# Respondents Brief — Utility Water Water Act Group Group v. Riverkeeper, Inc. (Nos. 07-597, 07-588, 07-589) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0048%3A14 ## Record - **Collection:** Supreme Court brief - **Document type:** Respondents Brief - **Published:** January 1, 2009 ## Text — rr a —— ee eee nee \o” 3 FILED Jit. 14 2608 ©. pure x Cs rim ee Gr Nos. ( © 589 and 07-59 FUE 8 OO In the Supreme Court of the Gnited States ENTERGY CORPORATION, PETITIONER Vv. ENVIRONMENTAL PROTECTION AGENCY, ET AL. PSEG FossIL LLC, ET AL., PETITIONERS vz. RIVERKEEPER, INC., ET AL. UTILITY WATER ACT GROUP, PETITIONER Vv. RIVERKEEPER, INC., ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE FEDERAL PARTIES AS RESPONDENTS SUPPORTING PETITIONERS GREGORY G. GARRE Acting Solicitor General Counsel of Record RONALD J. TENPAS Assistant Attorney General EDWIN S. KNEEDLER Deputy Solicitor General DARYL JOSEFFER Assistant to the Solicitor General PATRICIA K. HIRSCH DAVID S. GUALTIERI Acting General Counsel CYNTHIA J. MORRIS RICHARD T. WITT JESSICA O’DONNELL Attorney Attorneys Environmental Protection Department of Justice Agency Washington, D.C. 20530-0001 Washington, D.C. 20460 (202) 514-2217 ~ y é / LL QUESTION PRESENTED Whether Section 316(b) of the Clean Water Act, 33 U.S.C. 1326(b), authorizes the Environmental Protection Agency to compare costs with benefits in determining the “best technology available for minimizing adverse environmental impact” at cooling water intake struc- tures. (1) ee s¥/ Lo8 3 case % are Pcrthe AN iH ma = ee y ae La TABLE OF CONTENTS Page ECCT AT a ET Ie, See ne 1 EEE er ey ie a ne ree een ee ee eae 2 Statutory and regulatory provisions involved .............. 2 ee ee eee eee OE Or ere eee 2 I 65) els nce eweikedeekeb bb b0 5006s bene 10 Sidecar de iehectucauee bean ekekwerbee cee cs 0s 13 The Environmental Protection Agency may consider costs in relation to benefits in determining the best technology available for minimizing adverse environmental impact under Section 316(b)............ 13 A. The statutory text does not unambiguously prohibit consideration of the relationship between costs and benefits ..................004. 15 B. The statutory structure, context, and history confirm that EPA may consider the relationship between costs and benefits ..............:02-0--. 18 1. Section 316(b) cross-references provisions that require consideration of costs, including comparison of costs and benefits ............... 19 2. Congress conferred broad authority on EPA to determine how best to consider costs, benefits, and other relevant factors ..................... 22 C. The court of appeals usurped EPA’s discretion by imposing extra-textual constraints on EPA’s consideration of various factors ................... 26 D. There is no basis for applying an artificial presumption against consideration of the relationship between costs and benefits ........... 30 E. EPA’s consideration of costs and benefits in the rulemaking at issue here fell well within its SIE Sirhan ts ei iti Gh’ Bets inaeg Wok orn ta 35 IV Table of Contents—Continued: Page 1. EPA based the national performance standards on its weighing of multiple relevant se eee e as. eee eC ar Uhe ae eon eass soos 35 2. EPA permissibly authorized site-specific determinations in circumstances where costs significantly exceed benefits ................... 39 SE cdc Guu euun Gh hes Rhee ahs voneckct cea wceers 42 RR RRS Se Tao ta A SARE in, “einer Age ey ca aE SPP a la TABLE OF AUTHORITIES Cases: American lron & Steel Inst. v. EPA, 526 F.2d 1027 (3d Cir. 1975), amended, 560 F.2d 589 (3d Cir. SEERA CES Ae AT Rant MEISE eee M See eee aN 26 American Paper Inst. v. United States EPA, 660 F.2d I So ee a aa eae baw wowed ects 20 American Textile Mfrs. Inst. v. Donovan, 452 U.S. I So N ee aes cad acu The teus nae nA BAS On 31, 32 Appalachian Power Co. v. Train, 566 F.2d 451 (4th CE tettb pale teehee cane ede ures ik Eee w SEK EWA 4 Barnhart v. Walton, 535 U.S. 212 (2002) ........... 27, 30 BP Exploration & Oil, Inc. v. United States EPA, 66 ee IY ID hiseec keke ceeweesccsnses 16, 39 Chemical Mfrs. Ass'n v. United States EPA, 870 F.2d 177 (5th Cir. 1989), cert. denied, 495 U.S. 910 (1990) .. 25 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 ee eae. Ghee as eek cael 10, 15, 26, 28, 31, 34 Citizens Coal Council v. United States EPA, 447 F 3d I ree ee ge irre ge eee 16 Cases—Continued: Paye CPC Int'l, Inc. v. Train, 540 F.2d 1329 (8th Cir. 1976), cert. denied, 430 U.S. 966 (1977) .............020 0%: 26 EPA v. National Crushed Stone Ass'n, 449 U.S. 64 CORD ve vidoe ncdaetecissanee eee 20, 21, 24 Gregory v. Ashcroft, 501 U.S. 452 (1991) .............. 31 Michigan v. United States EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, 532 U.S. 903, and 532 U.S. | PP Tn rr a 32, 33 Morton v. Ruiz, 415 U.S. 199 (1974) ...............26.. 27 NWF v. EPA, 286 F.3d 554 (D.C. Cir. 2002) ........... 39 Public Serv. Co. of N.H. (Seabrook Station, Units 1 & 2), In re: No. 76-7, 1977 WL 22370 (June 10, 1977) remanded on other grounds, 572 F.2d 872 (hat GA. BGP 6 ks vnc cuvtuncesueeeeeeesene 5, 27 No. 76-7, 1978 WL 21140 (E.P.A. Aug. 4, 1978) .... 27 Riverkeeper, Inc. v. United States EPA, 358 F.3d 174 te S RPwrerreyr reer er ee passim Seacoast Anti-Pollution League v. Costle, 597 F.2d SOR Chae GC: TED voi ce vccéucscacdisveuseese ee 27 Sierra Club v. United States EPA, 314 F.3d 735 (5th CO. SD Scco'vedicnecdhse es peeae cus eae 32 Spector v. Norwegian Cruise Line Ltd., 545 U.S. 119 | PETC T Ee ee ee 31 Texas Oil & Gas Ass'n v. United States EPA, 161 Fb GS Gat Cr. SD oo oon vc kis easuncueeeeeeees 39 Weyerhaeuser Co. v. Costle, 590 F.2d 1011 (D.C. Cir. 2 errr Se ee 39 VI Case—Continued: Page Whitman v. American Trucking Ass’ns, Inc., 531 EE a 31, 32, 33 Statutes and regulations: Clean Air Act, 42 U.S.C. 7401 et seg. ..............6065 32 ere Dass ssa aid be keneeeeeseess 33 Clean Water Act, 33 U.S.C. 1251 et seq. ...........-55.. 2 33 U.S.C. 1311(b)(1)(A) (8 301(b)C (A)... 3, 19, 25 33 U.S.C. 1311 (bMS MA) . ... eee ee ee eee 3, 20, 21, 25 ES cnc deecueuseccceeeesecses 20 hdc dapedeceseccseceueces 20 Cs re 3, 20, 24 re kien asda vecescecesences 20 33 U.S.C. 1311(g) .......... a ae a ee 21 EE ee ee 20 MT ee oe | EE, MEE gc ccc b se ckeccccccccces 4,21, 24 Pee eee 4, 20, 24 33 U.S.C. 1316(a)(1) (§ 306(a)(1)) ..........-----. 4,21 33 U.S.C. 1816(b)(1)(B) (§ 306(b)0)(B)) .. ... 4, 21, 24, 26 33 U.S.C. 13826(b) (§ 316(b)) ... 2... .. 3, 10, 15, 16, 18, 22 eae sce wdesedecdebeesecrense 4 ee es cae pesensceeecseusne 26 td Coenen ak neces as secees 20 40 C.F.R.: Ne tag aesbbeccesdeaceuve 18 RG 4 i eee weee 7 Vil Regulations—Continued: Page SE MEE oo c.cccecacecceccectsaseeweed 40 Section 1IZb.90(aNMGNMH) .... ccc ccc ccccccees 35, 39, 41 Se I cs Gis wa Ge en ae ae eae oa 6, 36 IES ewcscincedsndsd cepeneeckanukeucene 5 Miscellaneous: American Heritage Dictionary (4th ed. 2006) ...... 16, 17 Black's Law Dictionary (8th ed. 2004) .............5.. 17 Central Hudson Gas & Elec. Corp., In re, Op. EPA Gen. Counsel, NPDES No. 63, 1977 WL 28250 SN NED Sh.euddbbnsndbddendcacsacsenes canes 27 Hon. Stephen Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulations (1994) ....... 14, 18 Matthew D. Adler & Eric A. Posner, Rethinking Cost-Benefit Analysis, 109 Yale L.J. 165 (1999) ...... 31 Oxford English Dictionary (2d ed. 1989) .............. 16 Random House Dictionary of the English Language ED ook a onc soba we Ui wenckescesucereapeunt 17 Foe Se Ber eee eee 23 41 Fed. Reg. (1976): Ee ae ae er ed en eee To 4 Dy EE hos Oa dkvedaetiecaseweescdeceseaeenanen 41 ob BO ff a rer er a 25 G6 Fed. Rem. G5.206 G0O1) .. nn ccc cece eee eees ore ee ee I 6. as95s ceartateeccch sceeer ieee 42 ey ey , BD 5060 6 ve Si ns cco eicewes 41, 42 ee ee. He. Se GED 6a vdewrsevesdiossincias 41, 42 VIII Miscellaneous—Continued: Page 69 Fed. Reg. (2004): PC ditdcuiviksxenesavoneneedesckde uke cacel 6 In the Supreme Court of the Gnited States No. 07-588 ENTERGY CORPORATION, PETITIONER e ENVIRONMENTAL PROTECTION AGENCY, ET AL. No. 07-589 PSEG FossIL LLC, ET AL., PETITIONERS Vv. RIVERKEEPER, INC., ET AL. No. 07-597 UTILITY WATER ACT GROUP, PETITIONER v. RIVERKEEPER, INC., ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE FEDERAL PARTIES AS RESPONDENTS SUPPORTING PETITIONERS OPINION BELOW The opinion of the court of appeals (Pet. App. la-94a) is reported at 475 F.3d 83.' ' Citations to the Pet. App. refer to the appendix filed in No. 07-5&8a. (1) yA JURISDICTION The judgment of the court of appeals was entered on January 25, 2007. A petition for rehearing was denied on July 5, 2007 (Pet. App. 95a-96a). On September 25, 2007, Justice Ginsburg extended the time within which to file the petitions for a writ of certiorari to and inclua- ing November 2, 2007, and the petitions were filed on that date. The jurisdiction of this Court rests on 28 U.S.C. 1254(1). STATUTORY AND REGULATORY PROVISIONS INVOLVED The pertinent statutory and regulatory provisions are set forth ‘n an appendix to this brief. App., infra, la-24a. STATEMENT 1. Steam eiectric power plants and other industrial and manufacturing facilities depend upon intake struc- tures to withdraw water from the Nation’s lakes, rivers, and other water bodies. The withdrawn water then ab- sorbs heat from the steam used to generate electricity. Among the adverse environmental impacts associated with the use of intake structures are “impingement,” which occurs when aquatic organisms are trapped ag- ainst the structures by the force of inflowing water, and “entrainment,” which occurs when smaller organisms are pulled into a facility’s cooling system. Billions of aquatic organisms are impinged or entrained by intake structures annually. See Pet. App. 3a. Section 316(b) of the Clean Water Act (CWA or Act), 33 U.S.C. 1251 et seq., requires that “the location, de- sign, construction, and capacity of cooling water intake structures reflect the best technology available for mini- 3 mizing adverse environmental impact.” 33 U.S.C. 1326(b). That provision is unique among CWA provi- sions because it addresses the intake of water, in con- trast to other provisions that regulate the discharge of pollutants into waters of the United States. The CWA does not define the substantive standard specified in Section 316(b)—“best technology available for minimizing adverse environmental impact” (BTA). 33 U.S.C. 1326(b). Section 316(b) does, however, cross- reference Sections 301 and 306 of the CWA by specify- ing that standards established pursuant to those sec- tions must require that intake structures reflect BTA, ibid., and Sections 301 and 306, in turn, call for consid- eration of costs. Section 301 requires the Environmental Protection Agency (EPA) to establish standards known as “effluent limitations” for existing point source discharges in two phases. In the first phase, applicable to all pollutants, EPA must establish effluent limitations based on the “best practicable control technology currently available” (BPT). 33 U.S.C. 1311(b)(1)(A). In establishing BPT, EPA must consider a number of specified factors, in- cluding “the total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application,” as well as “such other factors as the Administrator deems appropriate.” 33 U.S.C. 1314(b)(1)(B). In the second phase, EPA must establish effluent limitations for conventional pollutants based on the “best conventional pollution control technology” (BCT), and for toxic pollutants based on the “best available technology economically achievable” (BAT). 33 U.S.C. 1311(b)(2)(A), (E). In determining BCT, EPA must con- sider, »ter alia, “the relationship between the costs of 4 attaining a reduction in effluents and the effluent reduc- tion benefits derived” and “such other factors as the Administrator deems appropriate.” 33 U.S.C. 1314(b)(4)(B). In determining BAT, EPA must consider, inter alia, “the cost of achieving such effluent reduc- tion” and “such other factors as the Administrator deems appropriate.” 33 U.S.C. 1314(b)(2)(B). Section 306 directs EPA to establish performance standards for new sources based on the “best available demonstrated control technology” (BADT). 33 U.S.C. 1316(a)(1). In establishing BADT, EPA “shall take into consideration the cost of achieving such effluent reduc- tion, and any non-water quality, environmental! impact and energy requirements.” 33 U.S.C. 1316(b)(1)(B). The limitations and standards promulgated under Sections 301, 306, and 316(b) are implemented through National Pollutant Discharge Elimination System (NPDES) permits. Such permits are issued for terms of up to five years, either by States with approved NPDES programs or by EPA in States without such programs. See 33 U.S.C. 1342; 40 C.F.R. 125.90(a). 2. a. EPA first promulgated regulations implement- ing Section 316(b) in 1976. J.A. 38-49 (41 Fed. Reg. 17,387). In the preamble to those regulations, EPA stated that, while Section 316(b) does not “require” the agency to conduct a cost-benefit assessment, the agency would consider a technology’s “economic practicality” for individual facilities on a case-by-case basis. J.A. 42. The Fourth Circuit remanded those regulations to EPA for procedural reasons. Appalachian Power Co. v. Train, 566 F.2d 451 (1977). When EPA subsequently withdrew the remanded regulations, it directed permit- ting authorities to use their best professional judgment to determine BTA for each facility on a case-by-case 5 basis. See 40 C.F.R. 401.14. In 1977, EPA distributed a draft guidance document that proposed a process for determining BTA on a facility-specific basis. See Pet. App. 160a-161a. In 1977, EPA also issued a permitting decision and a General Counsel opinion explaining that it would not be “reasonable to interpret Section 316(b) as requiring use of technology whose cost is wholly disproportionate to the environmental benefit to be gained.” Jn re Pub. Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1977 WL 22370 (June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st Cir. 1978); accord Jn re Cen- tral Hudson Gas & Elec. Corp., Op. EPA Gen. Counsel, NPDES No. 63, 1977 WL 28250, at *8 (July 29, 1977). Thus, the framework in existence for more than 30 years has provided for permitting authorities to consider the relationship between costs and benefits to at least that extent in determining each facility’s BTA on a case-by- case basis. b. In 1995, EPA entered into a consent decree estab- lishing deadlines for proposing and taking final action on regulations implementing Section 316(b). That consent decree was later amended to provide for three “phases” of rulemaking addressing different categories of facili- ties. See Pet. App. 6a. EPA published a Phase I rule in 2001 66 Fed. Reg. 65,256. That rule governs new facilities that meet cer- tain threshold specifications, and it provides that closed- cycle recirculating cooling systems (which reuse with- drawn water) reflect 5TA for such facilities. /d. at 65,270-65,271. The Second Circuit largely upheld the Phase I rule. Riverkeeper, Inc. v. United States EPA, 258 F.3d 174, 181 (2004) (Riverkeeper /). The Phase I] rule, which is at issue here, establishes requirements for 6 intake structures at existing large power plants that meet certain criteria. Pet. App. 122a-593a (69 Fed. Reg. 41,576 (2004)). The Phase III Rule establishes require- ments for new offshore and coastal oil and gas facilities, existing manufacturing and industrial facilities, and smaller power plants. 71 Fed. Reg. 35,006 (2006). That rule is under review in the Fifth Circuit, which stayed its proceedings pending this Court’s disposition of this case. ConocoPhillips Co. v. EPA, No. 06-60662 (filed July 14, 2006). c. Inthe Phase II rule at issue here, EPA selected a combination of technologies to reflect BTA for existing large power plants. Pet. App. 224a-225a. Those technol- ogies include, am«ng others, relocation of intakes, fine mesh passive screens, double-entry single-exit traveling screens, velocity caps, larger intakes to decrease intake velocity, and barrier nets. See id. at 228a. EPA se- lected those technologies based on the various options’ “overall efficacy, availability, economic practicability, including economic impact and the relationship of costs with benefits, 2nd non-water quality environmental im- pacts, including energy impacts.” /d. at 253a. Based on the chosen technologies, EPA established national performance standards for reducing impinge- ment mortality (by 80%-95%) and entrainment (by 60%- 90%). 40 C.F.R. 125.94(b). EPA did not, however, re- quire the use of any specific technology, because it wanted to “provide[] a high degree of flexibility for ex- isting facilities to select the most effective and efficient approach and technologies for minimizing adverse envi- ronmental impact associated with their cooling water intake structures.” Pet. App. 226a. EPA considered treating closed cycle recirculating cooling systems, which it had determined to be BTA for 7 (new) Phase I facilities, as BTA for (existing) Phase II facilities. See Pet. App. 254a-26la. EPA rejected that alternative, however, because of its “generally high costs (due to conversions), the fact that other technologies approach the performance of this option, concerns for energy impacts due to retrofitting existing facilities, and other considerations.” /d. at 255a. EPA explained that: the cost of closed-cycle recirculating cooling towers for existing Phase II facilities was many times higher than for new Phase I facilities because of the need to retrofit facilities that had not been designed to use closed-cycle towers; such cooling towers were less energy efficient than EPA’s chosen alternatives; and, “{aJlthough not identical, the ranges of impingement and entrainment reduction are similar” under EPA’s chosen option and the closed-cycle alternative. /d. at 255a-261a; see id. at 368a-369a. The rule also allows a facility to request a variance resulting in a site-specific BTA determination if the fa- cility demonstrates that its cost of complying with the national performance standards is significantly greater than the environmental benefits. 40 C.F.R. 125.94(a)(5). EPA provided that flexibility because its “comparison of national costs to nationai benefits” underlying the na- _tionwide performance standards “may not be applicable to a specific site due to variations in (1) the performance of intake technologies and (2) characteristics of the waterbody in which the intake(s) are sited.” Pet. App. 250a. 3. After several parties petitioned for review, the petitions were consolidated in the Second Circuit. See Pet. App. la-94a. The court of appeals recognized that “Section 316(b) does not itself set forth * * * the spe- cific factors that the EPA must consider in determining 8 BTA.” /d. at 20a. Because Section 316(b) cross-refer- ences Sections 301 and 306, however, the court looked to the factors that EPA must consider in implementing various standards under those sections. /d. at 20a-23a. While those standards treat costs in different ways, and two of them specifically require a comparison of costs and benefits, the court concluded that Congress had manifested a clear intent in those other provisions “to move cost considerations under the CWA from a cost- benefit analysis to a cost-effectiveness one.” /d. at 22a. The court further asserted that, if Congress had in- tended to permit a comparison of costs and benefits un- der Section 316(b), it would have said so expressly in the statute. Jd. at 25a. The court of appeals then held that EPA may not engage in cost-benefit analysis, but instead “may per- missibly consider cost in two ways: (1) to determine what technology can be ‘reasonably borne’ by the indus- try and (2) to engage in cost-effectiveness analysis.” Pet. App. 26a. After consulting the definition of “cost- effectiveness” found in an Office of Management and Budget (OMB) circular that does not purport to imple- ment the CWA, the court explained that, in its view, per- missible cost-effectiveness review is limited to choosing “a less expensive technology that achieves essentially the same results” as the best technology that industry can reasonably bear. /d. at 23a n.10, 26a-28a. “For ex- ample, assuming the EPA has determined that power plants governed by the Phase II Rule can reasonably bear the price of technology that saves between 100-105 fish, the EPA, given a choice between a technology that costs $100 to save 99-101 fish and one that costs $150 to save 100-103 fish * * *, could appropriately choose the cheaper technology on cost-effectiveness grounds.” /d. 9 at 26a-27a. Thus, the court concluded, “the specified level of benefit is * * * a narrowly bounded range, within which the EPA may permissibly choose between two (or more) technologies that produce essentially the same benefits but have markedly different costs.” Jd. at 28a. , The court of appeals then remanded to EPA because, in the court’s view, “it is unclear whether the Agency improperly weighed the benefits and the costs of requir- ing closed-cycle cooling.” Pet. App. 32a-33a. Based on its cost-benefit holding, the court also invalidated a pro- vision of the Phase II rule that authorizes site-specific variances for facilities where costs of compliance with the nationwide performance standards would signifi- cantly exceed the environmental benefits. /d. at 56a- 60a. On the same basis, the court rejected an industry petitioner’s contention that the rule’s costs impermis- sibly exceed its benefits. Jd. at 27a n.13. While the court upheld EPA’s authority to express BTA as a range, it also concluded that the agency must “require facilities to choose the technology that permits them to achieve as much reduction of adverse environmental impacts as is technologically possible,” and the court directed EPA to reconsider its chosen ranges under that standard on remand. /d. at 43a-44a. The court of appeals addressed a number of other challenges to the rule as well. For example, the court held that EPA had not provided sufficient public notice concerning a provision that authorizes the operator of a facility to apply for a site-specific BTA determination in circumstances where the facility’s costs of complying with the nationwide performance standards would be significancly greater than the costs considered by EPA in establishing those standards. Pet. App. 5la-456a. The 10 court also upheld EPA’s determinations that Section 316(b) applies to existing as well as new facilities, id. at 72a-77a, and that the loss of aquatic organisms is an ad- verse environmental impact within the meaning of Sec- tion 316(b), id. at 7T8a-80a. SUMMARY OF ARGUMENT The agency’s gap-filling interpretation of Section 316(b) of the CWA is entitled to deference under Chev- ron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). The CWA is full of requirements governing the discharge of poilutants, and in many instances Congress specified, in detail, the factors that EPA must consider in implement- ing those requirements. In Section 316(b), in contrast, Congress included a single terse sentence concerning _ the intake of water, and assigned broad authority to the agency to determine how best to address that distinct issue. The court of appeals erred by attempting to micro-manage the agency’s exercise of its broad statu- tory discretion. A. The CWA requires that “the location, design, con- struction, and capacity of cooling water intake struc- tures reflect the dest technology available for minimiz- ing adverse environmental impact.” 33 U.S.C. 1326(b) (emphases added). Nothing in that statuterv standard speaks directly to the question whether, or co what ex- tent, EPA should consider the relationship between costs and benefits. The “best” way for pursuing a goal is not always the one that most single-mindedly pursues that goal at all costs. Instead, the best way often de- pends on other considerations. Moreover, whether a technology is “available” under Section 316(b) depends on its cost, as even the court of appeals acknowledged. And the term “minimizing” is 11 commonly used to refer to reductions that fall short of the greatest amount possible. Thus, the statutory stan- dard does not unambiguously require EPA to set BTA without regard to the relationship between costs and benefits. Nor does it specify the extent to which EPA may consider that relationship. Instead, the Act leaves that determination to EPA—the agency with expertise in making such determinations. B. Section 316(b) cross-references Sections 301 and 306 of the Act by specifying that standards established pursuant to those sections must require that intake structures reflect BTA. Those sections contain several “best” standards that govern the discharge of pollut- ants. Significantly, the Act expressly requires EPA to consider costs in promulgating all of those standards, and specifically requires EPA to consider the relation- ship between costs and benefits in promulgating two of them. Thus, while Section 316(b) sets forth a different standard than the “best” standards of Sections 301 and 306, and does not require EPA to follow those provisions as a model for determining BTA, the cross-reference to those provisions nonetheless suggests that EPA’s con- sideration of the relationship between costs and benefits is at least reasonable. Congress had good reason to confer greater discre- tion on the agency under Section 316(b) than under Sec- tions 301 and 306. Section 316(b) is unique among the CWA’s provisions in that it governs the intake of water, as opposed to the discharge of pollutants. Moreover, “Section 316(b) is something of an afterthought, having been added by the conference committee without sub- stantive comment.” Riverkeeper /, 358 F.3d at 186 n.12. Especially compared to the far more detailed provisions yoverning discharge limitations under Sections 301 and 12 306, Section 316(b)’s single sentence vests broad gap- filling authority in EPA to address the unique issue of intake restrictions. , C. The court of appeals’ error is confirmed not only by the text, structure, and history of the statute, but also by the extent to which the court attempted to micro- manage EPA’s consideration of various factors. The court held that EPA could undertake what the court called “cost-effectiveness” but not “cost-benefit” analy- sis—terms that appear nowhere in Section 316(b). While the court ultimately acknowledged that the agency could consider the relationship between costs and benefits, it held that the agency could do so only within an unspecified but “narrowly bounced” range. Pet. App. 28a. And the court held that, while cost-bene- fit analysis is impermissible, consideration of energy efficiency is permissible. Nothing in Section 316(b)’s single, terse sentence unambiguously draws those dis- tinctions; instead, the court effectively imposed its own preferences on the agency, in contravention of Chevron. D. The court of appeals also turned normal rules of statutory construction and agency deference on their head by asserting that agencies may consider the rela- tionship between costs and benefits only when Congress has clearly authorized them to do so. Under Chevron, if Congress has not directly spoken to the precise question at issue, the agency has leeway to adopt its own con- struction of the statute as long as it is reasonable. Thus, Congress’s silence or ambiguity on an issue confers dis- cretion, not limitation. In any event, the traditional in- terpretive principles discussed above make clear that, in this instance, Congress intended to confer especially broad discretionary authority on EPA. 13 E. The agency’s measured consideration of costs and benefits in. this rulemaking fell well within its discretion. Indeed, EPA’s selection of a nationwide performance standard based on multiple relevant factors may be per- missible even under the cramped standard created by the court of appeals. The agency found that the environ- mental respondents’ preferred technology had similar benefits, but far higher costs, than the performance standards selected by EPA, and that other factors such as energy efficiency and air quality also weighed in favor of EPA’s chosen performance standards. The agency further authorized a site-specific determination of BTA if a facility’s costs of compliance with the nationwide performance standards would be significantly greater than the benefits. Especially considering that BTA was historically determined on a facility-specific, best-pro- fessional-judgment basis, and the site-specific provision looks only to whether costs significantly exceed bene- fits, that provision falls comfortably within EPA’s dis- cretion. ARGUMENT THE ENVIRONMENTAL PROTECTION AGENCY MAY CON- SIDER COSTS IN RELATION TO BENEFITS IN DETERMIN- ING THE BEST TECHNOLOGY AVAILABLE FOR MINIMIZ- ING ADVERSE ENVIRONMENTAL IMPACT UNDER SEC- TION 316(b) Consideration of the costs of a certain action in rela- tion to its benefits is common in government regulation, as it is in human experience generally. In everyday life, ‘people routinely weigh costs against benefits in deciding whether to do something. If a bigger car would be safer than a smaller and less expensive one, a person must decide whether the extra expense (of both the larger car 14 and the subsequent gasoline purchases) is justified by the safety and other benefits. Similarly, if a better home fire alarm would cost more than a traditional one, or if expensive new insulation would be more fire-resistant than the insulation already installed in a house, the homeowner must decide whether the added safety bene- fit justifies the added cost. See Hon. Stephen G. Breyer, Breaking the Vicious Circle: Toward Effective Risk Regulation 16 (1994) (Vicious Circle). In numerous contexts, federal agencies engage in conceptually similar analyses by deciding whether a reg- ulatory alternative’s costs are justified by its benefits. To be sure, agencies do not always make cost-benefit analyses. And when they do such analyses, agencies consider costs and benefits in different ways, and give differing weight to costs and benefits. Sometimes costs and benefits are measured in monetary terms; other times they are compared qualitatively, as people do in everyday life. Sometimes an agency looks only at whe- ther the benefits exceed the costs; other times (as here) the agency considers the cost-benefit relationship in conjunction with other factors. In the latter circum- stance, after considering all relevant factors, an agency might decide te issue a regulation even though its costs are very high in proportion to its benefits. Or the agency might decide that the costs are too dispropor- tiomate to benefits to justify the proposal. But however an agency approaches the issue, consideration of costs and benefits is a common feature of agency decision- making, including in the environmental area. The question presented here is not whether or to what extent cost-benefit analysis is a good thing. In- stead, the question is whether Section 316(b) permits EPA to consider the relationship between costs and ben- 15 efits in determining the best technology available for minimizing the adverse environmental impact of cooling water intake structures. That question must be an- swered by applying the familiar two-step framework established by Chevron: first, “whether Congress has directly spoken to the precise question at issue”; and, if not, “whether the agency’s answer is based on a permis- sible construction of the statute.” 467 U.S. at 842-843. As explained below, Section 316(b) does not directly an- swer the question presented (or preclude EPA from con- sidering the relationship between costs and benefits), and EPA’s determination that it is appropriate to con- sider both costs and benefits in this context is an en- tirely permissible construction of the statute. A. The Statutery Text Does Not Unambiguously Prohibit Consideration Of The Relationship Between Costs And Benefits Section 316(b) requires that “the location, design, construction, and capacity of cooling water intake struc- tures reflect the best technology available for mintmiz- ing adverse environmental impact.” 33 U.S.C. 1326(b) (emphases added). That statutory standard does not directly speak to the question presented. Nor, to be clear, does it unambiguously preclude EPA from consid- ering the relationship between costs and benefits—espe- cially considering that Congress did not define any of the key statutory terms or otherwise specify the factors the agency may or must consider. See Pet. App. 20a (“Section 316(b) does not itself set forth * * * the spe- cific factors that the EPA must consider in determining BTA.”). The first key statutory term is “best.” Best is a rela- tive term capable of different meanings, and the “best” 16 way of pursuing a goal is not always the one that most single-mindedly achieves that goal at all costs. For ex- ample, the best way to drive home might not be the quickest and most direct route on a map. That route might be more dangerous than others, more prone to traffic jams, or more expensive (e.g., if it required pay- ment of a toll). Similarly, the best way to win a game does not typically entail violating the rules, even if cheating would improve one’s odds of winning, because other values matter as well. And the best way to catch fish is not necessarily the one that nets the most fish in the shortest period of time; to many, fly fishing has off- setting advantages. Moreover, Section 316(b) refers to the “best technol- ogy available for minimizing adverse environmental im- pact,” not the technology that is best at minimizing such impact. 33 U.S.C. 1326(b) (emphasis added). The word “for” is sometimes “[u]sed to indicate appropriateness or suitability.” American Heritage Dictionary 686 (4th ed. 2006) (American Heritage); accord VI Oxford English Dictionary 26 (2d ed. 1989). Thus, while an individual may be regarded as the best person at his trade, he might not be the best person for a particular job, de- pending on a range of considerations. As the Sixth Cir- cuit explained in construing another “best” standard in the CWA, the “requirement that EPA choose the ‘best’ technology does not mean that the chosen technology must be the best pollutant removal.” BP Exploration & Oil, Inc. v. United States EPA, 66 F.3d 784, 796 (1995); accord Citizens Coal Council v. United States EPA, 447 F.3d 879, 903 (6th Cir. 2006) (en bance). The statute also refers to the “best technology avail- able for minimizing adverse environmental impact.” 33 U.S.C. 1326(b) (emphases added). As the court of 17 appeals recognized, a technology’s availability under Section 316(b) depends on its cost. Pet. App. 24a; see also id. at 349a-350a. The court erred, however, in hold- ing that the statute unambiguously constrains EPA’s consideration of costs to whether a technology’s cost could be “reasonably borne by the industry.” /d. at 24a. Even considering the term “available” in isolation, many people would not think of a luxury item as being “avail- able” simply because its purchase would not bankrupt them. See Random House Dictionary of the English Language 142 (2d ed. 1987) (defining “available” to mean, among other things, “readily obtainable; accessi- ble”); American Heritage 125 (“| present and ready for use; at hand; accessible”). Indeed, assuming that the court of appeals did not intend tw require a jmat-shy-of- bankruptcy standard, but instead intended the “reason- ably borne” standard to be a more flexible one, that only underscores that Section 316(b)’s use of the term “avail- able” does not unambiguously preclude consideration of whether an option’s costs are warranted in light of other considerations. The statutory term “minimizing” is also significant. To be sure, that term most formally refers to “reduc- [ing] to the smallest possible amount, extent, size, or degree.” American Heritage 1119. But in common us- age, the terms “minimal” and “minimize” often refer to a lesser degree of reduction. See, e.g., ibid.; Black's Law Dictionary 1016 (8th ed. 2004) (“smallest accept- able or possible quantity”) (emphasis added). For exam- ple, if a person said that he was trying to minimize the risk of being hit by a car while crossing a street, he pre- sumably would not mean that he was staying inside his house at all times. Instead, the person would presum- ably mean that he was trying to reduce that risk consis- 1s tent with other practical considerations, including eco- nomic ones such as the need to travel to work, and thus, for example, was looking both ways before crossing a street. Accordingly, EPA determined that the appropr- ate “degree” of minimization may depend in part on “the relationship between costs and benefits.” Pet. App. 355a; see 40 C.F.R. 125.83 (“Minimize means to reduce to the smallest amount, extent, or degree reasonably possible.”) (emphasis added). The upshot is that the “best technology available for minimizing adverse environmental impact,” 33 U.S.C. 1326(b), is not unambiguously the one that achieves the greatest degree of environmental protection without regard to other considerations, including the relation- ship between costs and benefits. If it did, EPA might have to require a facility to devote billions of dollars to saving a relatively small number of organisms, even if those billions might be far better spent in other ways, including on more beneficial environmental objectives. Cf. Vicious Circle 18-19. Nothing in the statutory text compels that result. B. The Statutory Structure, Context, And History Confirm That EPA May Consider The Relationship Between Costs And Benefits Section 316(b) does not define its key terms or set forth the factors that EPA must or may consider in de- termining BTA. It does, however, cross-reterence Sec- tions 301 and 306 of the CWA by specifying that stan- dards established pursuant to those sections, which gov- ern the discharge of pollutants, must require that intake structures reflect BTA. 33 U.S.C. 1326(b). The only direct consequence of the cross-reference is a proce- dural] one: when anv standard under Section 301 or 306 33 public health” with “an adequate margin of safety,” 42 U.S.C. 7409(b)(1)—“unambiguously bars cost consider- ations from the NAAQS-setting process” when that pro- vision is “interpreted in its statutory and historical con- text and with appreciation for its importance to the CAA as a whole.” 531 U.S. at 471. Whitman is inapposite for a number of reasons. While that case applied a presumption against any con- sideration of costs in setting NAAQS, the court of ap- peals here held that EPA may consider costs in deter- mining BTA. See Pet. App. 26a. The question here is not (as it was in Whitman) whether EPA may consider costs at all in setting the relevant standaras, but whe- ther the agency’s consideration of costs may take the form of cost-benefit analysis. A presumption against any consideration of costs provides little if any support for the court of appeals’ decision permitting the agency to consider costs but greatly circumscribing its manner of doing so, which is presumably why the court of ap- peals itself did not rely on Whitman. In addition, the Whitman Court repeatedly empha- sized that its holding turned on the NAAQS’ centrality to the CAA. See 531 U.S. at 468, 469 n.1, 471. Thus, the Court did not disapprove the District of Columbia Cir- cuit’s cases holding that EPA may generally consider costs in the absence of an express directive to the con- trary. Instead, the Whitman Court emphasized that “Injone of the sections of the CAA in which the District of Columbia Circuit has found authority for the EPA to consider costs shares [Section] 109(b)(1)’s prominence in the overall statutory scheme.” /d. at 469 n.1 (citing, e.g., Michigan, 213 F.3d at 678-679). As explained above, Section 316(b)’s single sentence concerning the intake of water is by no means the centerpiece of the CWA. 34 Rather, it is “something of an afterthought, having been added by the conference committee without substantive comment,” Riverkeeper I, 358 F.3d at 186 n.12, that ad- dresses a unique issue separate and apart from the CWA’s normal focus on the discharge of pollutants into waters of the United States. See p. 23, supra. Thus, there is no basis for applying a presumption against weighing of costs and benefits in this case. b. Even if some presumption applied here, it would be overcome by the statutory text, context, and legisla- tive history discussed above. The text of Section 316(b)’s BTA standard, combined with its cross-refer- ence to Sections 301 and 306, provides a strong textual basis for concluding that cost-benefit analysis is permis- sible. Moreover, the terseness of the relevant statutory text, coupled with the circumstances of its enactment, make clear that Congress intended to confer especially broad authority on EPA to address the unique problems associated with intake of water by cooling towers. See pp. 22-23, supra. Thus, as the Second Circuit observed in Riverkeeper I, “[tlo the extent [Section 316(b)] is si- lent on issues to which other sections speak, [a court should} hesitate to draw the negative inference that the brevity of section 316(b) reflects an intention to limit the EPA’s authority rather than a desire te delegate signifi- cant rulemaking authority to the Agency.” 358 F.3d at 186 n.12. That understates the matter because such “hesitatlion]” is, of course, compelled by Chevron. See 467 U.S. at 842-843. 35 E. EPA’s Consideration Of Costs And Benefits In The Rulemaking At Issue Here Fell Well Within Its Discre- tion In the rulemaking here, EPA explained that “the relationship of costs to environmental benefits is an im- portant” consideration, because “EPA has long recog- nized that there should be some reasonable relationship between the cost of cooling water intake structure con- trol technology and the environmental benefits associ- ated with its use.” Pet. App. 253a. EPA also made clear, however, that the relationship between costs and benefits was not, by itself, determinative. Instead, se- lecting BTA “encompasses consideration of effective- ness, costs, non-water quality environmental impacts, feasibility issues and a host of other considerations.” /d. at 219a. EPA then considered costs along with other factors in selecting national BTA performance standards. See Pet. App. 255a-261a, 368a-369a. In addition, EPA autho- rized individual facilities to seek site-specific BTA deter- minations if, on a facility-specific basis, the costs of com- pliance with the national standard would be significantly greater than the benefits. 40 C.F.R. 125.94(a)(5)@i). In each instance, EPA’s consideration of costs and benefits was reasonable and fell comfortably within its statutory authority. 1. EPA based the national performance standards on its weighing of multiple relevant factors a. EPA determined BTA after analyzing the various options’ “overall efficacy, availability, economic practica- bility, including economic impact and the relationship of costs with benefits, and non-water quality environmental impacts, including energy impacts.” Pet. App. 253a. 36 EPA ultimately selected a combination of technologies to reflect BTA for existing large power plants. /d. at 224a-229a. Based on those technologies, EPA then es- tablished national performance standards for reducing impingement mortality (by 80%-95%) and entrainment (by 60%-90%), but did not require the use of any specific technology to achieve those standards. See 40 C.F.R. 125.94(b); Pet. App. 226a-227a. EPA rejected closed-cycle cooling technology as BTA “based on its generally high costs (due to conversions), the fact that other technologies approach the perfor- mance of this option, concerns for energy impacts due to retrofitting existing facilities, and other considerations.” Pet App. 255a. EPA had selected closed-cycle cooling technology as BTA for new facilities in the Phase I rule- making, but the agency determined that “retrofit{ting] existing systems is not the most cost-effective approach and at many existing facilities, retrofits may be impossi- ble or not economically practicable.” /bid. The agency explained that the cost of closed-cycle recirculating cool- ing towers for Phase IT facilities was many times higher than for Phase I facilities—at least $130-$200 million per tower, and probably more than that, with additional an- nuai operating costs of up to $20 million per facility, compared to annual costs as low as $170,000 for new facilities. Jd. at 255a-256a. In addition to considering costs, EPA stressed that mandatory closed-cycle cooling technology would impose an “energy penalty” because existing fossil-fuel power plants that installed that technology would produce be- tween 2.4% and 4% less electricity while consuming the same amount of coal. Construction of 20 additional plants could be required to make up for the lost produc- 37 tion, thereby increasing both financial costs and air pol- lution. Pet. App. 257a-258a. Finally, EPA compared the effectiveness of closed- cycle cooling technology with the option that it ulti- mately selected, and determined that, “[aJlthough not identical, the ranges of impingement and entrainment reduction are similar under both options.” Pet. App. 260a. After “consider[ing] this similarity in efficacy,” along with the other factors noted above, EPA deter- mined that “the total capital cost investment and associ- ated economic impact is simply too high * * * for EFA to be able to justify selecting cooling towers” as BTA. Id. at 261a; see id. at 260a, 368a-369a. b. EPA’s decisionmaking is fully consistent with its authority to consider costs and benefits under Section 316(b). As explained above, Section 316(b) permits EPA to consider the relationship between costs and benefits. Moreover, the agency’s analysis ultimately turned on the fact that its chosen option produces similar results to closed-cycle cooling technology at much lower cost and with less harm to the Nation’s energy supply and air quality. See Pet. App. 260a-261a, 368a-369a. Thus, the agency’s analysis may be permissible even under the cramped standard fashioned by the court of appeals. The court of appeals held that EPA may under- take what the court referred to as “cost-effectiveness” analysis by “choos[ing] [a] cheaper technology” even if that technology is somewhat less effective than a signifi- cantly more costly technology. Pet. App. 27a. The court also acknowledged that EPA may consider “energy effi- ciency or environmental impact.” /d. at 26a n.12. As discussed above, EPA undertook that type of analysis. While it is not clear whether the court of appeals would conclude that EPA had considered cost-effectiveness 38 only within a sufficiently “narrowly bounded range,” id. at 28a, or whether the court of appeals would ultimately agree with EPA’s balancing of the various other rele- vant factors, those matters fall well within EPA’s discre- tion, not the court of appeals’. Cf. id. at 32a-37a (re- manding for EPA to provide a further explanation of the basis for its decision).” Indeed, Riverkeeper I strongly suggested as much. In the Phase I Rule, EPA rejected a technology, known as dry cooling, that “dramatically reduc[ed) impinge- ment and entrainment” by “virtually eliminat[{ing] the need for cooling water.” Riverkeeper I, 358 F.3« at 194. EPA determined that, among other things, “dry .ooling costs more than ten times as much per year as closed- cycle wet cooling, but it is estimated to reduce water intake by only an additional 5 percent relative to once- through cooling.” Jd. at 194 (footnotes omitted). EPA also considered a variety of other factors, including en- ergy consumption and air emiss:ons. /d. at 195. Recog- nizing that EPA’s weighing of relevant factors falls within the agency’s “considerable discretion,” the court noted that it was “not well equipped * * * to meaning- fully weigh a 95 percent reduction in entrainment against .027 percent of new generating capacity, 300 pounds of mercury, and $443 million dollars.” Jd. at 196. * The court of appeals’ definition of the term “cost-effective” sows confusion because it differs from EPA’s use of that term. The court defined cost-effectiveness to refer to the least expensive method of achieving a narrowly bounded level of benefit. See Pet. App. 23a, 28a. In the rulemaking below, however, EPA’s cost-effectiveness analysis compared the incremental cost of a technology to its incremental benefits. Thus, while EPA explained that its decision was based in part on cost-effectiveness considerations, the agency also made clear that its cost-effectiveness analysis looked to the relationship between costs and benefits. See, e.g., id. at 260a-261a. 39 In reviewing EPA’s determination of BAT and BADT limitations under Sections 301 and 306, other courts of appeals have likewise observed that, because “Congress did not mandate any particular structure or weight for the many [relevant] factors,” Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1045 (D.C. Cir. 1978), EPA has “considerable discretion in evaluating the relevant fac- tors and determining the weight to be accorded to each.” Texas Oil & Gas Ass’n v. United States EPA, 161 F.3d 923, 928 (5th Cir. 1998); see NWF v. EPA, 286 F.3d 554, 570 (D.C. Cir. 2002); BP Exploration, 66 F.3d at 796.° 2. EPA permissibly authorized site-specific determina- tions in circumstances where costs significantly ex- ceed benefits In addition to establishing. nationwide performance standards, EPA authorized the operator of an individual facility to apply for a site-specific determination of BTA if the facility’s costs of complying with the national per- formance standards “would be significantly greater than the benefits.” 40 C.F.R. 125.94(a)(5)(ii). If the operator makes that showing with “reliable, scientifically valid” data, “[t]he [agency] must establish site-specific alterna- tive requirements * * * that achieve an efficacy that, in the judgment of the [agency], is as close as practica- ' ble to the applicable performance standards * * * without resulting in costs that are significantly greater * The court of appeals upheld EPA’s authority to express BTA as a range, but remanded EPA’s chosen ranges based on its view that Sec- tion 316(b) requires “as much reduction of adverse environmental! im- pacts as is technologically possible.” Pet. App. 43a. Because that hold- ing is based on the court’s erroneous construction of the Act, it should be reversed as well. 40 than the benefits at {the] facility.” /bid.; see Pet. App. 222a-224a." That provision, which is consistent with the historic practice of determining BTA on a facility-specific, best- professional-judgment basis, recognizes that site-spe- cific differences among facilities might warrant different results. The agency explained that its “comparison of national costs to national benefits may not be applicable to a specific site due to variations in (1) the performance. of intake technologies and (2) characteristics of the waterbody in which the intake(s) are sited.” Pet. App. 250a. “For example, there may be some facilities where the absolute numbers of fish and shellfish impinged and entrained is so minimal that the cost to achieve the re- quired percentage reductions would be significantly greater than the benefits of achieving the required re- ductions at that particular site.” /bid.; see id. at 355a- 356a. The court of appeals invalidated that provision based on its view that cost-benefit analysis is impermissible. Pet. App. 56a-60a. As explained above, that was error. The court underscored its error by taking particular exception to EPA’s determination that a cost-benefit variance might be appropriate if very few aquatic organ- isms were subject to impingement or entrainment in a particular waterbody, such that there would be little benefit in that waterbody from the use of more costly * EPA also authorized an application for a site-specific determination of BTA if a particular facility’s compliance costs “would be significantly greater than the costs considered by the Administrator * * * in establishing the applicable performance standards.” 40 C.F-.R. 125.94(a)(5)(i). The court of appeals remanded that provision for proce- dural reasons that are distinct from the question presented here. Pet. App. 49a-56a. 41 technology. See id. at 58a-€0a. The court determined that EPA may not consider water quality, and thus may not consider whether or to what extent a technology would have greater environmental benefits than a less expensive alternative. See ibid. As discussed above, however, Section 316(b) requires BTA for “minimizing adverse environmental impact,” and thus makes the en- vironmental benefit to be achieved an important consid- eration. See pp. 29-30, supra. Especially considering that EPA authorized a site-specific BTA only when the costs of complying with the nationwide performance standards would be “significantly greater” than the ben- efits, and that the agency nonetheless required a site- specific BTA to “achieve an efficacy that * * * is as close as practicable to the applicable performance stan- dards” consistent with the significantly-greater test, 40 C.F.R. 125.94(a)(5)(ii), EPA did not exceed its broad discretion under Section 316(b).° ° In the context of facility-specific BTA determinations, EPA’s long- standing view has been that it would be unreasonable to select as BTA a technology whose costs are wholly disproportionate to its benefits. See pp. 27-28, supra. For purposes of the site-specific variance provi- sion, EPA used a less stringent “significantly greater than” test in this rulemaking. 40 C.F.R. 125.94(a)(5)(ii). EPA’s legal interpretations have been consistent because the agency has not taken the position that the “wholly disproportionate” standard is the only permissible way to consider the relationship between costs and benefits; instead, EPA has opined that it would be unreasonable to ignore a disproportionality of that degree. See p. 27, supra. In addition, permit writers considered the “wholly disproportionate” test in conjunction with other factors as part of an overall best-professional-judgment determination. Whether to permit a variance from the new nationwide performance standards presents a different question, and EPA has long stressed the need for flexibility in determining BTA for any particular facility. E.g., Pet. App. 250a-251a; J.A. 42-45. The need for flexibility is particularly great for existing (Phase I1) facilities, because owners of newer facilities have far 42 CONCLUSION The judgment of the court of appeals should be re- versed with respect to the performance standards and the site-specific cost-benefit provision and the case re- manded. Respectfully submitted. GREGORY G. GARRE Acting Solicitor General RONALD J. TENPAS Assistant Attorney General EDWIN S. KNEEDLER Deputy Solicitor General PATRICIA K. HIRSCH Acting General Counsel RICHARD T. WITT Attorney Environmental Protection Agency Washington, D.C. 20460 DARYL JOSEFFER Assistant to the Solicitor General DAVID S. GUALTIERI CYNTHIA J. MORRIS JESSICA O'DONNELL Attorneys JULY 2008 more flexibility in building new technology into the initial design. J.A. 309; 68 Fed. Reg. 13,541 (2003); 67 Fed. Reg. 17,145 (2002). In addition, EPA determined that the more flexible “significantly greater than” standard was needed in this context to avoid unwarranted energy im- pacts, because the Phase II rule affects approximately 55% of the Na- tion's electric-generating capacity. 68 Fed. Reg. at 13,541; 67 Fed. Reg. at 17,145-17,146; J.A. 309. In any event, the court of appeals’ decision does not rest on the difference between the “wholly disproportionate” and “significantly greater than” standards; instead, the court errone- ously insisted on its own, distinct “cost effectiveness” test. See Pet. App. 26a; ef. id. at 55a-56a n.25 (noting the court’s “discomfort” with the “significantly greater than” test). APPENDIX 1. 33 U.S.C. 1311 provides in pertinent part: Effluent limitations (a) Illegality of pollutant discharges except in com- pliance with law Except as in compliance with this section and sec- tions 1312, 1316, 1317, 1328, 1342, and 1344 of this title, the discharge of any pollutant by any person shall be unlawful. (b) Timetable. for achievement of objectives In order to carry out the objective of this chapter there shall be achieved— (1)(A) not later than July 1, 1977, effluent limi- tations for point sources, other than publicly owned treatment works, (i) which shall require the applica- tion of the best practicable control technology cur- rently available as defined by the Administrator pur- suant to section 1314(b) of this title, or (ii) in the case of a discharge into a publicly owned treatment works which meets the requirements of subparagraph (B) of this paragraph, which shall require compliance with any applicable pretreatment requirements and any requirements under section 1317 of this title; and (B) for publicly owned treatment works in exis- tence on July 1, 1977, or approved pursuant to sec- tion 1283 of this title prior to June 30, 1974 (for which construction must be completed within four years of approval), effluent limitations based upon secondary treatment as defined by the Administrator pursuant to section 1314(d)(1) of this title; or, (la) 2a (C) not later than July 1, (977, any more strin- gent limitation, including those necessary to meet water quality standards, treatment standards, or schedules of compliance, established pursuant to any State law or regulations (under authority preserved by section 1370 of this title) or any other Federal law or regulation, or required to implement any applica- ble water quality standard established pursuant to this chapter. (2)(A) for pollutants identified in subparagraphs (C), (D), and (F) of this paragraph, effluent limita- tions for categories and classes of point sources, other than publicly owned treatment works, which (i) shall require application of the best available tech- nology economically achievable for such category or class, which will result in reasonable further prog- ress toward the national goal of eliminating the dis- charge of all pollutants, as determined in accordance with regulations issued by the Administrator pursu- ant to section 1314(b)(2) of this title, which such ef- fluent limitations shall require the elimination of dis- charges of all pollutants if the Administrator finds, on the basis of information available to him (includ- ing information developed pursuant to section 1325 of this ‘itle), that such elimination is technologically and economically achievable for a category or class of point sources as determined in accordance with regulations issued by the Administrator pursuant to section 1314(b)(2) of this title, or (ii) in the case of the introduction of a pollutant into a publicly owned treatment works which meets the requirements of subparagraph (B) of this paragraph, shall require compliance with any applicable pretreatment re- 3a quirements and any other requirement under section 1317 of this title; (B) Repealed. Pub. L. 97-117, § 21(b), Dec. 29, 1981, 95 Stat. 1632. (C) with respect to all toxic pollutants referred to in table 1 of Committee Print Numbered 95-30 of the Committee on Public Works and Transportation of the House of Representatives compliance with ef- fluent limitations in accordance with subparagraph (A) of this paragraph as expeditiously as practicable but in no case later than three years after the date such limitations are promulgated under section 1314(b) of this title, and in no case later than March 31, 1989; (D) for all toxic pollutants listed under para- graph (1) of subsection (a) of section 1317 of this title which are not referred to in subparagraph (C) of this paragraph compliance with effluent limitations in accordance with subparagraph (A) of this paragraph as expeditiously as practicable, but in no case later than three years after the date such limitations are promulgated under section 1314(b) of this title, and in no case later than March 31, 1989; (E) as expeditiously as practicable but in no case later than three years after the date such limitations are promulgated under section 1314(b) of this title, and in no case later than March 31, 1989, compliance with effluent limitations for categories and classes of point sources, other than publicly owned treatment works, which in the case of pollutants identified pur- suant to section 1314(a)(4) of this title shall require application of the best conventional pollutant contro] 4a technology as determined in accordance with regula- tions issued by the Administrator pursuant to section 1314(b)(4) of this title; and (F) for all pollutants (other than those subject to subparagraphs (C), (D), or (E) of this paragraph) compliance with effluent limitations in accordance with subparagraph (A) of this paragraph as expedi- tiously as practicable but in no case later than 3 years after the date such limitations are established, and in no case later than March 31, 1989. (3)(A) for effluent limitations under paragraph (1)(A)(i) of this subsection promulgated after Janu- ary 1, 1982, and requiring a level of control substan- tially greater or based on fundamentally different control technology than under permits for an indus- trial category issued before such date, compliance as expeditiously as practicable but in no case later than three years after the date such limitations are pro- mulgated under section 1314(b) of this title, and in no case later than March 31, 1989; and (B) for any effluent limitation in accordance with paragraph (1)(A)(i), (2)(A)(i), or (2)(E) of this subsection established only on the basis of section 1342(a)(1) of this title in a permit issued after Febru- ary 4, 1987, compliance as expeditiously as practica- ble but in no case later than three years after the date such limitations are established, and in no case later than March 31, 1989. (c) Modification of timetable The Administrator may modify the requirements of subsection (b)(2)(A) of this section with respect to any 5a point source for which a permit application is filed after July 1, 1977, upon a showing by the owner or operator of such point source satisfactory to the Administrator that such modified requirements (1) will represent the maxi- mum use of technology within the economic capability of the owner or operator; and (2) will result in reasonable further progress toward the elimination of the discharge of pollutants. (d) Review and revision of effluent limitations Any effluent limitation required by paragraph (2) of subsection (b) of this section shall be reviewed at least every five years and, if appropriate, revised pursuant to the procedure established under such paragraph. (e) All point discharge source application of effluent limitations Effluent limitations established pursuant to this sec- tion or section 1312 of this title shall be applied to all point sources of discharge of pollutants in accordance with the provisions of this chapter. (f) Illegality of discharge of radiological, chemical, or biological warfare agents, high-level radioactive waste, or medical waste Notwithstanding any other provisions of this chapter it shall be unlawful to discharge any radiological, chemi- cal, or biological warfare agent, any high-level radioac- tive waste, or any medical waste, into the navigable wa- ters. 6a (g) Modifications for certain nonconventional pollutants (1) General authority The Administrator, with the concurrence of the State, may modify the requirements of subsection (b)(2)(A) of this section with respect to the discharge from any point source of ammonia, chlorine, color, iron, and total phenols (4AAP) (when determined by the Administrator to be a pollutant covered by sub- section (b)(2)(F) of this section) and any other pollut- ant which the Administrator lists under paragraph (4) of this subsection. (2) Requirements for granting modifications A modification under this subsection shall be granted only upon a showing by the owner or opera- tor of a point source satisfactory to the Administra- tor that— (A) such modified requirements will result at a minimum in compliance with the require- ments of subsection (b)(1)(A) or (C) of this sec- tion, whichever is applicable; (B) such modified requirements will not re- sult in any additional requirements on any other point or nonpoint source; and (C) such modification will not interfere with the attainment or maintenance of that water quality which shall assure protection of public water supplies, and the protection and propaga- tion of a balanced population of shellfish, fish, and wildlife, and allow recreational activities, in and on the water and such modification will not Ta result in the discharge of pollutants in quantities which may reasonably be anticipated to pose an unacceptable risk to human health or the envi- ronment because of bioaccumulation, persistency in the environment, acute toxicity, chronic toxic- ity (including carcinogenicity, mutagenicity or teratogenicity), or synergistic propensities. (3) Limitation on authority to apply for subsection (c) modification If an owner or operator of a point source applies for a modification under this subsection with re- spect to the discharge of any pollutant, such owner or operator shall be eligible to apply for modifica- tion under subsection (c) of this section with respect to such pollutant only during the same time period as he is eligible to apply for a modification under this subsection. (4) Procedures for listing additional pollutants (A) General authority Upon petition of any person, the Administrator may add any pollutant to the list of pollutants for which modification under this section is authorized (except for pollutants identified pursuant to section 1314(a)(4) of this title, toxic pollutants subject to section 1317(a) of this title, and the thermal compo- nent of discharges) in accordance with the provi- sions of this paragraph. 8a (B) Requirements for listing (i) Sufficient information The person petitioning for listing of an addi- tional pollutant under this subsection shall sub- mit to the Administrator sufficient information to make the determinations required by this subparagraph... (ii) Toxic criteria determination The Administrator shall determine whether or not the pollutant meets the criteria for listing as a toxic pollutant under section 1317(a) of this title. (iii) Listing as toxic pollutant If the Administrator determines that the pollutant meets the criteria for listing as a toxic pollutant under section 1317(a) of this title, the Administrator shall list the pollutant as a toxic pollutant under section 1317(a) of this title. (iv) Nonconventional criteria determination If the Administrator determines that the pollutant does not meet the criteria for listing as a toxic pollutant under such section and deter- mines that adequate test methods and sufficient data are available to make the determinations required by paragraph (2) of this subsection with respect to the pollutant, the Administrator shall add the pollutant to the list of pollutants speci- fied in paragraph (1) of this subsection for which modifications are authorized under this subsec- tion. 9a (C) Requirements for filing of petitions A petition for listing of a pollutant under this paragraph— (i) must be filed not later than 270 days af- ter the date of promulgation of an applicable effluent guideline under Section 1314 of this ti- tle; (ii) may be filed before promulgation of such guideline; and (iii) may be filed with an application for a modification under paragraph (1) with respect to the discharge of such pollutant. (D) Deadline for approval of petition A decision to add a pollutant to the list of pollut- ants for which modifications under this subsection are authorized must be made within 270 days after the date of promulgation of an applicable effluent guideline under section 1314 of this title. (E) Burden of proof The burden of proof for making the determina- tions under subparagraph (B) shall be on the peti- tioner. (5) Removal of pollutants The Administrator may remove any pollutant from the list of pollutants for which modifications are authorized under this subsection if the Administrator determines that adequate test methods and sufficient data are no longer available for determining whether 10a or not modifications may be granted with respect to such pollutant under paragraph (2) of this subsection. * *£* * K 2. 33 U.S.C. 1314 provides in pertinent part: Information and guidelines (a) Criteria development and publication * * *£ * (4) The Administrator shall, within 90 days after December 27, 1977, and from time to time thereafter, publish and revise as appropriate information identify- ing conventional pollutants, including but not limited to, pollutants classified as biological oxygen demanding, _ suspended solids, fecal coliform, and pH. The thermal component of any discharge shall not be identified as a conventional pollutant under this paragraph. * *£+ *£ K& (b) Effluent limitation guidelines For the purpose of adopting or revising effluent limitations under this chapter the Administrator shall, after consultation with appropriate Federal and State agencies and other interested persons, publish within one year of October 18, 1972, regulations, providing guidelines for effluent limitations, and, at least annually thereafter, revise, if appropriate, such regulations. Such regulations shall— (1)(A) identify, in terms of amounts of constitu- ents and chemical, physical, and biological charac- teristics of pollutants, the degree of effluent reduc- tion attainable through the application of the best practicable control technology currently available lla for classes and categories of point sources (other than publicly owned treatment works); and (B) specify factors to be taken into account in determining the control measures and practices to be applicable to point sources (other than publicly owned treatment works) within such categories or classes. Factors relating to the assessment of best practicable control technology currently avail- able to comply with subsection (b)(1) of section 1311 of this title shall include consideration of the total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application, and shall also take into account the age of equipment and facilities involved, the pro- cess employed, the engineering aspects of the appli- cation of various types of control techniques, pro- cess changes, non-water quality environmental im- pact (including energy requirements), and such other factors as the Administrator deems appropri- ate; (2)(A) identify, in terms of amounts of constitu- ents and chemical, physical, and biological charac- teristics of pollutants, the degree of effluent reduc- tion attainable through the application of the best control measures and practices achievable including treatment techniques, process and procedure inno- vations, operating methods, and other alternatives for classes and categories of point sources (other than publicly owned treatment works); and (B) specify factors to be taken into account in determining the best measures and practices avail- able to comply with subsection (b)(2) of section 1311 of this title to be applicable to any point source 12a (other than publicly owned treatment works) within such categories or classes. Factors relating to the assessment of best available technology shall take into account the age of equipment and facilities in- volved, the process employed, the engineering as- pects of the application of various types of control techniques, process changes, the cost of achieving such effluent reduction, non-water quality environ- mental impact (including energy requirements), and such other factors as the Administrator deems ap- propriate; (3) identify control measures and practices avail- able to eliminate the discharge of pollutants from categories and classes of point sources, taking into account the cost of achieving such elimination of the discharge of pollutants; and (4)(A) identify, in terms of amounts of constitu- ents and chemical, physical, and biological charac- teristics of pollutants, the degree of effluent reduc- tion attainable through the application of the best conventional pollutant control technology (including measures and practices) for classes and categories of point sources (other than publicly owned treat- ment works); and (B) specify factors to be taken into account in determining the best conventional pollutant control technology measures and practices to comply with section 1311(b)(2)(E) of this title to be applicable to any point source (other than publicly owned treat- ment works) within such categories or classes. Fac- tors relating to the assessment of best conventional pollutant control technology (including measures 13a and practices) shall include consideration of the rea- sonableness of the relationship between the costs of attaining a reduction in effluents and the effluent reduction benefits derived, and the comparison of the cost and level of reduction of such pollu- tants from the discharge from publicly owned treat- ment works to the cost and level of reduction of such pollutants from a class or category of indus- trial sources, and shall take into account the age of equipment and facilities involved, the process employed, the engineering aspects of the applica- tion of various types of control techniques, process changes, non-water quality environmental impact (including energy requirements), and such other factors as the Administrator deems appropriate. 3. 33 U.S.C. 1316 provides: National standards of performance (a) Definitions For purposes of this section: (1) The term “standard of performance” means a standard for the control of the discharge of pollutants which reflect the greatest degree of effluent reduction which the Administrator determines to be achievable through application of the best available demonstrated control technology, processes, operating methods, or other alternatives, including, where practicable, a stan- dard permitting no discharge of pollutants. (2) The term “new source” means any source, the con- struction of which is commenced after the publication of proposed regulations prescribing a standard of perfor- mance under this section which will be applicable to such 14a source, if such standard is thereafter promulgated in accordance with this section. * *+ * * * (b) Categories of sources; Federal standards of perfor- mance for new sources (1)(A) The Administrator shall, within ninety days af- ter October 18, 1972, publish (and from time to time thereafter shall revise) a list of categories of sources, which shall, at the minimum, include: pulp and paper mills; paperboard, builders paper and board mills; meat product and rendering processing; dairy product processing; grain mills; canned and preserved fruits and vegetables process- Ing; canned and preserved seafood processing; sugar processing; textile mills; cement manufacturing; feedlots; electroplating; organic chemicals manufacturing; inorganic chemicals manufacturing; plastic and synthetic materials manufacturing; soap and detergent manufacturing; 15a fertilizer manufacturing; petroleum refining; iron and steel manufacturing; nonferrous metals manufacturing; phosphate manufacturing; steam electric powerplants; ferroalloy manufacturing; leather tanning and finishing; glass and asbestos manufacturing; rubber processing; and timber products processing. (B) As soon as practicable, but in no case more than one year, after a category of sources is included in a list under subparagraph (A) of this paragraph, the Adminis- trator shall propose and publish regulations establishing Federal standards of performance for new sources within such category. The Administrator shall afford interested persons an opportunity for written comment on such proposed regulations. After considering such comments, he shall promulgate, within one hundred and twenty days after publication of such proposed regula- tions, such standards with such adjustments as he deems appropriate. The Administrator shall, from time to time, as technology and alternatives change, revise such standards following the procedure required by this subsection for promulgation of such standards. Stan- dards of performance, or revisions thereof, shall become effective upon promulgation. In establishing or revising Federal standards of performance for new sources un- der this section, the Administrator shall take into con- 16a sideration the cost of achieving such effluent reduction, and any non-water quality, environmental impact and energy requirements. (2) The Administrator may distinguish among class- es, types, and sizes within categories of new sources for the purpose of establishing such standards and shall consider the type of process employed (including wheth- er batch or continuous). (3) The provisions of this section shall apply to any new source owned or operated by the United States. x K- KK KK 4. 33 U.S.C. 1326 provides: Thermal discharges (a) Effluent limitations that will assure protection and propagation of balanced, indigenous population of shellfish, fish, and wildlife With respect to any point source otherwise subject to the provisions of section 1311 of this title or section 1316 of this title, whenever the owner or operator of any such source, after opportunity for public hearing, can demon- strate to the satisfaction of the Administrator (or, if ap- propriate, the State) that any effluent limitation pro- pesed for the control of the thermal component of any discharge from such source will require effluent limita- tions more stringent than necessary to assure the pro- jection and propagation of a balanced, indigenous popu- lation of shellfish, fish, and wildlife in and on the body of water into which the discharge is to be made, the Ad- ministrator (or, if appropriate, the State) may impose an effluent limitation under such sections for such plant, with respect to the thermal component of such discharge l7a (taking into account the interaction of such thermal com- ponent with other pollutants), that will assure the pro- tection and propagation of a balanced, indigenous popu- lation of shellfish, fish, and wildlife in and on that body of water. (b) Cooling water intake structures Any standard established pursuant to section 1311 of this title or section 1316 of this title and applicable to a point source shall require that the location, design, con- struction, and capacity of cooling water intake struc- tures reflect the best technology available for minimiz- ing adverse environmental impact. (c) Period of protection from more stringent effluent limitations following discharge point source modifi- cation commenced after October 18, 1972 Notwithstanding any other provision of this chapter, any point source of a discharge having a thermal compo- nent, the modification of which point source is com- menced after October 18, 1972, and which, as modified, meets effluent limitations established under section 1311 of this title or, if more stringent, effluent limitations established under section 1313 of this title and which effluent limitations will assure protection and propaga- tion of a balanced, indigenous population of shellfish, fish, and wildlife in or on the water into which the dis- charge is made, shall not be subject to any more strin- gent effluent limitation with respect to the thermal com- ponent of its discharge during a ten year period begin- ning on the date of completion of such modification or during the period of depreciation or amortization of such facility for the purpose of section 167 or 169 (or both) of title 26, whichever period ends first. 18a 5. 33 U.S.C. 1362 provides in pertinent part: Definitions Except as otherwise specifically provided, when used in this chapter: * *+ * * * (13) The term “toxic pollutant” means those pollut- ants, or combinations of pollutants, including disease- causing agents, which after discharge and upon expo- sure, ingestion, inhalation or assimilation into any or- ganism, either directly from the environment or indi- rectly by ingestion through food chains, will, on the ba- sis of information available to the Administrator, cause death, disease, behavioral abnormalities, cancer, genetic mutations physiological malfunctions (including mal- functions in reproduction) or physical deformations, in such organisms or their offspring. 6. 40 C.F.R. 125.83 provides in pertinent part: W*... special definitions apply to this subpart? * * &* & * Minimize means to reduce to the smallest amount, extent, or degree reasonably possible. 19 is made applicable to a point source with an intake struc- ture, such as in an NPDES permit, the standard must also reflect BTA limits. Cf. Pet. App. 5a. Nonetheless, the cross-reference to Sections 301 and 306 is informa- tive, especially because those sections include numerous other “best” standards. See id. at 6a, 20a; Riverkeeper 1, 358 F.3d at 186; Pet. App. 154a, 349a-350a. As discussed below, Congress specified the factors that EPA must consider in promulgating each of the various “best” standards found in Sections 301 and 306. In doing so, it expressly required consideration of costs for all of those standards, and specifically required con- sideration of the relationship between costs and benefits for two of them. The express statutory mandate to con- sider costs under the cross-referenced sections strongly supports EPA’s interpretation that consideration of the relationship between costs and benefits is permissible under Section 316(b). Moreover, Congress's decision to specify the factors that EPA must consider under the “best” standards for the discharge of pollutants under Sections 301 and 306, but not under the different “best” standard for the intake of water under Section 316(b), confirms that Congress intended to grant broad discre- tion to the agency to interpret and implement Section 316(b)’s terse and unique provision. I. Section 316(b) cross-references provisions that re- quire consideration of costs, including comparison of costs and benefits The cross-referenced Section 301 directs EPA to promulgate “effluent limitations for point sources * * * which shall require the application of the best practica- ble control technology currently available” (BPT). 33 U.S.C. 1311(b)(1)(A). Congress specified that, in es- 20 tablishing BPT, EPA must consider, among other fac- tors, “the total cost of application of technology in rela- tion to the effluent reduction benefits to be achieved from such application.” 33 U.S.C. 1314(b)(1)(B). Deter- mination of BPT, therefore, requires “weighing benefits and costs.” EPA v. National Crushed Stone Ass’n, 449 U.S. 64, 76 (1980). While the BPT standards were to provide the first effluent limitations for «il pollutants, Congress directed EPA to promulgate more stringent effluent limitations thereafter. National Crushed Stone, 449 U.S. at 69-70 & n.9. For conventional pollutants, Congress required EPA to promulgate effluent limitations based on the “best conventional pollution control technology” (BCT). 33 U.S.C. 1311(b)(2)(E); see 33 U.S.C. 1314(a)(4) (grant- - ing EPA authority to identify conventional pollutants); see also National Crushed Stone, 449 U.S. at 70 n.9. In determining BCT, EPA must consider, among other factors, “the relationship between the costs of attaining a reduction in effluents and the effluent reduction bene- fits derived.” 33 U.S.C. 1314(b)(4)(B). Thus, Congress again expressly required consideration of the relation- ship between costs and benefits. See, e.g., American Paper Inst. v. United States EPA, 660 F.2d 954, 961 (4th Cir. 1981). For toxic and some other non-conventional pollut- ants, Congress required limitations that “require appli- cation of the best available technology economically achievable * * * which will result in reasonable fur- ther progress toward the national goal of eliminating the discharge of all pollutants” (BAT), unless EPA deter- mines that the complete elimination of pollutant dis- charges is “technologically and economically achievable” for a category or class of point sources. 33 U.S.C. 21 1311(b)(2)(A), (C), (D), (F); see 33 U.S.C. 1362(13) (de- fining the term “toxic pollutant”); see also National Crushed Stone, 449 U.S. at 70-71. In the latter situation, EPA is to require the elimination of such discharges. 33 U.S.C. 1311(b)(2)(A). Congress specified that, in pro- mulgating BAT standards, EPA “shall take into ac- count” a number of factors, including “the cost of achiev- ing such effluent reduction * * * and such other fac- tors as the Administrator deems appropriate.” 33 U.S.C. 1314(b)(2)(B). Congress further authorized EPA to promulgate standards less stringent than BAT, but at least as stringent as BPT, for certain non-conventional pollutants. See 33 U.S.C. 1311(g). While the various Section 301 standards govern ex- isting sources, Section 306 requires EPA to promulgate standards of performance for new sources. 33 U.S.C. 1316(b)(1)(B). Those standards must “reflect the great- est degree of effluent reduction which the Administrator determines to be achievable through application of the best available demonstrated control technology, pro- cesses, operating methods, or other alternatives, includ- ing, where practicable, a standard permitting no dis- charge of pollutants” (BADT). 33 U.S.C. 1316(a)(1). In establishing BADT, EPA “shall take into consideration the cost of achieving such effluent reduction, and any non-water quality, environmental impact and energy requirements.” 33 ''.S.C. 1316(b)(1)(B) (emphasis ad- ded). The bottom line is that each of the cross-referenced provisions requires consideration of costs, and two of them (BPT and BCT) specifically require comparison of costs and benefits. Section 316(b)’s cross-reference to those provisions therefore reinforces the conclusion that it does not unambiguously preclude EPA from consider- 22 ing the relationship between costs and benefits. Pet. App. 345a-350a. Indeed, considering that standards established pursuant to Sections 301 and 306 must re- quire that intake structures reflect BTA, and that all of the relevant standards and limitations are set forth in the same NPDES permit for a facility, see 33 U.S.C. 1326(b), it would make little sense for EPA to have less flexibility in determining BTA than in determining the other standards. 2. Congress conferred broad authority on EPA to deter- mine how best to consider costs, benefits, and other relevant factors a. Especially measured against the detailed provi- sions governing the factors that EPA must consider in promulgating effluent limitations under Sections 301 and 306, the single sentence set forth in Section 316(b) confers broad authority on the agency to determine both which factors to consider and how to consider them. Section 316(b) sets forth a different standard (BTA) than the other sections. And nothing in the Act evinces an intent to require EPA to treat BTA like—or differ- ently than—any one of the Section 301 or 306 effluent limitations. Nor does Section 316(b) evince any intent to require EPA to consider only the factors listed in one or another of those sections, or to consider any given factor in precisely the same manner that it considers that fac- tor in determining another of the “best” standards. In- stead, as the Second Circuit itself observed in River- keeper I, the fact that Congress set forth lists of factors that EPA must consider in implementing the various “best” standards of Sections 301 and 306, but conspicu- ously did not do so in Section 316(b), confirms the 23 breadth of the discretion left to EPA. 358 F.3d at 187; see Pet. App. 156a-157a. b. Congress had good reason to confer greater dis- cretion on EPA under Section 316(b) than under Sec- tions 301 and 306. Section 316(b) is unique among the CWA’s provisions in that it governs the intake of water, as opposed to the discharge of pollutants. Because “in- take structures are in a class by themselves,” River- keeper I, 358 F.3d at 193, there is no reason to presume that the same standards that govern the discharge of pollutants should also govern the intake of water. In- deed, as the court of appeals observed, “Section 316(b) is something of an afterthought, having been added by the conference committee without substantive com- ment.” Jd. at 186n.12. Thus, as the Second Circuit ex- plained in Riverkeeper I, the “brevity” of Section 316(b), combined with the “paucity of legislative history, when measured against the volumes of drafts and speeches devoted to other aspects of the 1972 amendments,” sug- gests that Congress “desire[d] to delegate significant rulemaking authority to the Agency.” /bid. Moreover, what little legislative history there is sup- ports EPA’s interpretation. A legislator explained that “(t]he reference here to ‘best technology available’ is intended to be interpreted to mean the best technology available commercially at an economically practicable cost.” 118 Cong. Rec. 33,762 (1972) (statement of Rep. Clausen) (emphasis added). Even the court of appeals acknowledged that “practicable” connotes cost-benefit considerations. Pet. App. 30a-31a. c. The court of appeals relied on what it believed to be a clear intent on the part of Congress to abolish cost- benefit analysis after 1989 because, in the court’s view, EPA may not undertake such analysis in determining 24 either BAT or BADT, and BAT replaced BPT in 1989. Pet. App. 20a-23a. As discussed above, Congress set forth lists of factors that EPA “shall” consider in deter- mining BAT and BADT. 33 U.S.C. 1314(b)(1)(B); 33 U.S.C. 1316(b)(1)(B); see pp. 19-21, supra. Without ex- planation, the court of appeals treated those lists as set- ting forth the only factors that EPA “could consider.” Pet. App. 2la. That interpretation is contradicted by the statute itself with respect to BAT, because Section 304(b)(2)(B), after identifying certain specific factors that EPA “shall” take into account, also authorizes con- sideration of “such other factors as the Administrator deems appropriate.” 33 U.S.C. 1314(b)(2)(B). Assuming for the sake of argument that cost-benefit analysis is not one of the other factors that EPA may consider in determining BAT, however, the court of ap- peals’ conclusion does not follow. Cf. National Crushed Stone, 449 U.S. at 71. Even if no Section 301 or 306 ef- fluent limitations could be based in part on cost-benefit analysis after 1989, that would manifest only an intent to preclude cost-benefit analysis for discharge limita- tions under Sections 301 and 306; it would not unambig- uously reflect an intent to preclude cost-benefit analysis for intake limitations under the different Section 316(b) standard. Moreover, the court of appeals erred in assuming that all Section 301 effluent limitations after 1989 are BAT limitations. As discussed above, the BAT standard is inapplicable to conventional pollutants, which are gen- erally governed instead by the BCT standard. 33 U.S.C. 1311(b)(2)(E). In determining BCT, SPA must consider “the reasonableness of the relationship between the costs of attaining a reduction in effluents and the efflu- ent reduction benefits derived.” 33 U.S.C. 1314(b)(4)(B). 25 If the incremental costs of more stringent technologies are not reasonable in light of their incremental benefits, EPA will set BCT effluent limitations at the BPT level. 51 Fed. Reg. 24,976 (1986). Thus, since 1989, EPA has continued to adopt BPT standards for some conventional pollutants. See Chemical Mfrs. Ass’n v. United States EPA, 870 F.2d 177, 206-207 (5th Cir.), decision clarified on reh’g by 885 F.2d 253 (1989), cert. denied, 495 U.S. 910 (1990). And Congress authorized EPA to set efflu- ent limitations for certain non-conventional pollutants at a level less stringent than BAT but at least as stringent as BPT. 33 U.S.C. 1311(g). The court of appeals there- fore erred in assuming that the BAT standard governs all Section 301 effluent limitations after 1989. Nor is there any basis for the court of appeals’ con- clusion that the Act unambiguously requires EPA to treat BTA as being more equivalent to BAT and BADT than to BPT. The court of appeals stated that BTA is “linguistically similar” to BAT but not BPT. Pet. App. 23a. But BTA, BPT, and BAT all include the terms “best,” “technology,” and “available,” and neither BPT nor BAT goes on to consider minimizing adverse envi- ronmental impacts, as BTA does. See 33 U.S.C. 1311(b)(1)(A) and (2)(A). The court of appeals suggested that the BPT standard is inapposite because the word “practicable” appears in BPT but not BTA. Pet. App. 3la. One could argue with equal force, however, that BAT is inapposite because the phrase “economically achievable” appears in BAT but not BTA. Accordingly, the court of appeals erred in concluding that the Act unambiguously treats BTA like BAT (but not BPT) for this purpose. The only sensible conclusion one can draw from the differences in jargon used by Congress is that all of the different “best” standards are indeed different 26 and susceptible to differing interpretations in their own right, such that none of the others controls the meaning of BTA. The BADT standards promulgated under Section 306 provide a poor analogy for an additional reason: they govern only new sources, while Section 316(b) governs both new and existing sources. See 33 U.S.C. 1316(b)(1)(B). Congress generally imposes stricter re- quirements on new sources because it is generally more feasible and less expensive for technology to be installed in new sources when they are first being built than for existing facilities to be reconfigured to incorporate that technology. See, e.g., CPC Int'l, Inc. v. Train, 540 F.2d 1329, 1341 (8th Cir. 1976), cert. denied, 480 U.S. 966 (1977); American Iron & Steel Inst. v. EPA, 526 F.2d 1027, 1058 (3d Cir. 1975), amended, 560 F.2d 589 (1977). The applicability of Section 316(b)’s BTA standard to both new and existing sources demonstrates not only that the BADT analogy is inapposite, but also that flexi- bility is needed in the application of the BTA standard. Section 316(b)’s broader coverage also provides another basis for Congress’s decision to confer greater discre- tion on EPA to implement Section 316(b) than to imple- ment the Section 301 and 306 standards. C. The Court Of Appeals Usurped EPA’s Discretion By Im- posing Extra-Textual Constraints On EPA’s Consider- ation Of Various Factors Because Section 316(b) does not “directly [speak] to the precise question at issue,” Chevron, 467 U.S. at 842, and Congress granted EPA broad rulemaking authority to administer the Act, see 33 U.S.C. 1361(a), EPA’s rea- sonable interpretation of the ambiguous statutory text is entitled to deference, Chevron, 467 U.S. at &43. 27 EP4A’s authority includes “the formulation of policy and the making of rules to fill any gap left, implicitly or ex- plicitly, by Congress.” Jbid. (quoting Morton v. Ruiz, 415 U.S. 199, 231 (1974)). EPA has long construed Section 316(b) to permit consideration of the relationship between costs and ben- efits. Cf. Barnhart v. Walton, 535 U.S. 212, 219-220 (2002). As early as 1977, EPA issued a permitting deci- sion and a General Counsel opinion that explained that, while Section 316(b) does not require a formal cost-ben- efit analysis, it would not be “reasonable to interpret Section 316(b) as requiring use of technology whose cost is wholly disproportionate to the environmental benefit to be gained.” In re Pub. Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1977 WL 22370 (E.P.A. June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st Cir. 1978); accord Jn re Cent. Hudson Gas & Elec. Corp., Op. EPA Gen. Counsel, NPDES No. 63, 1977 WL 28250, at *8 (E.P.A. July 29, 1977). Thus, the legal framework followed for more than 30 years has provided for EPA and state permitting authorities to consider the relationship between costs and benefits to at least that extent in making individual permitting deci- sions. See, e.g., /n re Pub. Serv. Co. of N.H. (Seabrook Station, Units 1 and 2), No. 76-7, 1978 WL 21140 (E.P.A. Aug. 4, 1978) (finding that an alternative’s costs would be wholly disproportionate to its benefits), aff’d, Seacoast Anti-Pollution League v. Costle, 597 F.2d 306, 311 (1st Cir. 1979) (upholding the agency’s consideration of costs); C.A. App. 492 (EPA determination, as part of 1988 permitting decision, that closed-cycle cooling tow- ers were not BTA for a facility because the costs would he “wholly disproportionate to the environmental bene- fit”); id. at 351 (EPA determination, as part of 1986 per- 28 mitting decision, that an alternative was not BTA be- cause its costs were “wholly disproportionate to antici- pated benefits”); J.A. 140 (describing “measures that have been required” by EPA when other technologies would have “wholly disproportionate” costs). While the court of appeals recited deference princi- ples, Pet. App. 16a-17a, the court sharply departed from those principles. The degree of that departure is under- scored not only by the implausibility of the court’s con- tention that Section 316(b) unambiguously precludes consideration of the relationship between costs and ben- efits, but also by the extent to which the court attempted to micro-manage EPA’s decisionmaking by establishing rules that cannot be found anywhere in the Act. The court concluded, for example, that EPA may consider costs as part of “cost-effectiveness” but not “cost-bene- fit” analysis—terms that appear nowhere in Section 316(b). See zd. at 24a, 26a. After consulting the defini- tion of “cost-effectiveness” found in an OMB circular that does not purport to interpret Section 316(b), the court proclaimed that EPA could adopt a significantly cheaper technology that would save 99-101 fish instead of 100-103 fish. Jd. at 22a-23a & n.10, 27a. While it is not clear what result the court of appeals would reach if five or ten additional fish were potentially affected in- stead of one or two, the point for present purposes is that the court of appeals’ approach contravenes the prin- ciples of Chevron by usurping the agency’s role of con- struing and filling in gaps in an ambiguous statute. As this Court has made clear, “a court may not substitute its own construction of a statutory provision for a rea- sonable interpretation made by the administrator of an agency.” Chevron, 467 U.S. at 844. 29 Indeed, by permitting the agency to weigh costs against at least one or two fish, the court of appeals es- sentially permitted EPA to consider the relationship between costs and benefits, but only in the most extreme cases. Even on its own terms, therefore, the court of appeals’ decision lacks a principled grounding in the statutory text, because nothing in the Act unambigu- ously permits such consideration but limits it in the manner the court of appeals imposed. Moreover, the court of appeals agreed to let EPA consider other practical factors, such as energy effi- ciency and countervailing environmental effects. Pet. App. 26a-27a n.12. While those factors are important, the lines drawn by the court of appeals are by no means required by the Act. The statutory standard makes no more reference to a technology’s energy efficiency than to the relationship between costs and benefits. Indeed, energy efficiency could be viewed as a cost issue, be- cause a power plant’s less efficient operation due to the use of new technology increases the cost of producing the same amount of energy. Yet the court of appeals permitted EPA to weigh energy efficiency but not costs against benefits. The court of appeals also was of the view that BTA _must be “technology-driven,” and that a standard se- lected based in part on cost-effectiveness analysis (or energy efficiency) is technology-driven, while a standard based in part on cost-benefit analysis is not. Pet. App. 24a. There is no statutory basis for those distinctions. Once one recognizes (as the court of appeals did) that EPA has discretion to consider factors other than tech- nology, the Act provides no basis for the court of ap- peals’ picking and choosing among such factors, espe- cially among factors that FPA is expressly required to 30 consider under one or more of the cross-referenced standards in Sections 301 and 306. That is especially true with respect to cost-benefit analysis. Section 316(b) does not require the use of technology for technology’s sake. Instead, it expressly looks to benefits by requiring the best technology available for minimizing adverse environmental impact. Id. at 157a, 249a-250a. And, as discussed above, the BTA standard and all of the cross- referenced provisions in Sections 301 and 306 authorize consideration of costs. See pp. 15-21, supra. As long as EPA is considering both costs and benefits, nothing in the Act prohibits the agency from considering the rela- tionship between the two. D. There Is No Basis For Applying An Artificial Presump- tion Against Consideration Of The Relationship Be- tween Costs And Benefits The court of appeals turned normal rules of statutory construction and Chevron deference on their head by reasoning that, ii Congress had intended to permit cost- benefit analysis, it would have clearly said so. See Pet. App. 25a. There is no logical or precedential basis for such a presumption against cost-benefit analysis. But even if there were, it would not apply in the context of this case, where Congress intended to confer broad au- thority on the agency and expressly cross-referenced sections that require cost-benefit analysis. a. Congress’s silence on whether an agency may consider the relationship between costs and benefits provides no basis for inferring an unambiguous legisla- tive prohibition against such consideration. “({SJilence, after all, normally creates ambiguity. It does not re- solve it.” Barnhart, 535 U.S. at 218. And in Chevron, this Court admonished that, “if a statute is silent * * * 31 with respect to the specific issue, the question for the Court is whether the agency’s answer is based on a per- missible construction of the statute.” 467 U.S. at 843. On unusual occasions, this Court has erected a plain statement rule“in order to avoid constitutional difficul- ties, e.g., Gregory v. Ashcroft, 501 U.S. 452, 460-461, 464 | (1991), or because of the unlikelihood that Congress would have intended a result, e.g., Spector v. Norwegian Cruise Line Lid., 545 U.S. 119, 131-132 (2005). But there is nothing inherently suspect about weighing costs and benefits. Numerous environmental and other stat- utes require or permit such analysis. See, e.g., Matthew D. Adler & Erie A. Posner, Rethinking Cost-Benefit Analysis, 109 Yale L.J. 165, 167 (1999). And in every- day life, people routinely determine whether an item is worth its cost. See pp. 13-14, supra. Thus, “other things being equal, [the Court] should read silences or ambigu- ities in the language of regulatory statutes as permit- ting, not forbidding, this type of rational regulation.” Whitman v. American Trucking Ass’ns, Inc., 531 U.S. 457, 490 (2001) (Breyer, J., concurring in part and in the judgment). The court of appeals erred in reading American Tex- tile Manufacturers Institute v. Donovan, 452 U.S. 490, 510 (1981), as erecting a presumption against consider- ation of the relationship between costs and benefits. See Pet. App. 24a-25a. Donovan upheld the Occupational Safety and Health Administration’s determination that it was not required to undertake cost-benefit analysis under a different statute. Donovan, 452 U.S. at 506, 541. Moreover, Donovan predated Chevron. Thus, while Donovan stated that, “[w]hen Congress has in- tended that an agency engage in cost-benefit analysis, it has clearly indicated such intent on the face of the stat- 32 ute,” id. at 510-511, the Donovan Court did not have occasion to address the question whether silence unam- biguously precludes consideration of costs and benefits. Indeed, the dissenting opinion in Donovan construed the Court’s opinion as “suggest[ing] * * * that the Act permits the Secretary to undertake [a cost-benefit] anal- ysis if he so chooses.” /d. at 544 (Rehnquist, J., dissent- ing). More recent court of appeals decisions applying Chevron principles of statutory construction have con- strued congressional silence as permitting cost-benefit analysis. See, e.g., Sierra Club v. United States EPA, 314 F.3d 735, 744 (5th Cir. 2002); Michigan v. United States EPA, 213 F.3d 663, 678-679 (D.C. Cir. 2000) (cit- ing cases), cert. denied, 532 U.S. 903, and 532 U.S. 904 (2001). The District of Columbia Circuit, for example, has explained that “(i]t is only where there is clear con- gressional intent to preclude consideration of cost that we find agencies barred from considering costs.” Michi- gan, 213 F.3d at 678 (internal quotation marks and cita- tion omitted). The court of appeals erred by relying on a contrary presumption. Riverkeeper’s reliance (Br. in Opp. 25-26) on Whit- man is also misplaced. In that case, the Court agreed with EPA that the Clean Air Act (CAA), 42 U.S.C. 7401 et seg., unambiguously precludes consideration of costs in setting National Ambient Air Quality Standards (NAAQS). 531 U.S. at 464-465. The Court stated that, because NAAQS are “the engine that drives” much of the CAA, EPA could consider costs only if Congress had provided a clear textual commitment of such authority to the agency. /d. at 467-468. The Court then agreed with EPA that the text of the CAA—which requires EPA to set NAAQS at levels “requisite to protect the 19a 7. 40C.F.R. 125.94 provides in pertinent part: How will requirements reflecting best technology avail- able for minimizing adverse environmental impact be established for my Phase II existing facility? (a) Compliance alternatives. You must select and implement one of the following five alternatives for es- tablishing best technology available for minimizing ad- verse environmental impact at your facility: (1)(Gi) You may demonstrate to the Director that you have reduced, or will reduce, your flow commensurate with a closed-cycle recirculating system. In this case, you are deemed to have met the applicable performance standards and will not be required to demonstrate fur- ther that your facility meets the impingement mortality and entrainment performance standards specified in paragraph (b) of this section. In addition, you are not subject to the requirements in §§ 125.95, 125.96, 125.97, or 125.98. However, you may still be subject to any more stringent requirements established under para- graph (e) of this section; or (ii) You may demonstrate to the Director that you have reduced, or will reduce, your maximum through- screen design intake velocity to 0.5 ft/s or less. In this case, you are deemed to have met the impingement mor- tality performance standards and will not be required to demonstrate further that your facility meets the perfor- mance standards for impingement mortality specified in paragraph (b) of this section and you are not subject to the requirements in §§ 125.95, 125.96, 125.97, or 125.98 as they apply to impingement mortality. However, you are still subject to any applicable requirements for en- trainment reduction and may still be subject to any 20a more stringent requirements established under para- graph (e) of this section. (2) You may demonstrate to the Director that your existing design and construction technologies, opera- tional measures, and/or restoration measures meet the performance standards specified in paragraph (b) of this section and/or the restoration requirements in para- graph (c) of this section. (3) You may demonstrate to the Director that you have selected, and will install and properly operate and maintain, design and construction technologies, opera- tional measures, and/or restoration measures that will, in combination with any existing design and construction technologies, operational measures, and/or restoration - Measures, meet the performance standards specified in paragraph (b) of this section and/or the restoration re- quirements in paragraph (c) of this section; (4) You may demonstrate to the Director that you have installed, or will install, and properly operate and maintain an approved design and construction technol- ogy in accordance with § 125.99(a) or (b); or (5) You may demonstrate to the Director that you have selected, installed, and are properly operating and maintaining, or will install and properly operate and maintain design and construction technologies, opera- tional measures, and/or restoration measures that the Director has determined to be the best technology avail- able to minimize adverse environmental impact for your facility in accordance with paragraphs (a)(5)(i) or (ii) of this section. (i) Ifthe Director determines that data specific to your facility demonstrate that the costs of compliance 2la under alternatives in paragraphs (a)(2) through (4) of this section would be significantly greater than the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards in paragraph (b) of this section, the Director must make a site-specific determination of the best technology avail- able for minimizing adverse environmental impact. This determination must be based on reliable, scientifically valid cost and performance data submitted by you and any other information that the Director deems appropri- ate. The Director must establish site-specific alterna- tive requirements based on new and/or existing design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that is, in the judgment of the Director, as close as prac- ticable to the applicable performance standards in para- graph (b) of this section, without resulting in costs that are significantly greater than the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards. The Director’s site-specific determination may conclude that design and construction tei .:nologies, operational measures, and/or restoration measures in addition to those already in place are not justified because of the significantly greater costs. To calculate the costs considered by the Administrator for a facility like yours in establishing the applicable performance standards you must: (A) Determine which technology the Administrator modeled as the most appropriate compliance technology for your facility; (B) Using the Administrator’s costing equations, calculate the annualized capital and net operation and 22a maintenance (O & M) costs for a facility with your de- sign intake flow using this technology; (C) Determine the annualized net revenue loss asso- ciated with net construction downtime that the Adminis- trator modeled for your facility to install this technol- ogy; (D) Determine the annualized pilot study costs that the Administrator modeled for your facility to test and optimize this technology; (E) Sum the cost items in paragraphs (a)(5)(i)(B), (C), and (D) of this section; and (F) Determine if the performance standards that form the basis of these estimates (7.¢e., impingement mortality reduction only or impingement mortality and entrainment reduction) are applicable to your facility, and if necessary, adjust the estimates to correspond to the applicable performance standards. (ii) If the Director determines that data specific to your facility demonstrate that the costs of compliance under alternatives in paragraphs (a)(2) through (4) of this section would be significantly greater than the ben- efits of complying with the applicable performance stan- dards at your facility, the Director must make a site-specific determination of best technology available for minimizing adverse environmental impact. This de- termination must be based on reliable, scientifically valid cost and performance data submitted by you and any other information the Director deems appropriate. The Director must establish site-specific alternative requirements based on new and/or existing design and construction technologies, operational measures, and/or restoration measures that achieve an efficacy that, in the 23a judgment of the Director, is as close as practicable to the applicable performance standards in paragraph (b) of this section without resulting in costs that are signifi- cantly greater than the benefits at your facility. The Di- rector’s site-specific determination may conclude that design and construction technologies, operational mea- sures, and/or restoration measures in addition to those already in place are not justified because the costs would be significantly greater than the benefits at your facility. » (b) National performance standards.— (1) Impingement mortality performance .andards. If you choose compliance alternatives in paragraphs (a)(2), (a)(3), or (a)(4) of this section, you must reduce impingement mortality for all life stages of fish and shellfish by 80 to 95 percent from the calculation base- line. (2) Entrainment performance standards. If you choose compliance alternatives in paragraphs (a)(1)(ii), (a)(2), (a)(3), or (a)(4) of this section, you must also re- duce entrainment of all life stages of fish and shellfish by 60 to 90 percent from the calculation baseline if: (i) Your facility has a capacity utilization rate of 15 percent or greater, and (ii)(A) Your facility uses cooling water withdrawn from a tidal river, estuary, ocean, or one of the Great Lakes; or (B) Your facility uses cooling water withdrawn from a freshwater river or stream and the design intake flow of your cooling water intake structures is greater than five percent of the mean annual flow. 24a (3) Additional performance standards for facilities withdrawing from a lake (other than one of the Great Lakes) or a reservoir. If your facility withdraws cooling water from a lake (other than one of the Great Lakes) or a reservoir and you propose to increase the design in- take flow of cooling water intake structures it uses, your increased design intake flow must not disrupt the natu- ra) thermal stratification or turnover pattern (where present) of the source water, except in cases where the disruption does not adversely affect the management of fisheries. In determining whether any such disruption does not adversely affect the management of fisheries, you must consult with Federal, State, or Tribal fish and wildlife management agencies). (4) Use of performance standards for site-specific determinations of best technology available. The per- formance standards in paragraphs (b)(1) through (3) of this section must also be used for determining eligibility for site-specific determinations of best technology avail- able for minimizing adverse environmental impact and establishing site specific requirements that achieve an efficacy as close as practicable to the applicable perfor- mance standards without resulting in costs that are sig- nificantly greater than those considered by the Adminis- trator for a facility like yours in establishing the perfor- mance standards or costs that are significantly greater than the benefits at your facility, pursuant to § 125.94(a)(5). --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0048%3A14. Public record. Not legal advice.