the implementation of the PSD

program in the State.

On the other hand, certain sections of the Act indicate

that EPA, in addition to setting broad guidelines and

standards, has the responsibility for ensuring that individual

permit decisions are in keeping with PSD program

regulations and policies. Other sections of the Act indicate

that EPA also has the authority to promulgate regulations

governing the determination of BACT.

While Congress, in Section 163, described in great

detail the increments and ceilings governing sulfur oxide and

particulate matter emissions, Section 166 only gives broad

direction to EPA’s regulation of the remaining criteria

pollutants, including nitrogen oxide (NOx), the pollutant at

issue here. 42 U.S.C. §§ 7473 & 7476. For instance,

Section 166 directs the Administrator to provide specific

measures for carrying out the goals and purposes of Sections

7

101 and 160 of the Act. 42 U.S.C. § 7476(d). One of these

purposes is to provide technical and financial assistance to

State and local governments in the execution of their air

pollution control programs. 42 U.S.C. § 7401(b)(3).

Another purpose is to assure that PSD permit decisions are

made only after “careful evaluation of all the consequences

of such a decision ....” 42 U.S.C. § 7470(5). Without the

ability to oversee a State’s BACT determination, EPA would

be hard-pressed to carry out this congressional mandate.

Concerning the promulgation of regulations governing these

remaining criteria pollutants (including NOx), EPA is

directed to provide, among other things, “a framework for

stimulating improved control technology ....” 42 U.S.C. §

7476(c). EPA’s “top-down” approach for determining

BACT would appear to fulfill these mandates of Congress.

Finally, Section 165 further signals EPA’s involvement

at the individual permit level. It provides that no facility

may be constructed unless “the proposed permit has been

subject to a review in accordance with this section, [and] the

required analysis has been conducted in accordance with

regulations promulgated by the Administrator ....” 42

U.S.C. § 7475(a)(2). This provision explicitly gives the

Administrator the authority to promulgate regulations

governing the analysis of the preconstruction process under

the PSD program. This same section indicates that the

BACT determination is to be part of that analysis. 42 U.S.C.

§ 7475(a)(4). Section 165 also mandates: “Each State shall

transmit to the Administrator a copy of each permit

application relating to a major emitting faciiity received by

such a State and provide notice to the Administrator of every

action related to the consideration of such a permit.” 42

U.S.C. § 7475(d)(1). Unless Congress expected the EPA to

actively oversee the program at the individual permit level, it

would make no sense to require the State to submit such a

8

thorough and timely account of the permit process to the

EPA.

Alaska’s interpretation of the statute would relegate

EPA to the role of an archivist. Alaska suggests that, other

than permits that violate the increments, EPA’s objection is

proper only when the State fails to include any BACT

limitation in a PSD permit or fails to issue a permit at all.

Pet. Brief 25. Accordingly, EPA’s role in overseeing BACT

and other permit determinations would simply be that of a

clerk, checking to make sure all the blanks were filled in, but

not being concerned about the contents.

C. EPA correctly exercised its oversight authority in

determining that ADEC’s BACT analysis was

deficient.

The issuance of an administrative order preventing

construction or modification of a major emitting facility is in

keeping with the enforcement options allowed by the Act.

This is the method EPA chose to correct the problem it

perceived in Cominco’s permit. The provisions governing

enforcement by EPA specifically mention an administrative

compliance order as a means of halting construction or

modification of a facility that does not comply with the

requirements of the PSD program. 42 USC. §§

7413(ay(S)A) & 7477.

Alaska’s interpretation strips the BACT provision of its

significance. Nothing in the language or structure of the

statute limits EPA’s oversight authority only to those permits

that violate the allowed increments. Pet. Brief 27. Nor do

the terms or scheme of the Act allow the permitting authority

to substitute an alternate technology regime for BACT, even

if the alternate regime results in lower emissions. Pet. Brief

42. If Congress had intended either result, there would have

9

been no need for a BACT provision. To limit EPA’s

objections to permits which violate the allowed increments,

all Congress would have needed to mandate is that no permit

may violate the increments. Similarly, instead of the BACT

prerequisite for PSD construction, the statute would call for

the control technology or combination of controls which

results in the lowest overall emissions for the facility. But

Congress included in the PSD program a requirement that

permits issued under that part force the facility to use the

“best achievable control technology.” 42 US.C.

7475(a)(1)&(4). Alaska’s reading of the statute renders the

BACT provision superfluous, violating the dictate that a

statute be interpreted so as to fit all parts into “an

harmonious whole.” (See Brown & Williamson, supra.)

D. The remedy for any shortcoming in EPA’s exercise

of authority is to remand the case to the Ninth

Circuit.

Despite the fact that EPA’s interpretation of BACT

protocol has not been issued as a final rule, it is still entitled

to deference. As long as it is reasonable, EPA’s

longstanding and consistent interpretation of the CAA is

entitled to deference under the Chevron doctrine. Chevron,

467 U.S. at 842-843. Additionally, the Court has found the

agency entitled to deference when it is attempting to

reconcile competing policies or when the regulatory scheme

is technical and complex. /d. at 865. This case involves the

very same complex regulatory scheme (CAA) and competing

policies (reducing air pollution versus economic growth) that

were at issue in Chevron. Logically, EPA should be

accorded the same deference in this case as it was in

Chevron.

However, the Court has recently indicated that the

failure of Congress to delegate general authority to the

10

agency or the manner in which an agency exercises its

statutory authority may affect the measure of deference to

which an agency rule is entitled. United States v. Mead

Corporation, 533 U.S. 218, 237 (2001). More specifically,

the Court has indicated that interpretations contained in

opinion letters, policy statements, agency manuals, and

enforcement guidelines do not warrant the Chevron-style

deference that would be accorded to formal adjudication or

notice-and-comment rulemaking. Christensen v. Harris

County, 529 U.S. 576, 587 (2000). Even if these

interpretations do not warrant Chevron-style deference, they

are still entitled to deference to the extent they are

persuasive. See generally, Skidmore v. Swift & Co., 323 U.S.

134 (1944).

The instances in which EPA has issued guidelines for a

BACT determination seem to fall on both sides of the line.

Regarding EPA’s interpretation of BACT’s objective

standards, a Legal Opinion by EPA’s Office of General

Counsel states that: “In the case of a decision applying best

available control technology (BACT) under Section

165(a)(4) for PSD, if a State has met all procedural norms,

considered all 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 that does not violate such objective standards.” Pet

App. at 12a. Another source of EPA guidelines, delineating

the “top-down” method, is EPA’s New Source Review

Workshop Manual (1990). Pet App. 13a. Interestingly, the

“top-down” approach has been the subject of a proposed

settlement (See 56 Fed. Reg. 34202 (1991)), a proposed rule

(See 61 Fed. Reg. 38250 (1996)), and several Unified

Agendas (See e.g., 64 Fed. Reg. 64023 (1999), 66 Fed. Reg.

61286 (2001)), but has not yet been published as a final rule.

Finally, the “top-down” approach has been addressed in

numerous policy memorandums [sic], guidance documents,

11

court cases, and administrative appeal decisions. J.A. at 175-

176.

To give the ultimate authority concerning the validity of

a BACT decision to the permitting authority would

contravene the intent of Congress. As discussed above,

Congress has repeatedly indicated its intent that EPA should

have authority over the PSD program. Ultimately, it is the

BACT determination which drives the PSD engine. Without

the ability to oversee a BACT determination, EPA’s PSD

enforcement authority amounts to very little. Therefore, if

the Court finds that EPA’s exercise of its PSD authority thus

far is not entitled to Chevron-style or even Skidmore-style

deference, the case should be remanded with an order that

EPA undergo notice-and-comment rulemaking to formalize

its BACT approach.

As ADEC has not objected to EPA’s “top-down”

approach, and indeed purported to follow that approach in

the Cominco permit decision, a remand would not affect the

outcome of the case below. ADEC only questioned EPA’s

authority to oversee ADEC’s permitting decision. The Ninth

Circuit correctly held that EPA has the authority to decide

whether a State has complied with the BACT requirements

of the Act and the State’s SIP, and concluded that EPA’s

exercise of that authority in this case was not arbitrary and

Capricious.

Il. THE POLICIES OF FEDERALISM AND

PRACTICAL EXPERIENCE SUPPORT EPA’S

CLEAN AIR ACT OVERSIGHT AUTHORITY.

A. The Clean Air Act can only work with strong EPA

oversight; any attempt to curtail that oversight

would only reverse the current progress towards

attaining the goals of the Act.

12

Many federal statutory schemes are based on th system

of cooperative federalism. New York v. United St, es. 505

U.S. 144, 167 (1992). Under this system, Congress... neat

a variety of methods to encourage the States to reg). i, 4

particular manner. Jd. One method is to attach CON): ons to

the receipt of federal funds. Jd. A second meth, whan

Congress has authority to regulate private activity, ¥ » ofie

States a choice between implementing the program

themselves, according to minimum federal standa = of

having a federally-run program implemented in the 5.3 -

The CAA is one example of a statutory scheme uti: |. g the

second method.

In a State which decides to implement its own program,

_ the scheme amounts to a shared power or partr ership of

sorts. As in any partnership, a certain amount of anaion te

bound to exist as to who is going to be the domina

It would be virtually impossible to have an equal p< ip;

when a disagreement arises, somebody is going = ri

exercise the final authority.

Reasonable arguments can be made on beha f of each

partner as to why they should fulfill the dominan‘ -_=

the States’ side of the debate are the ideas that the sate is in

a better position to respond to unique local co iene and

can allocate resources more efficiently. Di glas R

Williams, Cooperative Federalism and the Clean Air Act: .

Defense of Minimum Federal Standards, 20 St. “arn U

Pub. L. Rev. 67, 70 (2001). Likewise, the idea forcing

States to pay for regulations imposed on them by , federal

government (unfunded mandates), and fin es thet

Americans increasingly favor regulation at the State and

local level, argue for the State fulfilling the don. ant ~_

Jonathan H. Adler, The Green Aspects of Printz: :

ival

of Federalism and Its Implications for Environme To, 6

13

Geo. Mason L. Rev. 573, 580-582 (1998). Factors

supporting federal dominance are the inclination of pollution

to cross state boundaries, leading to disputes between States,

and the benefits to be gained from centralizing the

information collection and dissemination necessary with

such complex scientific and technical issues. Williams,

supra at 97-106. Also favoring federal regulation are the

race-to-the-bottom theory in which States lower

environmental standards in an attempt to attract business,

and the idea that States will not regulate to the standards

desired by the majority of State residents because of the

greater influence of the regulated entities on State

authorities. /d. at 107-112.

Studies and polls come to opposite conclusions as to

who is the preferred regulator in the popular arena, States or

the EPA. A 1996 national poll showed the majority of

Americans favor state and local environmental regulation.

Adler, supra at 582. Conversely, another author indicates

that a “supermajority” of Americans wants to preserve and

even expand federal environmental regulatory authority.

Joshua D. Sarnoff, The Continuing Imperative (but only from

a National Perspective) for Federal Environmental

Protection, 7 Duke Envtl. L. & Pol’y F. 225, 319 (1997).

Two elements, at least, are definite with regard to CAA

implementation. First, over the past three decades, there has

been substantial resistance on the part of the States, the

regulated community, and the EPA to expending the

resources necessary to implement the standards of the Clean

Air Act. Jd. at 307 (emphasis added). Second, the history of

the CAA and its amendments shows a progressive increase

in the enforcement power of the federal government.

The legislative history of the Act demonstrates that

Congress considered the positions and interests of both the

14

States and EPA in implementing the program, and divided

authority between the two. The Ninth Circuit opinion gives

an overview of the amendments and legislative history of the

Act that delegate increasing authority to the federal

government. Pet. App. 9a-10a. The 1970 amendments were

intended in part “to assure that the requirements of the Act

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

enforce the necessary measures.” H.R. Rep. No. 95-294, at

326 (1977).° Congress recognized the mechanics of the

race-to-the-bottom theory and the pressure that was exerted

on States by industry’s threat to locate to more permissive

States. Id. at 136-37. Congress provided for federal

oversight to protect States that wanted to maintain clean air.

Id. As Petitioner points out, the BACT decision was

recognized to be a key determination, and the committee

placed that responsibility with the State, giving it broad

flexibility to interpret the provision. S. Rep. No. 95-127, at

31 (1977). Also significant, however, was Congress’ view

of the Administrator’s role in monitoring State actions: “The

Administrator thus could go to court to stop a permit for

activities which would exceed increments of pollution or

which otherwise did not comply with the requirements of

[PSD], including use of best available control technology.”

Id. at 12 (emphasis added).

In spite of the increased federal enforcement

authority, the States’ costs of noncompliance with federal

mandates still are not likely to be very high. Williams, supra

at 88. A 1988 study by the General Accounting office

indicated that State and local officials were reluctant to

implement measures which might have inhibited economic

development or altered life-styles. Jd. at 87. Because of the

lackluster progress under the 1977 amendments of the Act,

> The Ninth Circuit attributes this to S. Rep. 95-127, at 326 (1977).

* This is also attributed to S. Rep. 95-127, at 136-7.

15

Congress implemented a “milestones program” designed to

evaluate progress towards emissions reduction targets in

nonattainment areas. Jd. at 88-89. Under this program, the

States were supposed to demonstrate their progress to EPA.

Id. However, the innovative mechanisms of the 1990

amendments have not been implemented or have been

ineffective, and the States have not been held accountable for

these shortcomings by EPA. /d. at 90.

Further impetus for continued or enhanced EPA

oversight derives from the fact that statistical data show an

inability to meet health standards under current criteria.

Recent studies indicate that the original standard for ozone

(of which NOx is a precursor) is not sufficient to protect

public health. Jd. at 68. All in all, though air quality has

improved since the inception of the Act, there still remains a

long way to go in achieving the goal of enhanced air quality.

Id. at 67. If anything, EPA oversight of the CAA needs to be

increased, not lessened.

B. If it is true that the country is in need of increased

energy capability, that fact only argues more

strongly for EPA oversight of the Act.

Although the Center for Energy and Economic

Development (CEED) (Petitioner’s Amicus) argues that the

anticipated increased demand for energy should dictate that

EPA stand aside in order to avert an energy crisis, in reality

the increased demand also increases the need for EPA

oversight. Logically, the 25% increase in energy generating

capacity that CEED deems necessary would result in a

corresponding increase in air pollution. As stated above, the

previous standard for ozone was inadequate to meet public

health requirements. The new standard promulgated by EPA

in 1997, although an improvement, may not be sufficient to

protect public heal h and also is far from being implemented.

16

See generally Whitman v. American Trucking Ass’ns, 531

U.S. 457 (2001), American Trucking Ass’ns, Inc. v

U.S.E.P.A., 283 F.3d 355, (D.C. Cir 2002), and Williams

supra at 68. Furthermore, recent studies indicate that

chronic exposure even to low levels of pollutants, including

NOx, may have serious health effects, especially in children.

See Testimony of Dr. Barry L. Johnson before the Senate

Environment and Public Works Committee, March 12, 2002

-// www v/~epw/107 >.

See also Jefferson H. Dickey, M.D., No Room to Breathe:

Health Effects of Criteria Air Pollutants from Power Plants

2002 // >. Caution

dictates that everything possible should be done to minimize

the increase in pollutants due to increased energy generating

capacity so that the corresponding health impacts are

minimized. EPA is in the best position to ensure that the

construction of these new generating facilities is performed

in a manner to reduce these emissions.

C. Past experience, public health, and public interest

indicate that federal oversight authority is

necessary if the goals and purposes of the Act are to

be respected.

Industry, although capable of great innovation, has a

tendency to resist change, even change which is ultimately

economically beneficial. One illustration of this is the

phase-out of ozone depleting substances under the Montreal

Protocol. At first, producers of ozone depleting substances

(ODSs), were extremely resistant to their phase-out and

argued that any control measures would damage them

economically. Richard Benedick, Ozone Diplomacy 2, 57

(1998). However once manufacturers saw the opportunity

for a competitive advantage, they led the effort to develop

chemical alternatives to ODSs. ODS users likewise were

able to alter processes and products in a manner that saved

17

them money through the reduction of solvent use and waste

disposal costs. Jd. at 104. Ultimately, the original dire

predictions of manufacturers and users failed to materialize.

Without strong regulation and oversight, the technology

forcing mandates of the Act will not be fulfilled. The status

of the implementation of the PSD and other CAA programs

is analogous to the situation experienced at the inception of

the Montreal Protocol. Industry will likely resist every effort

to implement new or more stringent emissions control

technology whenever that technology costs more. And it is

understandable that industry would do just that, as its focus

is to maximize profits. Without some sort of leverage,

industry is not likely to move towards new technology.

States cannot be counted on to fulfill this role because of the

conflict of interest inherent in their need to attract industry

for the benefit of their residents. EPA oversight is needed to

provide that leverage, and ensure that the CAA and the

innovations in technology it mandates are implemented.

Another illustration of the need for EPA oversight

comes from the recent Texas Air Quality Study 2000.

<http://www.utexas.edu/research/ceer/texaqsarchive/pdfs/EX

EC_ SUMMARY _Nov_02.pdf>. Texas learned that the

ozone modeling assumptions it had been using for the past

30 years were incorrect. This experience emphasizes the

need for a strong centralized process of information

gathering and dissemination mentioned in the Williams

article. Although there is room for innovation by the States,

the EPA serves as an overseer to keep the States from going

astray in their scientific calculations. EPA serves to ensure

that innovations by the States are truly innovations and not

merely empty promises of innovation.

While it is true that industry produces benefits for all

citizens, there are other economic benefits and costs to

18

consider. One aspect of the economic analysis that is often

overlooked is that savings for industry often result in other

sectors of society bearing greater costs. For instance, EPA

reports to Congress (required by Section 812 of the Act),

have estimated that, by 2010, the economic benefits derived

from the 1990 amendments to the Clean Air Act will total

around $127 billion (mainly in health benefits), more than

four times the cost of achieving those benefits. Furthermore,

EPA estimates that there are many more benefits that are not

presently quantifiable, such as benefits to crops and

ecosystems and further health benefits. See EPA’s Final

Report to Congress on Benefits and Costs of the Clean Air

Act, 1999-2010 -//www.epa.gov/oar/ > &

<http://www.epa.gov/hi / / >.

Three of the arguments made by Petitioner strongly

appeal to notions of common sense and fair play at first

glance, but fail to withstand closer scrutiny. For example,

Cominco’s idea to use Low NOx on all seven generators,

even those not requiring BACT analysis, has appeal because

it could result in lower overall emissions than if SCR were

used on only the two generators, MG-5 and MG-17.

(Getting lower overall net emissions also requires the

assumption that the two generators with SCR controls would

be placed in standby mode; if all generators were run at

operating capacity, then even this configuration would result

in an increase of 79 tons per year.) J.A. 86-87. However,

even the possible emissions reductions forecast under this

scheme may be short-lived.

If Cominco decides to expand production further, then

the net reduction in overall emissions quickly evaporates.

For instance, if Cominco decided to install one more

generator identical to MG-17 and were able to use Low NOx

on that generator instead of SCR, the result would be a net

increase of approximately 500 tons per year of nitrogen

a

19

oxide (NOx) emissions. J.A. 110, 198. Low NOx is the

baseline control for the new generators, therefore using Low

NOx as BACT on a new generator results in an emission rate

of 530 tons per year and a reduction of 0%. (Low NOx

results in emissions reductions on the older generators

because they went online with lesser controls or none at all.)

If Cominco expanded with two new generators, the increase

in emissions using Low NOx would be 1060 tons per year;

with three new generators 1590 tons per year, etc. On the

other hand, SCR control as BACT would resu’ in an

emission rate of only 53 tons per year per generator, a

reduction of 90% for each new generator installed.

In fact, the idea of expansion is not so far-fetched.

Cominco originally planned a greater output with generator

MG-5, but then reduced the emission increases from MG-5

in order to avoid modification and BACT review. J.A. 197.

Presumably, if BACT at this time is determined to be SCR, it

would be difficult to find that a lesser control is BACT for

any future generators. Likewise, a determination that Low

NOx is BACT for the current modification makes it that

much easier for Cominco (or a similar facility) to obtain a

determination that Low NOx is BACT in the future.

Secondly, Petitioner’s analysis of the reasons for giving

a State some flexibility in its BACT determination is

similarly flawed when applied to the facts of this case.

Petitioner refers to a situation in which a State, concerned

about the impact of increased costs on a critically important

employer, decides to allow that employer to implement a less

stringent, less costly technology, presumably to keep that

employer from leaving the area. Pet. Brief 24. This appears

to be precisely the reason for allowing a less stringent

control technology for Cominco — the fact that the Red Dog

Mine offers employment in a remote area with few other

opportunities for employment. /d. at 9-13. The flaw in this

20

argument is that there is no danger here that the mine will

relocate; the zinc deposits are in the ground and must be

mined where they are found.

Thirdly, Cominco and Alaska asserted that the

increased costs of using SCR would reduce the mine’s

competitiveness on the world market and have adverse

economic impacts. Ordinarily, these factors might provide a

reasoned justification for allowing a less stringent BACT

determination on the basis of economic infeasibility.

However, no economic analysis was offered to bolster the

claims of economic infeasibility. J.A. 116. Rather, Cominco

and Alaska simply relate that Cominco’s Red Dog Mine is

the largest producer of zinc concentrate in the world and the

royalty payments from the mine to the Inupiat shareholders

are expected to total $1 billion over the life of the mine. Pet.

Brief 8-9. Even if SCR were run on the new generator for 40

years (at a $2.9 million initial capital cost and $635,000/year

in operating costs), the total cost of its operation would

amount to only about two percent of the expected royalty

payment. J.A. 113. Generally, royalty payments are

substantially less than the profits expected from a business

venture, therefore it is hard to imagine how using SCR could

be economically infeasible for Cominco. And, in fact,

ADEC found SCR was economically feasible in its

preliminary technical analysis. J.A. 84. In its final technical

analysis, ADEC admits that Cominco failed to present it with

detailed financial information, making analysis of the

economic feasibility of SCR impossible, nevertheless,

ADEC still allowed a less stringent technology as BACT.

J.A. 116.

This all leads directly to EPA’s and the Ninth Circuit’s

logical conclusion that ADEC failed to offer a reasoned

justification for its BACT determination. Pet. App 12a-13a.

Even if Alaska is correct in its argument that EPA should be

21

required to show that the State’s decision is arbitrary and

capricious, the above economic information should suffice to

do so. Pet. Brief 36. The burden should then shift to the

State to show that its actions were not arbitrary and

capricious. On the facts of this case, the State of Alaska

cannot meet this burden. As the Ninth Circuit pointed out,

Alaska’s analysis was “uncomfortably reminiscent of one of

the very reasons Congress granted EPA enforcement

authority — to protect states from industry pressure to issue

ill-advised permits.” Pet. App. 16a.

Finally, the desire for certainty in the permitting

process, although understandable, fails to support the

argument against EPA oversight authority in BACT

determinations. Amici States North Dakota, et.al., (States)

and National Environmental Development Association,

et.al., (NEDA) argue that EPA’s intrusion into the State role

of determining BACT injects an unacceptable level of

uncertainty into the permitting process. States’ Brief at 15,

NEDA Bref at 11. Indeed, the costs involved in facility

construction are great, and uncertainty as to the proper

control technology could create a difficult situation for

industry if they proceed with construction under an incorrect

assumption as to which is the proper technology. However,

it could be just as easily argued that the uncertainty stems

from EPA’s failure to consistently enforce the requirements

of the Act as mentioned above. If EPA would strictly

enforce the Act and industry could rely on that strict

enforcement, that consistency would also provide the desired

measure of certainty.

The need for EPA enforcement is now more necessary .

than ever. Although it is desirable for the State to play the

primary role under the system of cooperative federalism, that

role is presently strained in many States due to their huge

budget deficits. Even if a State may wish to perform its role

22

in an exemplary fashion, it may not have the capability to do

so. As Dr. Barry L. Johnson said in his testimony before

Congress, “Now is not the time to gamble with unproven

administrative procedures that may set back the progress

already made.” Although industry seems to look upon EPA

as a sword, there are those who look upon EPA as a shield,

and breathe easier with EPA’s oversight in the tremendously

complex process of implementing the Clean Air Act.

CONCLUSION

For the foregoing reasons, the judgment below should

be upheld. Short of that, the case should be remanded for

further proceedings.

Respectfully submitted,

Donald B. Potter

Counsel of Record

Donald B. Potter, P.C.

522 S.W. Fifth Avenue

Suite 1110

Portland, OR 97204

(503) 223-2612 _

July 2003