Amicus Curiae Brief — Environmental Defense v. Duke Energy Corporation

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IN THE

Supreme Court of the United States

ENVIRONMENTAL DEFENSE, ET AL.,

Petitioners,

DUKE ENERGY CorpP., ET AL.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF OF AMICI CURIAE

U.S. REPRESENTATIVE JOE L. BARTON

IN SUPPORT OF THE RESPONDENTS

GEORGE C. LANDRITH

CHRISTOPHER C. HORNER

FRONTIERS OF FREEDOM

P.O. Box 69

Oakton, VA 22124

(703) 246-0110

Counsel for Amici Curiae

U.S. Representative Joe L. Barton

—— EEE

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

TABLE OF CONTENTS

BAR GP AU TRIE 8 Bi vcpcecccesnsscesesesccsscenevessosesees

STATEMENT OF AMICUS CURIAE IDENTITY

PITT ET OTE

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FRET T eoicntenrssicensteniniteniitiedubatematasennicitaniavtaneinien

CONGRESS DID NOT INTEND THE NSR

PROGRAM TO THREATEN ALL EXIST-

ING FACILITIES WITH A “SUBMIT OR

SHUT DOWN” ULTIMATUM UPON

EXPIRATION OF SOME UNWRITTEN

“GRACE - PERIOD” OR = “GRAND-

POTTS. Siciisiaaiindadiiesciniadudanasantisidnlcevinipuiondnti

A. The Clean Air Act Represents a Delib-

erate, Comprehensive Regulatory Regime

I a GI itasictitesintnescitetinbiitaninn

B. Congress Deliberately Designed Different

Programs to Control New Versus Existing

is cacietbbinnictintnteniduicintciastnisinincinpumediniing

1. NSR was designed to address new

TI icirnichesieieiatrheitedeieiiniciicseccbinpstbiiinainasrnais

2. NSR was not designed or intended to

control Existing Sources......................+

3. NSR was deliberately designed to

i iincncientnnvtttincntnnitinmtenssenies

4. In the 1990 Clean Air Act Amend-

ments, Congress reaffirmed previous

regulatory choices, and strengthened

controls on existing sources, without

altering NSR’s role in the hierarchy ......

(i)

mW WN =

TABLE OF CONTENTS—Continued

Page

C. Grandfathering in the Clean Air Act;

Congress did not play Petitioners’ argued

SORDOCUMIORS” BOTIG ..00.000.0rcensseveoresrececcsessees 16

Il. THE NEW SOURCE PROGRAMS

MODIFICATION RULE APPLIES ONLY

TO EXISTING SOURCE CHANGES THAT

CREATE NEW AND UNREGULATED

Pee Oana dincttllininstnccincasiinneintiinstnatvicbiieteasens 19

A. The Modification Rule focuses on new

GHAIENOTED COBICIEY ose ccccsesccsensescosocssecesesoeees 20

B. NSPS and NSR are closely related pro-

grams sharing common features, including

the same definition of “Modification.”........ 21

1. Congress deliberately defined NSR

modification by references to NSPS

I cesccctintnncesntctntuncneininininioniiinas 21

2. NSPS and NSSR share overlapping

Tegulatory QOals ............secsesessecvesesesseens 23

SOT incecsinsiencrtsensiinessusitinnensiorssantinsittinttccnineniinnn 27

iil

TABLE OF AUTHORITIES

CASES Page

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

n> S|, | seihinionee fodegampannsounbiipeeispeeonnaematis 18, 25, 26

General Motors Corp. v. United States, 496 U.S. :

ae icickeississieectinibnibibthabsdatplbipaaabiiiathiiuioundbites 6

IBP, Inc. v. Alvarez, 126 S. Ct. 514 (2005)............ 23

New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005)... 10

Puerto Rican Cement Co. v. EPA, 889 F.2d 292

CEE, Be intecnessdeiertomnienscnntanleietseiincnsiieen an

Sullivan v. Stroop, 496 U.S. 478, 484 (1990)........ 22

Union Elec. Co. v. EPA, 427 U.S. 246 (1976)....... 6

United States v. Alabama Power Co., (N.D. Ala.;

Case No. 2:0)-cv-00152-VEH (Memorandum

Opinion, Aug. 14, 2006))...........ccscsesesesesseeeees 5

United States v. Cinergy Corp., No. 06-1224 (7th

2 RSDAINE anaes elejdiedtbbadnenedegeniconnaiinie 23

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

gg ___. RRIEERD LEARNER Savior ener 6

Wisconsin Electric Power Co. v. Reilly, 893 F.2d .

ee EGE: CTD cinsitiatincsnacitinctsigtiisctunapentienen 19

STATUTES

ae te PD iad icinecsitntstcieniceisinenniéintn 6

es 1 IED wetdbactciccccstanseaseininsimiatnitiann 14

Se ik ae FIRE dechaceesiathdnemeiennesinaenniiinacbingnitvinns 6

a PI cdincaiciehicaetinntgndbensnedunsasainhibeniionrite 6

42 U.S.C. § 7410(a)(2)(D), ()(4) 0. eccceeeeeteeeeenes 23

es Oe Fee OD seed icenetnsientociansenctintuiindasaes 20

Oe is Oe Pte aintinticrnccccentesestundiiciiapiinemunte 17

Pgs Tole | RRS NaEaS sieindinsbieddieanisapashidpbene 14

ie Pe Diecoscidipesvisisaniisiaeniisitnaniivesancae 15

eae I ciiisitnlhaaisicdtynetiianicsmeaiianaiindis 25

42 U.S.C. §§ 7491(b)2)A)...........eseceecessesesseesees 11

42 U.S.C. § 7501()).......... alanis nlartaaleadiibigidetitipted 11

BEST AVAILABLE COPY

TABLE OF AUTHORITIES—Continued

Page

as OP tnkciincsccttnsintistsiiaddatannea 9, 20, 22

Se Cas FD icicisncitsintcsctdnsiaitinteiuaniaies 1]

42 U.S.C. §§ 7651(a)(28)-(29), 7651(b)..........00008 15

De Shs Te PP Oe ictitnntdvintscenetinbaesitcdedimecbanbiis 16

REGULATIONS ©

40 C.F.R. §§ 51.166(b)(2)(iii); 60.14(e)(3)........... 25

SE, FR. Ba MD cctctsienaniscnsichetiiniibéniaiion 25

OTHER SOURCES |

116 Cong. Rec. 42,520 (1970).........cc.cccsscccccccesssenes 9

116 Cong. Rec. 19,206 (1970)............ccsscsccssseeess )

116 Cong. Rec. 33,115 (1970)........cccccsccssccccsscecees 17

123 Cong. Rec. 18,019 (1977)..........c.ccccoccscovecsoeses 12

123 Cong. Rec: 18,021 (1977).........cccccccccscsscosesees 20

123 Cong. Rec. 18,040 (1977)............csscsseesseseeeeee 21

123 Cong. Rec. 18,022 (1977)........0..ccccrsessscevess 22

Environmental Policy Division (1978), Library of

Congress, 95th Cong., 2nd Sess., A Legislative

History of the Clean Air Act Amendments of

1977: a Continuation of the Clean Air Act

Amendments of 1970 (1978), Washington, DC:

US Senate Committee on Environment and

FOES CRIES FOIE vcssevirtisscssincinnisnnistoveniasiieniibas 12

H.R. Rep. No. 91-1146 (1970) wo. ceeceeeeeteeeees 8, 20

H.R. Rep. No. 95-294 (1977) .........ccscssssseseseeees 11, 14, 22

H.R.4567, 99th Cong. (1986)..........cceceeeeceeseeeees 12

Peay PFU GAIN, LT PUER saceccsapsnsssecdnvnmncepentiiis 12

Pub. L. No. 91-604, § 4(a), 84 Stat. 1676, 1685-

SOP oe sisndsnidieenedncimindincinasimeadiunpintdeeiinienamnniiles 17

S. Rep. No. 91-1196 (1970)......ccccccccsscssssesesesseseeee. 10

TER PUR. DRO RST COE F Peccsncrccvesssscosensittstetsainans 20, 21

ee POR CE, CUO F Pics cocinnctavnicnesiinmiinsanideniia 12

TABLE OF AUTHORITIES—Continued

Page

S.31G6, 10ORs Comm, (196 7)....0:seccrrccecvseosecvscecsereseees 12

S.3GO, 1GOEs Cog, (196 7)..0..0ccvcescresecesecesccrsceeseees 12

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aris Se Ne BR icccececsceseocccinecsccosscsserpnenneees 12

Sen. George Voinovich, Chairman, Senate Sub-

committee on Clean Air, Climate Change and

Nuclear, “7he Clean Air Act's New Source

Review Program: A Policy in Desperate Need

iIITIT -isidos estan tnatetscnnncecinnmamansstessatotens 8

FEDERAL REGISTER

39 Fed. Reg. 36,946 (Oct. 15, 1974) .......ccccceeees 19

39 Fed. Reg. 42,510 (Dec. 5, 1974)... ..cccccecceeeeee 9, 22

39 Fed. Reg. 42,512 (Dec. 5, 1974)................ obaes 22

39 Fed. Reg. 42,513 (Dec. 5, 1974) ......5.ccccccceseseees 22

40 Fed. Reg. 58,416 (Dec. 16, 1975)............:c0000 13

41 Fed. Reg. 55,524 (Dec. 21, 1976)............c0c000 9

45 Fed. Reg. 52,677 (Aug. 7, 1980) .............ccec0ee 26

45 Fed. Reg. 52,691-92 (Aug. 7, 1980)................. 24

45 Fed. Reg. 52,704 (Aug. 7, 1980) .......c.cccesse0000 27

68 Fed. Reg. 61,248, 61,273 (Oct. 27 2003)......... 10

68 Fed. Reg. 61,248, 61,268 (Oct. 27, 2003)........ 10

68. Fed. Reg. 61,253 (Oct. 27, 2003) .........cccccceceee 27 ©

69 Fed. Reg. 23,951, 23,986 (Apr. 30, 2004)........ 14

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IN THE

Supreme Court of the Anited States

No. 05-848

ENVIRONMENTAL DEFENSE, ET AL.,

Petitioners,

Vv.

DUKE ENERGY CoRrP., ET AL.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Fourth Circuit

BRIEF OF AMICI CURIAE

U.S. REPRESENTATIVE JOE L. BARTON

IN SUPPORT OF THE RESPONDENTS

STATEMENT OF AMICUS CURIAE

IDENTITY AND INTEREST’

U.S. Representative Joe L. Barton files this amicus brief to

correct Petitioners’ and others’ inaccurate representations of

Congressional intent. Representative Barton participated in

the lengthy legislative debates and discussions that led to the

1990 amendments to the Clean Air Act (“CAA” or the “Act”)

' Pursuant to Supreme Court Rules 37.3 and 37.6, the undersigned

represents that (1) all parties consented to the filing of this brief, (2) no

counsel for any party authored this brief either in whole or in part; and

(3) no person or entity other than the above-named amici curiae and their

counsel made any monetary contribution to its preparation or submission.

and, as Chairman of the House Committee on Energy and

Commerce with Clean Air Act oversight responsibility has a

unique interest in ensuring that the Act is correctly construed

and properly and fairly implemented.

INTRODUCTION

Chairman Barton respectfully requests that this Court take

note that the conclusion advanced by Petitioners and a num-

ber of Amici Curiae Waxman, ef al. (hereinafter, “Petition-

ers”) in Environmental Defense, et al., v. Duke Energy Corp.,’

et al—that the Act’s New Source Review program was

intended to serve as an omnibus pollution control regime

ultimately applicable to all existing sources electing to

continue in operation—is wrong for reasons made quite clear

by the Act’s history, language and implementation.

First, Congress never intended New Source Review as a

principal vehicle for achieving pollution control from existing

sources. Had Congress intended such an outcome it would

have said so, as revealed by the Act’s very deliberate

construction. Instead, Congress intentionally chose a regu-

latory regime where existing sources of pollution were

principally regulated by the individual states. Moreover, as

the program’s name implies, Congress intended New Source

Review to address new sources of otherwise unregulated

pollution—that is, newly constructed sources or those that

undergo “modification” expanding their capacity to emit.

The Act’s history is replete with clear illustrations that the

counterintuitive reading advanced by Petitioners was not in

fact Congress’ intent. That the radical policy shift Petitioners

advocate would make significant Clean Air Act regulatory

programs superfluous is but one example. Further, Congress

expressly addressed and rejected Petitioners’ suggested policy

both in the 1977 and 1990 CAA amendments.

The Fourth Circuit accurately determined that EPA’s 1980

“modification” rule must be consistent with Congress’ view

that neither the New Source Review program (“NSR”) nor

the New Source Performance Standards Program (“NSPS”)

(hereinafter, “New Source Programs”) were intended to be

the primary regulatory mechanism for reducing pollution

from existing sources.

SUMMARY OF THE ARGUMENT

Congress’s goal in enacting and amending the Clean Air

Act has always been to reduce air pollution to protect public

health. Instead of requiring each plant to cut pollution by

retrofitting new pollution control technologies, Congress

chose pollutant-specific National Ambient Air Quality

Standards (“NAAQS”). EPA was charged with periodically

reviewing the standards and revising them in line with

contemporary scientific information on public health needs.

Meanwhile, Congress gave the States authority to implement

the standards.

Contrary to Petitioners’ arguments, Congress did not intend

to confront stationary sources with an option of either

shutting down or retrofitting new advanced pollution controls

within a specified period of time. Unlike other CAA control

regimes, Congress did not enact the New Source Programs

to reduce emissions from existing sources operating in

accordance with their original design capacity. Instead,

pollution from existing sources was to be, and is, controlled

through the air quality implementation plans developed by the

States. In contrast, the New Source Programs’ goal was to

spur technology development by matching the pollution

contro] performance of new facilities or existing facilities

building expansions with state of the art pollution contro] at

the time the new source or expansion is initiated. Emissions

from existing facilities not so “modified” remain within the

discretion and purview of the individual States to devise

and implement actions to attain the NAAQS, subject to

EPA approval, as provided in the 1970 and 1977 CAA

Amendments.

Congress did not intend that New Source’ Programs be

triggered by activities that accomplish nothing more than

enabling a facility to operate as constructed and within

permitted limits. Had Congress so intended, it would have

plainly said so in statutory language and in the legislative

history. It did neither.

Nor do New Source Programs otherwise disrupt Congress’

deliberately constructec hierarchy of Clean Air Act regu-

latory programs for obtaining emission reduttions from

existing sources, with NSR created to respond to activities

adding new pollution for which States had not previously

accounted in their role as primary regulatory authority over

existing facility emissions.

Construing the term “modification” to include “the most

mundane activities” at existing sources, regardless of whether

they actually create’ new pollution, requires believing that

Congress intended to make redundant and/or obsolete other

regulatory programs it went to great effort and detail to enact,

and that Congress intended to drive the entire emission

inventory attributable to the operations of major stationary

sources down to the lowest, technologically feasible levels

within a relatively short window of time. The structure and

entire legislative history of the Act defy this conclusion.

Petitioners’ view of NSR begs the question why Congress

bothered to enact the highly complex CAA programs, such as

the landmark Title I'V acid rain provisions and elaborate Title

I reasonable further progress (“RFP”) provisions designed to

independently achieve NAAQS attainment, which Petitioners

would make redundant and unnecessary. This outcome defies

credulity and all available evidence, seeking to institute

“regulation by litigation instead of by notice and comment

rulemaking.” See United States v. Alabama Power Co., (N.D.

Ala.; Case No. 2:01-cv-00152-VEH (Memorandum Opinion,

Aug. 14, 2006)).

Congress developed an extensive hearing record, in the

years-long debate over the 1990 Amendments, to assess the

sufficiency of extant programs including NSR and NSPS to

attain the large additional reductions in key air pollutants

necessary to address acid rain. Congress concluded and

plainly articulated that NSR was neither capable of secur-

ing nor designed to secure emission reductions from exist-

ing sources.

Construing the NSR provisions established by the CAA

Amendments of 1977 as Petitioners request would therefore

ignore this history and also strip the subsequently enacted

1990 Amendments of any discernible meaning. It is axio-

matic that such a construction defies congressional intent,

specifically as reflected in at least the major 1977 and 1990

CAA revisions. This Court should therefore reject Petition-

ers’ construction of the Act and the 1980 NSR regulations.

ARGUMENT

I. CONGRESS DID NOT INTEND THE NSR

PROGRAM TO THREATEN ALL EXISTING

FACILITIES WITH A “SUBMIT OR SHUT

DOWN” ULTIMATUM UPON EXPIRATION OF

SOME UNWRITTEN “GRACE PERIOD” OR

“GRANDFATHERING.”

A. The Clean Air Act Represents a Deliberate,

Comprehensive Regulatory Regime Enacted by

Congress. ;

Congress deliberately titled its “New Source” Programs as

such because these Programs were intended to cover new

facilities, that is, new and otherwise unregulated capacity to

pollute, or “new sources.” These include existing sources

that are “modified” to create new pollution not yet regulated

under the CAA programs for existing sources of pollution,

thereby protecting public health and welfare. The Act’s

evolution clearly and obviously reveals this scheme. °

While Congress, through its 1970 Clean Air Act amend-

ments, introduced a federal requirement for States to com-

ply with the NAAQS, see 42 U.S.C. § 7409, Congress also

reserved “primary responsibility” forthe States to attain and

maintain NAAQS, see 42 U.S.C. § 7401(a)(3); see also

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

phasizing that Clean Air Act section 110 left to the States

“the power to determine which sources would be burdened by

regulations and to what extent”). This hierarchy reflects

Congress’ considered judgment that State governments better

under-stand local needs and circumstances and are thus best

able to craft appropriately tailored programs to improve air

quality. See, e.g, Whitman v. American Trucking Ass'ns, 531

U.S. 457, 470-71 (2001); id. at 493 (Breyer, J., concurring in

part and concurring in the judgment); General Motors Corp.

v. United States, 496 U.S. 530, 532-33 (1990).

This same conclusion—that States are better suited to

determine local conditions, needs and solutions—informed

Congress’ decision to leave to the States with discretion over

what specific retrofit measures were needed to attain the

NAAQS. Thus, each State’s individual State Implementation

. Plan or “SIP” articulates how best to achieve the Act’s air

quality goals through emission reductions and controls from

sources within each State’s border. See 42 U.S.C. § 7410. In

the SIP, the State calculates an attainment-level “emissions —

budget,” comparing it with the existing and projected base-

line “business as usual” emissions level. The State is thus

able to determine the required aggregate emission reductions,

and to assign detailed emissions limitations to existing

sources to achieve this required quantity of reductions.

It is noteworthy that Congress did assert federal primacy

for regulating particular categories of pollution. These

national programs generally focus on sources that individual

States are unable to control such as automobiles and other

mobile source standards. This reinforces State primacy over

pollution sources they can control such as large stationary

sources. The interpretation of the NSR program that

Petitioners advance, by contrast, both subverts the State’s

regulatory primacy in this area and significantly revises the

CAA’s scheme by abandoning the concept of State discretion

over how to regulate existing sources to attain the NAAQS.

Finally, it is important to note that existing facility emis-

sions from sources operating as constructed and permitted to

operate and not installing or creating new capacity ensure

attainment, and are, therefore, by definition not “increas[ing]

pollution.” In establishing individual source emissions limits,

States assume the maximum potential emissions from each

existing source—based on around-the-clock operations,

unless otherwise limited by an enforceable permit term. A

State must demonstrate that with the controls implemented

for each source it will attain the standard for the relevant

criteria pollutant by the required attainment date, even with

all sources operating at maximum capacity. As a result, the

relevant SIP already takes into account all the existing air

pollution capacity in a way designed to attain and maintain

the NAAQS. There is, therefore, no new pollution capacity

created by a source that repairs a broken or failing component

so that the source can continue to operate as it was

constructed and permitted by the State to operate, and then

continues to operate in subsequent years in accordance with

the SIP and its Clean Air Act permits.

B. Congress Deliberately Designed Different Pro-

grams to Control New Versus Existing Sources.

NSR has always been focused on regulating new capacity

to pollute, that is, on managing new growth. It was never

about obtaining additional reductions from existing facilities

as Petitioners now advance. Such a result would blur and

indeed obviate Congress’ clearly drawn lines. What Peti-

tioners actually seek is judicial implementation of a 1997

internal enforcement policy memo to impose this radical

policy change’ —€viscerating major programs specifically

designed to regulate precisely those sources.

1. NSR was designed to address new sources.

Although State-level SIP actions are the principal Clean Air

Act mechanism to achieve NAAQS compliance, Congress

also envisioned several CAA regulatory measures directed

exclusively at new sources. Congressional considerations in

adopting those new source provisions included avoiding

industrial relocation, or “forum shopping,” which Congress

addressed by calling upon new sources to install advanced

pollution controls, irrespective of the local air quality needs,

* See, e.g., “[A] 1997 enforcement memorandum leaked to the media

. Shows EPA’s desire to force additional reductions in emissions by

arbitrarily revising enforcement practices instead of the more appropriate

regulatory process complete with its public comment and review

requirements. In 1998, the EPA changed enforcement practices when they

renounced the 1992 NSR interpretation in a proposed rule calling parts of

the WEPCO decision a departure from Agency policy which should not

be continued. . . . Finally, in 1999, the EPA filed NSR lawsuits against

seven electric utility companies and an administrative enforcement order

against the Tennessee Valley Authority, alleging NSR modification

violations at 24 different facilities, reaching back as many as 22 years.”

Sen. George Voinovich, Chairman, Senate Subcommittee on Clean Air,

Climate Change and Nuclear, “The Clean Air Act's New Source Review

Program: A Policy in Desperate Need of Reform,” found at — /I

voinovich.senate.gov/policy_paper/nsr_whitepaper.pdf.

‘again while reserving primacy over existing sources to the

States. H.R. Rep. No. 91-1146, at 3 (1970). Despite this and

select other new source-specific regulatory programs, Con-

gress was clear that the NSPS was a narrow departure from

the overall State primacy in abating air pollution.

Numerous Members of Congress instrumental in the 1970

CAA amendments elaborated on this State/federal hierarchy

in the CAA, including Representative Harley O. Staggers’

and Representative William L. Springer.*

In 1974, EPA on its own initiative created the NSR

program through the regulatory process.” Congress codified

this program in 1977, incorporating in the process the NSPS

definition of “modification.” See, e.g., 42 U.S.C. § 7501(4)

(“The terms ‘modifications’ and ‘modified’ mean the same as

> “The: enforcement of air pollution regulations is partly the

responsibility of the States and partly that of the Federal Government. -

The [1970 amendment] provides that the Federal Government shall have

primary responsibility for the enforcement of performance standards for

new stationary sources and hazardous emissions from stationary sources.

The States on the other hand will have primary responsibility for the

enforcement of State plans and the emission limitations provided for in

those plans with regard to existing stationary sources.” 116 Cong. Rec. 42,

520 (1970).

* Springer noted during the floor debates that NSPS was a “departure”

from the ordinary division of responsibility, but that the departure was

“sensible” because “[s]topping these extraordinary problems before they

develop is best for the antipollution effort and it is also best for those who

would build such installations and then find they could not operate.” 116

Cong. Rec. 19,206 (1970).

* EPA established the Prevention of Significant Deterioration (“PSD”)

component in 1974 for sources located in attainment areas, see Approval

and Promulgation of Implementation Plans: Prevention of Significant Air

Quality Deterioration, 39 Fed. Reg. 42,510 (Dec. 5, 1974), and the non-

attainment sources were subjected to NSR through a 1976 EPA rule, see

Requirements for Preparation, Adaption [sic], and Submittal of Imple-

mentation Plans: Air Quality Standards; Interpretive Ruling, 41 Fed. Reg.

55,524 (Dec. 21, 1976).

the term ‘modification’ as used in section 7411(a)(4) of this

title [the NSPS program].”) (emphasis added).

As with other CAA decisions described herein, this was a

deliberate act. By incorporating the NSPS modification

definition into the NSR program, Congress ensured that

existing sources traditionally addressed’ at the State level

became subject to federal requirements to install new pollu-

tion control equipment only when projects at these sources

increased their capacity to emit pollutants—which is the clear

threshold for becoming a “new source” of pollution. ;

It was for these reasons that Congress never described NSR

as a program to decrease emissions from existing sources.

Despite its current litigation posture, EPA agrees—recently

declaring that to interpret the Clean Air Act to “ensure that all

major facilities eventually trigger NSR cannot be squared

with the plain language of the Clean Air Act.” Prevention of

Significant Deterioration (PSD) and Non Attainment New

Source Review (NSK): Equipment Replacement Provision of

the Routine Maintenance, Repair and Replacement Exclusion,

68 Fed. Reg. 61,248, 61,273 (Oct. 27, 2003).

Similarly, EPA also acknowledges Congress’ view that

SIPs, not NSR programs, were the primary vehicle for

obtaining emissions reductions: “Rather than NSR, the Act’s

primary mechanisms for achieving the emission reductions

needed to attain or maintain NAAQS are State Imple-

mentation Plans.” Brief of the Envtl. Prot. Agency 75, New

York v. EPA, 413 F.3d 3 (D.C. Cir. 2005).

2. NSR was not designed or intended to control

Existing Sources.

Beginning in 1970, Congress repeatedly considered and

rejected schemes to impose on existing sources the mandatory

contro] technology required of new sources. For example, in

1970, Congress considered and rejected imposing NSPS

- requirements on existing emissions sources covered by the

SIP limits. See S. Rep. No. 91-1196, at 15-16 (1970).

Then, during debate over the 1977 Clean Air Act Amend-

ments Congress again specifically rejected attempts to impose

universal retrofitting of all existing major stationary sources.

See H.R. Rep. No. 95-294, at 185 (1977):

Building control technology into new plants at time of

_ construction will plainly be less costly than requiring

‘retrofit when pollution ceilings are reached. For

example, testimony from the electric utility industry

indicates that it costs about 25 percent less to purchase

and install flue gas desulfurization technology on’a new

plant than it would cost to retrofit that plant

subsequently.

- Congress’ reasoning is inescapable: requiring NSR and the

installation of advanced pollution controls would be prohib-

itively expensive for existing sources. Congress therefore

rejected using the approach of across-the-board, technology-

forcing regulation for existing sources, favoring instead

narrowly tailored, State-administered schemes to achieve

emission reductions from existing sources. See, e.g., 42

U.S.C. §§ 7491(b)(2)(A) (providing for “best available

retrofit technology” for a limited class of existing facilities),

7502(c) (providing for “reasonably available control tech-

nology” (“RACT”) for certain existing facilities in non-

attainment areas). In-this regard, the mandatory RACT

requirement was limited to helping provide for the afore-

mentioned “reasonable further progress” (“RFP”) to ensure

“attainment of the applicable [NAAQS] by the applicable

date.” 42 U.S.C. § 7501(1).

Congress certainly would have seen such a detailed scheme

for existing sources as unnecessary if it had already required,

as Petitioners suggest, that NSR mandate eventual universal

retrofitting of advanced pollution controls on all existing

facilities.° Indeed, universal application of new source

control technology contradicts Congress’ express belief that

such retrofitting would be unnecessary because of other

targeted, existing source-level controls. As made clear by the

principal architect of the 1977 Clean Air Act Amendments,

Senator Edmund Muskie: “It is [Congress’] intent that

‘reasonable further progress’ means pollution control will

reduce emissions at a rate that will lead to attainment of

the ambient standards in the time required.” 123 Cong.

Rec. 18,019 (1977); Environmental Policy Division (1978),

Library of Congress, 95th Cong., 2nd Sess., A Legislative

History of the Clean Air Act Amendments of 1977: a Con-

tinuation of the Clean Air Act Amendments of 1970 (1978),

Washington, DC: US Senate Committee on Environment and

Public Works Print. Accordingly, the RFP requirements,

including RACT-level controls, were intended to attain the

NAAQS without additional reductions secured through the

‘non-attainment NSR program.

This pattern continued during the 1980s when Congress

repeatedly considered and rejected legislative proposals to

impose, on existing coal-fired boilers, the choice between

retrofitting with new source control technologies and shutting

down. See §.321, 100th Cong. (1987); $.316, 100th Cong.

(1987); S.300, 100th Cong. (1987); $.2813, 99th Cong.

(1986); $.2203, 99th Cong. (1986); $.2200, 99th Cong.

(1986); H.R.4567, 99th Cong. (1986); S.52, 99th Cong.

(1985); H.R.5555, 97th Cong. (1982). That Congress

projects that Petitioners contend trigger NSR are similar io projects

undertaken every year across industry by every industrial facility merely

to maintain the ability to operate as constructed and permitted to operate. -

If one accepts at face value the complaints filed by citizen groups and the

Government in the NSR enforcement initiative, every individual! industrial

facility in this country has routinely triggered NSR preconstruction

permitting under the NSR program year after year since 1980.

bothered considering these sector-specific bills reveals its

understanding that all existing facilities do not ultimately

trigger NSR. Rejecting the proposals only affirms Congress’

intent that ultimate NSR coverage of all industrial facilities

could not be the case. The present EPA NSR enforcement

initiative implausibly assumes that the entire electric utility

industry, refining industry, and much of the American indus-

trial sector were for decades all in massive non-compliance

with existing regulatory requirements. That Congress

engaged in the major 1977 and 1990 rewrites of the Clean Air

Act without taking notice of such an anomaly, were it real,

only further exposes the unsupportable nature of EPA’s

litigation position.

In sum, the history of the Clean Air Act prior to its 1990

Amendments manifests repeated congressional rejection of

Petitioners’ preferred “retrofit or shut down” mandate to

control emissions from existing sources. Instead, Congress

left decisions regarding existing-source pollution primarily to

the States and reserved authority to EPA only in limited areas

consistent with the statutory hierarchy, explicitly avoiding the

massive economic disruption that would follow from a heavy-

handed, top-down approach to controlling pollution from

existing sources.

” In fact, EPA had the same understanding when it included the

reconstruction provision in the NSPS rules. Reconstruction is an excep-

tion to the requirement that an emissions increase triggers NSPS for an

existing unit. When an existing unit expends 50% or more of the cost of a

comparable entirely new facility, then that expenditure triggers appli-

cation of NSPS. This is because EPA, like Congress, understood new

source controls rarely apply to existing sources, and thus only required

retrofitting new source controls when creating new and unregulated

pollution or spending so much on an old facility that it becomes in essence

a new facility. 40 Fed. Reg. 58,416 (Dec. 16, 1975) (final rule); 39 Fed.

Reg. 36,946 (Oct. 15, 1974) (proposed rule), id. at 36,948 (“The purpose

of this proposed [reconstruction] provision is to discourage the per-

petuation of a facility, instead of replacing it at the end of its useful life

with a newly constructed facilitv.”).

3. NSR was deliberately designed to address

growth.

As Congress repeatedly confirmed that mandatory new

source pollution control retrofits from existing sources was

not the law, Congress also staked out a deliberate role in the

overall Clean Air Act scheme for EPA’s regulatory PSD and

NNSR programs. The 1977 Clean Air Act Amendments

established a PSD “increment” program menaging growth in

areas meeting air quality standards to ensure that air quality

did not significantly deteriorate. See 42 U.S.C. § 7470 (PSD

program is intended “to protect health and public welfare

from any actual or potential adverse effects . . . notwith-

standing attainment,” while ensuring that economic growth

“will occur in a manner consistent with the preservation of

existing clean air resources.”) As EPA recently explained,

“the NSR program is a growth measure and is not specifically

designed to produce emission reductions. Instead, its purpose

is to allow new source growth to occur without interfering

with an area’s ability to attain.” Final Rule to Implement the

8-Hour Ozone National Ambient Air Quality Standard, 69

Fed. Reg. 23,951, 23,986 (Apr. 30, 2004).

NSR’s focus on new emissions growth, and not on in-

creased utilization of existing permitted emissions capacity,

reflects Congress’ balancing of economic and environmental

concerns. The Clean Air Act repeatedly took care to note its

goal, in addition to protecting and improving the nation’s air

quality, of regulating in a fashion that is protective of the

American economy. 42 U.S.C. § 7401(b)(1). The purpose of

the 1977 Amendments, which included the NSR provisions,

was to “insure the protection of the public health and the

environment . . . while at the same time considering the

energy and economic needs of this Nation.” H.R. Rep. No.

95-294, at 34-35 (1977). Futher, Congress declared that the

occurrence of economic growth is among the purposes of the

PSD provisions in the Clean Air Act. 42 U.S.C. § 7470(3).

Petitioners ignore these express considerations by predicating

mandatory retrofit of new source control technology on the

act of performing maintenance on existing productive

capacity. Thus, while Petitioners cite the Act’s purpose in

their attempt to support the need to interpret “modification”

differently in NSPS and PSD, they conveniently avoid citing

the entirety of the Act’s stated purpose.

4. In the 1990 CAA Amendments, Congress

reaffirmed previous regulatory choices, and

strengthened controls on existing sources,

without altering NSR’s role in the hierarchy.

The 1990 Clean Air Act Amendments further affirm that

NSR does not mandate all existing units eventually to retrofit

mandatory new source control technology, and that NSR does

not apply when existing power plants undertake activities not

changing their original design capacity, even if those

activities extend the source’s productive life.

A major objective of the 1990 Clean Air Act Amendments

was to mitigate potential environmental damage from acid

rain. The major pollutants implicated in acid rain are sulfur

_ dioxide (“SO”) and nitrogen oxides (“NO,”). Consequently,

Congress required significant reductions in SO) and NO,

emissions. When considering potential control tools, Con-

gress understood that electric utilities that were never subject

to the NSPS or NSR programs were undergoing refurbish-

ment and life extension work, that they would be operated

without new source pollution controls beyond 2010, and that

their longer operating lives and increased utilization would

cause a steady rise in national emissions in compliance with

extant Clean Air Act permits and regulations. See 42 U.S.C.

§§ 765 1(a)(28)-(29), 7651(b).

Congress nonetheless elected against requiring each exist-

ing power piant to retrofit new source pollution control

equipment, favoring instead a national cap-and-trade regime

designed to reduce SO emissions much more efficiently and

at much lower cost than by mandating uniform technology.

Congress also achieved a reduction in NO, emissions of

approximately two million tons under Title IV, and addressed

the long-range transport of NO,. 42 U.S.C. § 7651(b). These

provisions, not NSR, were designed to generate massive

reductions in air pollution from existing sources. Unlike

applying NSR to existing facilities, the Title IV acid rain

program did so with economic efficiency, and deliberately so.

Congress’ decision to create the Title IV acid rain program

is important for three reasons. First, it shows yet again

Congress’ understanding that NSR is not triggered when

existing facilities undergo life extension projects allowing

them to operate within existing, regulated capacity. Second,

Title IV demonstrates that Congress deliberately avoided

requiring universal retrofitting of new source pollution

controls on existing. coal-fired facilities. Third, Congress

pioneered the use of “market-based” tools (cap-and-trade)

rather than command-and-control measures (such as NSR),

for the explicit purpose of striking a balance between pollu-

tion abatement and economic prosperity. These assumptions

underlying the 1990 Amendments regarding power plant

operation, and the very cap-and-trade mechanism that Con-

gress created in this legislation, belie claims that NSR

required all existing units to “retrofit or shut down.”

C. Grandfathering in the Clean Air Act; Congress

did not play Petitioners’ argued “expectations”

game.

Despite ample opportunity, particularly including during

significant amendment of the Clean Air Act, at no time

between 1970 and 1990 did Congress statutorily mandate

immediate reductions in air emissions from existing facilities,

exempt sources entirely from the need to reduce emissions, or

impose pollution cuts on existing sources after “grand-

fathering” them for some limited period of time.

In instances where Congress instituted limited “grand-

fathering,” the relevant statutory language is clear and unam-

biguous. No rigorous search for unexpressed intention ‘is

required. For example, the 1970 Clean Air Act Amendments

provided a 90-day grace period for existing sources to bring

their emissions of Hazardous Air Pollutants (“HAPs”) to

within prescribed limits. Pub. L. No. 91-604, § 4(a), 84 Stat.

1676, 1685-86 (1970) (enacting 42 U.S.C. § 7412); see also

116 Cong. Rec. 33115 (1970) (statement of Senator Prouty:

“An innovative feature of the [1970] bill, in keeping with the

urgency of the problem, is the establishment of definite

deadlines.”) Likewise, section 112, as revised by the 1990

Amendments, gives existing sources three years to comply

with the Maximum Available Control Technology for air

toxics. 42 U.S.C. § 7412(i)(3).

Instead of a definite time-measured mandate, a source

triggers NSR when and if it undertakes activity that creates,

new, heretofore unregulated, pollution.

Petitioners argue that the NSR program mandates some

unspecified grandfathering that eventually forces all sources

into NSR. This confuses an expectation—that some number

of existing sources might eventually be replaced with new

sources—with a statutory mandate ultimately compelling

installation of advanced controls on all existing sources.

Manifesting this confusion is Petitioners’ misplaced reliance

on a passage from the House report on the 1977 amendments

quoting an industry representative’s statement to the effect

that “[pjroven FGD [flue gas desulfurization] systems are

justified for new plants utilizing higher sulfur fuel where

sizable emission reductions are needed to meet new source

performance standards. * * * [I}t is imprudent to backfit

FGD into existing plants, especially older units facing

retirement within 10-15 years.” Certainly Congress would

make such a significant policy decision in a more direct and

explicit way.® Yet even a cursory examination of the quoted

passage reveals that the “10-15 years” reference is not a

limitation on the universe of existing plants for which

backfitting FGD would be imprudent. It is simply a specific

illustration—a subset of the universe of existing units for

which such backfitting would be “especially” imprudent.

Such practical considerations aside, what this report

actually says is that some Members of Congress may have

expected that some existing power plants would be retired

and new ones constructed. And this indeed has occurred.

It certainly does not, however, indicate that Congress has

adopted statutory lanyuage designed to compel this outcome.

Building upon this misconstruction of the 1977 CAA

Amendments’ legislative history, Petitioners proceed to

misconstrue further the relevant case law to bolster their

argument. For example, Petitioners reinterpret the D.C.

Circuit opinion in Alabama Power v. Costle, 636 F 2d 323,

400 (D.C. Cir. 1979)}—which actually described the 1977

Clean Air Act Amendments as intending to “grandfather

existing Industries,” but not create a “perpetual immunity

from all standards, under the PSD program”—from its long-

® Current and former Members of Congress Waxman, Markey, Rooney,

Maguire, Ottinger, Moffett and Anderson (“Waxman, et al. Amici”) have

filed an amicus curiae brief in this case. Amici Waxman, ef al., particu-

larly elevate this remark (Amici Waxman, ef al. Brief at p. 21) stating,

“Congress's decision to allow these sources to continue operating without

NSR controls was based on the expectation that many ‘older units facfe]

retirement in 10-15 years,’ meaning that they would have to be refur-

bished —and controlled—if they were to continue operating.” Certainly

Congressman Waxman appreciates the nature of estimates. See, ¢.g.,

Cong. Waxman letter to Congressional leadership reminding that

estimates offered to and/or relied-spen by government are just that and

can prove to be conservative (in the context of the Department of Home-

land Security cost estimates), at http://www .democrats.reform.house.gov/

Documents/20040827 | 407 14-65532.pdf.

understood meaning and scope to now stand for a proposition

that the court never addressed, specifically, that increasing

pollution for PSD purposes means something~ more than

increasing the capacity of the facility to emit. In Alabama

Power, no party challenged the provision of the 1978 PSD

rules requiring an increase in the “potential emission rate” of

a source for there to be a “modification.” Thus, the Alabama

Power court’s explanation that “Congress wished to apply the

permit process . . . only where industrial changes might

increase pollution,” and its related observation regarding

“perpetual immunity,” merely recognize that existing sources

become subject to NSPS and PSD when they undertake

section 111 modifications.

Similarly, statements by the Seventh Circuit in Wisconsin

Electric Power Co. v. Reilly, expressing concern over

opening “vistas of indefinite immunity from the provisions of

NSPS and PSD,” must be read in the context of the Circuit’s

rejection of Wisconsin Electric Power’s. argument that

“massive” and “unprecedented” projects, enabling facilities to

increase their hourly emitting capacity by up to 40 percent,

were routine maintenance that failed to trigger NSR. 893

F.2d 901, 909-10 (7th Cir. 1990).

Il. THE NEW SOURCE PROGRAMS MODIFI-

CATION RULE APPLIES ONLY TO EXISTING

SOURCE CHANGES THAT CREATE NEW

AND UNREGULATED POLLUTION. ~

The definition of “modification,” which is the trigger for

every new source program in the Clean Air Act, reflects

Congress’ deliberate and fundamental policy distinction

between regulation of new sources of pollution and existing

sources of pollution. This understanding has been a central

feature of the Clean Air Act since 1970.

A. The Modification Rule focuses on new emis-

sions capacity.

The New Source Programs modification rule arises from

the 1970 Clean Air Act Amendments and the NSPS program

they created. At that time, Congress required review of

“modification” for reconstruction as well as “construction”

activities because both can create new capacity to emit. H.R.

Rep. No. 91-1146, at 10 (1970) (“[N]ew sources may take the

form either of entirely new facilities or expanded or modified

facilities. .. .”). The Clean Air Act defines “modification” as

any physical or operational change “which increases the

amount of any air pollutant emitted by such source.” 42

U.S.C. § 7411(a)(4). Accordingly, the “modification” defi-

nition from its inception focused on activity creating new

(i.g., unregulated) emissions, and until this enforcement was

initiated, EPA never interpreted the term “modification” to

the contrary.

It is inarguable from the text and structure of the 1977

Amendments that Congress carried over this NSPS meaning

of “modification” to the NSR program. See, e.g., 42 U.S.C.

§ 7501(4). The legislative history of the 1977 amendments

confirms that Congress focused NSR on new emissions—not

on the use or maintenance of existing facilities and their

already-regulated emissions capacity. S. Rep. No. 95-127, at

55 (1977) (Congress determined that “some mechanism | was]

needed to assure that before new and expanded facilities are

_ permitted, a State demonstrate that these facilities can be

accommodated within its overall plan to provide for

attainment of air quality standards.”) (emphasis added); see

123 Cong. Rec. 18,021 (1977) (Senator Muskie, one sponsor

of the 1977 Clean Air Act Amendments, noted that the NSR

procedures “apply only to new major emitting facilities and

do not affect existing facilities”); S. Rep. No. 95-127, at 29

(1977); see also 123 Cong. Rec. 18,040 (1977) (statement of

Senator Randolph) (“{T]he nondcterioration section [PSD]

applies only to major new emission sources. It does not relate

to sources already in existence.”).

As illustrated, supra, as part of the SIP process, States

review and regulate emissions capacity from their resident

sources. So long as the SIP assessment of the regulated

emissions capacity of a source is not disturbed, air quality

remains protected no matter how many hours the source

operates or what physical changes are made to enable it to

continue such operation. Congress specifically intended the

term “modification” to encompass only activity that increases

the capacity of a facility to emit—not the use of existing

capacity as constructed and permitted, recognizing the

redundancy inherent in reviewing these sources again unless

the source is changed in a way that creates new, heretofore

unregulated emissions. See Puerto Rican Cement Co. v. EPA,

889 F.2d 292, 298 (1st Cir. 1989) (“[T]he statute refers to the

‘construction’ of facilities, not to increased use of existing

facilities.”). B

B. NSPS and NSR are closely related programs |

sharing common features, including the same

definition of “Modification.”

1. Congress deliberately defined NSR modif-

cation by reference to NSPS modification.

Far from scrapping the NSPS model and beginning anew

when crafting NSR, Congress instead modeled the statutory

NSR program after EPA’s 1974 regulatory PSD program, in

which EPA defined “modification” precisely-as in the NSPS

program, emphasizing the Administrator’s intent for “the

definition of modification under Part 52 [addressing PSD]

to be consistent with the final definition of this term under

Part 60 [governing the NSPS program].” See 39 Fed. Reg. at

42,513 (Dec. 5, 1974).

In 1977, Congress codified the NSR program, incor-

porating the NSPS definition of modification into the NSR

definition. See, e.g., 42 U.S.C. §7501(4) (“The terms ‘modi-

fications’ and ‘modified’ mean the same as the term ‘modi-

fication’ as used in section 7411(a)(4) of this title [the NSPS

program].” ) (emphasis added).”

That Congress expressly incormorated the NSPS definition

into the statutory NSR program is not simply a case in which

two related programs, in the same Act, have identical words

that should normally be given the same meaning. See

Sullivan v. Stroop, 496 U.S. 478, 484 (1990). Here, Congress

expected that NSR review would occur in conjunction with

NSPS review and that the process would be much the same.

H. Rep. No. 95-294, at 144-45 (1977). This was also a major

concern for EPA when creating the regulatory PSD program.

See Approval and Promulgation of Implementation Plans:

Prevention of Significant Air Quality Deterioration, 39 Fed.

Reg. 42,510, 42,512 (Dec. 5, 1974). Appropriately, EPA

itself has recognized the close ties between the NSPS and

NSR programs. 68 Fed. Reg. 61248, 61268 (Oct. 27, 2003)

(“The NSR program’s scope is closely related t. the scope of

the NSPS program.”). In fact, given the explicit cross-

* Congress codified EPA’s regulatory program in the 1977 amend-

ments with some alterations, for instance, strengthening the statutory NSR

program’s contro] technology requirements from those required by EPA

in the regulatory program, reflecting the concern expressed at the time by

Senator Muskie that there existed a “gap” between “actual best available

technology and what has been required under new source performance

standards.” 123 Cong. Rec. 18,022. Senator Muskie’s statement, that

“the record to date under the [NSPS] approach has been disappointing,”

123 Cong. Rec. 18,022 (June 8, 1977) (quoted in Pets. Br. 5), specifically

referred to the difference in “control” technolegy between BACT and

NSPS, not to the scope of applicability of NSPS or PSD to activities at

existing facilities. See id; see also id. at 18,018 (The new NNSR provi-

sions “establish controls more stringent than the [pre-existing NNSR]

ruling by EPA.”).

incorporation between the PSD and NSPS definition, the

application of NSPS and “major modification” review under

NSR should be identical. See /BP, Jnc. v. Alvarez, 126 S. Ct.

514, 523 (2005).

Here, Congress once again acted deliberately, incorpo-

rating by reference an existing term having a recognized,

accepted meaning. Congress failed to qualify “mean the

same as” with, for example, “but only for statutory pur-

poses, not for regulatory implementation purposes.” Such

qualification is precisely what the court in United States v.

Cinergy Corp., No. 06-1224 (7th Cir. 2006) would read into

the statute.

2. NSPS and NSR share overlapping regulatory

goals.

Unable to find support for their position in the statutory

language, Petitioners argue that the NSPS and PSD programs

have fundamentally different purposes requiring that cov-

erage of projects undertaken at existing facilities be broader

under the PSD program than under the NSPS program.

Specifically, they argue that because the PSD program is an

“ambient-based” program, whereas NSPS is a “technology-

based” program, preconstruction permit coverage must be

coterminous with the activities that consume the PSD

“increments.” These claims are specious.

Petitioners’ argument fundamentally ignores that, starting

with the 1970 CAA, both technology requirements and

ambient-based preconstruction review were triggered by

NSPS “modification” activities. Specifically, under the 1970

Act, preconstruction review to ensure compliance with the

NAAQS was triggered by NSPS “modification,” 42 U.S.C.

§§ 7410(a)(2)(D), (a)(4), that being activity that created new

pollution. By contrast, preconstruction review was not

triggered by existing emissions already reviewed and regu-

lated under the SIP—like emissions resulting from increased

hours of operation or from switches to an alternate fuel that

the source was designed to accommodate. In other words,

like nearly everything else in the Clean Air Act regulatory

scheme, the decision to exclude these changes from the

definition of “modification” under the 1970 Act emerges as a

deliberate decision in the context of a regulatory regime

where SIPs regulate emissions from existing sources at full

capacity to ensure attainment and maintenance of the

NAAQS. Under this regime, because all pollution up to an

NSPS “modification” would be fully accounted for in the SIP,

variations in operation of existing capacity would not trigger

preconstruction review (as EPA made clear in its early

regulations defining modification for NSPS and PSD), while

“new pollution” that had not been reviewed would have

to undergo review to assure “attainment and maintenance”

of NAAQS."

Furthermore, arguments seeking to defeat Congress’

instruction that “‘modifications’ and ‘modified’ mean the

same as the term ‘modification’ as used in [the NSPS

program],” by extrapolating different meanings between the

terms through touting differing purposes of the PSD and

NSPS programs, also ignore the fact that some activities that

could cause NAAQS exceedances or consume the PSD

“increment” are not, and have never been, regulated under the

preconstruction permit programs. For instance, Petitioners

suggest that because the “baseline” for increment consump-

tion accounting purposes in PSD areas is based on an area’s

air quality, any activity that increases “actual emissions” and

potentially affects the air quality must necessarily trigger PSD

preconstruction review. Pets. Br. at 40-41. This is incorrect.

'° For such reasons, in its preamble of the 1980 Rules, EPA articulated

disagreement with commenting parties that had argued the focus of NSPS

was based solely on technology, explaining that “the decision to develop

the NSPS is clearly based on ambient air quality concerns.” 45 Fed. Reg.

at 52,691-92 (Aug. 7, 1980).

Petitioners’ view conflates “baseline” for purposes of in-

crement accounting, which is the date of the first PSD permit

application filed in a PSD area, see 42 U.S.C. § 7479(4)

(“[t]he term ‘baseline concentration] means, with respect to a

pollutant, the ambient concentration levels which exist at the

time of the first application for a permit in an area subject to

this part”), with “baseline” for applicability purposes (i.e., for

determining whether a particular activity increased emissions

and thus was a “modification”), which is a period shortly

before the activity, see, e.g., 40 C.F.R. § 52.21(d)(21)(ii)

(establishing as a baseline date “a two-year period which

precedes the particular date and which is representative of

normal source operations’). These two dates can be separated

by years—indeed, decades, for projects conducted in the late

1980s through 2000, as is the case here—and thus bear no

relationship to each other.

Moreover, even where a correspondence between the two

exists, Petitioners’ argument proves too much. As recognized

in Alabama Power vy. Costle, a fuel switch to a higher-

emitting fuel allowed under a facility’s permit potentially

consumes increment, but has always been excluded from PSD

review. 636 F.2d at 378. In the court’s own words, this

argument “conflates the different yet complementary func-

tions of [pre-construction] review and calculation of incre-

ment consumption.” Jd. EPA’s longstanding- definition of

“modification” in both its NSPS and NSR programs has —

excluded from the definition increased hours of operation

within permitted capacity. 40 C.F.R. §§ 51.166(b)(2)(iii);

60.14(e)(3). Yet, under Petitioners’ reasoning every exclusion

under the PSD rules (fuel switch, production rate, hours of

operations, efc.) would be illegal, since every exclusion nec-

essarily describes activity that potentially consumes incre-

ment but that is not subject to pre-construction review. This

_ Cannot be correct."’

Arguments about the ostensibly different purposes of the

NSPS and PSD programs ignore the fact that, like the NSPS

program, the PSD program is both technology-based and

ambient-based. As discussed above, the 1970 Clean Air Act

Amendments combined a technology-based NSPS program,

see 42 U.S.C. § 7411, and an ambient, NAAQS-based “pre-

construction” program, see 42 U.S.C. § 7410(a)(4), with

the same trigger for projects at existing facilities—an NSPS

“modification.” Under the 1974 PSD program, a “tech-

nology-based” program requiring installation or the best avail-

able contro] technology (“BACT”) and an “ambient-based”

program designed to protect “PSD increments” in attainment

areas were merged in one PSD program. In this program, the

permits required that new emissions capacity comply with

BACT-, NAAQS and the PSD increment program.

anh

'' EPA recognized as much, again in the 1980 Rules preamble,

discussing how States can address this issue: First, noting that the

increments must be protected separately from any pre-construction

requirements, EPA explained that the State must periodically review air

quality and take “corrective action” if the increments are exceeded. This

is one of the aspects of the PSD programs that Congress specifically

“tightened” in 1977. See Alabama Power v. Costle, 636 F.2d at 361-64.

Under the 1974 PSD rules, there was no requirement (or authority) to take

action to protect the increments if they are exceeded due to “non-

modification” activity (e.g., fuel switch). 45 Fed. Reg. at 52,677 (Aug. 7,

1980). Second, EPA explained that States could “revise SIPs and/or issue

operating permits so that SIP requirements and permits reflect actual

source operating conditions.” /d at 52,721-22. If the State does the

latter—i.e., revise a source’s permit to limit hours of operations, as the

example in the preamble posits, see id at 52,70S—any increase in hours

in excess of an enforceable permit limit, whether made possible by

maintenance work or not, would trigger PSD. If the permit does not

restrict hours, however, there is no basis in the regulations, or in logic, to

differentiate between the two types of increases in hours of operation of

the existing unit.

CONCLUSION

Electric utility operations routinely fluctuate by the hour,

day, month, and year. This is due to variable demand driven

by many factors including the weather, economic health, and

the availability of other units on the system. Utilities keep

their units in good repair to respond to the market’s fluctu-

ations. They are issued permits that do not limit their

operating hours, enabling them to meet these obligations.’

To ensure that these fluctuating source-specific emissions do

not interfere with attainment or maintenance of the NAAQS,

State regulators at the technical air quality planning level

issue permits to utility sources that either reflect a specific

emission limit or assume round-the-clock operations, and

translate the relevant pollution numbers into the overall

States’ attainment and maintenance plans.

At the more basic level, this approach to air quality

planning reflects the fundamental distinction between existing

source pollution, which is fully accounted for and subjected

to a NAAQS compliance-driven level of control, and green-

field units and modified sources creating “new” pollution.

The Clean Air Act’s language and history make clear that the

NSR and NSPS programs were always intended by Congress

to address and apply to this new pollution (emissions from

new sources). Old pollution (emissions from existing

sources), no matter how it fluctuates within the universe of

emissions generated by existing sources, is controlled by

other (i.e., non-NSR) Clean Air Act programs. In their

pursuit of a major policy shift repeatedly rejected by Con-

? EPA has consistently recognized that Congress did not intend to

regulate such fluctuations. See 68 Fed. Reg. 61,253 (Oct. 27, 2003).

(“{A}pplication of the major NSR program to ‘modified’ plants is [not]

desiened to require existing plants that are continuing to operate in a

manner consistent with their original design to curtail their rate of

production or hours of operation beyond limitations set forth in their

existing permits.”); see also 45 Fed.Reg. 52,704 (Aug. 7, 1980).

gress, Petitioners make “grace period” or “grandfathering”

arguments and other similar claims that fundamentally

misstate and misconstrue all of the major policy choices made

by Congress throughout the entire life of the Clean Air Act.

In turn, the common definition of “modification,” to be

applied in the context of the NSR and NSPS programs, was

developed in response to, and is driven both by these

overarching regulatory policy imperatives and by Congress’

decision to regulate old and new pollution in fundamentally

different ways. Petitioners indicate that failure to adopt their

desired policy shift will result in a policy hole in America’s

air pollution regulations. To the contrary, revising the

definition “of modification” along the lines suggested by the

Petitioners so as to apply NSR to the fluctuating emis-

sions of already-regulated pollution would defeat Congres-

sional intent and effectively emasculate the non-NSR Clean

Air Act programs. The Court should refuse to indulge in such

a fundamental re-write of one of this nation’s most important

and carefully balanced regulatory statutes.

Respectfully submitted,

GEORGE C. LANDRITH

CHRISTOPHER C. HORNER

FRONTIERS OF FREEDOM

P.O. Box 69

Oakton, VA 22124

(703) 246-0110

September 15, 2006 Counsel for Amici Curiae

U.S. Representative Joe L. Barton

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FILED

No. 05-848 JUL 2 1 2006

OFFICE OF THE CLERK

In The

Supreme Court of the Anited States

ENVIRONMENTAL DEFENSE, et al.,

Petitioners,

Vv.

DUKE ENERGY CORP., et ai.,

Respondents.

On Writ Of Certiorari To The

United States Court Of Appeals

For The Fourth Circuit

BRIEF OF LAW PROFESSORS

JOHN E. BONINE, OLIVER A. HOUCK,

RICHARD J. LAZARUS, EDWARD LLOYD,

THOMAS O. MCGARITY, ROBERT V. PERCIVAL,

ZYGMUNT J.B. PLATER, ARNOLD W. REITZE, JR..,

WILLIAM H. RODGERS, PETER M. SHANE,

AND MARK SQUILLACE AS AMICI

CURIAE IN SUPPORT OF PETITIONERS

JARED A. GOLDSTEIN

ROGER WILLIAMS UNIVERSITY

SCHOOL OF LAW

Ten Metacom Ave.

Bristol, Rhode Island 02908

(401) 254-4594

JULY 2006 Counsel for Amici Curiae

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

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INTERESTS OF AMICI CURIAE ..................ccceeeeeeeees 1

ITED sucicestncicsbiaidecniitininhinepnaiiiianatsadnsegeisiiadiibnieginateines 4

SUMMARY OF ARGUMENT. ..................:::ccceesseeeeeeeeees 6

ET iiibistichesiliisniensinsigtine-cctaitassttininiinnsiniciaiiiieiibipaitin 8

I. THE PLAIN MEANING OF THE “MODIFI-

CATION” DEFINITION AND THE UNMIS-

TAKABLE PURPOSE OF THE PSD

PROGRAM REQUIRE AN ACTUAL ANNUAL

STE DIED acinesesssesncnmnciscnseetnonisnetsinteacoten 8

II. THE PRESUMPTION OF CONSISTENCY DOES

NOT SUPPORT THE INVALIDATION OF THE

ACTUAL ANNUAL EMISSION TEST.................. 13

A. This Court Has Unanimously Rejected the

Argument that a Term Must Be Construed

Identically Whenever It Is Defined in a Sin-

ip RICE TIRED onicsccccessevecocewssnsccsens 13

B. Rowan Does Not Support the Fourth

re si siiecetncniiiiineincientebinioninnss 17

C. The Actual Annual Emissions Test Would

Be Valid Even if EPA Were Required to

Employ the Same Test for the NSPS and

I cies scicipctalinctichdisdceiiaantinhadieibiistahidigaeis 21

SEE cicntirstnsvesasconasstanenecnintincnsenseiininvasnaiusbeetindn 24

TABLE OF AUTHORITIES

Page

CASES

Ala. Power v. Costle, 636 F.2d 323 (D.C. Cir 1979)........... 11

Alaska Dept. of Environmental Conservation v.

se as Ee ED sieninhnvsndiiennnsdacadinindsntianicinentavions 12

Atlantic Cleaners & Dyers, Inc. v. United States,

Se an, HE IT A cshcsinniocinhelncesecestienhciealeatesotealiep 7, 13, 14

Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984)....... 6, 19, 20

Christensen v. Harris County, 529 U.S. 576 (2000).......... 19

Cohen v. de la Cruz, 523 U.S. 213 (1998)................ccce eee 22

General Dynamics Land Systems v. Cline, 540 U.S.

Ee TED benivcdkonachinsincishetasadsdiaiialinnhiaaaniaiuindsenivies 14,15

Lee v. Madigan, 358 U.S. 228 (1959) ....0.0... eee 13

New York v. EPA, 413 F.3d 3 (D.C. Cir. 2005).....10, 11, 17, 23

N. Plains Res. Council v. EPA, 645 F.2d 1349 (9th

a aa 21

Robinson v. Shell Oil Co., 519 U.S. 337 (1997).... 7, 15, 16, 17

Robinson v. Shell Oil Co., 70 F.3d 325 (4th Cir. 1995)......... 15

Rowan Cos. v. United States, 452 U.S. 247

ig a te a 7, 8, 17, 18, 19, 20

United Sav. Assn. of Tex. v. Timbers of Inwood

Forest Associates, Ltd., 484 U.S. 365 (1988) ................. 14

United States v. Cleveland Indians Baseball Co.,

I 14

Wachovia Bank v. Schmidt, ___ U.S. ___, 126 S.Ct.

ERE EST er SN LORY Ie oe OC AO OR 14

ili

TABLE OF AUTHORITIES -— Continued

Page

STATUTES

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REGULATIONS

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ERR tele DD Ma REY PTO 5

MISCELLANEOUS

Norman J. Singer, Statutes and Statutory Construc-

NE: MII didcicrbsitaikaihsdnnintinicinipesdgincniainsamibiaecen 13

Webster’s Third New International Dictionary

SEIT inhsseishicheisonlieteehheiitisdehesdeliiciiceidloen auth niabbsbibaia sesbitiaitintathaten 9

INTERESTS OF AMICI CURIAE'’

Amici are professors of law who teach and write in the

fields of environmental and administrative law. Amici

have substantial expertise relevant to the questions of

interpretation of the Clean Air Act law presented in this

case, and strong professional interests in the development

of legal rules that promote fidelity to the public policies

established in the Clean Air Act.

John E. Bonine is a professor of law at the University

of Oregon.” He is the former Associate General Counsel for

Air, Noise, and Solid Waste at the United States Environ-

mental Protection Agency, in which capacity he provided

legal advice on all aspects of the Clean Air Act. His book

(with Professor Thomas O. McGarity), The Law of Envi-

ronmental Protection (2d ed. 1992), analyzed both the PSD

program and other significant Clean Air Act pro-

grams. Professor Bonine has taught pollution law for 28

years.

Oliver A. Houck is a professor of law at Tulane Uni-

versity Law School, where he directs the environmental

law program. He served as an Assistant United States

Attorney and as General Counsel to the National Wildlife

Federation before joining the Tulane faculty in 1981. He

' The parties have consented to the filing of this brief. Letters of

consent to the filing of this brief are being filed in conjunction with this

brief. Pursuant to this Court’s Rule 37.6, counsel states that this brief

was not authored in whole or in part by counsel for a party and that no

one other than amici and their counsel made a monetary contribution to

the preparation or submission of this brief.

* Law school affiliations are included here for identification only

and should not be construed as endorsement by the institutions of any

positions asserted in this brief.

has published widely on environmental, administrative,

and constitutional law.

Richard J. Lazarus is a professor of law at George-

town University Law Center, where he teaches environ-

mental law, natural resources law, and torts. He

previously worked for the U.S. Justice Department, in

both the Environmental and Natural Resources Division

and the Solicitor General’s Office. He is the author of The

Making of Environmental Law (2004) and co-editor of

Environmental Stories (2005), as well as dozens of law

review articles in the area of environmental and natural

resources law.

Edward Lloyd is the Evan M. Frankel Clinical Profes-

sor in Environmental Law at Columbia University School

of Law. He has practiced in environmental law for more

than thirty years. Prior to joining the faculty at Columbia,

Professor Lloyd served as the founding director of the

Rutgers University Law School Environmental Law Clinic

from 1985 to 2000.

Thomas O. McGarity holds the W. James Kronzer

Chair in Trial and Appellate Advocacy at the University of

Texas School of Law, where he has taught environmental

law, administrative law, and torts since 1980. He is the

author of Reinventing Rationality: The Role of Regulatory

Analysis in the Federal Bureaucracy (1991), and, with

Professor Bonine, The Law of Environmental Protection

(1991).

Robert V. Percival is the Robert F. Stanton Professor

of Law and Director of the Environmental Law Program at

the University of Maryland School of Law. He has written

extensively on environmental law and regulatory policy

and is the principal author of the environmental law

casebook Environmental Regulation: Law, Science &

Policy, the fifth edition of which was published this year.

Zygmunt J. B. Plater is a professor of law at Boston

College Law School, where he teaches environmental! law,

property, and land use. Professor Plater is lead author of

the casebook Environmental Law and Policy: Nature, Law,

and Society, now in its third edition, as well as numerous

articles in the field of environmental law.

Arnold W. Reitze, Jr., is the J.B. and Maurice C.

Shapiro Professor of Environmental Law and director of

the environmental law program at the George Washington

University Law School, where he has taught since 1970.

Professor Reitze is the author of six books and more than

fifty research studies and articles on environmental law.

His most recent books are Air Pollution Control Law:

Compliance and Enforcement (2001), and Stationary

Source Air Pollution Law (2005).

William H. Rodgers, Jr., is the Stimson Bullitt Profes-

sor of Environmental Law at the University of Washing-

ton. He published the Handbook of Environmental Law, in

1977, with a second edition in 1994; a case book, Energy

and Natural Resources Law, in 1983; a four-volume

treatise on environmental law in 1986, 1988 and 1992; and

scores of essays and article on environmental law.

Peter M. Shane is the Joseph S. Platt/Porter Wright

Morris & Arthur Professor of Law at the Ohio State

University, Moritz College of Law, as well as the Director

of Center for Interdisciplinary Law and Policy Studies at

Moritz College of Law. He has taught constitutional and

administrative law since 1981, and he is co-author of the

casebook Administrative Law: The American Public Law

System, now in its fifth edition, as well as numerous

articles on administrative law.

Mark Squillace is a professor of law and the Director

of the Natural Resources Law Center at the University of

Colorado School of Law. He is a co-author of Natural

Resources Law and Policy (2004) and numerous articles in

the area of environmental law. In addition to teaching and

writing in the areas of environmental law and natural

resources law, Professor Squillace also served as Special

Assistant to the Solicitor of the Department of the Interior.

STATEMENT

This case addresses the validity of the regulatory test

adopted by the Environmental Protection Agency (“EPA”)

under the Clean Air Act for determining whether a change

to a stationary source of air pollution constitutes a “modi-

fication” as that term is used in the Prevention of Signifi-

cant Deterioration program (“PSD”), 42 U.S.C. §§ 7470-

7492. The PSD program specifies standards for the “con-

struction” of major pollution sources operating in attain-

ment areas, that is, areas that comply with the Clean Air

Act’s national ambient air quality standards. 42 U.S.C.

§ 7475(a). The Act defines “construction” for the PSD

program to include “modification” of existing sources, and

defines “modification,” in turn, by cross-reference to 42

U.S.C. § 7411. That provision, part of the New Source

Performance Standards (“NSPS”) program, defines “modi-

fication” as “any physical change in a stationary source

which increases the amount of any air pollutant emitted by

such source.” 42 U.S.C. §7411l(a\(4). EPA promulgated

regulations implementing the PSD program by establishing

an actual annual emissions test for measuring whether a

change “increases” the amount of air pollution emitted and

thereby constitutes a “modification.” The test compares

“actual emissions” from a source, measured in “tons per

year,” with past actual annual emissions. See 40 C.F.R.

§ 51.166(b)(2), (3), (21) (1987).

In this enforcement action, the Fourth Circuit refused to

give effect to the actual annual emissions test on the ground

that EPA has adopted a different test for measuring emissions

increases under the NSPS program. The NSPS test measures

emissions “increases” on the basis of hourly emission rates,

expressed in kilograms of pollutants that a source is capable of

emitting per hour, rather than total actual annual emissions.

40 C.FR. § 60.14 (1988). The Fourth Circuit ruled that the

text of the Clean Air Act establishes an “effectively irrebut-

table” presumption that EPA must establish identical regula-

tory tests for measuring emissions increases under both the

PSD and NSPS programs: “When Congress mandates that

two provisions of a single statutory scheme define a term

identically, the agency charged with administering the statu-

tory scheme cannot interpret these identical definitions

differently.” United States v. Duke Energy Corp., 411 F.3d 539,

546-547 (4th Cir. 2005).

Concluding that EPA must employ the same test for

measuring emissions increases under both programs, the

Fourth Circuit refused to apply the actua: annual emissions

test adopted under the PSD program because the NSPS test

had been adopted first: “No one disputes that prior to enact-

ment of the PSD statute, the EPA promulgated NSPS regula-

tions that define the term ‘modification’ so that only a project

that increases a plant’s hourly rate of emissions constitutes a

‘modification.’ The EPA must, therefore, interpret its PSD

regulations defining ‘modification’ congruently.” Jd. (em-

phasis supplied by the court).

SUMMARY OF ARGUMENT

The court of appeals erred in effectively invalidating

the actual annual emissions test. That test is fully sup-

ported, if not mandated, by the text of the “modification”

definition. The actual annual emissions test measures

whether there has been an “increase” in the “amount” of

air pollutants “emitted,” as the quoted words are used in

42 U.S.C. § 7411(a)(4), by comparing the total amount of

pollutio . emitted per year to annual amounts emitted in

past years. EPA reasonably concluded that pollution

emissions can be said to increase if more pollution is

emitted this year than in past years.

In ruling otherwise, the court of appeals did not follow

basic principles of statutory construction. Although the

court found that the text of the Clean Air Act does not

allow the actual annual emissions test, the court did not

examine the statutory text, history, or purposes of the

Clean Air Act and the PSD provisions, and the court did

not hold that the actual annual emissions test is in any

way inconsistent with the Clean Air Act. The court like-

wise did not conclude that the “modification” definition

unambiguously requires that “increases” be measured by

the hourly rate test adopted under the NSPS program,

making the actual annual emissions test in EPA’s PSD

regulations an impermissible agency interpretation under

the framework of Chevron U.S.A. v. NRDC, 467 U.S. 837

(1984). Nor is it possible that the court could have reached

such conclusions.

Rather than undertaking any analysis that properly

could be characterized as statutory construction, the

Fourth Circuit invalidated the actual annual emissions

test solely on the ground that EPA had adopted a different

emissions test under the NSPS program. This Court's

cases do not support that conclusion. This Court has

stated that a presumption of consistent meanings arises

when a term appears in more than one statutory provi-

sion, but this Court has long recognized that the presump-

tion “is not rigid” and “readily yields” when application of

ordinary principles of statutory construction reveals that

the term should be construed differently in different

statutory provisions. Atlantic Cleaners & Dyers, Inc. v.

United States, 286 U.S. 427, 433 (1932).

The court of appeals mistakenly concluded that the

presumption of consistency becomes “effectively irrebut-

table” when a repeated term is defined in a single provi-

sion, but this Court has already unanimously rejected that

argument. In Robinson v. Shell Oil Co., 519 U.S. 337

(1997), this Court ruled that Congress’s use of a single

statutory definition for the term “employee” in Title VII

does not mean that the term must be given an identical

construction in every provision in which it appears. Even

though Title VII includes a definition of “employee” appli-

cable throughout the statute, this Court held that the term

means past and present employees in some provisions but

only present employees in other provisions. This Court's

decision in Rowan Cos. v. United States, 452 U.S. 247

(1981), upon which the Fourth Circuit relied in finding the

presumption of consistency “effectively irrebuttable,” does

not support such a beefed-up presumption. Rowan holds

that the term “wages” should be given a consistent mean-

ing in different provisions of the tax code based on the

text, purposes, and legislative history of the provisions at

issue. Rowan does not hold that the presence of a common

statutory definition invariably mandates consistency.

Even if the Fourth Circuit were correct that EPA must

employ identical tests for determining if there has been an

emissions “increase” under both the NSPS and PSD pro-

grams, that conclusion would not mean that the actual

annual emissions test is invalid. That EPA adopted differ-

ent tests under the two programs does not suggest which

test is right or wrong. The Fourth Circuit gave no reason for

preferring the hourly rate test over the actual annual

emissions test other than the fact that the hourly rate test

was adopted first. If consistency is required, however, there

is no reason to prefer an earlier test to a later test. Instead,

the validity of either test should be determined using the

ordinary methods of statutory construction, examining the

statutory text, context, purposes, and history of the Clean

Air Act, and giving proper deference to EPA for its resolu-

tion of any statutory ambiguities. Under that analysis, the

actual annual emissions test is plainly valid. ;

ARGUMENT

I. THE PLAIN MEANING OF THE “MODIFICA-

TION” DEFINITION AND THE UNMISTAK-

ABLE PURPOSE OF THE PSD PROGRAM

REQUIRE AN ACTUAL ANNUAL EMISSIONS

TEST

In reviewing the court of appeals’ refusal to give effect

to EPA regulations, it is important to note what the court

did not do: it did not undertake to construe the definition

of “modification” as it appears in 42 U.S.C. § 7411(a)(4),

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.