Amicus Curiae Brief — Environmental Defense v. Duke Energy Corporation
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Sir (4) FILED
ss SEP 15 2006
—-
No. 05-848
SU , U.S.
IN THE
Supreme Court of the Gnited States
ENVIRONMENTAL DEFENSE, ef ail.,
Petitioners,
v.
DUKE ENERGY CORPORATION, ef ai.,
Respondents.
On Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit
BRIEF AMICUS CURIAE FOR THE NATIONAL
ENVIRONMENTAL DEVELOPMENT
ASSOCIATION’S CLEAN AIR PROJECT
IN SUPPORT OF RESPONDENTS DUKE ENERGY
CORPORATION, ET AL.
LESLIE SUE RITTS
LORANE F. HEBERT*
HOGAN & HARTSON L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-6573
*Counsel of Record Counsel for Amicus Curiae
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001
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TABLE OF CONTENTS
STATERGENTE OF THE CARE. .W.n....ccocecoccssoscoseossecccceees
SUMMARY OF ARGUMENT..............cccsssssseeeeseeeees
RITE ssccnitesisirinnsnsininapannnatisicistentateanmnenneninbatiain
I. A TWO-STEP NSR APPLICABILITY
TEST IS CONSISTENT WITH THE
PLAIN LANGUAGE OF THE CAA................
Il. A TWO-STEP NSR APPLICABILITY
TEST IS THE ONLY REASONABLE
AND WORKABLE APPROACH TO
IMPLEMENTING THE NSR
PER cinieresnnsetcicinsiiclintinieasintinucdminsspeecenmiene
A. NSR Review And Permitting Is Bur-
densome, Time-Consuming, And Ex-
B. If Petitioner’s And EPA’s Theory Of
NSR Applicability Were To Prevail,
Manufacturers Would Be Subject To
Frequent And Repeated NSR Review
FR Gilacitchinteicindeciterasinniéctainttiittrninnin
(i)
12
15
15
17
ii
TABLE OF CONTENTS—Continued
C. Because Construction Of A Project
That Triggers NSR Review Cannot
Begin Until An NSR Permit Has Been
Issued, Manufacturers Would Have To
Operate Broken Equipment, If At All,
In Its Impaired Condition While Wait-
ing For A Permit To Be Issued...................
D. A Two-Step NSR Applicability Test Is
Necessary For Satisfactory Economic
And Administrative Results .................000+.
SEINE scicssiensssetstionsiiainipthisetenchenstsestinbiietonntite
lii
TABLE OF AUTHORITIES
Page
CASES:
Alabama Power Co. v. Costle, 636 F.2d 323
SUI nass Ut: SITTER cincics cctiilineiisilecedennieiamatiiiadsipidicsiniciie passim
Alaska Dep't of Envtl. Conservation v. EPA,
Ps Ne ED ccchitstnbethitsenctricseheneticinnnicisiacine 16
ASARCO Inc. v. EPA, 578 F.2d 319
Bs Meats STII sisteciapedheininsipcenbeeninisttnisncetibnansibibpiindiatind 6,14
Chevron U.S.A. Inc. v. NRDC,
ae Se Oe vrcietiintvdtssicintrinstittnnsninniied 4, 7,9, 14
In re Tennessee Valley Authority,
ee cities bv tinciepciiecdbinticindeasinantaghciies 22
New York v. EPA, 443 F.3d 880 (D.C. Cir.
MIU slikisitcaliiltenites tec oteiusieakedadiadsiihamsniaiiinitininiane 19
NRDC v. Gorsuch, 685 F.2d 718 (D.C. Cir.
1982), rev'd on other grounds sub nom.,
Chevron U.S.A. Inc. v. NRDC, 467 U.S.
i RT rt a Alpe CR eee OPER e 14
United States v. Ohio Edison Co.,
276 F. Supp. 2d 829 (S.D. Ohio 2003)................. 19
Wisconsin Elec. Power Co. v. Reilly,
SPS F268 SOL (7a Cie. 1990).....cccsecoccccsccosscccsccesee 21
iv
TABLE OF AUTHORITIES—Continued
STATUTES:
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BUDE: 6 POI c cicivcicicnct eee
42 U.S.C. § T4TS(A)(6).......recececssssncossersossersssesencnsarssesees
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BUG. 8 FOTIA OO seccceseccnivsininatinininsasaniiaanetanetgia
GE ABA,. F PEFR icoovvsccccsnsnisescvinsechiapinatantaseniinanaiaaa
G2 UBS. F POPS wecrictninrecssventaistinicasinlaiiiaal
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Se reek Be Se IDO, scnncitstoiicnninnisinticniaaiaiies
GE UA, GF eet rccceneccccssccncinnesseniuitdgnntinpiabanictainiiiien
Vv
TABLE OF AUTHORITIES—Continued
Page
RAE PUNE istncecncatesednsticindatscsetensepionsighacnesetnpeds 7, 16
I ST iis cahnancinnsiniaepiignitcbeninnticesanbees 7
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itl ceedernraanrraeartenaniatednenes 6, 14
RULES:
Na i ahcchscicdicechtclaeiansebedanedsstonduinnpinstinaanasenes 2
I ci ed liicieniichicieslcneasiepeiintehidbdadnacinntbetsiatanteindunens 2
REGULATORY MATERIALS:
EE RE A Oe a CO 16
GO CPR. § 51. 16G(a LT Milli) «....2.....0ceccecscesecscsscsosseseosess 18
40 C.F.R. § 51.166(b)(2)(i) (1987).........ccececccseeseseeeeens 9
40 C.F.R. § 51.166(b)(2)(iii)(a) (1987) ......cccccecceseeeeees 19
40 C.F.R. § 51.166(b)(2)(iii)(£) (1987) cocecccoceccesescoseeeee 9, 12
vi
TABLE OF AUTHORITIES—Continued
40 C.F.R. § 51.166(b)(3)(i)-(Viii) (1987) ..s.scccccsccsseeeon
GOO IB 6 DE OI icsecenecenscctasircisesseneitiornie
40 C.F.R. § 51.166(b)(23)(i) ...sccccsccccccescesssesssssvecsesneesee
40 C.F.R. § 51.166(b)(23)(i) (1987) ..ccccccccsscsscssseeeseeneees
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39 Fed. Reg. 36,946 (Oct. 15, 1974) ..cccsssssssssessessseees
40 Fed. Reg. 58,416 (Dec. 16, 1975) ..c...cccesssssssseeseeenees
43 Fed. Reg. 26,380 (June 19, 1978)........c.scscsssssssseeesee
45 Fed. Reg. 52,676 (Aug. 7, 1980) ...cc...ccssessssseeessesseees
46 Fed. Reg. 50,766 (Oct. 14, 1981) ...c...ccssssscsssseeseseeees
57 Fed. Reg. 32,314 (July 21, 1992) .....cccccsccccesesssssseeees
65 Fed. Reg. 77,623 (Dec. 12, 2000) .......ccsse-sssceeesenvees
65 Fed. Reg. 79,825 (Dec. 20, 2000) BE cersise:
67 Fed. Reg. 80,186 (Dec. 31, 2003) ....c..ccsssssecesssseeesee
Vii
TABLE OF AUTHORITIES—Continued
70 Fed. Reg. 61,081 (Oct. 20, 2005)
PPP ted
OTHER AUTHORITIES:
EPA, New Source Review: Report to the Presi-
ED Ge ct cctctnmtntntnininsnmpinnnsiinniansy
Federal Land Managers’ Air Quality Related
Values Workgroup Phase I Report (Dec. 2000)......
Interior, Environment, and Related Agencies
Appropriations for 2007 Part 7: Hearing Be-
fore the Subcomm. on Interior, Environment
and Related Agencies of the H. Comm. on
Appropriations, 109th Cong. 591 (2006) (Tes-
timony of Members of Congress, Prepared
Statements of Outside Witnesses)
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IN THE
Supreme Court of the GQnited States
No. 05-848
ENVIRONMENTAL DEFENSE, ef ai.,
Petitioners,
v.
DUKE ENERGY CORPORATION, ef ai.,
Respondents.
On Writ of Certiorari to the
United States Court of Appeals
for the Fourth Circuit
BRIEF AMICUS CURIAE FOR THE
NATIONAL ENVIRONMENTAL DEVELOPMENT
ASSOCIATION’S CLEAN AIR PROJECT
IN SUPPORT OF RESPONDENTS DUKE ENERGY
CORPORATION, ET AL.
STATEMENT OF INTEREST OF AMICUS CURIAE
Amicus curiae the National Environmental Development
Association’s Clean Air Project (“NEDA/CAP”) is a coali-
tion of manufacturers representing major industrial sectors,
including the aerospace, aluminum, automobile manufactur-
ing, natural resource exploration, refining and petrochemi-
cals, pharmaceuticals, electronics, and home products
2
industries.' NEDA/CAP was formed in 1979, shortly after
the enactment of the 1977 Clean Air Act Amendments, to
address major policy issues arising under the Clean Air Act
(“CAA”), its regulations, and Environmental Protection
Agency (“EPA”) guidance. NEDA/CAP’s members own and
operate “major emitting facilities” and “major stationary
sources” under the CAA, and thus are subject to the exten-
sive review and permitting requirements of the CAA’s New
Source Review (“NSR”) program when they make changes at
their plants that trigger NSR review.
Although this case involves an electric utility, the issue in
this case—whether a “modification” for NSR purposes
requires an increase in maximum achievable hourly emis-
sions—affects a broad spectrum of manufacturing industries,
both large and small. In contrast to electric utilities that use a
single configuration of equipment to generate electricity,
manufacturers typically use multiple process lines—
consisting of dozens or even hundreds of pieces of equipment
with numerous emissions points—to manufacture various
products during different periods of the year depending on
economic demand and other factors. While electric utilities
often make large-scale repairs to very large pieces of equip-
ment—i.e., coal-fired boilers—to keep them operating as
designed, manufacturers often make smaller changes to
smaller pieces of equipment in response to breakdowns and
other disturbances. If petitioners’ and EPA’s interpretation
of the CAA were upheld, such activities would be repeatedly
subject to NSR review. The recent invalidation of an EPA
regulation concerning an exclusion for “routine, mainte-
Pursuant to this Court’s Rule 37.6, NEDA/CAP notes that no
part of this brief was authored by counsel for any party, and no
person or entity other than NEDA/CAP made any monetary
contribution to the preparation or submission of the brief. This
brief is filed with the written consent of all parties pursuant to Rule
37.3(a). Copies of the requisite consent letters have been filed
with the Clerk.
3
nance, repair, and replacement” elevates the importance of
the definition of emissions “increase” at issue here. See New
York v. EPA, 443 F.3d 880 (D.C. Cir. 2006).
More than 35 years ago, EPA interpreted the statutory
definition of “modification” for the first time in the context
of the New Source Performance Standards (“NSPS”) pro-
gram and interpreted it to mean an increase in maximum
achievable hourly emissions. Several years later, EPA
defined “major modification” in the NSR context as a
significant net increase in actual annual emissions. Congress
specifically provided that the term “modification” in the NSR
context have the same meaning as the term “modification” in
the NSPS context. Thus, NSR review should be triggered
only if a change results in a “modification”—requiring an
increase in a unit’s maximum achievable hourly emissions—
and a “major modification”’—trequiring a significant net
increase in source-wide actual annual emissions.
This two-step NSR applicability test ensures that NoR
applies only to those projects that merit both the extensive
permit application and review process and the installation of
costly emission controls. An increase in maximum achiev-
able hourly emissions typically does not occur unless a
manufacturer makes a change that increases production
capacity. A change that increases production capacity—and
thus increases maximum achievable hourly emissions—
warrants the application of new emissions controls. Not all
increases in hourly emissions are significant enough, how-
ever, to warrant NSR review and permitting and the installa-
tion of state-of-the-art emissions controls. Many increases in
maximum achievable hourly emissions at an individual unit
will not cause a significant net increase in source-wide actual
annual emissions because, for example, demand or produc-
tion may decrease over the course of a year or because an
emissions increase at an individual unit may be offset by an
emissions decrease at another unit within a plant. If a project
will not only increase maximum achievable hourly emissions
4
(a “modification”) but also cause a significant net increase in
actual annual emissions (a “major modification”), then the
project may have a significant environmental impact—one
that more reasonably justifies NSR review and the installa-
tion of more costly emissions controls. Thus, a two-step
NSR applicability test closely aligns with one of the central
goals of the NSR program—balancing the interest in improv-
ing air quality with “the allowance of reasonable economic
growth.” Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 863
(1984).
Petitioners and EPA would have this Court hold that a
“modification” is not required to trigger NSR review—i.e.,
that the Court eliminate the first step of the NSR applicability
test. Petitioners’ and EPA’s interpretation of the CAA—
which subjects a source to NSR review even where a change
does not increase production capacity—would require
sources to undergo NSR review far more frequently than
Congress could have ever intended. This Court should
affirm the judgment below and hold that “modification” in
the NSR context means the same thing as it does in the NSPS
context—i.e., a change that increases maximum achievable
hourly emissions. At the same time, the Court should make
clear that EPA’s definition of “major modification”—
requiring a significant net increase in source-wide actual
annual emissions before NSR review is triggered—is consis-
tent with the CAA. As we explain below, there are key
differences between the NSPS and NSR _ programs—
highlighted in a line of significant decisions—that warrant
the requirement of a “major modification” as a second step of
the NSR applicability test.
STATEMENT OF THE CASE
The NSPS Program. In 1970, Congress enacted the NSPS
program, which directed EPA to prescribe national technol-
ogy-based performance standards for various categories of
equipment—e.g., fossil fuel-fired steam generators. See 42
5
U.S.C. § 7411; 40 C.F.R. § 60.40. The NSPS program
applies only to “new sources”—i.e., any “stationary source,”
the “construction” or “modification” of which is commenced
after the publication of regulations prescribing a performance
standard applicable to such source. 42 U.S.C. § 7411(a)(2).
“Modification” is defined as “any physical change in, or
change in the method of operation of, a stationary source
which increases the amount of any air pollutant emitted by
such source or which results in the emission of any air
pollutant not previously emitted.” Jd. § 7411(a)(4).
In 1975, EPA promulgated regulations that for the first
time “clariflied] the phrase * * * ‘increases the amount of
any air pollutant,’ ” in the statutory definition of “modifica-
tion.” 39 Fed. Reg. 36,946, 36,946 (Oct. 15, 1974). The
1975 rules provided that, with certain exceptions, “any
physical or operational change to an existing facility which
results in an increase in the emission rate to the atmosphere
of any pollutant to which a standard applies shall be a
modification.” 40 Fed. Reg. 58,416, 58,419 (Dec. 16, 1975)
(40 C.F.R. § 60.14(a), (e)(3)) (emphasis added). To further
“clarif[y] what constitutes an increase in emissions,” 39 Fed.
Reg. at 36,947, the 1975 rules provided that the “[e]mission
rate shall be expressed as kg/hr of any pollutant discharged
into the atmosphere.” 40 Fed. Reg. at 58,419 (40 C.F.R.
§ 60.14(b)). As EPA explained, the unit “kg/hr” has “the
advantages of being sensitive to increased production capac-
ity and to the overall increase in total emissions to the
atmosphere,” while “automatically allow[ing] increases in
operating hours as intended by one of the existing exemp-
tions.” 39 Fed. Reg. at 36,947 (emphasis added).
The 1975 rules also provided that “[a] modification shall
not be deemed to occur if an existing facility undergoes a
physical or operational change where * * * the total emission
rate of any pollutant has not increased from all facilities
within the stationary source.” 40 Fed. Reg. at 58,419. That
application of the “bubble concept”—which treats an entire
6
plant as a single “source” and allows emissions increases
from units within the plant to be offset by emissions de-
creases from other units within the plant—was invalidated by
the D.C. Circuit in ASARCO Inc. v. EPA, 578 F.2d 319 (D.C.
Cir. 1978). The NSPS provisions define “stationary source”
as “any building, structure, facility, or installation which
emits Or may emit any air pollutant.” 42 U.S.C.
§ 7411(a\(3). In the 1975 rules, however, EPA defined
“stationary source” to include a “combination” of facilities.
See 40 Fed. Reg. at 58,418. By so defining “stationary
source,” the rules “allow[ed] a facility whose emissions are
increased by alterations to avoid complying with the applica-
ble NSPS as long as emissions decreases from other facilities
within the same ‘source’ cancel out the increase from the
altered facility.” 578 F.2d at 326. The D.C. Circuit con-
cluded, however, that EPA “ha[d] no authority to rewrite the
statute in this fashion.” /d. at 327.
The NSR Program. In 1977, Congress enacted the New
Source Review (“NSR”) program. The NSR program has
two components: the Prevention of Significant Deterioration
(“PSD”) program, see 42 U.S.C §§ 7470 ef seg., and the
Nonattainment New Source Review (“NNSR”) program, see
id. §§ 7501 et seq. The PSD program applies in “attainment
areas” —i.e., those areas meeting the NAAQS for particular
pollutants, id. § 7471; the NNSR program applies in “nonat-
tainment areas”—i.e., those areas that have not yet met the
NAAQS for particular pollutants, id. § 7501(2). The PSD
program applies to any new or modified “major emitting
facility,” id. § 7479(1); the NNSR program applies to all new
or modified “major stationary sources,” id. § 7502(c)(5).
“Major stationary source” and “major emitting facility” are
defined as “any stationary facility or source of air pollutants
which directly emits, or has the potential to emit, one hun-
dred tons per year of any air pollutant.” /d. § 7602(j).” The
2 The term “major emitting facility” is separately defined in the
Act to include a number of specifically identified “stationary
7
NNSR provisions define “modification” to “mean the same
as the term ‘modification’ as used in section 741 1(a\(4)”—
ie., the NSPS definition of “modification.” Jd. § 7501(4)
(emphasis added). The PSD provisions define “construction”
to “include[] * * * modification * * * (as defined in section
7411(a).” Id. § 7479(2)(C) (emphasis added).
Both the PSD and NNSR programs require affected sources
to undergo an extensive preconstruction review process and
to obtain a preconstruction permit, which may not be issued
“unless several stringent conditions are met.” Chevron, 467
U.S. at 840. See 42 U.S.C. §§ 7475, 7503; infra at 15-16.
The PSD program requires affected sources to apply emis-
sions controls determined to be the “best available control
technology” (“BACT”). 42 U.S.C. §§ 7475(a)(4), 7479(3).
The NNSR program requires affected sources to apply
emissions controls determined to achieve the “lowest achiev-
able emissions rate (“LAER”). /d. § 7501(3), 7503(a)(2).
The NNSR program also requires that any emissions increase
at a source be offset by a corresponding decrease at the same
source or another source in the same non-attainment area.
See id. § 7503(c).
In 1978, EPA promulgated rules implementing the PSD
program. The 1978 rules defined “major modification” as
“any physical change [or] change in the method of operation
of * * * a stationary source which increases the potential
emission rate of any air pollutant regulated under the Act
*** by either 100 tons per year or more for [certain]
source[s] * * * or by 250 tons per year or more for any
stationary source.” 43 Fed. Reg. 26,380, 26,382 (June 19,
1978) (emphases added). In Alabama Power Co. v. Costle,
636 F.2d 323 (D.C. Cir. 1979), the D.C. Circuit held that,
while there was no statutory basis for EPA’s 100- and 250-
ton thresholds for PSD applicability, “EPA does have discre-
sources of air pollutants,” such as “kraft pulp mills” and “iron and
steel mill plants.” 42 U.S.C. § 7479(1).
8
tion, in administering the statute’s ‘modification’ provision, —
to exempt from PSD review some emission increases on
grounds of de minimis or administrative necessity.” Jd. at
400 (emphasis added). As the court recognized, “the applica-
tion of BACT requirements to the emission of all pollutants
from a new facility, no matter how miniscule some may be,
could impose severe administrative burdens on EPA, as well
as severe economic burdens on the construction of new
facilities.” Id. at 405 (emphases added).
The Alabama Power court als« endorsed the application of
the “bubble concept” in the .‘SD context. As the court
recognized, “alterations of alimost any plant occur continu-
ously; whether to replace depreciated capital goods, to keep
pace with technological advances, or to respond to changing
consumer demand.” /d. at 401. Congress, however, intended
to subject sources to PSD review “only where industrial
changes might increase pollution in an area, not where an
existing plant changed its operations in ways that produced
no pollution increase.” Jd. Thus, the court concluded, an
“interpretation of ‘modification’ as requiring a nef increase is
* * * consistent with the purposes of the Act.” Jd. (emphasis
added).
In so holding, the court distinguished its decision in
ASARCO, relying on differences in statutory language in the
NSPS and PSD provisions. In the NSPS context, the court
explained, EPA had no authority to expand the definition of
“source” to include an entire plant where “[t}hat definition
*** was not expanded by any other part of the NSPS
provisions.” /d. at 397. “With regard to PSD, however,
Congress clearly envisioned that entire plants could be
considered to be single ‘sources.’” Jd. As the court ex-
plained, the CAA expressly defines “major emitting facility”
to include “many types of plants as stationary sources.” /d.
at 396. Thus, the court concluded, “EPA has latitude to
adopt definitions of the component terms of ‘source’ that are
different in scope from those that may be employed for
9
NSPS * * *, due to differences in the purpose and structure
of the two programs.” /d. at 397-398 (emphasis added).
In 1980, EPA issued new PSD regulations in response to
Alabama Power. See 45 Fed. Reg. 52,676 (Aug. 7, 1980).
The 1980 rules defined “major modification” as “any physi-
cal change in or change in the method of operation of a
stationary source that would result in a significant net emis-
sions increase of any pollutant subject to regulation under the
Act.” Id. at 52,730 (40 C.F.R. § 51.166(b)(2)(i) (1987))
(emphasis added). The rules also specified that “[a] physical
change or change in the method of operation shall not
include * * * [a]n increase in the hours of operation.” /d. at
52,736 (40 C.F.R. § 51.166(b)(2)(iii)(f) (1987)) (emphasis
added). The 1980 rules set “significance levels” for pollut-
ants by defining “significant” as “a rate of emissions that
would equal or exceed” specified amounts of emissions (in
tpy) for given pollutants, id. at 52,732 (40 C.F.R.
§ 51.166(b)(23)(i) (1987)), and also established methods of
determining source-wide “net” increases (netting rules). /d.
at 52,730 (§ 51.166(b)(3)(1)-(viii) (1987)).
In 1981, EPA promulgated regulations applying the “bub-
ble concept” in the NNSR context. See 46 Fed. Reg. 50,766
(Oct. 14, 1981). In Chevron, supra, this Court held that
EPA’s definition of the term “source”—which defined the
component terms of the NSPS statutory definition of
“source” to include “all of the pollution-emitting devices
within the same industrial grouping”—was “a permissible
construction of the statute which seeks to accommodate
progress in reducing air pollution with economic growth.”
Id. at 840, 865. As the Court noted, the legislative history of
the CAA “plainly identifies the policy concerns that moti-
vated the enactment [of the NSR program],” and “the plant-
wide definition is fully consistent with one of these con-
cerns—the allowance of reasonable economic growth.” Id.
at 863 (emphasis added).
10
SUMMARY OF ARGUMENT
I. A two-step NSR applicability test—requiring both a
“modification” and a “major modification” to trigger NSR
review—is consistent with the plain language of the CAA.
Because Congress specifically incorporated the NSPS
definition of “modification” into the NSR definition of
“modification,” an NSPS “modification” is required in the
first instance to trigger NSR review. EPA’s definition of
“major modification”—requiring in addition a significant net
increase in source-wide actual annual emissions before NSR
review is triggered—teflects two key differences between the
NSPS and NSR programs. First, the “bubble concept”—
which allows plantwide emissions increases to be offset by
contemporaneous emissions decreases—applies in the NSR
context, but not the NSPS context. Second, the NSR pro-
gram contains exemptions for de minimis increases, without
which the NSR program would “impose severe administra-
tive burdens on EPA, as well as severe economic burdens on
the construction of new facilities.” Alabama Power, 636
F.2d. at 405. These two salient features of the definition of
“major modification” have been upheld by the courts and
“explain why emissions under [NSR] must be calculated on
an annual basis” as a second step in determining NSR
applicability. Pet. App. 64.
II. A two-step NSR applicability test is also the only
reasonable and workable approach to implementing the NSR
program. There is no question that NSR review and permit-
ting is burdensome, time-consuming, and expensive. Manu-
facturers often make repairs and other changes that do not
increase production capacity—and thus do not increase
maximum achievable hourly emissions—to maintain produc-
tion capacity, respond to market demand, and ensure the
reliability, efficiency, and safety of their equipment. If
petitioner’s and EPA’s theory of NSR applicability were to
prevail, repairs and other changes that do not increase
production capacity could potentially trigger NSR review, as
1]
EPA measures increases by comparing past historical emis-
sions—i.e., emissions before a repair when the equipment
was Operating in an impaired condition—to future actual
emissions—i.e., emissions after the repair when the equip-
ment may be fully functional and operating as designed.
Frequent—and for the same piece of equipment, re-
peated—NSR review would have a crippling effect on
manufacturers, permitting authorities, and the economy.
Because construction of a project that triggers NSR review
may not begin until a permit has been issued, manufacturers
would have to operate broken equipment in its impaired
condition—or worse, not at all—during the lengthy NSR
review and permitting process and until construction is
completed. If NSR review were required for changes that do
not increase production capacity, manufacturing would come
to a standstill, critical (and life-saving) products would not
reach consumers, and financially-strapped permitting authori-
ties would be overwhelmed.
The first step of the NSR applicability test—requiring an
increase in a unit’s maximum achievable hourly emissions—
is therefore a critical step for manufacturers. But equally
vital is the second step of the NSR applicability test—
requiring a significant net increase in source-wide actual
annual emissions. Not all changes that increase production
capacity—and that warrant the application of NSPS emis-
sions controls—have a significant enough impact on ambient
air quality to warrant NSR review and the application of
costly state-of-the-art emissions controls. As noted in
Alabama Power, the two salient features of the annual
emissions test—significance levels and netting—ensure that
the NSR program does not “impos[e] a completely disabling
administrative and regulatory burden.” 636 F.2d at 400
(emphasis added). A two-step applicability test—requiring
NSPS controls for changes that increase production capacity
and NSR controls for those changes that also have a signifi-
cant impact on ambient air quality—is therefore not only
12
consistent with the CAA, but also the only approach that
yields satisfactory economic and administrative results.
ARGUMENT
lL A TWO-STEP NSR APPLICABILITY TEST IS
CONSISTENT WITH THE PLAIN LANGUAGE
OF THE CAA.
More than 35 years ago, EPA “clariflied]” for the first time
the term “increase” in the statutory definition of “modifica-
tion.” 39 Fed. Reg. at 36,946. At that time, EPA recognized
that many potential “unit[s] of measurement” could be used
to “determin{e] whether an increase in emissions has oc-
curred”—e.g., “units of time (day, year), concentration, feed
- rate into a process, and production rate.” /d. at 36,947. EPA
concluded, however, that “[uJnits of time” have “the advan-
tages of being sensitive to increased production capacity and
to the overall increase in total emissions to the atmosphere.”
Id. EPA decided that the most appropriate “unit of time” for
“determining whether an increase in emissions has occurred”
was the unit “kg/hr,” which would “automatically allow
increases in operating hours as intended by one of the exist-
ing exemptions.” /d. (emphasis added).
There is no reason why an “increase” in emissions should
be defined as an increase in a unit’s maximum achievable
hourly emissions rate for NSPS purposes but not for NSR
purposes, particularly where the NSR regulations include the
same exclusion for “increases in operating hours.” See 40
C.F.R. § 51.166(b)(2)(iii)(f) (1987). But the application of
the NSPS hourly emissions test in the NSR context does
not—and should not—preclude the further application of a
source-wide annual emissions test. Indeed, EPA itself has
opined that there must be both an NSPS “modification” and
an NSR “major modification” to trigger NSR review. As
EPA confirmed shortly after it adopted the 1980 rules, as a
threshold matter, “PSD applicability is determined by
evaluating any change in the [hourly] emissions rates caused
13
by” a proposed physical or operational change. See J.A. 27-
28. Thus, the District Court below concluded that PSD
review is triggered only if there is 1) an increase in a unit’s
maximum achievable hourly emissions, and 2) a significant
net increase in source-wide actual annual emissions. As the
court explained:
PSD may be triggered if there is an increase in the maxi-
mum hourly emissions rate. In this regard, the PSD and
NSPS emissions tests are similar. Unlike NSPS which is
always triggered whenever there is an increase in the
hourly rate of emissions, PSD is potentially triggered
when there is an increase in the hourly emissions rate but
only if the annualized emissions increase (1) exceeds the
significance levels in 40 C.F.R. § 51.166(b)(23) and (2) is
not offset by contemporaneous decreases at the source,
id. § 51.166(b)(3). [Pet. App. 64a.]}
The same result should follow under the Fourth Circuit’s
approach, which focused solely on the fact that “Congress
mandated that the PSD statute incorporate the NSPS statu-
tory definition of ‘modification.’” Jd. at 18a. The Fourth
Circuit held that “EPA cannot interpret ‘modification’ under
the PSD inconsistently with the way it interprets that term
under the NSPS.” /d. at lla (emphasis added). Because
“NSPS regulations * * * define the term ‘modification’ so
that only a project that increases a plant’s hourly rate of
emissions constitutes a ‘modification,’ ” the Fourth Circuit
held that “EPA must * * * interpret its PSD regulations
defining ‘modification’ congruently.” /d. at 18a. There is
nothing “inconsistent” about defining “modification” in both
the NSPS and NSR contexts to mean an increase in a unit’s
maximum achievable hourly emissions and defining “major
modification” in the NSR context to mean a significant net
increase in source-wide actual annual emissions. Put differ-
ently, it is not inconsistent for EPA to use an hourly emis-
sions test in the NSPS context and a two-step hourly and
annual emissions test in the NSR context, where the use of
14
that second step is based on important differences between
the two programs.
One significant difference between the NSPS and NSR
programs involves the application of the “bubble concept,”
which allows plantwide emissions increases to be offset by
contemporaneous emissions decreases. In ASARCO, the
D.C. Circuit rejected the application of the bubble concept in
the NSPS context. See 578 F.2d at 326-327; supra at 5-6. In
Alabama Power, the D.C. Circuit—trelying on differences in
statutory language in the NSPS and NSR provisions—held
that the application of the bubble concept in the PSD context
was “mandatory.” NRDC v. Gorsuch, 685 F.2d 718, 726
(D.C. Cir. 1982), rev'd on other grounds sub nom. Chevron
U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984). See supra at 8-9.
In Chevron, this Court held that EPA had reasonably exer-
cised its discretion to employ the bubble concept in the
NNSR context. See 467 U.S. at 865; supra at 9.
Another key difference between the NSPS and NSR pro-
grams involves the exemption of de minimis increases. In
Alabama Power, the D.C. Circuit recognized that subjecting
all increases to PSD review, “no matter how miniscule some
may be,” could “impose severe administrative burdens on
EPA, as well as severe economic burdens on the construction
of new facilities.” 636 F.2d. at 405 (emphasis added). Thus,
the court held, “EPA does have discretion, in administering
the statute’s ‘modification’ provision, to exempt from PSD
review some emission increases on grounds of de minimis or
administrative necessity.” /d. at 400 (emphasis added).
Those exemptions are reflected in the “significance levels”
that EPA has established for various pollutants. See 40
C.F.R. § 51.166(b)(23)(i); supra at 9.
As the District Court below explained, the “two conditions
for PSD applicability—significance levels and netting”—
“explain why emissions under PSD must be calculated on an
annual basis.” Pet. App. 64. “[M]Jeasuring emissions in tons
15
per year makes possible netting (addition and subtraction) of
emissions rates between various units at a plant.” /d An
annual emissions test also “makes possible” the exemptions
for de minimis increases, which must be measured in tons per
year since “major” stationary sources are defined as sources
that emit “one hundred fons per year or more of any air
pollutant.” 42 U.S.C..§ 7602(j) (emphasis added).
EPA’s definition of “major modification” in the NSR con-
text reflects these differences between the NSPS and NSR
programs. Thus, in the NSR context, EPA may require both
a “modification” and a “major modification” to trigger NSR
review. What EPA emphatically cannot do is require NSR
review for a change that is not “modification.”
Il. A TWO-STEP NSR APPLICABILITY TEST IS
THE ONLY REASONABLE AND WORKABLE
APPROACH TO IMPLEMENTING THE NSR
PROGRAM.
A two-step NSR applicability test is not only consistent
with the plain language of the CAA, but the only reasonable ~
and workable approach to implementing the NSR program.
Without the two-step test, manufacturers would be subject to
frequent—and for the same piece of equipment, repeated—
NSR review and permitting. That outcome would have a
crippling effect on industry, permitting authorities, and the
economy.
A. NSR Review And Permitting Is Burdensome,
Time-Consuming, And Expensive.
There is no question that the NSR program imposes sub-
stantial burdens on industry. If a proposed change triggers
NSR review, an operator must comply with numerous
“stringent” requirements. Chevron, 467 U.S. at 840. See 42
U.S.C. §§ 7475, 7503. Among other things, extensive
computer modeling is required to determine the proposed
project’s impact on ambient air quality, PSD increments, and
16
NNSR growth margins. See id. §§ 7475(a)(3), (6), (b),
7503(a)(1). If a Class I national park or wilderness area in a
PSD area may be affected, an analysis of the project’s effect
on visibility and environmentally sensitive biota, such as
milkweed, clover, and poison ivy, is also required. See id.
§ 7475(d)(2)(b); Federal Land Managers’ Air Quality Re-
lated Values Workgroup Phase I Report 84-102 (Dec. 2000).
The technical feasibility and the costs of applying state-of-
the-art emissions controls—i.e., BACT or LAER—must also
be evaluated. See 42 U.S.C. §§ 7475(a)(4), 7479(3), 7501(3),
7503(a)(2). If NNSR review has been triggered, an emis-
sions offset must be obtained at the same source or another
source within the same non-attainment area. See id.
§ 7503(c).
NSR review is also very time-consuming. EPA recently
reported that the entire NSR permitting process can take
between 7 and 22 months. See EPA, New Source Review:
Report to the President 20 (2002); see also Alaska Dep't of
Envtl. Conservation v. EPA, 540 U.S. 461, 515 (2004) (18-
month PSD permitting process) (Kennedy, J., dissenting). In
the experience of NEDA/CAP’s members, the permitting
process for a complex project can actually take much
longer—sometimes between five and seven years. See
Alaska, 540 U.S. at 516-517 (noting experience of
NEDA/CAP’s members) (Kennedy, J., dissenting). That is
due in no small part to the substantial burden that NSR places
on, not only industry, but permitting authorities. See Ala-
bama Power, 636 F.2d at 400, 405 (recognizing administra-
tive burden imposed by PSD). Permitting authorities must
devote a substantial amount of time to reviewing and analyz-
ing permit applications and supporting documentation. Once
a permit application has been approved, it must be subjected
to public notice and comment; agencies must respond to such
comments and provide a hearing, if requested. See 40 C.F.R.
Part 124; § 51.166(q).
17
And it cannot be disputed that NSR review is expensive.
See, e.g., Alabama Power, 636 F.2d at 353 (noting the
“substantial regulatory costs imposed by” the PSD program)
(emphasis added). The costs of preparing a permit applica-
tion alone can be substantial. Last year, one of
NEDA/CAP’s members spent $300,000—exclusive of legal
costs—to prepare a permit application to make a change at an
Ohio auto plant. In 2004, another NEDA/CAP member spent
more than $1 million to prepare a permit application to install
two paper machines and a gas-fired boiler at a Missouri paper
and diaper plant. Neither of those applications was publicly-
contested, which can occur and multiply exponentially the
costs of obtaining a permit.
But the costs of preparing a permit application pale in
comparison to the capital expenditures required to retrofit
equipment with BACT or LAER, which can run into the
millions of dollars. In 2002, a NEDA/CAP member was
required to comply with BACT at an existing source hv
installing a $6 million carbon absorber to reduce VOC
emissions. In 2001, another NEDA/CAP member would
have had to spend between $75-$100 million to equip a 400
megawatt coal-fired industrial boiler with BACT to reduce
SO2, NOx, and CO emissions. Because of the staggering
cost of BACT, the project was abandoned.
B. If Petitioner’s And EPA’s Theory Of NSR Appli-
cability Were To Prevail, Manufacturers Would
Be Subject To Frequent And Repeated NSR Re-
view And Permitting.
If the first step of the NSR applicability test were elimi-
nated—i.e., if changes that do not constitute a “modification”
because they do not increase production capacity potentially
triggered NSR review—manufacturers would be subject to
frequent and repeated NSR review. Manufacturers often
make changes that do not increase production capacity—and
thus do not increase maximum achievable hourly emissions.
18
For example, manufacturers continually repair equipment
due to breakdowns, wear and tear, and damage. Such repairs
allow manufacturers to maintain production capacity, re-
spond to market demand, and ensure the reliability, effi-
ciency, and safety of their equipment. While such changes
may allow increased hours of operation—because, for
example, the equipment is fully functional and operating as
designed—they generally do not increase maximum achiev-
able hourly emissions. If the first step of the NSR applicabil-
ity test were eliminated, such changes might trigger NSR
review, as EPA measures increases by comparing past
historical emissions to future actual emissions. See infra at
21.
Frequent and repeated NSR review for repairs and other
changes that do not increase production capacity would have
a crippling effect on industry, permitting authorities, and the
economy. The costs of repeatedly complying with the NSR
permitting process—not to mention the costs of re-applying
BACT or LAER, if new technology emerges—would alone
have a devastating impact on industry.
C. Because Construction Of A Project That Triggers
NSR Review Cannot Begin Until An NSR Permit
Has Been Issued, Manufacturers Would Have To
Operate Broken Equipment, If At All, In Its Im-
paired Condition While Waiting For A Permit To
Be Issued.
Even more devastating to industry would be the substantial
delays resulting from frequent NSR review. If NSR review
is triggered, construction of a project may not begin until a
permit has been issued. See 40 C.F.R. § 51.166(a)(7)(iii).
That means that if broken equipment is being replaced, a
manufacturer must operate the equipment in its impaired
condition—or worse, not at all—until a permit has been
issued and construction completed. Given that dozens if not
hundreds of such changes may occur on a single process line
19
over the course of a year, manufacturing would grind to a
halt if NSR permitting were required for changes that do not
increase production capacity.”
In that regard, not only industry but the entire economy
would suffer. What is more, critical products—ike life-
saving medicines—would not reach consumers. Nor is
frequent and repeated NSR permitting desirable from a
regulatory perspective. As noted, the NSR program places
substantial administrative burdens on EPA and state and
local permitting authorities operating with limited resources."
> The 1980 rules exclude from the definition of “physical
change or change in the method of operation” certain changes that
are “routine maintenance, repair and replacement.” See 40 C.F.R.
§ 51.166(b)(2\iii)(a) (1987); see also 40 C.F.R.
§ 51.166(b)(2)(iii)(a). The scope of that exclusion—a disputed
issue in this case below—is a matter of great uncertainty and
complexity. EPA has published interpretative guidance that
requires consideration of at least 14 criteria to determine whethe: a
change is “routine maintenance, repair, and replacement.” See 65
Fed. Reg. 77623 (Dec. 12, 2000). EPA has asserted that the
exclusion is “very narrow,” United States v. Ohio Edison Co., 276
F. Supp. 2d 829, 888 (S.D. Ohio 2003), and the D.C. Circuit has
suggested that it only applies to changes that cause de minimis
emissions increases. See New York v. EPA, 443 F.3d at 890.
Amici Curiae STAPPA & ALAPCO recently testified
before Congress concerning proposed budgets cuts to grants to
State and local permitting authorities, protesting such cuts “{iJn a
time of limited state and local resources, where state and local
governments are straining to maintain existing programs.”
Interior, Environment, and Related Agencies Appropriations for
2007 Part 7: Hearings Before the Subcomm. on Interior, Environ-
ment and Related Agencies of the House Comm. on Appropria-
tions, Testimony of Members of Congress, Prepared Statements of
Outside Witnesses, 109th Cong. 591 (2006) (statement of State
and Territorial Air Pollution Program Administrators and the
Association of Local Air Pollution Control Officials) (emphasis
added).
20
If NSR permits are to be required for repairs and other
changes that do not increase production capacity, permitting
authorities will be quickly overwhelmed—thus leading to
even longer delays in the permitting process—unless they
receive substantial additional funding which likely would
have to be diverted from other important governmental
programs.
D. A Two-Step NSR Applicability Test Is Necessary
For Satisfactory Economic And Administrative
Results.
As the foregoing makes clear, the first step of the NSR
applicability test—requiring an increase in a unit’s maximum
achievable hourly emissions—is a critical step for manufac-
turers. But equally vital is the second step of the NSR
applicability test—requiring a significant net increase in
source-wide actual annual emissions. While changes that
increase production capacity—and thus increase a unit’s
maximum achievable hourly emissions—warrant the applica-
tion of NSPS emissions controls, not all such changes have a
significant enough impact on ambient air quality to warrant
NSR review and the application of state-of-the-art emissions
controls. Many increases in a unit’s maximum achievable
hourly emissions will not cause a significant net increase in
source-wide actual annual emissions because, for example,
the equipment may be operated for only a short time. Thus,
only those changes that not only increase production capacity
but also cause a significant net increase in source-wide actual
annual emissions warrant NSR review and permitting.
As the D.C. Circuit explained in Alabama Power, an ex-
emption for de minimis increases and netting—the two
salient elements of “major modification”—“allow for im-
provement of plants, technological changes, and replacement
of depreciated capital stock, without imposing a completely
disabling administrative and regulatory burden.” 636 F.2d
at 400 (emphasis added). A two-step applicability test—
“=>.
wae.
21
requiring NSPS controls for changes that increase production
capacity and NSR controls for increases in capacity that also
have a significant impact on ambient air quality—is therefore
not only consistent with the CAA, but also the only approach
that yields satisfactory economic and administrative results.
That two-step test also provides industry with two things of
which it is sorely in need: consistency and predictability.
EPA’s current test for calculating an emissions increase is by
no means “longstanding.” Pet. Br. i. EPA’s departure from
its contemporaneous conclusion that the 1980 rules required
an increase in maximum achievable hourly emissions to
trigger NSR review began with the applicability determina-
tion at issue in Wisconsin Elec. Power Co. v. Reilly, 893 F.2d
901 (7th Cir. 1990) (“WEPCo”). See J.A. 27-28, 35-37.
There, EPA applied an “actual-to-potential” test to a utility’s
like-kind replacement of aging equipment. 893 F.2d at 916.
Since then, EPA has applied various methodologies for
comparing emissions before and after a change. In response
to the invalidation of the “actual-to-potential” test in WEPUo,
EPA adopted an optional “actual-to-projected actual” test—
but only for existing electric utilities. See 57 Fed. Reg.
32,314, 32,314 (July 21, 1992). In 2002, EPA adopted an
optional “actual-to-projected actual” test for all existing
sources. See 67 Fed. Reg. 80,186, 80,196 (Dec. 31, 2003).
Presently pending is EPA’s 2005 proposal of a new test that,
if adopted, “would establish a uniform emissions test nation-
ally under the NSPS and NSR programs”—but, again, only
for existing electric utilities. See 70 Fed. Reg. 61,081,
61,081 (Oct. 20, 2005).
This case itself highlights EPA’s inconsistency: after ini-
tially asserting that the applicable test was the “actual-to-
potential” test, EPA later abandoned that approach in favor of
an “actual-to-projected actual” test. See Pet. App. 58a &
n.17. In a previous enforcement action against the Tennessee
Valley Authority, EPA never even identified the emissions
increase test that provided the basis for its enforcement
22
action, but instead asserted that an emissions increase re-
sulted under any of “several different methods” of calculating
an emissions increase. See In re Tennessee Valley Authority,
9 E.A.D. 357, 439-440 & n.97 (2000). In establishing the
NSR program, Congress surely could not have envisioned
such a confusing and haphazard regulatory scheme.
CONCLUSION
For the foregoing reasons, the judgment below should be
affirmed.
Respectfully submitted,
LESLIE SUE RITTS
LORANE F. HEBERT*
HOGAN & HARTSON L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
(202) 637-6573
*Counsel of Record Counsel for Amicus Curiae
| FILED
(3) JUL 21 2006
OFFICE OF THE
SUPREME COURT US
ees
No. 05-848
IN THE
Supreme Court of the United States
ENVIRONMENTAL DEFENSE, ET AL.,
Petitioners,
We
DUKE ENERGY, ET AL,
Respondents.
On Petition for a Writ of Certiorari to
the United States Court of Appeals for the Fourth Circuit
BRIEF OF AMICI CURIAE NATIONAL PARKS
CONSERVATION ASSOCIATION
AND OUR CHILDREN’S EARTH FOUNDATION
IN SUPPORT OF PETITIONER
GEORGE E. Hays* MICHAEL A. COSTA
Attorney at Law Our Children’s Earth
236 West Portal Avenue Foundation
#110 100 First Street, Suite 100-367
San Francisco, CA 94127 San Francisco, CA 94105
(415) 566-5414 (415) 896-5289
*Counsel of Record
—-
TABLE OF CONTENTS
Be er PSE. be cccccccessecccscceveces ii
STATEMENT OF INTEREST ........ccccsccccecess 1
SUMMARY OF ARGUMENT .........ccccicccceces 2
EE, iki baidsedncndiantesvbsnnesseenases 3
A. The Underlying Issue in the Case .............. 3
B. The Fourth Circuit’s Interpretation Cannot Be
Supported by the Language of the Regulations ... 4
C. Allowing a Collateral Attack of an Environmental
Regulation in the Context of an Enforcement Action
Would Undermine the Enforcement Scheme of
Many Environmental Statutes ................ 1]
D. The Outcome in this Case Could Have Broad
Implications on the Air Quality in the Nation’s
RSE NGA RIE Sere a nae SpE AN cone 14
EE contievehshscnseb onataetcteucwan 23
TABLE OF AUTHORITIES
CASES:
Alabama Power Co. v. Costle,
636 F.2d 323 (D.C. Cir. 1980) .... 02.0.0... eee 22
American Paper Inst., Inc. v. EPA,
882 F.2d 287 (7" Cir. 1989)... 0. cece ee eee. 12
Commonwealth of Virginia v. United States,
og ne 12
Dow Chemical Co. v. Costle,
484 F. Supp. 101 (D. Del. 1980)................. 13
Getty Oil Co. (Eastern Operations), Inc. v. Ruckelshaus,
467 F.2d 349 (3d Cir. 1972), cert. denied,
EE oh conc kiucbheuevaueinadce 12
Longview Fibre Co. v. Rasmussen,
960 F.2d 1307 (9° Cir. 1992) .............0000- 12
Madison Gas & Electric v. U.S. E.P.A.,
4 F.3d 529 (7® Cir. SIN bl Sr ale teil on oad 12
Natural Resources Defense Council, Inc. v. Outboard
Marine Corp. 702 F. Supp. 690 (N.D. Il. 1988) .... 13
New York v. Environmental Protection Agency,
O52 F508 3 GOL. Cie. BOOB)... ccc ecscccvcccs 7,10
United States v. Ho,
311 F.3d 589 (5® Cir. 2002), cert. denied,
De URE PPE in bd'v necceatecaceneieeecine 12
United States v. Ohio Edison Company,
276 F. Supp. 2d 829 (S.D. Ohio 2003) .......... 4,22
United States v. Cinergy Corp.,
384 F. Supp. 2d 1272 (S.D. Ind. 2005) ............ 10
U.S. Ecology, Inc. v. Carlson,
638 F. Supp. 513 (C.D. Ill. 1986) ................ 13
Wisconsin Electric Power Co. v. Reilly,
te fe Sh) ere 7
STATUTES:
Pub. L. No. 95-95, 91 Stat. 685 (1977) ..........-005- 15
RE 60a bg ae cd wes nen ye seeeseem en 14
PE ED ccc cnvodcesessnssvescocuces 13
I a once es cnaavcessesesednedes cue 14
es nc ke kip Jan deamekbageceans 14
SEED vv vceccccscceccescascsvcdsenes 3
EEE Bb cccucctusscchscveennstauepenve 15
EE aks cveehedesknkbewedeuel ae
SE IEE Sec wccccdesveteeciovouascuee 15
aE 6 viene Odd ecceedenvsee teu es passim
Gs EEE hn Wad ecb vce véeweedes dcsevesases 13
LEGISLATIVE MATERIALS:
H.R. Rep. 294, 95" Cong. (1977),
1977 U.S.C.C.A.N. 1077, 1283 (1977) ........... 15
S. Raw. He. 87, SO Ces COSTA) noc cccccccvccesss 22
ill
ADMINISTRATIVE MATERIALS:
Per re passim
de i | eee a 5,10
¢ Se I os ob dc cuvcndeeddpawassccuens 7
SP Gre DO PREIED s 5 icc cncccccciseswavces 6, 7,8
PEED nb bb nu accnskeCdveaubskinaal 3
ee RE 00 5.504 Annex bdosebinnnondacdes 3
45 Fed. Reg. 52676 (Aug. 7, 1980) .............0000. 5
47 Fed. Reg. 7836 (Feb. 23, 1982) ..............c000 5
47 Fed. Reg. 6017 (Feb. 10, 1982)............... Sckvehe
57 Fed. Reg. 32314 (July 21, 1992) ........... cece ees 8
64 Fed. Reg. 35714 (July 1, 1999) .................... 22
69 Fed. Reg. 4566 (Jan. 30, 2004) ..............00000, 2
70 Fed. Reg. 25162 (May 12, 2005) .............. vas ae
70 Fed. Reg. 39104 (July 6, 2005) ...............005. 22
ADDITIONAL MATERIALS:
Enforcement Chart - New Source Review, An E&E
Publishing Special Report, available at:
http://www.eenews.net/features/
special_reports/nsr/enforcement_chart.php (last visited
Se EE dvb cd ddvesviude cleaendierce 14
Great Smoky Mountains National Park Management Folio
#2, Air Quality, available at
http://www.nps.gov/grsm/gsmsite/airquality01 .pdf (last
RI ase 18, 19
National Park Service, “Air Quality in the National Parks,
2nd Edition,” available at:
http://www?2.nature.nps.gov/air/Pubs/aqnps. cfm. 17, 18
iv
National Park Service, “Great Smoky Mountains National
Park: Nature & Science: Air Quality,” available at:
http://www.nps.gov/grsm/pphtml/subenvironmentalfacto
rs23.html (last visited July 16, 2006) .......... 18, 19
National Park Service, “Great Smoky Mountains National
Park: Nature & Science: Overview,” available at:
http://www.nps.gov/ grsm/pphtm//nature.htm! (last
visited July 16, 2006). ........-.022 eee eee TITY 17
National Park Service, Rocky Mountain National Park,
Nitrogen Deposition Correlated with Changes in Lake
Organisms, available at: http://www.nps.gov/romo/
downloads/CDRLC/summaries/diatoms.pdf (last visited
tite ea dgeet heehee eeensh ee eeue < 21
National Park Service, Shenandoah National Park, Nature
and Science, Air Quality, available at:
http://www.nps.gov/shen/pphtml/
subenvironmentalfactors23.html(last visited July 16,
St don seen oe eee die cade oe seesen see 20
National! Park Service, Shenandoah National Park, Nature
and Science, Scenic Vistas, available at:
http://www.nps.gov/shen/pphtm//
subenvironmentalfactors25.html (last visited July 16,
Ee oP isd Oo VETOES Reena 20
National Research Council, “Protecting Visibility in National
Parks and Wilderness Areas” (1993) ............. 16
Rocky Mountain National Park Initiative, “Nitrogen
Deposition: Issues and Effects in Rocky Mountain
National Park (Technical Background Document),”
March 2004, available at: http://www.cdphe.state.co.us
/ap/rmnp/noxtech.pdf (last visited July 16, 2006) ... 21
U.S. Department of Justice, U.S. EPA, “U.S. Sues Electric
Utilities in Unprecedented Action to Enforce the Clean
Air Act,” Press Release, November 3, 1999 ........ 23
United States Environmental Protection Agency,
“Controlling Power Plant Emissions:
Overview” available at http://www.epa.gov/mercury
control _emissions/ index.htm (last visited July 16,
EE hdsbNdecdcedanscdedndwar tl newieddecne 15
United States Environmental Protection Agency, "Frequent
Questions About Mercury," available
athttp://www.epa.gov/mercury/ faq.htm#3(last visited
ET dcivbandskacacanaedaednbadskk 16
United States Environmental Protection Agency, “NO,:
What is it? Where does it come from?,” available at
http://www.epa.gov/air/urbanair/ nox/what1.html (last
I EE id ens dtoddwidecbssencees 15
United States Environmental Protection Agency, “Six
Common Air Pollutants: Chief Causes of Concern,”
available at: http://www.epa.gov/air/urbanair/
nox/chf1 .html (last visited July 16, 2006). ......... 15
United States Environmental Protection Agency, “Six
Common Air Pollutants: Chief Causes of Concern,”
http://www.epa. gov/air/urbanair/ so2/chf1 .htm! (last
SESE PUL ED occ cccscceucccccecucevece 15
United States Environmental Protection Agency, “SO,:
What is it? Where does it come from?,” available at
http://www.epa.gov/air/urbanair/ so2/what1 .html (last
ED coe cceduesavindibsgecesenn 14
U.S. Energy Information Administration, “Electric Power
Monthly” (July 2006), available at:
epm_sum.html (last visited July 16, 2006) ......... 14
Webb, et al. 2005, “Occurrence and Distribution of Mercury
in Mammoth Cave National Park,” Paper No. 167-7,
Geological Society of America. ................. 20
Vii
STATEMENT OF INTEREST"
The National Parks Conservation Association (“NPCA”)
is a nonprofit citizen organization whose purpose is to protect
and enhance the natural and cultural resources of America’s
National Park System as well as forests, wilderness, and open
space areas through research, public education, advocacy, and
litigation. NPCA was founded in 1919 and today has over
450,000 members nationwide. NPCA, with its members, is
active in protecting air quality in natural areas of interest.
As part of its activities, NPCA is a plaintiff in two Clean
Air Act citizen suits against the Tennessee Valley Authority
alleging the same type of violations at issue in this case. Nat'l
Parks v. TVA, Case No. 05-6329 (6" Cir.) (pending) and
National Parks Conservation v. TVA, No. 06-10729-J (11*
Cir.) (pending). NPCA contends that these alleged violations
(from TVA plants located in Alabama and Tennessee) cause
tens of thousands of tons of needless pollution annually and are
having a significant adverse impact on protected federal lands,
including Great Smoky Mountains National Park.
Our Children’s Earth Foundation (“OCE”), a non-profit
membership organization, is dedicated to protecting the public,
especially children, from the health impacts of pollution and
other environmental hazards and to improving environmental
quality for the public benefit. OCE has members in Tennessee,
and to protect the interests of its members, particularly from the
impact of TVA’s alleged excessive emissions of sulfur dioxide
' Pursuant to Supreme Court Rule 37.6, no counsel for any party
authored this brief either in whole or in part. No persons other than amici
curiae or their counsel made any monetary contributions to its preparation
or submission. Both Petitioner and Respondent consented to this filing; their
letters of consent are being submitted with the brief.
(“SO,”) (a precursor to fine particle pollution),” OCE has joined
NPCA as a plaintiff in the Clean Air Act citizen suit in
Tennessee. Nat'l Parks v. TVA, Case No. 05-6329 (6" Cir.)
(currently pending).
SUMMARY OF ARGUMENT
The Fourth Circuit’s decision in this case did precisely
what the Clean Air Act’s enforcement scheme was designed to
prevent: allow a facial challenge to a regulation in the context
of an enforcement action. 42 U.S.C. § 7607(b)(2). This brief
in support of the petitioner focuses on the plain language of the
applicable regulations and shows how the Fourth Circuit’s
decision is contrary to that language. In summary, the Fourth
Circuit failed to analyze the regulatory text at all, but instead
based its holding on a theory that the regulations are
inconsistent with the statute. Such an invalidation of the
regulations is proper only in the D.C. Circuit, and that circuit
has upheld these same regulations. Allowing this type of
collateral attack on a validly promulgated regulation would
undermine the enforcement scheme created by Congress for the
Clean Air Act and many other environmental statutes.
Furthermore, given current serious air pollution problems in
National Parks caused by coal-fired power plants, and the
number of those plants that have allegedly violated the
regulations at issue here, the Fourth Circuit’s error will have
widespread adverse consequences.
* See (Proposed) Rule To Reduce Interstate Transport of Fine
Paruculate Matter and Ozone (Interstate Air Quality Rule), 69 Fed. Reg.
4566, 4572 (Jan. 30, 2004)(“Mass associated with ammonium sulfate
concentrations make up a significant portion (25 to 50 percent) of the annual
average PM, , mass. The largest sulfate contributions to PM, , mass occur
during the summer season mainly within a large multi-State area centered
near Tennessee and Southwest Virginia.”).
2
ARGUMENT
A. THE UNDERLYING ISSUE IN THE CASE
Under the Clean Air Act’s Prevention of Significant
Deterioration program (“PSD”), 42 U.S.C. §§ 7470-79, if an
owner of a major stationary source makes a “major
modification,” then it becomes subject to emission limits
known as “Best Available Control Technology” (“BACT”). 40
C.F.R §§ 51.166 § (i) and (j). In this case, the plaintiffs alleged
that Duke Energy undertook 29 projects at eight coal-fired
power plants between 1988 and 2000, and each of these
projects met the definition of “major modification.” Pet. App.
25a-26a. Because these projects were “major modifications,”
Duke Energy should have obtained stringent BACT emission
limits for them, but it never did. The plaintiffs seek an order
requiring Duke Energy to obtain the emission limits and
operate under them, potentially leading to reductions in
hundreds of thousands of tons in sulfur dioxide and nitrogen
oxide emissions.
In order to have a “major modification” for the purposes of
the PSD program, there must be: (1) a physical change in or
change in the method of operation at a major stationary source
that would (2) result in a significant net emissions increase. 40
C.F.R. § 51.166(b)(2). The Fourth Circuit’s opinion focused
on this second element. The plaintiffs contended that in order
to have a modification, there must be an increase in annual
actual emissions. Pet. App. 6a-7a. The defendant utility
contended that there must be an increase in the hourly rate of
emissions. Pet. App. 6a-7a. Which test applies has practical
real world consequences.
The measure of a power plant’s ability to generate power
in a particular hour is known as its “capacity.” Pet. App. 67a.
A power plant, as it ages, may be able to maintain its maximum
capacity when it is operating, but it may not be available to
3
generate power around the clock, particularly because
malfunctions, or forced outages, cause unplanned shutdowns.
United States v. Ohio Edison Company, 276 F. Supp. 2d 829,
838 (S.D. Ohio 2003). Accordingly, a power company can
undertake massive overhauls that eliminate forced outages,
significantly improving a plant’s availability, on an annual
basis, yet leave its “capacity” to generate power in any
particular hour when it is operating, unchanged. In this case,
Duke Energy argued that its projects did not trigger the PSD
regulations because the projects did not increase the facilities’
hourly capacity. Pet. App. 7a. Thus, if the applicable
regulations are interpreted to require an increase in annual
actual emissions, the projects, assuming they are found to be
non-routine, triggered the PSD regulations. On the other hand,
if the regulations are interpreted to require an increase in the
hourly rate of emissions, the projects did not trigger the PSD
regulations.
B. THE FOURTH CIRCUIT’S INTERPRETATION
CANNOT BE SUPPORTED BY THE LANGUAGE
OF THE REGULATIONS
In this case, the Fourth Circuit, under the guise of
“interpreting” the applicable regulat.ons, held that in order to
have a “major modification,” a project must lead to an increase
in the hourly rate of emissions, not just an increase in annual
actual emissions. Pet. App. 6a-7a. However, the language of
the applicable regulations cannot support the Fourth Circuit’s
interpretation. Accordingly, the only way the Fourth Circuit
could have achieved its holding was by invalidating the
regulation, something it had no jurisdiction to do. 42 U.S.C.
7607(b)(2). This brief closely examines the applicable
regulations to show that they cannot support the Fourth
Circuit’s result.
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.