Appendix — Ohio Power Co. v. Thomas
Supreme Court brief1988
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‘> Supreme Court, U.S,
8 g 6 FILED
0 JUL 12 1988
No. 87-
| JOSEPH F. SPANIOL, UR,
i
IN THE
Supreme Court of the United States
OCTOBER TERM, 1988
OHIO POWER COMPANY AND ORMET CORPORATION,
V.
Petitioners,
LEE M. THOMAS, et al.,
Respondents.
APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
DONALD C. WINSON
RICHARD S. WIEDMAN
ECKERT, SEAMANS,
CHERIN & MELLOTT
42nd Floor, 600 Grant Street
Pittsburgh, PA 15219
(412) 566-6000
Counsel for Petitioner
Ormet Corporation
July 1988
HENRY V. NICKEL
(Counsel of Record)
F. WILLIAM BROWNELL
MEL S. SCHULZE
HUNTON & WILLIAMS
2000 Pennsylvania Ave., N.W.
Suite 9000
Washington, D.C. 20006
(202) 955-1500
A. JOSEPH DOWD
JEFFREY P. WHITE
AMERICAN ELECTRIC POWER
SERVICE CORPORATION
One Riverside Plaza
P.O. Box 16631
Columbus, Ohio 43216
(614) 223-1636
Counsel for Petitioner
Ohio Power Company
WILSON - EPES PRINTING Co., INc.
- 789-0096 - WASHINGTON, D.C. 20001
a
“oy _ E
APPENDIX
TABLE OF CONTENTS
DECISION AND SUBSEQUENT ORDERS OF THE
COURT
Natura! Resources Defense Council v. Thomas,
Re Be EE OR Oe) ) a
Order of April 13, 1988 [denying petitions for
a SEE ae Oe aR jai ntapatasatddacnaihoon
Order of April 13, 1988 [denying suggestions for
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Order of May 5, 1988 [delaying issuance of man-
I ee su Ga somaasiaeeianann
AGENCY DECISIONS, FINDINGS OF FACT AND
REGULATIONS
Environmental Protection Agency, Final Stack
Height Regulations, 50 Fed. Reg. 27892, et seq.
I aati rans acest sk seetadmneindecinsnaiennnncnineiicanlensleclaenbie
Environmental! Protection Agency, Proposed Stack
Height Regulations, 49 Fed. Reg. 44878, et seq.
“tT na, DE Ree PLO RE LNS RON REL Ree
RELATED STATUTES
Clean Air Act §§ 110(a) (1)-(a) (2) (k), 123, 42
U.S.C. §§ 7410(a) (1)-(a) (2) (k), 7423 (1982)..
Administrative Procedure Act §§4, 10(e), 5
pis Fee GF Re teen eer es
Page
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UNITED STATES COURT OF APPEALS
DISTRICT OF COLUMBIA CIRCUIT
Nos. 85-1488 and 86-1331
NATURAL RESOURCES DEFENSE COUNCIL, INC., et al.,
Petitioners,
Vv.
LEE M. THOMAS, Administrator,
United States Environmental Protection Agency,
Respondent,
ALABAMA POWER COMPANY, et al., AMERICAN PAPER IN-
STITUTE and the NATIONAL FOREST PRODUCTS ASSOCIA-
TION, NATIONAL COAL ASSOCIATION, KENNECOTT, NAT-
URAL RESOURCES DEFENSE COUNCIL, INC., and SIERRA
CLUB, STATE OF OHIO, Intervenors
OHIO POWER COMPANY,
Petitioner,
V.
LEE M. THOMAS, Administrator,
United States Environmental Protection Agency, et al.,
Respondents,
NATURAL RESOURCES DEFENSE COUNCIL, INC., and
SIERRA CLUB,
Intervenors.
Argued Sept. 25, 1987
Decided Jan. 22, 1988
2a
Petition for Review of an Order of the
U.S. Environmental Protection Agency
David G. Hawkins, with whom Richard E. Ayers and
Howard I. Fox, Washington, D.C., for the Natural Re-
sources Defense Council, Inc., et al., James M. Shannon,
Atty. Gen. and Janet G. McCabe, Asst. Atty. Gen., the
Commonwealth of Massachusetts, Boston, Mass., James E.
Tierney, Atty. Gen. for the State of Maine, Augusta Me.,
and Robert Abrams, Atty. Gen. for the State of New
York, Albany, N.Y., were on the brief for petitioners.
Robert Whitehead and Kenneth N. Tedford, Asst. Atty.
Gen., State of Conn., Hartford, Conn., and Greg Sample,
Asst. Atty. Gen., State of Maine, Augusta, Me., also en-
tered an appearance for Natural Resources Defense Coun-
cil, Inc., et al.
Henry V. Nickel, with whom F. William Brownell and
Mel S. Schulze, Washington, D.C., for Alabama Power
Co., et al., Donald C. Winson and Richard S. Wiedman,
Pittsburgh, Pa., for Ormet Corp.; Robert F. Stauffer,
Washington, D.C. and David C. Branand, Cleveland,
Ohio for National Coal Ass’n, and Michael H. Holland
and Earl R. Pfeffer, Washington, D.C., for United Mine
Workers of America were on the joint brief for peti-
tioners Alabama Power Co., et al. John W. Ublinger,
Jr., also entered an appearance for petitioner Ormet Corp.
Lawrence A. Demase, Pittsburgh, Pa., and J. Daniel
Hull, Washington, D.C., were on the brief for petitioners
Monongahela Power Co. and Potomac Edison Co.
Ann G. Daniels, San Francisco, Cal., entered an ap-
pearance for petitioner Environmental Defense Fund, Inc.
Paul H. Schneider, Asst. Atty. Gen., State of New
Jersey, Trenton, entered an appearance for petitioner,
State of New Jersey.
3a
Charles Carter, Asst. Gen. Counsel, EPA and Lisa F.
Ryan, Atty., U.S. Dept. of Justice, with whom Scott
Slaughter, Atty., Dept. of Justice, Alan Eckert, Associate
General Counsel, EPA and Patricia Embrey, Atty., EPA,
Washington, D.C., were on the brief for respondents.
Michael W. Steinberg, Atty., U.S. Dept. of Justice and
Gaylene Vasaturo, Atty., EPA, Washington, D.C., also
entered an appearance for respondents.
Alfred V.J. Prather and Kurt E. Blase, Washington,
D.C., were on the brief for intervenor Kennecott.
Dale T. Vitale, Asst. Atty. Gen., Columbus, Ohio for
the State of Ohio, was on the brief for intervenor-
respondent the State of Ohio.
Henry V. Nickel, W. William Brownell and Mel S.
Schulze, Washington, D.C. for Alabama Power Co., et al.,
Michael K. Glenn, Washington, D.C., for American Paper
Institute, et al., and David C. Branand, Washington,
D.C., for National Coal Ass’n., were on the brief for in-
tervenors Alabama Power Co., et al. Richard S. Wasser-
strom, Washington, D.C., also entered an appearance for
American Paper Institute, et al. Robert F. Stauffer,
Washington, D.C., also entered an appearance for Na-
tional Coal Ass’n.
Edwin Lloyd Pittman, Atty. Gen. State of Mississippi
and Robert Franklin Spencer, Asst. Atty. Gen., State of
Mississippi, Jackson, Miss., were on the brief for amici
curiae the State of Mississippi, et al. urging affirmance.
Before RUTH B. GINSBURG and WILLIAMS, Cir-
cuit Judges, and AUBREY E. ROBINSON, Jr., Chief
Judge, U.S. District Court for the District of Columbia.*
Opinion for the Court filed by Circuit Judge WIL-
LIAMS.
* Sitting by designation pursuant to 28 U.S.C. § 292(a).
I.
Il.
ITI.
4
BACKGROUND ............................ eaibiidbesnall See
STACK HEIGHT VALIDATION: EMISSIONS RATE
ASSUMPTIONS IN DEMONSTRATIONS .
A.
B.
The Control-First Dispute ....
Demonstrations Supporting Stack Height I In-
creases Within the Formula .
1. Attacks on the formula
2. Attacks on the demonstration procedures..
. The NSPS Presumption for Above-Formula
Stacks ............
1. Substantive objections .
2. Procedural challenges ..
STACK GRANDFATHERING ISSUES
Sheltering pre-October 1, 1983 Within-
A.
Formula Stack Increases from the Demon-
stration Requirement ........... :,
B. Automatic Credit to Formula Height for pre-
January 12, 1979 Stacks ..................
1. Credit up to 2.5H for pre-1979 sources
GING ID... ccrciecnaitncdacceeee
2. Credit up to H+1.5L for pre-1979 sources
not showing reliance ..................................
C. EPA’s Definition of “Stack Height i in Exist-
GUD” - sncscirincthensintnieeiictiaiaiaee eae
D. Application of New Demonstration Require-
ments to Sources that Have Completed
a at Pit a)
| BF eat SEEN SR Sal me, Pea
A. Original ilies and Construction as One
Stack ......... RAND RE 5s in Os ON :
B. General Rule for Merged Stacks _.........
C. Partial Grandfathering of Stacks Merged
ORNS GUN GSS sicntemumesenaet ee a
1233
1233
1239
1239
1239
1240
1241
1242
We I iii ceili alisha adie ... 1256
Ss <<. ¥ —— sso 1256
B. Definition of “Nearby” as Used in Demon-
ATE a a eee WoO Se SERED Spe RINT OueR i. Sout 1256
C. Modeling Adjustments for Complex Terrain... 1257
8 IRE NT Oe a 1257
WILLIAMS, Circuit Judge:
Under the Clean Air Act as amended in 1970, 42 U.S.C.
$§ 7401 et seg. (1982), the Environmental Protection
Agency sets national ambient air quality standards
(“NAAQS”) for various pollutants. /d. § 7409. Once
they are set, each state must adopt and submit to the
EPA a state implementation plan (“SIP”) providing for
achievement of the standards in each air quality control
region. Jd. § 7410(a)(1).' Such plans obviously must
distribute the necessary pollution cutbacks among the
various pollution sources. From 1970 to this day a dis-
pute has raged over the extent to which pollution sources
may make their required contribution toward these
localized clean air goals by dispersing pollution rather
than by reducing their emissions.
Dispersion may be either through space or time. A
source may disperse its pollution through space by such
devices as “tall stacks,” which carry the pollutants away
from the region and from the ground levels at which
satisfaction of the NAAQS is measured. It may disperse
pollution over time by intermittent controls systems
(“ICS”), which vary the time of discharges so as to take
advantage of changes in weather conditions.
1 Under 42 U.S.C. § 7407, the country is subdivided into inter-
state as well as intra-state regions. As of 1981 there were 236 such
regions. B. ACKERMAN & W. HASSLER, CLEAN COAL/DIRTY AIR 65
(1981).
6a
Dispersion techniques vary from emission reductions
in two fundamental ways. They are, at least up to a
point, considerably cheaper than emissions reductions.
This makes them attractive to industry and often to the
states of origin. (The attraction may be particularly
great where the state of origin produces high-sulphur
coal.) On the other hand, reliance cn such techniques in-
creases the aggregate amounts of pollution dumped into
the atmosphere. This makes them unattractive to en-
vironmentalists and to the citizens of downwind states,”
to which the pollution will be swept and where acid rain
may result.
First the courts and then Congress intervened to pre-
vent states from allowing pollution sources to satisfy their
obligations by means of dispersion. As a result, reduc-
tions in local ground-level pollution do not “count” toward
satisfaction of the NAAQS to the extent that they rely
on those dispersion techniques that are disapproved.
While these limitations obviously relate to important
goals, the system has a certain eccentricity. The ambient
air quality standards are ones to be fulfilled in more
than 236 specific /ocal areas. The anxiety over dispersion
stems primarily from dispersion’s impact outside the
region of origin. But the means of allaying that anxiety
is to disregard, for purposes of measuring contribution to
local clean air, conduct which indisputably helps clean
local air. Yet none of the constraints on dispersion,
whether devised by courts, EPA or Congress, has forged
2 Of course individuals may also benefit from restrictions on
dispersion as residents of the states where the stacks exist, for (as
will appear) denial of credit for pollution control through dispersion
will result in local sources reducing their pollution by more than
the amount required for achievement of the NAAQS. However,
as the NAAQS are set at levels found by EPA as “requisite to
protect” the public health and welfare, 42 U.S.C. § 7409(b), many
local residents may feel that the decrease in pollution is not worth
the increment in electricity costs.
———_™™
Ta
an operating link between those constraints and the in-
juries inflicted by dispersion. Thus, although the parties
adduce some figures as to changes over time in total
atmospheric “loadings” of sulphur dioxide, these are not
related to any statutory goal or to any scheme for attain-
ing specific cutbacks. This incongruity may account for
some of the logical difficulties encountered in trying to
apply the statute and controlling precedents.
This battle has proceeded in the agency, the courts and
Congress. The latter tried to resolve the matter in 1977
by adding a new provision to the Act, § 123, 42 U.S.C.
§ 7423 (1982), which has not proved at all free of am-
biguity. This court reviewed the EPA’s 1982 “stack
height” regulations in Sierra Club v. Environmental Pro-
tection Agency, 719 F.2d 436 (D.C.Cir.1983), cert. denied,
468 U.S. 1204, 104 §.Ct. 3571, 82 L.Ed.2d 870 (1984)
(“Sierra Club”). We affirmed many aspects of those
regulations, invalidated two provisions, and directed the
agency to reconsider other provisions on remand. In
1985 the agency promulgated a new set of regulations
attempting to respond to Sierra Club.’ In these consoli-
dated cases, environmental petitioners led by the Natural
Resources Defense Council (and supported by an array
of northeastern states)‘ and industry petitioners( sup-
* The 1985 Final Stack Height Regulations at issue here appear
at 50 Fed.Reg. 27,892 (1985). After their publication, Title 40 of the
C.F.R. was reorganized, and these regulations are now codified at
40 C.F.R. Part 100. This opinion, however, will refer to the C.F.R.
cites as they appear in the 1985 Federal Register notice.
* Petitioners attacking the regulations as insufficiently protective
of the environment include NRDC, the Environmental Defense
Fund (“EDF”), the Sierra Club, and the states of Connecticut,
Maine, Massachusetts, New Hampshire, New Jersey, New York,
Rhode Island and Vermont. These parties submitted one consoli-
dated brief, and will be referred to collectively as “NRDC” or the
“environmental petitioners.”
8a
ported by an array of middle western states)° chailenge
the amended regulations. We regret to say that we can-
not find them in full compliance with § 123 as construed
in Sierra Club.®
I. BACKGROUND
This court described the statutory provisions at issue
in this case, together with their legislative and adminis-
trative history, in Sierra Club, 719 F.2d at 439-43, and
in our earlier opinion in Alabama Power Co. v. Costle,
636 F.2d 328, 388-91 (D.C.Cir.1979). Here we confine
ourselves to a brief summary.
Section 110 of the Act directed the EPA Administrator
to approve a SIP if it complied with the applicable pro-
5 Parties petitioning on the ground that the regulations are too
stringent, and intervening in support of the agency against the
NRDC challenges, include Alabama Power Co., the American Paper
Institute, the National Forest Products Association, United Mine
Workers of America, Monongahela Power Co., the National Coal
Association, Ohio Power Co., Ormet Corp., and the State of Ohio.
These parties have been aided by an amici curiae brief submitted
by the states of Indiana, Mississippi and Georgia. These parties will
be referred to generally as “industry petitioners.” Kennecott is an
Intervenor in support of the agency’s approval of the multipoint
roll-back system, an emissions control system challenged by the
environmental petitioners.
6 Prior to oral argument, petitioner NRDC filed a motion for
enlargement of time to submit a supplemental appendix. Soon there-
after it submitted a motion to correct the certified index to the
record and file its supplemental appendix. These motions were
opposed by both the agency and the industry petitioners/intervenors.
The industry petitioners in turn filed a motion requesting the oppor-
tunity to tender supplemental briefs should we grant NRDC’s mo-
tions. NRDC’s motion for enlargement of time is, at this point,
moot. We have reviewed its supplemental appendix and conclude
that nothing contained therein affects our disposition of the case.
It is therefore unnecessary for us to consider the merits of NRDC’s
motion or those tendered in opposition. We deny both the motion
to correct the certified index and file the supplemental appendix
and the industry petitioners’ subsequent motion for supplemental
briefing.
9a
cedural requirements and included (among other things)
“emissions limitations . . . and such other measures as
may be necessary to insure attainment” of the NAAQS.
42 U.S.C. § 7410(a) (2) (B). The agency initially ap-
proved state plans that authorized the use of “‘tall stacks”
and ICS compliance measures. Several courts found this
approach illegal, reading § 110 to establish a hierarchy
among control techniques. Under the hierarchial view,
“other measures” qualified as “necessary” only to the
extent that the SIP had exhausted the “emissions limita-
tions’ approach, 7.e., only where further compliance
through such limitations was “unavailable or infeasible.”
NRDC v. EPA, 489 F.2d 390, 410 (5th Cir.1974), rev’d
on other issues sub nom., Train v. NRDC, 421 U.S. 60,
95 $.Ct. 1470, 43 L.Ed.2d 731 (1975); Big Rivers Elec-
tric Corp. v. EPA, 523 F.2d 16, 21-22 (6th Cir.1975)
(involving ICS), cert. denied, 425 U.S. 934, 96 S.Ct.
1663, 48 L.Ed.2d 175 (1976); Kennecott Copper Corp. v.
Train, 526 F.2d 1149, 1153-54 (9th Cir.1975) (involving
ICS and tall stacks), cert. denied, 425 U.S. 935, 96 S.Ct.
1665, 48 L.Ed.2d 176 (1976). (We refer to these cases
collectively as the “NRDC triolgy.”) Round I to the
environmentalists.
In 1976 EPA issued guidelines seeking to implement
the Fifth Circuit’s view of §110. 41 Fed.Reg. 7450
(February 11, 1976) (‘1976 Guidelines’). The guide-
lines employed a variety of distinctions that continue to
haunt the area. First, they focused on the control credit
that a source could receive for pollution control through
stack height. Thus they did not purport to restrict a
source’s actual employment of a tall stack, but simply
limited the extent to which the actual reduction in
ground-level pollution achieved by such a stack would
count towards compliance with the NAAQS. Id. at 7451.
Second, they drew a distinction between stacks that
were equal to or less than 21 times the height of the
10a
facility (the “2.5H” formula) and stacks that were tal-
ler, favoring within-formula stacks. Jd.’
Third, they looked relatively askance at increases in
stack height as opposed to stack heights attained in
original construction, presumably because the former
were more likely than the latter to reflect a purpose to
avoid emission reduction costs rather than adherence to
conventional engineering practice. Id.
Fourth, they employed “grandfathering” concepts both
with respect to increases and original construction stacks.
For example, they treated the stacks of sources that re-
ceived construction permits before the Fifth Circuit’s
decision more favorably than those of sources initiating
construction later. Jd.
This is not the place to describe the rather complex
pattern that emerged from all these elements. We will
return to aspects of the 1976 Guidelines as we go along.
For the moment, we note that credit for control through
stacks was to be unlimited if the source applied “the best
available control technology” (“BACT’’), even for the
least favored vintage of stack and for stacks of increased
height. Jd. at 7451-52. Stacks initiated before the Fifth
Circuit’s NRDC decision were grandfathered, up to what-
ever figure the 2.5H formula might produce. Jd.
In 1977 Congress stepped in with § 123, moved at
lease in part by concern that the 1976 Guidelines were
7In 1981, the agency began defining H as the “height of nearby
structure(s).” 46 Fed.Reg. 49,817/1 (Oct. 7, 1981). This minor
alteration has no bearing on the current action.
5 Section 123, 42 U.S.C. § 7423, reads as follows:
(a) The degree of emission limitation required for control
of any air pollutant under an applicable implementation plan
under this subchapter shall not be affected in any manner by—
(1) so much of the stack height of any source as exceeds good
engineering practice (as determined under regulations promul-
gated by the Administrator), or (2) any other dispersion
technique. The preceding sentence shall not apply with respect
lla
too lax. See Sierra Club, 719 F.2d at 440. The section
in essence elaborates on §110’s references to “other
methods,” and, to a degree, subordinates the use of tall
stacks and other dispersion techniques to emission con-
trols. It creates a new concept, “good engineering prac-
tice” (“GEP”), with a complex definition. The methods
and distinctions used in the 1976 guidelines reappear,
with important variations.
Like the earlier guidelines, § 123 addresses only the
issue of credit for pollution reduction through dispersion
techniques, explicitly stating that the Administrator is
not to prohibit increases or restrict stack height. § 123
(ec), 42 U.S.C. § 7423(c). Further, it builds in at least
some significance for the 2.5H formula,” specifying that
to stack heights in existence before December 31, 1970, or dis-
prsion techniques implemented before such date ....
(b) For the purpose of this section, the term ‘dispersion
technique” includes any intermittent or supplemental control
of air pollutants varying with atmospheric conditions.
(c) Not later than six months after August 7, 1977, the
Administrator, [sic] shall[,] after notice and opportunity for
public hearing, promulgate regulations to carry out this section.
For purposes of this section, good engineering practice means,
with respect to stack heights, the height necessary to insure
that emissions from the stack do not result in excessive con-
centrations of any air pollutant in the immediate vicinity of
the source as a result of atmospheric downwash, eddies and
wakes which may be created by the source itself, nearby struc-
tures or nearby terrain obstacles (as determined by the Ad-
ministrator). For purposes of this section such height shall
not exceed two and a half times the height of such source unless
the owner or operator of the source demonstrates, after notice
and opportunity for public hearing, to the satisfaction of the
Administrator, that a greater height is necessary as provided
under the preceding sentence. In no event may the Adminis-
trator prohibit any increase in any stack height or restrict in
any manner the stack height of any source.
® The agency carried the 2.5H formula over from the 1976 Guide-
lines in its initial effort to give meaning to the GEP concept. 42
12a
GEP height must not exceed that formula unless the
source owner demonstrates to the Administrator that
such greater height is “necessary” as that term is used
in the GEP definition. Third, it employs grandfathering,
but in a more limited sense than did the 1976 guidelines,
protecting only stacks “in existence” or dispersion tech-
niques “implemented” before the 1970 amendments (De-
cember 31, 1970). § 123(a), 42 U.S.C. § 7423(a). § 123’s
structure differs from that of the 1976 Guidelines in that
it draws no explicit distinction between increases in
stack height and original construction.
Although § 123(c) directed the EPA to issue regula-
tions implementing its provisions by February 7, 1978,
they did not emerge in final form until February 8,
1982. 47 Fed.Reg. 5864. The Sierra Club and the Na-
tural Resources Defense Council chalienged the regula-
tions in this court under 42 U.S.C. § 7607(b) and pre-
vailed in part. We will not here summarize the hold-
ings of Sierra Club, as a summary would be unneces-
sary for the cognoscenti, meaningless for others. The im-
portant aspects of the decision appear throughout this
opinion as we address the many current issues.
The upshot was a remand to the agency, with direc-
tions to promulgate new final regulations “within six
months from the date of issuance of [the] court’s man-
date,” 719 F.2d at 470. The mandate issued on July 18,
1984, after the denial of certiorari by the Supreme Court,
Fed.Reg. 57,459 (Nov. 3, 1977). It refined this formula in its 1979
proposed regulations, defining GEP stack height as the height of a
nearby structure plus one and a half times the lesser of the height
or the width of the nearby structure, or H + 1.5L. 46 Fed.Reg.
2608, 2610 (Jan. 12, 1979). The current regulations except from
the H + 1.5L formula those pre-1979 sources that relied on 2.5H.
50 Fed.Reg. 27,906/3 (1985), 40 C.F.R. § 51.1(ii) (2) (i). When we
use the term “formula height,” we are referring to that height
dictated by the stack height formula applicable to the source in
question.
13a
468 U.S. 1204, 104 S.Ct. 3571, 82 L.Ed.2d 870. The
agency later secured a postponement from the court, and
promulgated the final regulations on June 27, 1985. 50
Fed.Reg. 27,892 (1985). Environmental and industry
petitioners challenge the revised regulations in this court
under 42 U.S.C. § 7607(b) (1), which directs review here
for “nationally applicable regulations.” Thus, 17 years
after the 1970 amendments and 10 years after the enact-
ment of § 123, we again address the permissible scope
of reliance on dispersion techniques.
II. STACK HEIGHT VALIDATION: EMISSIONS RATE
ASSUMPTIONS IN DEMONSTRATIONS
A. The Control-First Dispute
The 1982 Regulations allowed sources to build stacks
to formula height and to increase existing stacks to for-
mula height at will. But a source seeking credit for
above-formula stacks was required to demonstrate (by
fluid modeling or field studies) that the extra height was
“necessary” within the meaning of § 123’s definition of
GEP (“height necessary to insure that emissions . . . do
not result in excessive [downwash-induced] concentra-
tions of any air pollutant... .”). 47 Fed.Reg. 5865/2
(1982). The agency defined “excessive concentrations”
in terms of a “relativist” test: downwash-induced pol-
lutant concentrations were excessive if they exceeded
maximum non-downwash concentrations by 40 percent
or more Id. at 5869/1.
Though the 40 percent figure is not in itself at issue,
a word of explanation is in order. In preparing the 1982
regulations EPA found that downwash increased ground-
level pollution concentration levels by about 40 percent
where a source’s stack was at formula height (7.e.,
2.5H). Sierra Club, 719 F.2d at 446. As Congress had
recognized the 2.5H formula as indicative of traditional
engineering practice and therefore presumptively sound,
14a
the agency reasoned that any downwash-induced pollu-
tion increase exceeding what a formula-height stack
would normally produce should be regarded as excessive.
Id.
In Sierra Club, environmenal petitioners attacked the
relativist test and prevailed. They argued that Congress
was content to give credit to stacks only to the extent
that their height was necessary to protect human health,
so that a downwash-induced concentration could be “ex-
cessive” only if it were health-threatening. 719 F.2d at
447. The 40 percent realtivist test of course had no
direct connection with any health threat.
The relativist-absolute dispute appeared to the court in
Sierra Club to dissolve into the question whether Congress
meant in § 123 to codify a traditional engineering formula
or to create a health-and-welfare based stack height
standard. The court found that the statute and its
legislative history ‘“disclose[d] sharply conflicting sig-
nals,” and concluded, after reviewing the question in
detail, that “Congress [probably] thought traditional en-
gineering practice and protection of health were the
same thing.” Jd. at 448. But the court also found evi-
dence in the legislative history that Congress recognized
that a choice between the two standards would be neces-
sary if traditional engineering practice dictated a height
greater than that necessary to protect human health. Jd.
The court concluded that “meeting air quality standards
was primary in [Congress’s] mind and that good engi-
neering practice was merely a way to do so.” Jd. Finding
it unlikely that the 40 percent standard would identify
“an absolute pollutant concentration that is dangerous to
health,” the court remanded to the agency with instruc-
tions to “develop a standard directly responsive to the
concern for health and welfare that motivated Congress
to establish the downwash exception.” 7d. at 450.
The mandate to develop an absolute test revealed an
issue that did not exist under the relativist one. Ground-
15a
level concentrations are obviously a function not only of
stack height and other elements mentioned in § 123’s
GEP definition, but also of the emissions emerging at the
top of the stack. Once “excessive” concentrations are de-
fined in absolute terms, the stack height “necessary” to
avoid those concentrations on the ground will obviously
vary with a source’s actual emissions. Thus Sierra Club
opened a gap in § 123’s GEP definition, the gap expressed
in the bracketed and emphasized clause below: “height
necessary [given a specified emissions level] to insure
that emissions from the stack do not result in excessive
concentrations... .”
Although the parties disagree as to how much the
assumed emissions rate affects any computation of credit-
worthy stack height, they agree on the direction of the
impact; high assumed emissions rates entail relatively
generous stack credits (and thus relatively high permis-
sible emissions rates), low assumptions the opposite.
EPA’s choice of a baseline emissions rate in the 1985
regulations has varied with the particular contexts pre-
sented by the rule-making. The critical decisions have
related to the “demonstrations” (consiting of field studies
or fluid modeling demonstrations) that the regulations
require of sources in some circumstances. First, sources
seeking credit for any stack height increase after criginal
construction must (unless the stack is grandfathered)
demonstrate compliance with § 123’s GEP definition, even
though the height for which credit is sought in within
EPA’s formula.” 40 C.F.R. § 51.1(kk) (2). Here, EPA
has specified that the baseline must be “the emission rate
10 These increases account for a substantial share of the pollution
dispersed rather than controlled by the utility industry, but the data
before us do not indicate precisely how much. NRDC directs
our attention to data suggesting that 168 pre-1970 sources have
“doubled” their ability to disperse pollution, NRDC Brief at 9-11,
but its data combine the effects of stack height increases with
those of merged stacks (a practice discussed in part IV, infra). Id.
16a
specified by any applicable State implementation plan (or,
in the absence of such a limit, the actual emissions rate).”
Id. NRDC argues that instead the baseline must be that
emissions rate which would result from the source’s using
all “available methods.” NRDC Brief at 22 (emphasis
added). The parties have dubbed NRDC’s contention the
“control-first”’ approach.
EPA also requires a demonstration for any stack
height above that resulting from its formula (unless the
stack is grandfathered). 40 C.F.R. § 51.1(kk) (1). Here
it uses as the baseline the rate provided in the “new
source performance standards” (“NSPS”) promulgated
for new power plants under § 111 of the Act, 42 U.S.C.
$ 7411, unless the source can show that the NSPS rate is
unfeasible. This conditional NSPS standard is, of course,
a variant of control-first; it is vigorously attacked by
industry."
Finally, the baseline emissions rate is relevant to EPA’s
validation of its formula, a matter that is indirectly at
issue here. That validation was based in part on studies
from various power plants, the cleanest having an emis-
sions rate of 4.65 pounds of sulphur dioxide per million
British thermal units (Btu). J.A. 834. This compares
with an NSPS emissions limit of 1.2 pounds per million
Btu for plants built between 1971 and 1978, 40 C.F.R.
§ 60.43 (a) (2), and thus obviously does not fit the control-
first model.
In this part we address the general question whether
$ 123 requires use of control-first and conclude that it
11 Under the new regulations, sources are also required to under-
take GEP stack height demonstrations when a federal, state, or
local authority believes that the formula has overestimated their
necessary stack height. 40 C.F.R. § 51.1(kk)(3). For purposes of
these demonstrations, EPA chose to retain its old relativistic defi-
nition of excessive concentrations, and thus had no need to define
an applicable emissions rate.
17a
does not. Later sections face the baseline emissions rate
problem in the specific contexts already mentioned.
We first address EPA’s contention that NRDC’s control-
first claims are barred by res judicata, as it failed to
raise the argument in Sierra Club. Of course where res
judicata (claim preclusion) applies, it bars relitigation
not only as to all matters which were determined in the
previous litigation, but also as to all matters that might
have been determined. Tutt v. Doby, 459 F.2d 1195, 1197
(D.C.Cir.1972). Moreover, enforcement of the 60-day
time limits imposed by the statute providing for review,
42 U.S.C. § 7607(b) (1), requires that issues raised by an
initial set of rules be raised within that time limit, not
saved for use against the rules that may emerge from a
remand.
Neither of these barriers applies here. The issue of the
proper baseline emissions rate became ripe only after the
Sierra Club court remanded for application of an abso-
lute test. While the environmentalists’ briefs in Sierra
Club might have mentioned the issue, they could hardly
have induced this court to pass on it before EPA had a
chance to do so. They are not, therefore, precluded from
raising the matter in the present litigation.
On the merits, we start by noting the scope of our
review. If, using “traditional tools of statutory construc-
tion,’ we can discern Congress’s intentions in regard to
baseline emissions rates, obviously we must give effect to
Congress’s will. NLRB v. United Food & Commercial
Workers Union, Local 23, USS. ' , 108 S.Ct.
413, 421, 98 L.Ed.2d 429 (1987) (citations omitted) ;
Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104
S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). If we find
that “the statute is silent or ambiguous” on the issue,
however, we must defer to the EPA’s interpretation if it
is based upon a “permissible” statutory construction.
NLRB, U.S. at , 108 S.Ct. at 421, quoting
Chevron, 467 U.S. at 843, 844, 104 S.Ct. at 2782, 2783.
18a
Before evaluating the various appeals to the dictionary
and to legislative history, we think it suitable to note that
the view which NRDC says Congress adopted carries
drastic implications. Control-first would require each
source to assume, for purposes of its stack height credit
demonstration, the lowest achievable emissions rate, de-
termined on either a generic or an individualized basis.
Although the record does not allow us to infer exactly the
impact of the baseline emissions rate on the emissions
rate that would emerge (after the stack height credit
were calculated and then used to determine the permissi-
ble emissions), all parties agree that that impact is sub-
stantial. Indeed, that is what the fight is all about. If
Congress in § 123 prescribed the use of such a baseline
emissions rate, with all its implications for ultimate
emissions ceilings, it did so in a remarkably cryptic way.
In the Clean Air Act Congress has formulated stand-
ards for development of emissions limits in a variety
of contexts. For example, it provided for generic emis-
sions limits for new sources in § 111, 42 U.S.C. § 7411
(1982), spelling out at length the criteria for calculation
of the limits. In a variety of other contexts, it has pro-
vided—at length—for determination of the lowest feasible
emissions level on a source-by-source basis. See, e.g., 42
U.S.C. $$ 7475(a) (4), 7479(3) (mandating use of the
“best available control technology” (“BACT”) for new
sources in attainment areas, and defining the parameters
of the standard); 42 U.S.C. §§ 7502(b) (2), 7501(3)
(requiring “lowest achievable emissions rate” (“LAER”)
for new sources in nonattainment areas, and defining
LAER); 42 U.S.C. § 7502(b) (3) (requiring “reasonably
available control technology (“RACT”) for existing
sources in nonattainment areas); 42 U.S.C. § 7491(g)
(requiring “best available retrofit technology” (“BART’’)
for pre-1971 sources impairing visibility in national parks
and certain other clean areas). NRDC in essence con-
tends that in § 123 Congress mandated agency pursuit
LL
19a
of a similar strategy, but without providing a word of
guidance. All NRDC’s arguments must be assessed in
light of one’s estimate of the plausibility of any such
scenario. We think it quite unlikely.
NRDC argues that its control-first interpretation is
consistent with the plain meaning of the statutory lan-
guage and is clearly supported by relevant legislative
history. It argues further that even if the statute were
ambiguous, EPA’s interpretation is internally inconsistent
and therefore invalid.
NRDC contends that the control-first approach follows
inexorably from the plain meaning of the word “neces-
sary.” Webster’s Third New World Dictionary defines
“necessary” to mean essential or “indispensable.” /d. at
1511. It argues that this definition compels a finding
that stack height cannot be “necessary” to control ground
level pollution unless the source has employed all feasible
emission-control alternatives for reaching the desired
levels under downwash conditions. NRDC Brief at 22.
But courts have frequently interpreted the word “neces-
sary” to mean less than absolutely essential, FTC v.
Rockefeller, 591 F.2d 182, 188 (2d Cir.1979); 9 to 5
Organization for Women Office Workers v. Board of Gov-
ernors, 721 F.2d 1, 10 (1st Cir.1983), and have explicitly
found that a measure may be “necessary” even though
acceptable alternatives have not been exhausted. In FTC
v. Rockefeller, supra, for example, the court said that
“the word ‘necessary’ is not always used in its most rigid
sense.” 591 F.2d at 188. Specifically, it found that a
subpoena could be “necessary” to an FTC investigation
even though the Commission had not pursued “reasonably
available alternatives.” IJd.; cf. Chrisner v. Complete
Auto Transit, Inc., 645 F.2d 1251, 1261-62 (6th Cir.
1981) (statutory term “reasonably necessary” is not ab-
solute and does not require complete absence of alterna-
tives). As these courts have recognized, meaning varies
20a
with context; Webster’s definition by no means tells us
that Congress intended that the baseline emissions rate—
an issue that surfaced only after this court’s Sierra Club
decision—must be premised on the source’s having em-
ployed all available emissions controls.
NRDC asserts that the legislative history clearly dem-
onstrates Congress’s intent to adopt a control-first posture.
The House Committee which drafted § 123 stated that it
was “intended to ratify the general thrust, if not the
specific holdings, of the three U.S. courts of appeals
which have considered the issue of the permissibility of
use of intermitten controls, tall stacks, and other dis-
persion enhancement techniques.” House Report at 91-
92. The cases cited by the House Report are, of course,
the familiar ones of the NRDC trilogy, and each found
that “other measures” for complying with the NAAQS
are “necessary,” for purposes of § 110(a) (2) (B) review,
only when further limits on emissions were infeasible.
We do not believe, however, that legislative history en-
dorsing the “general thrust” of the NRDC triolgy demon-
strates that Congress in § 123 itself clearly resolved the
exact degree of hierarchy appropriate in ranking control
above dispersion.
Just as the Sierra Club court did not anticipate the
present issue, we see no evidence that the courts involved
in the NRDC trilogy anticipated it. Once one recognizes
—as Congress indisputably recognized in § 123—-that dis-
persion through stacks can play a quite legitimate role
in protecting health and welfare from downwash, it is
not by any means obvious that in calculating the appropri-
ate role of stacks one must assume that reduction efforts
have been pushed to the point of infeasibility.
Section 123’s concept of GEP stack height not only
acknowledges a legitimate role for stacks, but endorses
engineering practices developed at a time when emissions
were largely unregulated. In fact, Congress gave those
2la
practices a specific endorsement in authorizing the EPA
to rely on the 2.5H formula in granting credit. See § 123
ic) (Administrator is only obligated to conduct demon-
strations for above-formula stacks). It is true that this
court decided in Sierra Club that in any potential clash
between defining GEP as that height necessary to avoid
downwash-induced effects on human health and welfare,
and defining it as 2.5H, the former must prevail. 719
F.2d at 448. But that decision did not undermine the
statutory assumption that sources might legitimately rely
on stacks aimed at protecting health and welfare from
emissions rates such as have prevailed on plants built
before Congress’s vigorous 1970 intervention into clean
air regulation.
Thus it appears to us that the cases of the NRDC
trilogy simply do not speak to the issue of calculating
GEP height, because those courts never even considered
the possibility that sources could rely on stacks except
when driven to do so by the infeasibility of all alterna-
tives. Legislative history endorsing their “general thrust”
therefore cannot answer new questions posed by $123
itself: “Necessary” as used in the GEP definition of § 123
cannot be answered by reference to the trilogy’s construc-
tion of the word in § 110(a) (2) (B).
NRDC further points to legislative history that in its
view suggests that Congress believed credit should be
given only for stack heights needed by “well controlled”
sources. In discussing its reasons for granting source’s
credit for GEP stack height, the House Committee ex-
plained that
for many years, good air quality management has
meant building a stack sufficiently tall to offset aero-
dynamic downwash created by structures in the im-
mediate vicinity of the stack. Without some provision
for stack height, a plume released downwind of such
structure might become engulfed by turbulent eddys
22a
[sic] within the wake of the structure. When this
occurs even the plume from a well-controlled source
may cause air quality standards (or other require-
ments) to be violated.
House Report at 98, U.S.Code Cong. & Admin.News 1977,
p. 1171 (emphasis added).
We find NRDC’s reading strained. It seems clear to
us that the Committee was merely justifying its decision
to grant credit up to GEP stack height with the observa-
tion that even well controlled sources may need to rely on
the dispersion engendered by a GEP height stack to avoid
excessive local ground-level pollution concentration.
Finally, NRDC points to a number of references ex-
pressing disapproval of the use of the dispersion effects of
“tall stacks” to meet the NAAQS. See, e.g., House Re-
port at 93 (“the courts have determined that the 1970
act prohibited tall stacks as a final compliance method’’) ;
Conference Report, H.R.Rep. No. 564, 95th Cong., 1st
Sess. 144 (1977), U.S.Code Cong. & Admin.News, pp.
1077, 1171, 1524 (“Tall stacks are not a means of emis-
sion limitation under the Clean Air Act of 1970.”). But
we noted in Alabama Power v. Costle that “tall stack” is
“a term that really covers a too-tall stack. 636 F.2d 323,
389 (D.C.Cir.1979) (emphasis added). Thus the refer-
ences merely reiterate the Congress’s intent to deny stack
height credit beyond the hight dictated by GEP; they do
not reflect any legislative decisions on how to calculate
GEP.
Far from finding a clear Congressional intent to adopt
NRDC’s control-first strategy, we find the statute’s use
of the term “necessary” to be completely ambiguous. We
find no evidence in the statute or the legislative history
that Congress ever thought through the question of how
to determine GEP or formulated any view on the “control-
first” approach. In view of Congress’s endorsement of the
historic practice of using stacks to protect health from
23a
downwash-induced pollution, we think the agency, in
adopting existing or SIP-required emissions rates as the
baseline for demonstrations to support within-formula
height increases, gave the statute a quite reasonable
interpretation.
NRDC asserts that even if we find the statute to be
silent as to the appropriate emission level assumption,
we should reject the agency’s approach as internally in-
consistent and therefore arbitrary and capricious. See
5 U.S.C. § 706(2) (A). As noted above, while EPA au-
thorizes use of existing or S1P-required emissions as the
baseline for justifying within-formula increases, 40 C.F.R.
§ 51.1 (kk) (2), it requires an assumption of NSPS emis-
sions for demonstrations needed to justify above-formula
stack heights, 40 C.F.R. § 51.1(kk) (1). NRDC claims
that as NSPS is defined in terms of technological and
economic feasibility, the latter provision reflects the
agency’s partial acceptance of the control-first approach.
The agency’s treatment of within-formula increases, it
says, is hopelessly inconsistent with its view of above-
formula stacks. NRDC Brief at 28-29.
The EPA explained in the rulemaking that it rejected
use of existing emissions in the above-formula context for
fear of impermissible circularity—‘“to the extent that [a
source’s preexisting emissions] limit relied on greater
than formula hight, it would amount to using a tall
stack to justify itself.” See 50 Fed.Reg. 27,898/2. But
we think that §123 left the agency free to regard this
circularity as permissible in the within-formula context,
impermissible in the above-formula context. EPA ex-
plained that its use of NSPS (the stringent standard
applicable to new sources) for above-formula stacks con-
formed to Congress’s expectation that the “credit for
stacks above formula height .. . be granted only in rare
cases.” 50 Fed.Reg.27,898/1.
NRDC is certainly correct when it notes that the
circularity problem that attends the use of existing emis-
24a
sions levels for above-formula demonstration purposes also
applies to within-formula demonstrations. Where the
formula has overstated the stack height necessary to
avoid excessive ground level concentrations, the SIP or
existing emissions levels may reflect the benefit of the
erroneous assumption, so that its use in a within-formula
stack height demonstration will inflate the “necessary”
stack height. The problem, however, is plainly less severe
than in the above-formula height context. The initial
stack height credit was by definition within-formula, thus
limiting the source’s existing emissions rate, and thus
the extent to which the laxity of the process may inflict
potential damage. The reliance on the formula in the
initial computation establishes an outer bound on the
degree of error. This is quite different from the risks
entailed by use of existing rates in the above-formula
context, precisely where both this court and Congress
itself have warned the agency to extend credit only with
“utmost caution,” Sierra Club, 719 F.2d at 450.
Accordingly, we reject NRDC’s contentions that § 123
prohibits use of existing emissions rates in within-for-
mula demonstrations andj that the discrepancy between
the baseline assumptions for above- and within-formula
demonstrations renders the latter arbitrary and capri-
cious.
B. Demonstrations Supporting Stack Height Increases
Within the Formula.
1. Attacks on the formula. In the Sierra Club litiga-
tion the environmental petitioners did not directly chal-
lenge the accuracy of the stack height formula. (By then
the 2.5H formula had evolved into H + 1.5L, where L
refers to the lesser of the height or width of any struc-
ture near the stack. Some references are to formulas in
the plural because the old 2.5H persisted as to some
grandfathered stacks.) They did, however, attack the
agency’s failure to require demonstrations to justify
—
25a
stack height credit in either of two special cases: (1)
when a source raised a preexisting stack, and (2) when
federal, state or local authorities believed the formula
had overstated the necessary stack height. The EPA in
turn defended the omission of such demonstration re-
quirements largely on the ground of the formula’s ac-
curacy. 719 F.2d at 456. The court found this faith
unsupported by the record, as it was explicitly based on
the agency’s erroneous relativistic conception of ‘“‘exces-
sive concentrations.” ?* Jd. at 458. The court therefore
held that the agency had not considered whether the for-
mulas were an accurate enough measure, in light of the
construction of “excessive” concentrations as related to
health and welfare, to justify dispensing with a demon-
stration requirement in the two special cases. It remanded
for that reconsideration. Jd. Thus, despite the absence of
direct attack, the Sierra Club decision invited reconsid-
eration of the formula, by suggesting to EPA that supe-
rior validation of the formula was an alternative to
adopting demonstration requirements in the areas spe-
cifically found to be vulnerable.
On remand, the agency provided demonstration re-
quirements not only for the two circumstances specifically
disputed in the preceding litigation, 40 C.F.R. § 51.1 (kk)
(2) (stack height increase demonstrated), 51.1(kk) (3)
(governmental authority instigated demonstration), but
also for sources with porous structures or buildings whose
shapes are areodynamically smoother than the simple
structures on which the formulae were based. 50 Fed.
Reg. 27,900/2 (explaining the reach of 40 C.F.R. § 51.1
12 The agency had derived its concept of “excessive” from the
formula itself, defining excessive emissions as ones exceeding the
percentage increase in ground level concentrations normally occur-
ring with formula height stacks during periods of downwash. 50
Fed.Reg. at 27,893/3; and see pp. 1233-1234 supra. Its subsequent
finding that the formula predicted the minimum stack height neces-
sary to avoid excessive concentrations was as unsurprising as it
was circular.
26a
(kk) (3)). Given these demonstration requirements,
nothing in our Sierra Club opinion required EPA to re-
evaluate the accurac, of its formula. Accordingly, con-
sideration of deficiencies in the formula is barred by res
judicata (and by the time limits of 42 U.S.C. § 7607(b)
(1)), unless we find that the demonstration procedures
chosen by EPA are insufficient to fulfill the statutory
purposes. We now turn to that issue.
2. Attacks on the demonstration procedures. In Sierra
Club this court found it proper to assume that large
plants of the sort at issue here would have been built
in accordance with “good air quality management” prac-
tices, or, effectively, GEP as the term is used in § 123.
719 F.2d at 459. The corollary of this was an assump-
tion that post-construction stack increases were not jus-
tified by any need to correct downwash-induced dangers
to health and welfare. The court said that this assump-
tion could be rebutted in individual cases “only by a re-
liable indicator” of the height needed for that purpose.
Id.
EPA responded by imposing demonstration require-
ments. Under the 1985 regulations, sources seeking credit
for height increases must show, through fluid modeling
or wind tunnel demonstrations, that the increase is neces-
sary to avoid downwash that would otherwise exceed at
least one of several health- or welfare-related criteria
(applicable NAAQS, “prevention of significant deteriora-
tion” standards covering areas in full attainment of the
NAAQS under § 7475(a) (4), or levels amounting to a
lceal nuisance). 40 C.F.R. § 51.1(kk)2). As noted above,
a source is to assume for the purposes of the demonstra-
tion an emission level equivalent to the applicable SIP,
or, if no SIP applies, to its actual emissions rate. 7d.
NRDC argues that these emissions rate assumptions
undermine the demonstrations, denying them the relia-
bility demanded by Sierra Club. As we have noted, an
27a
assumption of existing or SIP-required emissions rates
plainly gives the demonstrations a certain circularity:
the now existing or required emissions rate will have
been based on a given stack height, which will then be
used to justify a stack height. NRDC Brief at 29.*
NRDC argues that instead EPA was required to as-
sume the best achievable emissions rate. Id. at 22.
We have already rejected NRDC’s claims that failure
to employ control-first assumptions directly violates § 123
or is arbitrary and capricious in light of EPA’s own con-
demnation of circularity and partial adoption of control-
first for above-formula demonstrations. The sole question
currently before us, then, is whether EPA’s use of ex-
isting rates in this context is so defective as to fail short
of Sierra Club’s reliability requirement.
We note at this point that the agency’s failure to es-
tablish perfect logic in support of its emissions baseline
decision may well stem from the nature of § 123 itself.
While its goal is the reduction of overall pollution load-
ings, at least in part with a view to protect against acid
rain in regions distant from the sources, it operates
solely on the means by which sources meet national goals
for local health and welfare. It would be startling if im-
plementation of this process’ did not involve a few logical
imperfections.
There appears, in fact, to be no completely logical basis
on which to select a baseline rate for any demonstration.
If EPA were to use NSPS for all demonstrations, for
example, demonstrations would in a sense underpredict
the appropriate stack height for sources with higher
13 NRDC does not suggest that under EPA’s regulations a source
could inerease its emissions and raise its stack, justifying the stack
height (and thus the increased emissions) by demonstrations em-
ploying the latter rate. We do not read the reference in 40 C F.R.
§ 51.1(ff) (2) to “the actual emission rate” to encompass such a
scenario.
28a
emissions rates. Assumption of a single high emissions
rate, conversely, would overpredict the appropriate stack
height for cleaner piants. But selecting each plant’s ex-
isting permitted rate is subject to the circularity objec-
tion. In this world of imperfections, we think EPA’s
choice reasonable. This is particularly so in light of
Congress’s having obviously contemplated reliance on a
historic notion of “‘good engineering practice,” a notion
developed during an era of relatively primitive emissions
controls. We do not find EPA’s methodology for the
conduct of within-formula demonstrations arbitrary or
capricious.
C. The NSPS Presumption for Above-Formula Stacks.
In developing a baseline emissions rate for demonstra-
tions to justify above-formula stacks, EPA initially pro-
posed that sources assume “either (1) the existing, ap-
proved emission limit; (2) any applicable technology-
based emission limit, such as the new source performance
standards (NSPS); or (3) the emission limit that would
result from the use of GEP formula stack height, which-
ever is applicable to the source being modeled.” 49 Fed.
Reg. 44,882/1. The last phrase clearly indicates that
NSPS would be used only for plants to which it applied
by virtue of $111. The final rule was dramatically
different. It required each source to assume NSPS emis-
sion levels, or, if it could show those to be infeasible,
the lowest achievable levels. 40 C.F.R. § 51.1(kk) (1).
Industry petitioners strenuously object to this conditional-
NSPS assumption on both substantive and procedural
grounds."
14 NRDC does not directly challenge the agency’s above-formula
stack height demonstration provisions, which mandate a NSPS
emissions level assumption, subject to feasibility constraints. But
it does object to EPA’s proposals for gauging feasibility, set forth
in certain ‘“guidance memoranda.” NRDC Brief 28 n.54. This court
has previously held that the memoranda at issue do not represent
29a
1. Substantive objections. Petitioners raise three dis-
tinct challenges to the agency’s decision to adopt the
NSPS presumption.” First, they argue that because Con-
gress did not prescribe the use of a techonolgy-based emis-
sions limit for GEP fluid modeling demonstrations, the
Administrator lacks the authority to mandate its use.
Alabama Power Brief at 19. As we have already noted
in our discussion of NRDC’s control-first argument, Con-
gress imposed technology-based emission limitations—
NSPS, BACT, LAER, RACT and BART—in a variety
of situations. Two of these, BART and RACT, govern
pre-1971 sources. 42 U.S.C. $$ 7502 (b), 7491 (b) (2) (A).
Industry petitioners would have us infer from the con-
trast between those express conferrals of authority, and
the absence of any such reference here, that Congress
denied EPA the authority to assume such an emissions
rate.
We find the attempt of industry to bar control-first
here is not stronger than NRDC’s effort to require it
in the within-formula context. As we noted in discussing
NRDC’s theory, the record raised considerable doubt
whether anyone in Congress even recognized the issue.
The silence alone seems to support neither a requirement
nor a prohibition. What Congress did in § 123 was to
grant broad discretion to the agency, requiring owners
of above-2.5H stacks to demonstrate the necessity for the
higher stacks “to the satisfaction of the Administrator.”
42. U.S.C. $ 7423(¢c). In Sierra Club we read the section
to mean above-2.5H credit should be granted only with
final agency action subject to review. NRDC v. Thomas, No. &5-
1834 (D.C. Cir. Aug. 3, 1986) (Order dismissing petition for re-
view).
15 Besides the three is a frivolous effort to prove that EPA mis-
takenly read Sierra Club as mandating the use of NSPS. This is
patched together from arguments in EPA’s brief explaining how
its efforts to meet the Sierra Club remand, coupled with defects in
alternative emissions baselines, led it to choose NSPS.
30a
the “utmost caution,” 719 F.2d at 447, which the selection
of the NSPS baseline seems to reflect.
Second, industry petitioners assert that the use of the
NSPS presumption only for above-formula stack height
demonstrations will unfairly prejudice sources located in
mountainous terrain, since it is in such areas that above-
formula stacks are most likely to be found. Industry
petitioners argue that this contravenes the will of Con-
gress. Alabama Power Brief at 34. In Sierra Club, how-
ever, we found a congressional recognition “that the tall
stacks provision would have a disproportionately heavy
impact on polluters in mountain areas.” 719 F.2d at 455.
In fact, the court found an affirmative intent to “dis-
courage utilities from locating in hilly terrain, because
such locations tend to require very tall stacks, leading
to a greater dispersion of pollutants.” Jd. at 445. The
court adopted that construction in the context of rejecting
EPA’s claim that it could consider “plume impaction” in
computing excessive concentrations. Id. at 452-56. As
that decision applied even to plants contsructed before
the adoption of § 123, whose owners were obviously not
free to respond to its “discourag[ing]” influence, Sierra
Club’s interpretation of congressional non-solicitude for
plants in hilly terrain was a strong one. Any disad-
vantages inflicted on such plants by EPA’s choice of the
NSPS baseline fit readily within our prior reading of
the law.
Finally, the industry petitioners assert that in order
to use the NSPS presumption, EPA must be able to point
to substantial evidence that it is attainable by most of
the affected sources. But as EPA allows any source to
use a higher emissions rate when NSPS is infeasible,
there is no need for any sort of generic demonstration
that it is normally so. Nor was it improper for EPA
to place the burden of showing infeasibility on the source
owner, rather than assuming the burden of showing
feasibility. Congress appears to have intended that above-
3la
formula stack height be approved only in “rare circum-
stances.” House Report at 93, U.S.Code Cong. & Admin.
News 1977, p. 1171. Cf. Sierra Club, 719 F.2d at 450
(“utmost caution” to be exercised in granting above-
formula credit). EPA’s location of the burden is thus
rationally related to the purposes of the statute and well
within the Administrator’s discretion.
2. Procedural challenges. As described above, EPA
initially outlined a scheme through which each source
would assume its “applicable” emissions rate for purposes
of above-formula demonstrations: (1) sources subject to
technology-based emission limits would assume those rates;
(2) sources not subject to such limits would assume their
existing, approved SIP limits; and (3) sources not sub-
ject to either of the above would assume the limit
that would result if they were to operate with the stack
height credit that the formula would produce. 49 Fed.
Reg. 44,882/1. Less than two weeks before promulgating
the final regulations, the agency informed industry repre-
sentatives of its decision to adopt instead a uniform (but
conditional) NSPS presumption. Because time was short,
industry representatives were only able to respond with
two short letters strongly urging reconsideration of the
new rule. J.A. 1483, 1491 (letters from the Utility Air
Regulatory Group (“UARG”) and American Electric
Power Company). Industry petitioners now assert that
this abrupt shift denied them the opportunity to comment
afforded by § 4 of the Administrative Procedure Act, 5
U.S.C. § 533.
In the preamble to its Final Rule, the agency sought to
undermine this claim by characterizing its 1984 proposal
as presenting three distinct alternatives, rather than a
coherent three-part scheme. 50 Fed.Reg. 27,898/2. This
is quite disingenuous. Nothing in the initial formulation
suggested that EPA intended to adopt one of the three
rates for universal use. And where EPA was offering
alternatives from which it intended to make a choice in
32a
its final rule, it said so. See, e.g., 49 Fed.Reg. 44,881/1
(proposing and soliciting comments on two alternatives
for the definition of “excessive concentrations”) ; 44,884 /1
(proposing and soliciting comments upon three approaches
for modeling “nearby” terrain features).
The EPA can obviously promulgate a final regulation
that differs in some respects from its proposed regulation.
We recognized in /nternational Harvester Co. v. Ruckles-
haus, 478 F.2d 615, 632 n. 51 (D.C.Cir.1973), that “a
contrary rule would lead to the absurdity that .. . the
agency can learn from the comments on its proposals only
at the peril of starting a new procedural round of com-
mentary.” Thus, this court has held under both the APA
and the Clean Air Act that the agency’s final rule must
only be a “logical outgrowth” of its proposed rule. Small
Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d
506, 547 (D.C.Cir.1983) (citing circuit precedent on this
matter).
We think the agency’s ultimate choice qualifies—if
barely—as a logical outgrowth of the original proposal.
Obviously the germ of NSPS was there, as one of the
possibly-applicable technology-based limits. Moreover, the
primary concern that drove EPA away from allowing
sources to use existing SIP limits ‘and thus towards
NSPS) was obvious at an early stage: NRDC’s con-
stantly asserted control-first theme. See 51 Fed.Reg.
27,898/2 (agency rejects use of existing SIP emissions
limits because “to the extent that |a source’s limit] relied
on greater than formula height, it would be using a tall
stack to justify itself”).
To be sure, EPA never explained in the administrative
proceeding why it rejected use of the emissions rate that
would flow from use of the formula. In fact, in its Re-
sponse to Comments the agency defended this option
against environmentalist charges that it was incurably
circular. J.A. 314-15. Here the agency’s lawyer explained
ee
oe er
os
ee ees
33a
that the formula emissions level assumption was inap-
propriately strict. EPA Brief in Ohio Power, Nos. 86-
1331, 86-1362, at 28-29. However valid this critique may
be, it is little help in showing the agency’s intellectual
path to the NSPS choice. However, as neither the in-
dustry petitioners nor anyone else in this litigation advo-
cates that choice, it can hardly have been so attractive
that its disappearance came as a shock.
Further, the public comments raised the possibility of
adopting a single, technology-based limit. The New York
State Attorney General’s Office suggested an NSPS as-
sumption for all demonstrations. J.A. 434. This gave
industry participants a clear opportunity to shoot the
idea down. NRDC attacked each of the three limits set
forth in the 1984 proposal, J.A. 829-33, and advocated
use of the rate that would result from use of “the maxi-
mum degree of control available to the source.” /d. at
832 n. 6. Though the target raised by this contention
was broader than NSPS, it certainly gave industry critics
an opportunity both to shore up the non-NSPS components
of the original proposal and to attack any form of control-
first. Nor was industry free to discount these proposals
merely because they came from parties favoring a control-
first reading of the statute, see Alabama Power Reply
Brief at 15; there was a clearly foreseeable risk that
EPA would reject the environmentalists’ reading of the
law but proceed to adopt control-first as a matter of
choice. This, in essence, is what it did in a limited sphere.
Finally, EPA’s warning of the NSPS threat, communi-
cated two weeks before promulgation, gave industry peti-
tioners at least a limited opportunity to focus a direct
attack on NSPS. Though severely pressed, they managed
to file objections 7-10 days before the final regulations
were signed. J.A. 1483, 1491.
Although this case stretches the concept of “logical out-
growth” to its limits, we think it does not reach the
breaking point. The NSPS assumption appears to have
34a
emerged from the agency’s notice and comment process,
as the agency responded to others’ comments by stripping
away the components of the original proposal that it con-
cluded were more vulnerable. Of course, our affirmance
of EPA on this point does not require it permanently
to resist useful suggestions or critiques that may emerge.
III. StTAcK GRANDFATHERING ISSUES
The agency has in several cases grandfathered stacks
and in one instance rejected an industry request for
grandfathering treatement. NRDC attacks several ele-
ments of the grandfathering as too generous; several
firms (including one heavy buyer of electricity) attack
the rejection of their claim. The decisions at issue are as
follows:
1. EPA limited its demonstration requirement for
within-formula stack height increases to “sources seeking
credit after October 1, 1983 [10 days before our decision
in Sierra Club].” 40 C.F.R. § 51.1(kk) (2). (The pre-
amble makes clear that the date refers to the time owners
raised the stack, not the time they “sought” credit. 50.
Fed. Reg. 27,899 /2.)
2. EPA affords credit up to 2.5H, free of any demon-
stration requirements (including such as might be im-
posed by state or local] air pollution authorities), for any
stack in existence on January 12, 1979, the date when
EPA first proposed the more sophisticated formula, H-+-
1.5L. Pursuant to our remand in Sierra Club, this is
limited to cases where the owner or operator produces
evidence of having relied on the 2.5H formula in estab-
lishing its emission limitation. 40 C.F.R. §$ 51.1(ii) (2)
(i). EPA also affords credit up to H+1.5L or any stack
in existence on January 12, 1979, regardles of reliance.
Id. at § 51.1 (ii) (2) (ii).
3. For purposes of the grandfathering explicitly af-
forded by § 123, for stacks “in existence” before Decem-
35a
ber 31, 1970, EPA in the 1982 regulations defined “in
existence” in terms of the start of continuous construction
or entering into certain types of contracts. 40 C.F.R.
§ 51.1(gg). We upheld this in Sierra Club, 719 F.2d at
464-66. NRDC claims that EPA should have revised this
definition in the light of later discoveries about the num-
ber of plants advantaged by the grandfathering.
4. EPA has refused to provide any grandfathering for
plants that prior to the Final Rule conducted demonstra-
tions to justify above-formula stacks, even though the
demonstrations conformed entirely to the then-applicable
rules. J.A. 64-65.
Some general principles are applicable to all these
issues. First, none of them is governed by the rule
adopted in Georgetown University Hospital v. Bowen,
821 F.2d 750, 756-58, 760 (D.C.Cir.1987), generally in-
validating retroactive rules. The rules there at issue
would have limited reimbursements for past transactions.
All that is at stake here are restrictions on plants’ future
emissions. Retroactivity is involved here simply because
enforcement of the demonstration requirement might im-
pinge unfairly on source owners that made investments or
other commitments in reasonable reliance on prior under-
standings.
Second, our decision in Sierra Club observed that some
of the considerations governing an agency’s duty to apply
a rule retroactively were
(1) whether the new rule represents an abrupt de-
parture from well established practice or merely
attempts to fill a void in an unsettled area of law,
(2) the extent to which the party against whom the
new rule is applied relied on the formed [sic] rule,
(3) the degree of the burden which a retroactive
order imposes on a party, and (4) the statutory
interest in applying a new rule despite the reliance
of a party on the old standard.
36a
719 F.2d at 467 (quoting Retail, Wholesale & Depart-
ment Store Union v. NLRB, 466 F.2d 380, 390 (D.C.
Cir.1972) ). Clearly the issue entails a balancing of the
interest in prompt and complete fulfillment of statutory
goals against the inequity of enforcing a new rule against
persons that justifiably made investment decisions in re-
liance on a past rule or practice. Cf. Retail, Wholesale &
Department Store Union v. NLRB, 466 F.2d at 390;
Associated Gas Distributors v. FERC, 824 F.2d 981, 1040
(D.C.Cir.1987).
We now turn to the specific complaints. |
EE PEPE res ee
A. Sheltering pre-October 1, 1983 Within-Formula Stack
Increases from the Demonstration Requirement
At the outset, EPA invites us to discard NRDC’s ob-
jection by means of an argument that to us is quite
obscure: that the Sierra Club court did not insist on a
retroactive demonstration requirement, or indeed on any
demonstration requirement at all. EPA Brief at 34. The |
premise seems to be that because EPA’s adoption of a
demonstration requirement was voluntary, it need not
explain its decision not to impose the requirement on pre- |
1983 increases. The argument does not add up. First, |
EPA’s adoption of a demonstration requirement for in- |
creases could be viewed as wholly voluntary only if EPA
had set out thoroughly to validate its H+1.5L formula. |
This it did not really purport to do, although its preamble
contains some favorable—and hotly disputed—observa-
tions on the subject."®
16 The agency asserts that “[s!tacks below formula height are
associated with downwash-related violations of the [38-hour SO,,
NAAQS] where emission rates significantly exceed the level specifi-
fied by NSPS.” 50 Fed. Reg. 27,987/3. To back up this assertion
EPA relies primarily upon its evaluation of five fluid modeling
studies which, it claims, demonstrate significant exceedances of the
NAAQS. /d. at 27,897/1. NRDC argues that because these studies
measured only ten-to-fifteen minute concentrations, they cannot be
‘
'
a
'
37a
In any event, the agency found, in light of this court’s
reading of $123 in Sierra Club, that a demonstration
requirement was suitable. That being so, exemption of
a large class of increased stacks is an important de-
cision subject to attack as possibly arbitrary and ¢a-
pricious. It would fail that test if it is inconsistent
with the retroactivity analysis set forth in Sierra Club.
taken to demonstrate NAAQS exceedances. NRDC Brief at 37-38.
As wind speed and direction are highly variable in the real world,
one cannot simply extrapolate ten-to-fifteen minute averages to
estimate pollution averages for longer periods. Thus, the normal
practice is to apply a conversion factor to short-term wind tunnel
results. See e.g., “Eastlake 1980” study at B4-B6, J.A. 111-12; EPA
Brief at 23. Environmental petitioners contend that if the agency
had applied a standard conversion factor to the EPA studies, the
results would demonstrate conclusively that even the comparatively
dirty plants tested did not need formula height stacks to avoid
NAAQS exceedances. NRDC Brief at 38. In response EPA asserts
only that its analysis of meteorological data for each plant convinced
it that use of a conversion factor was not warranted.
In addition to its NAAQS exceedances rationale, the agency
asserts that the formula is necessary to prevent short-term emis-
sions peaks that “raise a real prospect of local health or welfare
impacts.” 50 Fed. Reg. 27,987/3-98/1. We have no doubt that the
agency is permitted to consider hazardous short-term conditions as
within the sphere of “excessive concentrations.” Cf. Sierra Club,
719 F.2d at 447 (state nuisance law may provide a proxy for ex-
cessive concentrations). However, the agency provides no support
for its assertion that the current formula predicts the stack height
necessary to avoid such short-term hazards.
EPA has stated that it did not rely upon industry data to sup-
port its short-term peaks rationale, Response to Comments at 40,
J.A. 308, and has specifically disavowed reliance upon the only other
study cited in its preamble that supports its short-term peak con-
clusions (Huber & Pooler, “Comments on Peak Ground-Level Con-
centrations Due to Building Downwash Relative to Peak Concentra-
tions Under Atmospheric Dispersion Processes” (June 10, 1985),
J.A. 129). See EPA Brief at 27. And while the agency points out
that the ten-to-fifteen minute concentrations measured in the fluid
modeling studies exceeded the 1300 microgram per cubic meter
level specified in the three hour NAAQS, it does not demonstrate
that short-term exposures at that level are hazardous.
38a
Invoking the first factor identified by Sierra Club,
NRDC argues that here there simply is no “well-estab-
lished practice.” A fluctuating rather than well-estab-
lished practice presumably counts against grandfather-
ing, as it undermines the actor’s claim that its reliance
was legitimate. In fact, the record indicates consider-
able waffling by EPA. There appear to have been new
policy moves in 1973, 1976, 1979, 1980, and 1981 and
1982. In its 1973 Guidelines, it actively encouraged
sources with short stacks to increase to GEP formula
height. 38 Fed.Reg. at 25,701/2 (1973) (“The increase
of stack height up to a height consistent with good en-
gineering practice is acceptable without qualification. ...
For fairly level terrain, good engineering practice is nor-
mally taken to be a stack height 21. times the height of
the facility or nearby structure.”). In 1976 it responded
to the circuit courts’ disparaging treatment of its 1973
effort with considerable severity: putting aside stack
increases started before the Fifth Circuit’s NRDC de-
cision, the 1976 guidelines gave credit only for increases
by sources that applied BACT (“best available control
technology”). 41 Fed.Reg. at 7451/2-3 (1976). In-1979,
after Congress’s adoption of § 123, the agency proposed
regulations considerably less stringent, allowing sources
that raised existing stacks automatic credit up .9 H +
1.5L, with the proviso that the EPA or a state or local
control agency could order the source to justify use of
the formula height by demonstrating, through fluid
modeling, the existence of “an air quality problem, at-
tributable to downwash.” 44 Fed.Reg. at 2614/1 (Jan.
12, 1979). In a 1980 “policy change,” sparked by a
heightened concern “that use of its GEP formula for
stack height increases [was] increasing pollutant load-
ings and acid rain,” the agency tightened again, an-
nouncing its intention to require fluid modeling demon-
strations for all future stack height increases. 45 Fed.
Reg. 42,282/1 (June 24, 1980). Eleven months later,
the EPA drew back, leaving in place the scheme adopted
——————
39a
in its 1979 proposed rules. 46 Fed.Reg. 28,650 (May
28, 1981). The agency’s 1982 Final Regulations moved
further in the direction of leniency, granting automatic
credit up to formula height for sources raising existing
stacks, with no provision for support through demon-
strations. 47 Fed.Reg. 5868/3 (1982). Of course it was
this rule that the Sierra Club court remanded for recon-
sideration. 719 F.2d at 458-59.
Clearly the legitimacy of increasing stack height in
reliance on regulatory policy has varied radically from
period to period. The equities for a firm increasing its
stack in the 1976-79 era are slight compared to ones
that increased under the 1973, 1979 or 1981 policies.
Besides, the policies represent a scatter rather than a
clear line, reducing the equities for reliance even on
the moments of lax policy. Finally, equitable claims have
some tendency to degrade over time; a 15-year 1973
contract for the purchase of high-sulphur coal may have
loomed large in 1976 but hardly amounts to anything in
1987.
EPA’s defense of its grandfathering decision failed to
focus on any of these difficulties. See 50 Fed.Reg. at
27,899 /3-900/1. Indeed, EPA’s policy imposed no re-
quirement of reliance at all, even though it was precisely
that omission that persuaded this court to remand the
grandfathering issue raised in Sierra Club. 719 F.2d at
468.
Against the seemingly weak claims for grandfathering
is the possible frustration of the statutory goal. This
looks significant. The vulnerability of the formula per-
suaded EPA to require demonstrations. These demon-
strations are impaired by the circularity problem that
EPA has recognized. Yet EPA’s grandfathering rule
allows most of the affected sources to escape even this
modest check.
40a
Administrative problems may partly explain EPA’s
generous grandfathering. An immediate run of demon-
strations for all sources that have increased stack height
since 1970 would evidently tax the capacity of the facili-
ties for running such demonstrations. EPA Brief at 18.
But this alone appears a weak justification, as EPA has
the alternative of adopting a formula clearly valid
enough to dispense with demonstrations altogether.
Thus we find it necessary to remand. We do not say
there is no room for grandfathering on these facts, but
the case for it seems unusually weak. Any grandfather-
ing chosen should fit, to a reasonable degree, the varia-
tions in regulatory history and degrees of reliance. We
recognize, of course, that administrative necessity or de
minimis principles will prevent a perfect fit; EPA could
not be expected to match the six layers of regulatory
policy with a six-layer grandfathering scheme. But fi-
delity to the congressional purpose requires a far more
careful effort to address the problem than the agency
has yet made.
B. Automatic Credit to Formula Height for pre-January
12, 1979 Stacks
The regulations provide credit for heights up to for-
mula levels for sources originally built or subsequently
raised before January 12, 1979. 40 C.F.R. §§ 51-1(ii)
(2) (i) and (ii). As now written, the rule shelters such
sources not only from the requirement of demonstrations
initiated by state or local authorities, 40 C.F.R. § 51.1
(kk) (3), but also from the demonstration requirements
for stack increases. For purpose of our present discus-
sion, we assume that on remand EPA will look to our
analysis in part III.A in deciding to what extent (if
any) it will shelter older within-formula increases from
the new demonstration requirements. Acccordingiy we
limit our consideration here to the 1979 grandfathering
provision only insofar as it shelters stacks from state-
4la
initiated demonstration requirements and only insofar
as it applies to credit for stacks at or within their origi-
nal heights. The rules have this effect for (1) credit up
to 2.5H for pre-1979 stacks of sources whose owners re-
lied on the 2.5H formula and (2) credit up to H + 1.5L
for all pre-1979 stacks regardless of reliance.
At the outset, and applicable to both types of grand-
fathering, is the question whether freedom from the ne-
cessity for supplying demonstrations, at the behest of
government authorities, is of any great importance to the
realization of the goals of the Clean Air Act. We can-
not detect much importance. As a practical matter, it
seems likely that virtually all such requirements would
originate with a state, or with a local entity acting with
the authority of the state. But 42 U.S.C. § 7410 leaves
states completely free to establish more stringent pollu-
tion controls than EPA. See Indiana & Michigan Elec-
tric Co. v. EPA, 509 F.2d 839, 844 (7th Cir.1975); Ap-
palachian Power Co. v. EPA, 477 F.2d 495, 498 (4th
Cir.1973). Thus no EPA rules on demonstrations could
bar a state from insisting on the most onerous demon-
stration imaginable. The failure to provide for such a
demonstration for pre-1979 sources seeking credit within
the formulae thus has little practical effect; the statutory
interest in retroactive application is modest. On the
other hand, the agency must supply some reason for
treating pre-1979 sources more leniently than later ones.
We now turn to that problem in the 2.5H and H +
1 51, contexts.
1. Credit up to 2.5H for pre-1979 sources showing re-
liance. In Sierra Club, we made clear that the agency
was to either justify its faith in the accuracy of the
formula or provide a mechanism through which local au-
thorities could force sources within their jurisdiction to
prove their need for formula height stacks. As noted
in part III.A above, the agency failed to properly vali-
date its formula. It chose instead to promulgate a state-
42a
initiated demonstration provision, 40 C.F.R. § 51.1(kk)
(3), subject to the grandfathering here at issue. |
We have no difficulty upholding this limited shelter. |
We found in Sierra Club that calculation of GEP through
use of the 2.5H formula was, until 1979, an established |
practice and that protection of sources relying on such
a practice in their original construction would not “main- |
tain a situation that Congress sought to end.” 719 F.2d
at 468. Moreover, the states’ alternative route to control,
noted above, further dilutes the interests supporting ret-
roactivity.
NRDC first contends that EPA’s failure to advance a
full substantiation of even the H + 1.5L formula utterly
prevents it from allowing automatic credit for stacks
originally constructed in reliance on the 2.5H formula.
But the environmental petitioners in Sierra Club did not
attack the formula at all and attacked the want of dem-
onstrations only for stack height increases and instances
where local authorities were concerned that the formula |
might over-predict GEP. Thus, once the state option to |
be more severe is recognized, Sierra Club left EPA quite
free so far as concerns within-formula original-construc- |
tion stacks. The sole constraint was that, in grandfather- |
ing the difference (for original-construction stacks) be-
tween the height yielded by the 2.5H formula and that |
yielded by the newer H + 1.5L, EPA must afford the
benefit only to firms actually relying on the 2.5H figure.
719 F.2d at 468. The agency responded to that aspect
of the remand by explicitly conditioning grandfather
treatment under the new regulations on such a showing
of reliance. 40 C.F.R. § 51.1 (ii) (2) (i).
NRDC’s second objection relates to the exact terms
of the reliance requirement. The grandfathering is avail-
able where the source owner establishes its reliance on
the formula “in establishing an emission limitatien,” 40
C.F.R. § 51.1(ii) (2) (ii), meaning, all agree, that the
43a
agency looks to the source’s emission rate rather than its
actual stack height. See also 50 Fed.Reg. 27,901/2.
Thus, if a source built a stack taller than 2.5H, but
set its emission limits assuming 2.5H credit, the agency
will concede that ‘a convincing demonstration has been
made that the source properly relied on the formula.”
Id. at 27,901/3. Conversely, if such source based its
emission limits ‘fon some other stack height credit, such
as 2.8H, 3.5H or some other number,” the agency would
infer that it had not relied on the formula. /d.
Here NRDC’s objection flows from its reading of our
decision in Sierra Club. It believes that case to preclude
grandfather treatment for sources with stacks taller than
2.5H, relying heavily on the following paragraph, es-
pecially its last sentence:
We hold that the statute does not prevent EPA from
allowing its past rule to be applied to stacks built
before its new formula was proposed, but that the
agency has erred in allowing sources that did not
rely on the old formula to use it. Congress was
moved to enact section 123 by evidence that during
the 1970’s many sources had built tall stacks far
above the heights dictated by sound engineering
practice. To allow such sources to claim credit for
heights up to the 2.5 Rule would be a windfall for
them, unjustifiable under either the statute or the
equitable considerations that govern retroactivity.
719 F.2d at 467.
The paragraph taken as a whole simply states that
allowing sources with above-formula height stacks to
claim 2.5H credit without a demonstration of reliance on
the 2.5H formula would be unlawful. That it does not
require EPA to deny credit for the dispersion effects of
the part of a tall stack fitting within the 2.5H formula
is reinforced by the court’s discussion of the burden of
retroactivity. The court observed that such a burden
44a
might take the form of expensive retrofitting of control
equipment or renegotiation of coal contracts. Jd. at 468.
As these consequences derive from the need to change
emission limitations, and not from the height of the stack
itself, it is clear that the court believed that a source
could demonstrate the requisite reliance by demonstrating
that it had set its emission limits by reference to the
2.5H formula. As the statute does not regulate actual
stack height (and in fact specifically forbids the Ad-
ministrator from doing so, § 123(c), 42 U.S.C. § 7423(c)),
but rather regulates stack height credit, it would be
perverse to make grandfathering depend on actual stack
height rather than upon emission limitation decisions
driven by expectations of allowable credit.
2. Credit up to H + 1.5L for pre-1979 sources not
showing reliance. As noted above, the states’ complete
freedom to impose demonstration requirements appears to
sap this particular grandfathering of any great signifi-
cance. Nonetheless, in drawing a distinction between pre-
1979 and later stacks, the agency must supply some
reason. In this context we cannot identify one.
Before EPA introduced the H + 1.5L formula in its
1979 proposal, the 2.5H formula was the only formula
sanctioned by the agency. Thus, not only does the agency
not impose a reliance requirement in this context, but we
cannot understand how a pre-1979 source could have relied
on H + 1.5L. Even when the statutory interest in apply-
ing a rule retroactively is slight, an agency must articu-
late some equitable rationale for grandfathering. Al-
though we cannot say that there is none, we cannot upheld
the decision in the absence of any explanation.
C. EPA’s Definition of “Stack Height in Existence”
In Sierra Club petitioners contended that EPA’s defini-
tion of stack “in existence on Decernber 31, 1970,” as used
in § 123(a), impermissibly extended protection to stacks
merely under construction. The court accepted EPA’s
45a
view. 719 F.2d at 464-65. At the time, the record before
the court indicated that only four to eight piants would
be affected by the dispute, and the court mentioned this
fact. Id. at 465. NRDC now contends that the broader
definition will encompass 32-to-98 utility sources, NRDC
Brief at 74, and challenges EPA’s refusal to reconsider
the issue in light of this reassessment of its probable
impact.
Although the Sierra Club court indisputably mentioned
the limited number of plants thought to be affected, its
acceptance of EPA’s interpretation rested on the view
that it was “necessary to make the clause equitable,
which was undoubtedly Congress’s purpose,” 719 F.2d at
465, not on the number of plants affected. We recognize
that under the balancing test by which retroactivity is
evaluated, frustration of the statutory purpose is a key
element militating against non-retroactive application.
The new discoveries of affected plants up the ante. But
the “in existence” definition did not represent a de novo
retroactivity decision by EPA, merely an implementation
of Congress’s decision. NRDC points us to nothing in the
prior rulemaking suggesting that the number of plants
affected influenced EPA’s choice of the broader definition.
Compare 46 Fed.Reg. at 49,816/1 (Oct. 7, 1981) (ex-
pressing decision to broaden definition without a word as
to the number of plants). Accordingly, we are not 2on-
fronted with a case where “a significant factual predicate
of a prior decision” has been removed, which may some-
times trigger a duty to revisit the issue. See WWHT,
Inc. v. FCC, 656 F.2d 807, 819 (D.C.Cir.1981) ; Geller v.
FCC, 610 F.2d 973, 980 n. 59 (D.C.Cir.1979). EPA’s
adherence to its prior position is lawful. We would be
reluctant in any event to start undermining a six-year-
old provision governing the scope of Congress’s 10-year-
old choice tu protect decisions actually made more than
17 years ago.
46a
D. Application of New Demonstration Requirements to
Sources that Have Completed Demonstrations
Industry petitioners urged the agency to exempt from
its new demonstration requirements sources that had
already made demonstrations supporting above-formula
stacks but employing prior more lenient tests. Response to
Comments 333-34, J.A. 65-66. Thevagency refused, ex-
plaining that “[t}he fluid modeling demonstration has no
significance apart from showing whether the source quali-
fied for credit under the stack height guidelines then in
effect.” Id. at 334, J.A. 66 (emphasis added). Three
power companies (Ohio Power, Monongahela Power and
Potomac Edison), and an aluminum manufacturer that
is a major buyer from Ohio Power, challenge this re-
jection. These petitioners challenge the validity of the
final regulations in NRDC v. Thomas, No. 85-1488, and
challenge the agency’s denial of their petition for re-
consideration of these regulations in Ohio Power v.
Thomas, Nos. 86-1331, 86-1362.
A preliminary issue raised by petitioners is whether
this court or the Fourth Circuit properly has jurisdiction
over their claims. § 307(b) (1) of the Act provides for
review here of “nationally applicable regulations.” 42
U.S.C. § 7607(b) (1). It then states that a petition for
review of final action which is “locally or regionally ap-
plicable may be filed only in the United States Court of
Appeals for the appropriate circuit.” 7d.
Conceivably one might characterize the present grand-
fathering issue as regional, as its impact evidently falls
only on sources in limited geographic areas. Whatever
the distribution uf affected plants, however, we think the
clearly nationwide scope of the regulation is controlling.
The section calls for review in local courts of appeals
for regulations that are “locally or regionally applicable.”
If the jurisdictional provision turns on the de facto scope
of the regulation, choice of the correct forum might
47a
raise complex factual and line-drawing problems. Such
a complication of the jurisdictional test would waste time
and serve little purpose. See Sharp v. Weinberger, 798
F.2d 1521, 1524 (D.C.Cir.1986) (Scalia, J.). We believe
the clause governing “nationally applicable regulations”
provides jurisdiction over both the direct challenge to the
regulations and the petition for reconsideration.
A second preliminary issue is whether the regulations,
which say nothing explicit on the subject, actually in-
validate the prior approvals. We believe they do. First,
nothing in the regulations expresses any affirmative in-
tent to grandfather such sources. The statute precludes
emission credit for stack height beyond GEP. The reg-
ulations in turn state the rules for determination of
GEP. The fact that a source’s stack has been found to
comply with a former definition of GEP clearly does not
suggest that the stack qualifies under the current, more
stringent standard. Moreover, the agency has in many
places expressly stated its provision of grandfather treat-
ment, discussed in prior parts of this section of this opin-
ion. It has included none in its articulation of criteria
for above-formula demonstrations. Finally, EPA in the
preamble to the Final Regulations explicitly denied any
intention to exempt post-1970 sources from the above-
formula demonstration provisions, 50 Fed.Reg. 27,899/1,
and in its response to industry comments explicitly de-
nied any intention to grandfather previously approved
plants, J.A. 334. Thus, we conclude that the agency has
in fact made a final decision not to exempt these sources.
Petitioners make two distinct challenges to the agency’s
decision. First, they argue that the failure to honor the
stack height credit they received pursuant to valid notice
and comment proceedings violates the doctrine of “re-
pose.” Ohio Power Company Brief at 20-26. The cases
cited for the doctrine all involve agencies’ attempts to
revoke, in adjudicatory proceedings, previously issued
licenses, exemptions, or rights-of-way. See, e.g., Hirschey
48a
v. FERC, 701 F.2d 215 (D.C.Cir.1983) ; Greater Boston
Television Corporation v. FCC, 463 F.2d 268 (D.C.Cir.),
cert. denied, 406 U.S. 950, 92 S.Ct. 2042, 32 L.Ed.2d 338
(1971); Chapman v. El Paso Natural Gas Co., 204 F.2d
46, 52-54 (D.C.Cir.1953). In Greater Boston, the court
described the doctrine as binding an agency “to respect
the governance of a final administrative decision for the
particular matter there determined.” Greater Boston,
463 F.2d at 291. The doctrine is not an absolute even
where clearly applicable. /d. (the finality interests em-
bodied in the doctrine of repose are “dominant but not
absolute”).
Clearly one can make a linguistic argument, as the
EPA does, that the matters determined in the earlier
demonstrations were only the applicants’ entitlements to
above-formula credit under the rules then prevailing.
This is so, but one could construct similarly narrow defi-
nitions of the first decision in each of the above cases.
More to the point, it seems that in the context of adjudi-
catory revocations of adjudicatory grants, special scrutiny
is needed to protect legitimate reliance interests from un-
justifiable agency shifts in direction.
Here, a new set of duly promulgated rules has substi-
tuted more stringent criteria for those prevailing when
petitioners made their demonstrations. The risk of ca-
pricious agency action is far less severe, as the shift
from one set of regulations to another was applicable to
a broad range of parties. Cf. Bi-Metallic Investment Co.
v. State Board of Equalization, 239 U.S. 441, 36 S.Ct.
141, 60 L.Ed. 372 (1915); Upjohn Co. v. FDA, 811 F.2d
1583 (D.C.Cir.1987); American Airlines, Inc. v. CAB,
359 F.2d 624 (D.C.Cir.), cert. denied, 385 U.S. 843, 87
S.Ct. 73, 17 L.Ecd.2d 75 (1966). Accordingly, we think
the EPA’s authvrity to apply the new criteria to peti-
tioners is not governed by the relatively restrictive
bounds of the doctrine of repose, but by the looser ones
49a
already employed in the earlier retroactivity analyses of
this section.
Petitioners’ second claim is in fact based on the retro-
activity criteria set forth in Sierra Club and applied in
this section of this opinion. They object that the agency
failed to spell out any application of those criteria, ren-
dering its decision arbitrary and capricious. Monanga-
hela Power Company Brief at 15-16. The agency’s spare
disposition of the subject seems to us to fall, barely, on
the “tolerably terse” side of the line, as distinct from
the “intolerably mute.” Greater Boston Television Corp.
v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970), cert. denied,
403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971).
First, it stressed the importance of the statutory goal.
In the preamble to the Final Regulations, it rested its
decision to apply the new demonstration requirements to
all post-1970 sources on its view that Congress in § 123
did “affirmatively ‘intend to alter’” industry reliance
upon above-formula height stacks. 50 Fed. Reg. 27,899/1.
On the other side of the retroactivity balance fall the
sources’ reliance interests. Sources that underwent pre-
vious above-formula stack height demonstrations obviously
relied on previous EPA guidance in doing so, and the
new absolute test, coupled with the NSPS presumption
as to emissions, indisputably represents a significant de-
parture from the past requirements. (But EPA noted
that regulatory pronouncements since 1970 had consis-
tently placed a higher burden on credits for above-
formula stacks. Jd.) If the new regulations forced the
petitioners to renegotiate longterm coal contracts or ren-
dered obsolete major investments in emission control
equipment, petitioners might in some circumstances have
a strong equitable argument for grandfathering. (Ohio
Power makes claims of such commitments; Monangahela,
which has not constructed its proposed stack, relies solely
on the funds expended in the earlier demonstration it-
self.) But as the NSPS presumption can be rebutted by
50a
a showing of infeasibility, each source owner will have
an opportunity to identify these costs and secure such
relief as their size may justify. 50 Fed.Reg. 27,898/2.
Thus, the petitioners have not demonstrated that retro-
active application of the new demonstration requirement
will force them to shoulder a heavy burden.
In fact, the only sunk cost that is directly wasted by
the new regulations is the cost of the demonstrations
themselves. In the case of one facility that cost was
$500,000, in the other $200,000. These figures are hardly
negligible, but we should think it a rare case where the
costs of securing data could alone entitle a party to
grandfathering. We think the agency did not here abuse
its discretion.
IV. PLUME RISE
Dispersion of pollutants is greater when a lot of ex-
haust is combined in a single stack rather than ejected
through several. Thus one key indicator of dispersive
effect is “plume rise,” the distance the exhaust is carried
above the top of the stack. We deal here with EPA reg-
ulation of such stack combinations. The phenomenon oc-
curs both as (1) a stack originally constructed combining
exhaust that might have been handled with several stacks
and as (2) a stack built to replace several separate
stacks.
Section 123(a) bars credit not only for “too tall”
stacks but also for “any other dispersion technique.” In
its 1982 Regulations, EPA expressed a narrow definition
of the practices to be denied credit under this language,
and expressly excluded several, including “combining the
exhause gases from several stacks into one stack.” 47
Fed.Reg. 5868/3 (1982). The Sierra Club court read
EPA’s explanation of the definition as in essence a weigh-
ing of “the likelihood that [the various practices] would
be used as dispersion techniques . . . and the burden,
both on enforcement agencies and on industry, of at-
5la
tempting to differentiate legitimate from illegitimate
uses.” 719 F.2d at 462. The environmental petitioners
challenged the definition’s exclusion of certain practices,
including stack combination. They advocated a defini-
tion depending on intent: if a source adopted a practice
in order to obtain a less stringent emission level or to
avoid imposition of a harsher one, the practice would be
regarded as a “dispersion technique.” Sierra Club Brief
(Sierra Club litigation) at 36.
The court agreed with Sierra Club that the agency’s
conception of “dispersion technique” was unduly re-
stricted, and held that “the words . . . sweep broadly
enough to encompass at least the meaning urged by pe-
titioners; the use of devices, alterations to the stack, or
other techniques when they are significantly motivated
by an intent to gain emissions credit for greater disper-
sion.” Sierra Club, 719 F.2d at 462. The court acknowl-
edged the agency’s authority to exempt entire categories
of practices on either of two grounds—administrative
necessity or the de minimis character of the effects. But
it concluded that the agency had “fallfen] far short” of
demonstrating either. 7d. at 463. In its remand to the
agency, however, the court left open the possibility that
the, agency could ”develop classes of plant improvements
a are clearly legitimate or clearly illegitimate” so as
“reduce substantially the number of cases in which
a ® fall scale examination of the motivation for the change
will be required.” Id. at 463-64.
The agency responded to the court’s remand by amend-
ing its definition of “dispersion technique” to include
any technique which attempts to affect the concen-
tration of a pollutant in the ambient air by .. .
(iii) Increasing final exhaust gas plume rise by
manipulating source process parameters, exhaust gas
parameter, stack parameters, or combining exhaust
gases from several existing stacks into one stack;
52a
or other selective handling of exhaust gas streams
so as to increase the exhaust gas plume rise.
40 C.F.R. §51.1(hh)(1) (emphasis added). NRDC
challenges the agency’s new intent-based test, arguing
that Congress intended to cover all features having dis-
persive effects, at least to the extent they may exceed
“normal” dispersion. See NRDC Brief at 62 n. 121.
NRDC urged this court four years ago to adopt a defi-
nition of “dispersion technique” based on a source’s mo-
tivation. This court accepted NRDC’s view. The envir-
onmental petitioners could then have made their current
argument in favor of an effects test. Since res judicata
(claim preclusion) bars relitigation not only of matters
determined in a previous litigation but also ones that a
party could have raised, Tutt v. Doby, 459 F.2d 1195,
1197 (D.C.Cir.1972), NRDC is barred. To accept
NRDC’s invitation to reopen the issue would be to ignore
the concern for finality that underlies res judicata and
create incentives for future strategic gamesmanship. We
decline.
Nor does the presence of other parties on the brief
open up reconsideration of the matter. 42 U.S.C. § 7607
(b) (1) (1982) requires that any petition for review of
such regulations as these be filed within 60 days after
their appearance in the Federal Register. Contentions
in favor of an effects test over one of intent were obvi-
ously ripe at the time of initial promulgation in 1982.
No party offers the slightest excuse for failure to raise
these contentions in the challenges to that set of rules.
While we have recently suggested a number of implicit
qualifications to apparently iron time limits on challenges
to agency rules, National Labor Relations Board Union
v. FLRA, 834 F.2d 191, 195-197 (D.C.Cir.1987), noth-
ing in that case suggests that a party, fully on notice
as to the potential impact of rules upon its interests, is
free to sit back while the matter is subject to prolonged
53a
and complex litigation, and then challenge remanded
rules on the basis that the court’s first ruling did not go
far enough. Any such interpretation would make a trav-
esty of Congress’s efforts to bring litigation of agency
rules to a timely conclusion and to protect the likely
reliance of affected parties.
Thus the only issue properly before us is whether the
agency properly responded to our remand in Sierra Club.
It endeavored to do so by creating bright line rules with
which to discern whether a source’s decision to use a
single stack was significantly motivated by a desire to
achieve a higher degree of pollution dispersal. These are
expressed in the subparts of 40 C.F.R. § 51.1 (hh) (2)
(ii). Subpart (A) exempts stacks “originally designed
and constructed” with combined gas streams, and sub-
part (B) exempts stack mergers occurring as part of a
change in operations comprising an installation of pollu-
tion controls and a net reduction in allowable emissions
of a pollutant. Subpart (C) provides a laxer test, based
on grandfathering precepts, for stack mergers occurring
before July 8, 1985 (the date of the rules’ appearance in
the Federal Register). For them, exemption applies if
the merger occurred either as part of a change in opera-
tions that included installation of emissions control equip-
ment or was carried out for “sound economic or engineer-
ing reasons.”” NRDC objects to each of these classes of
exemptions. We address them in turn.
A. Original Design and Construction as One Stack
A person with only the notoriously risky “little knowl-
edge” of our air pollution control laws might suppose
that the pollution effects of this exclusion must be de
minimis. After all, we are talking only of post-1970
stacks, and original-design post-1970 stacks should be at-
tached to post-1970 plants, which in turn should be sub-
ject to NSPS emissions rates. If SIPs are unlikely to
54a
impose stricter controls than NSPS, then nothing would
be at stake.
NRDC asserts, however, that as many as 56 post-1970
plants are not covered by NSPS, and it appears that of
these 25 have a combined stack as part of their original
design. ICF Inc., Final Analysis of the Proposed Stack
Height Regulations, June 1985, Appendix D, reprinted
in NRDC Brief, Addendum B. EPA appears not to con-
test the point, and indeed has not invoked the de minimis
concept to justify its decision. Accordingly, we plunge
ahead on the premise that something of moment is at
issue.
The agency provides three arguments in support of
this exemption. Each of them appears to us, for one rea-
son or another, to misfire. While we do not by any means
find that the EPA’s conclusion is in violation of statu-
tory authority, we are unable to conclude that it rests
upon “reasoned decisionmaking.” See SEC v. Chenery
Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed.
1995 (1947) (‘We may not supply a reasoned basis for
the agency’s action that the agency itself has not
given.”) ; Greater Boston Television Corp. v. FCC, 444
F.2d 841, 851 (D.C. Cir. 1970), cert. denied, 403 U.S.
923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971) (the court
must intervene if the agency “has not genuinely engaged
in reasoned decisionmaking”’).
First, EPA rests on the text of our opinion in Sierra
Club and on concepts of ordinary language. It notes that
original design characteristics do not increase plume rise,
so that, it says, they cannot be dispersion techniques.
50 Fed. Reg. at 27,903. It cites Sierra Club’s references
to dispersion techniques as “alterations to the stack,”
“changes in stack dimensions,” and “improvements” in
support of this reading of the statutory language. EPA
Brief at 60, citing 719 F.2d at 462-64.
We think the observations of Sierra Club on the sub-
ject are highly inconclusive. The passages cited by the
55a
EPA appear to have been merely mentioning examples,
not attempting an exhaustive list. Elsewhere the court
used potentially more inclusive language. See 719 F.2d
at 462 (noting that the statutory term would reach “the
use of devices .. . when they are significantly motivated
by an intent to gain emissions credit for greater dis-
persion”).
So far as ordinary language is concerned, clearly noth-
ing inherently prevents the term “dispersion technique”
from encompassing a practice adopted during the facility
design phase. Moreover, the statute itself does not use
the term “increase,” with its connotation of change from
the levels produced by an existing condition. That term
appears only in the EPA’s definition of dispersion tech-
nique. 40 C.F.R. § 51.1(hh) (1) (iii) (“any technique
which attempts to affect the concentration of a pollutant
in the ambient air by... [i]ncreasing final exhaust gas
plume rise by . . . selective handling of exhaust gas
streams”).
Second, the EPA argues that treatment of original
design stacks as dispersion techniques raises insuperable
administrative difficulties, namely determining what stack
configuration a firm would have adopted in lieu of a uni-
fied stack. Indeed, EPA could not necessarily assume
that the size of the plant’s units would have been the
same. Cf. Sierra Club, 719 F.2d at 462 (endorsing ex-
emption of a class of practices if the agency could dem-
onstrate that “attainment of the statutory goals is im-
possible”). As ariculated by EPA, however, these diffi-
culties do not seem enough standing alone. NRDC has
suggested one plausible solution, that of using average
plume rise as of 1970 as a proxy for normal plume rise.
NRDC Brief at 62 n.121. Indeed, the agency’s August
1984 draft of the current regulations would have estab-
lished assumptions as to normal plume rise for source
categories through a comparative analysis of stack pa-
rameters. Rebuttal Comments 61, J.A. 865. EPA’s re
jection of both these alternatives is unexplained, leaving
Sy eee aN et oa
56a
the claim of undue enforcement difficulty inadequately
supported.
Finally, the agency asserts that stacks are often
merged pursuant to original facility design for legiti-
mate economic or engineering reasons. It points out, for
instance, that it is less expensive to build one large stack
than three smaller stacks, and also less costly to fit one
stack with pollution control equipment than to install
such equipment in multiple stacks. 50 Fed. Reg. at
27,903. EPA suggests that because there are legitimate
nondispersion-related reasons for merging gas streams,
and mergers for the purpose of increasing plume rise are
“only a theoretical possibility,” its decision to exempt all
originally designed merged streams is justified.
The difficulty with this argument is that, given other
data in the record, it appears not to satisfy EPA’s own
test of “intent” to obtain dispersion benefits. NRDC
points to evidence indicating that power plants have long
realized that merged gas streams can significantly in-
crease plume rise, and that firms have purposefully de-
signed plants to take advantage of this increased dis-
persion since the early 1960s. A.J. Clarke, ‘The Applica-
tion of Air Pollution Research to Power Station De-
sign,” Phil. Transportations (Roy. Soc. London), Nov. 18,
1969, at 265, 269-72, J.A. 862 n.25. Thus the record,
viewing it most favorably to the EPA position, appears
to suggest dual purposes, each alone sufficient to explain
sources’ selection of the single-stack option.
Conceivably EPA might rest on the view that the ex-
istence of a sufficient non-dispersion motive exonerates a
practice, 7.e., establishes its failure to meet the Sierra
Club intent test. Although the language of Sierra Club
is ambiguous, and the matter was not at issue, the court
appears likely to have contemplated a different view—
that the presence of dispersion intent as a sufficient mo-
tive, or as a motive crucial (in combination with others)
to tilt the decision in favor of a single stack, would ren-
der the device a dispersion technique. See 719 F.2d at
57a
463 (suggesting that the EPA could not find a lack of
dispersion intent for an entire class of techniques unless
it could demonstrate that “there is in fact no or little
incentive to implement these techniques because the poten-
ial reduction in emissions limitations would not be worth
the cost”). But in fact the EPA appears to have re-
jected the narrower test. See 50 Fed. Reg. 27,902/3 (“a
pure ‘but for’ test runs the risk of creating exclusions
that effectively swallow the rule itself’). Thus, so far
as we can grasp it, the EPA believes a source charac-
teristic should be presumed a dispersion technique if dis-
persion purposes alone provide a sufficient motivation, re-
gardless of the strength of other purposes. If so, EPA’s
findings of legitimate nondispersionary purposes are not
enough, by its standards, to exonerate an original-con-
struction single stack.
To sum up: EPA relies on (1) a notion of “increase”
that it never tries to substantiate; (2) administrative
difficulties that it asserts without negating the solutions
proposed by others and itself; and (3) the existence of
a sufficient alternative purpose, which (assuming it is
substantiated) is not enough under its own apparent
view of the law. The total is three flawed reasons. While
in some cases they might form a tenuous sort of tripod,
here they seem to us to fail. According to NRDC’s un-
disputed claim this issue accounts for a large fraction of
the dispersed emissions at stake. It is fair to demand
more, loath as we are to prolong the agony of this proc-
ess,
Obviously we owe the agency deference if it affords a
reasoned explanation, consistent with what Congress has
“clearly” required or (in the absence of a clear man-
date) with a “reasonable” interpretation of the statute.
Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-44, 104
S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). The present
record, however, does not appear to bring us to that
point.
58a
B. General Rule for Merged Stacks
As noted, this rule exempts stack mergers effected as
part of a change in operation that includes the installa-
tion of pollution controls and is accompanied by a net
reduction in the allowable emissions of a pollutant. This
exclusion only applies to the emission limitation for the
pollutant affected by the change in operations. 40 C.F.R.
§ 51.1 (hh) (2) (ii) (B). NRDC argues that this exemp-
tion is potentially too lenient by noting the hypothetical
possibility that a source could use merger credit for ‘‘in-
crement expansion” purposes under the prevention of
significant deterioration (PSD) program, 42 U.S.C.
§ 7470 et seq., thus enabling the source to meet PSD re-
quirements at reduced expense. NRDC does not spell out
the objection in any detail. Mere allusion to such a hypo-
thetical is not enough to persuade us that the exemption
represents an abuse of the Administrator’s discretion.
C. Partial Grandfathering of Stacks Merged Before
July 8, 1985
Such mergers qualify for exemption if a source can
demonstrate that its merger was accomplished as part of
a change in operation to install pollution control equip-
ment or for good economic or engineering reasons. 40
C.F.R. § 51.1 (ii) (2) (i) (C). The rule creates a pre-
sumption of intent to gain emissions credit in two cases:
(1) where there was an increase in the emission limita-
tion after the merger; or (2) where there was no emis-
sion limitation in existence before the merging but the
quantity of pollutants actually emitted increased in com-
parison to the pre-merger levels. Jd.
NRDC attacks EPA’s retroactivity analysis, claiming
that the agency has not supported its decision to apply
a more lenient rule to pre-1985 mergers than to post-
1985 mergers. First, it maintains that before 1985 there
was no “well established practice” of allowing credit for
59a
dispersion resulting from stack merger. NRDC finds evi-
dence of a more severe approach in EPA’s 1976 Guide-
lines and the 1979 proposed regulations. It substantiates
the former solely with one letter from a regional EPA
administrator disapproving credit for a particular
merger, and the latter with quotation of the proposal’s
vague language (“other selective handling of exhaust gas
streams so as to increase the exhaust gas plume rise’).
NRDC Brief at 60, 61 n.119. The agency asserts the
existence of a uniformly permissive rule, pointing to
three 1980 guidance documents which “uniformly took
the view that merging of separate stacks into a single
stack ‘is generally not considered a dispersion technique’
absent other factors.” 50 Fed. Reg. 27,903/2. We find
the evidence in this regard to be somewhat inconclusive.
Second, NRDC argues that the agency erred in not
requiring a demonstration of reliance. The agency re-
sponds that it is infeasible to require a demonstration of
“actual reliance” when the reliance in question is upon
general agency guidance rather than a specific formula
or rule. EPA Brief at 66. The point is well taken. Thus,
for us, the question comes down to whether the agency’s
rule for pre-1985 sources is sufficiently protective of the
statutory purpose.
NRDC asserts that the regulations provide large loop-
heles for mergers that were significantly motivated by
an intent to gain increased dispersion credit. As to
mergers accompanying installation of poliution control
equipment, it suggests that a source might intentionally
install equipment for one pollutant in order to secure the
right to increase emissions of another. On the facts, this
seems most improbable. The rule applies only to pre-
1985 mergers, and we doubt many source owners had the
foresight to anticipate EPA’s exemption and slip through
its supposed loophele before its promulgation. Further
protection is added by EPA’s presumption of a signifi-
cant dispersion motive where the merger was accompa-
60a
nied by a relaxation of emissions limits or an increase in
emissions.
As to the exemption for mergers made for “sound
economic or engineering reasons,” NRDC objects not on
the basis of that language itself but by reference to lan-
guage in a “Guidance” document later published by
EPA, “Implementation of Stack Height Regulations—
Exceptions From Restrictions on Credit for Merged
Stacks” at 3 (October 28, 1985). In a separate suit
brought by NRDC before this court we declined substan-
tive review of that document on the ground that the
guidelines “represent tentative agency positions that may
be modified in subsequent agency proceedings,” and “do
not represent final agency action subject to judicial re-
view under 42 U.S.C. § 7607(b) (1982).” NRDC v.
Thomas, No. 85-1488 and consolidated cases (D.C. Cir.
Aug. 3, 1986). NRDC has brought nothing to our atten-
tion that would increase their finality.
Acordingly, the substantive review now appropriate re-
veals no illegality in EPA’s rules for pre-1985 stack
mergers.
V. MISCELLANY
A. Multi-Point Rollback
NRDC argued in a footnote in its opening brief that
a system of calculating emissions limitations known as
multi-point rollback (“MPR”) is a form of intermittent
control system (“ICS”), and is therefore unlawful under
the statute. §123(b) states that dispersion techniques
include “any intermittent . . . contro! of air pollutants
varying with atmospheric conditions.”
MPR in fact involves calculating emission limits in
light of the fact that a certain proportion of days will
involve relatively high dispersion; it allows the source to
emit more on an equivalent proportion of days. But the
days of higher emission need not correspond with the ac-
tual days of higher dispersion. We think that under
6la
Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S.Ct.
2778, 81 L.Ed.2d 694 (1984), EPA was entitled to read
the statutory language as referring only to control sys-
tems that varied output with the time of actual weather
changes. We join the Ninth Circuit in upholding the
agency’s reading. See Kamp v. Hernandez, 752 F.2d
1444, 1451-52 (9th Cir.1985).
B. Definition of “Nearby” as Used in Demonstrations
Section 123(c) defines GEP stack height as that height
necessary to insure that emissions from the stack will not
cause excessive pollution concentrations as a result of
downwash created by “the source itself, nearby structures
or nearby terrain obstacles.” 42 U.S.C. § 7423(¢c) (em-
phasis added.) In its 1982 Regulations, the agency’s ar-
ticulation of its formula considered structures only if lo-
cated within one-half mile of the source. Its provision
for demonstrations provided no similar limit on the struc-
tures or terrain features to be taken into account. In
Sierra Club, this court upheld the one-half mile defini-
tion of “nearby” used in the formula as consistent with
the statute and legislative history, 719 F.2d at 444, but
criticized the agency for not applying the same restric-
tion in its rules for demonstrations. The court remanded
for EPA to “include new regulations that apply the same
‘nearby’ limitation to demonstrations as is applied to the
formulas.” Jd. at 445-46. The agency proceeded to do so.
40 C.F.R. § 51.1(jj) (2).
Industry petitioners, noting an EPA statement that the
Sierra Club “court required EPA to apply the half-mile
limit to the definition of ‘nearby’ in fluid-modeling dem-
onstrations,” J.A. 286, argues that EPA erroneously sup-
posed that Sierra Club bound it to the half-mile figure
and therefore failed to exercise its discretion to determine
whether a different definition might be more appropriate
for demonstrations. Alabama Power Brief at 40-42. See
62a
Phillips Petroleum Co. v. FERC, 792 F.2d 1165, 1169
(D.C.Cir.1986) (“deference ... is only appropriate when
the agency has exercised its own judgment. When, in-
stead, the agency’s decision is based on an erroneous view
of the law, its decision cannot stand”) (emphasis in orig-
inal).
We agree with the petitioners that this court did not
mandate a one-half mile restriction for demonstrations.
Rather, it held that the one-half mile restriction was a
reasonable exercise of the Administrator’s statutory dis-
cretion as applied to the formula, and also that the Ad-
ministrator must apply in demonstrations the same nu-
merical limit as it uses in application of its formula. If
we thought that the agency had misread Sierra Club to
preclude its_choice of some other numerical limit, we
would remand the issue for further consideration.
In fact, however, we do not read the quoted language
as indicating such a mistake. So far as appears no peti-
tioner asked the agency to reconsider the half-mile figure
for formulas. Accordingly, when the agency spoke of the
compulsion of Sierra Club, we think it meant only that,
there being no further debate on use of the half-mile
figure for the formula, Sierra Club required it to employ
that figure for ¢monstrations.
C. Modeling Adjustments for Complex Terrain
“Plume impaction” occurs when a stream of exhaust
gases hits a higher hill or mountain downwind before
dispersion, causing high concentrations on the mountain-
side. 719 F.2d at 452. To take account of this phenom-
eon, the agency gave credit in its 1982 Final Regulations
“for the amount of its stack necessary to ensure that
violations [would] not occur on the mountain as a result
of the amount of the mountain’s height that is above GEP
height.” Jd. This court found “much to commend EPA’s
63a
action from a policy perspective,” but concluded that
§ 123 did not permit such an adjustment. Jd at 455. The
court therefore reversed the agency’s “attempt to reduce
emissions limitations by [credit for] so much of the stack
height as needed to avoid plume impaction.” Jd. at 456.
ey ee
Pursuant to this court’s holding on the matter, the
agency included no provision for plume impaction credit
in its 1985 regulations. Industry petitioners recognize
that the agency is precluded from reintroducing plume
impaction credits. Alabama Power Brief at 45. However,
they maintain that unless the agency adjusts its complex
terrain screening models to account for the existence of
plume impaction, sources will be treated as if they were
violating NAAQS in mountainous terrain when in fact
they have avoided such violations by building appropri-
ately tall stacks. Jd. at 45-47. They therefore urged the
agency during the rulemaking to make “adjustments to
its overpredictive complex terrain screening models.” /d.
at 45; see also J.A. 557-81.
ee ee Teel)
EPA rejected the proposal because it found that
“(mjanipulation . . . of modeling parameters to
avoid predicting theoretical plume impaction where
actual stacks have been constructed above GEP
would be tantamount to granting the same impac-
tion credit that was invalidated by the [Sierra Club]
court.” 50 Fed.Reg. 27,904/2.
The actuai meaning of EPA’s remark is not fully clear
to us. In a currently ongoing rulemaking EPA is revis-
ing its “Guideline on Air Quality Models” and is evaluat-
ing the merits of the “Rough Terrain Display Model”
advocated by industry. 50 Fed.Reg. at 27,904/2. The
outcome of this rulemaking will presumably delineate
what the agency believes is permissible and what is not.
There being nu final decision on the subject, we may not
intervene.
ee i ee ee oe A Bee ae wyreyrt wv wWwWrIeueern. ©
: -
:
64a
CONCLUSION
We uphold the agency except as to its grandfathering
of pre-October 1, 1983 stack increases from demonstra-
tion requirements (part IJI.A), grandfathering of pre-
January 12, 1979 original height stacks up to H + 1.5L
(part III.B.2), and exemption of original construction
single stacks from its “dispersion technique” definition
(part IV.A). These we remand to the agency for pro-
ceedings consistent with this opinion.
CT eT Na er er eS ee re ee ee ee
65a
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 85-1488
NATURAL RESOURCES DEFENSE COUNCIL, INC. et al.
V.
LEE M. THOMAS, Administrator
U.S. Environmental Protection Agency
and consolidated cases
No. 86-1331, et al.
OHIO POWER COMPANY, et al.
Vv.
LEE THOMAS, et al.
and consolidated cases
[Filed Apr. 18, 1988]
Before: RUTH B. GINSBURG and WILLIAMS, Circuit
Judges; AUBREY ROBINSON, Chief Judge, U.S.
District Court of the District of Columbia
66a
ORDER
Upon consideration of the petitions for rehearing of
Respondents, of the Natural Resources Defense Council
Ine, et al., and of the State of Ohio, et al., it is
ORDERED, by the Court, that the aforesaid petitions
are denied.
FOR THE COURT:
CONSTANCE L. DUPRE
Clerk
By: /s/ Robert A. Bonner
ROBERT A. BONNER
Deputy Clerk
ihn AAS toa ch a Si A Nt sa es es nada bani aie bmS
ana sil ks
PBIDY DG ASa gard Ney WY DPD SL ON =a y se gesy Ye aw 7 yer
67a
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 85-1488
NATURAL RESOURCES DEFENSE COUNCIL, INC. e¢ al.
v.
LEE M. THOMAS, Administrator
U.S. Environmental Protection Agency
and consolidated cases
No. 86-1331, et al.
OHIO POWER COMPANY, et al.
Vv.
LEE THOMAS, et al.
and consolidated cases
[Filed Apr. 13, 1988]
Before: WaAzd, Chief Judge; ROBINSON, MIKvA, ED-
WARDS, RUTH B. GINSBURG, STARR, SILBER-
MAN, BUCKLEY, WILLIAMS, D. H. GINSBURG
and SENTELLE, Circuit Judges; AUBREY RoB-
INSON, Chief Judge, U.S. District Court for
the District of Columbia
68a
ORDER
The sugestions for rehearing en banc of the United
Mine Workers of America, et al., Ohio Power Company
and Ormet Corporation and of the State of Ohio, et al.,
have been circulated to the full court. No member of the
court requested the taking of a vote thereon. Upon con-
sideration of the foregoing it is
ORDERED, by the Court en banc, that the aforesaid
suggestions are denied.
FOR THE COURT:
CONSTANCE L. DUPRE
Clerk |
By: /s/ Robert A. Bonner
ROBERT A. BONNER
Deputy Clerk
Circuit Judge Silberman did not participate in this
Order.
69a
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 85-1488
NATURAL RESOURCES DEFENSE COUNCIL, INC. et al.
Petitioners
V.
LEE M. THOMAS, Administrator
U.S. Environmental Protection Agency
Respondent
and consolidated Cases Nos. 85-1489, 85-1543, 85-1552,
85-1554, 85-1556, 85-1557, 85-1558, 85-1560, 85-1568
[Filed May 5, 1988]
Before: RuTH B. GINSBURG and WILLIAMS, Circuit
Judges, and AUBREY ROBINSON, Chief Judge,
United States District Court for the District
of Columbia
ORDER
Upon consideration of the Motion of Respondent—
Intervenors Alabama Power Company, et al. for Stay of
Issuance of Mandate, the Opposition thereto, and of the
reply, it is
70a
ORDERED, by the Court, that the Clerk is directed
to withhold issuance of the Court’s mandate for a period
of 30 days from the date of this order.
FoR THE COURT:
CONSTANCE L. DUPRE
Clerk
By: /s/ Robert A. Bonner
ROBERT A. BONNER
Deputy Clerk
71a
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 51
[AD-FRL-2847-6]
Stock Height Regulation
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rulemaking.
SUMMARY: Section 123 of the Clean Air Act, as
amended, requires EPA to promulgate regulations to en-
sure that the degree of emission limitation required for
the control of any air pollutant under an applicable State
implementation plan (SIP) is not affected by that portion
of any stack height which exceeds good engineering prac-
tice (GEP) or by any other dispersion technique. A reg-
ulation implementing section 123 was promulgated on
February 8, 1982, at 47 FR 5864. Revisions to the regu-
lation were proposed on November 9, 1984, at 49 FR
44878. Today’s action incorporates changes to the pro-
posal and adopts this regulation in final form.
EFFECTIVE DATE: This regulation becomes effective
on August 7, 1985.
FOR FURTHER INFORMATION CONTACT: Eric 0.
Ginsburg, MD-15, Office of Air Quality Planning and
Standards, EPA, Research Triangle Park, North Carolina
27711. Telephone (919) 541-5540.
SUPPLEMENTARY INORMATION:
Docket Statement
Pertinent information concerning this regulation is in-
cluded in Docket Number A-83-49. The docket is open for
72a
public inspection between the hours of 8:00 a.m. and
4:00 p.m., Monday through Friday, at the EPA Central
Docket Section, West Tower Lobby, Gallery One, 401 M fe
Street, SW., Washington, D.C. Background documents |
normally available to the public, such as Federal Register
notices and Congressional reports, are not included in the
docket. A reasonable fee may be charged for copying
documents.
Background
Statute
Section 123, which was added to the Clean Air Act by
the 1977 Amendments, regulates the manner in which
techniques for disperson of pollutants from a source may
be considered in setting emission limitations. Specifically,
section 123 requires that the degree of emission limitation
shall not be affected by that portion of a stack which ex-
ceeds GEP or by “any other dispersion technique.” It
defines GEP, with respect to stack heights as:
the height necessary to insure that emissions from the
stack do not result in excessive concentrations of any air
pollutant in the immediate vicinity of the source as a re-
sult of atmospheric downwash, eddies or wakes which
may be created by the source itself, nearby structures or
nearby terrain obstacles . . . [Section 123(c) ].
Section 123 further provides that GEP stack height shall
not exceed two and one-half times the height of the source
(2.5H) unless a demonstration is performed showing that
a higher stack is needed to avoid “excessive concentra-
tions.” As the legislative history of section 123 makes
clear, this reference to a two and one-half times test re-
flects the established practice of using a formula for de-
termining the GEP stack height needed to avoid excessive
downwash. Finally, section 123 provides that the Admin-
istrator shall regulate only stack height credits—that is,
a
73a
the portion of the stack height used in calculating an
emission limitation—rather than actual stack heights.
With respect to “other dispersion techniques” for which
emission limitation credit is restricted, the statute is less
specific. It states only that the term shall include inter-
mittent and supplemental control systems (ICS, SCS),
but otherwise leaves the definition of that term to the
discretion of the Administrator.
Thus the statute delegates to the Adminisirzior the
responsibility for defining key phrases, including ‘“exces-
sive concentrations” and “nearby,” with respect to both
structures and terrain obstacles, and “other dispersion
techniques.” The Administrator must also define the re-
quirements of an adequate demonstration justifying stack
height credits in excess of the 2.5H formula.
Rulemaking and Litigation
On February 8, 1982 (47 FR 5864), EPA promulgated
final regulations limiting stack height credits and other
dispersion techniques. Information concerning the devel-
opment of the reguiation was included in Docket Number
A-79-01 and is available for inspection at the EPA Cen-
tral Docket Section. This regulation was challenged in
the U.S. Court of Appeals for the D.C. Circuit by the
Sierra Club Legal Defense Fund, Inc.; the Natural Re-
sources Defense Council, Inc.; and the Commonwealth of
Pennsylvania in Sierra Club v. EPA, 719 F.2d 436. On
October 11, 1983, the court issued its decision ordering
EPA to reconsider portions of the stack height regula-
tion, reversing certain portions and upholding other por-
tions. Further discussion of the court decision is pro-
vided later in this notice.
Administrative Proceedings Subsequent to the Court De-
cision
On December 19, 1983, EPA held a public meeting to
take comments to assist the Agency in implementing the
74a
mandate of the court. This meeting was announced in
the Federal Register on December 8, 1983, at 48 FR
54999. Comments received by EPA are included in
Docket Number A-83-49. On February 28, 1984, the elec-
tric power industry fiied a petition for a writ of certio-
rari with the U.S. Supreme Court. While the petition
was pending before the court, the mandate from the U.S.
Court of Appeals was stayed. On July 2, 1984, the Su- .
preme Court denied the petition (104 S.Ct. 3571), and :
on July 18, 1984, the Court of Appeals mandate was for-
mally issued, implementing the court’s decision and re-
quiring EPA to promulgate revisions to the stack height ;
regulations within 6 months. The promulgation deadline
was ultimately extended to June 27, 1985, in order to
provide additional opportunities for public comment, to
allow EPA to hold a public hearing on January 8, 1985,
and to provide additional time for EPA to complete its
analysis of rulemaking alternatives.
ee ee
Documents
In conjunction with the 1982 regulation and this re-
vision, EPA developed several technical and guidance
documents. These served as background information for
the regulation, and are included in Dockets A-79-01 and
A-83-49. The following documents have been or will be
placed in the National Technical Information Service
(NTIS) system and may be obtained by contacting NTIS
at 5285 Port Royal Road, Springfield, Virginia 22161.
(1) “Guideline for Use of Fluid Modeling to Deter-
mine Good Engineering Stack Height,” July 1981. EPA,
Office of Air Quality Planning and Standards, EPA-450/
4-81-003 (NTIS PB82 145327).
(2) “Guideline for Fluid Modeling of Atmospheric
Diffusion,” April 1981. EPA, Environmental Sciences
Research Laboratory, EPA-600/8-81-009 (NTIS PB81
201410).
————————
Tba
(3) “Guidance for Determination of Good Engineer-
ing Practice Stack Height (Technical Support Document
for the Stack Height Regulation),” June 1985. EPA,
Office of Air Quality Planning and Standards, EPA-450/
4-80-023R.
(4) “Determination of Good Engineering Practice
Stack Height—A Fluid Model Demonstration Study for a
Power Plant,” April 1983, EPA. Environmental Sciences
Research Laboratory, EPA-600/3-83-024 (NTIS PB83
207407).
(5) “Fluid Modeling Demonstration of Good-
Engineering Practice Stack Height in Complex Terrain,”
April 1985, EPA Atmospheric Sciences Research Labora-
tory, EPA 600/3-85/022 (NTIS PB85 203107).
In addition, the following documents are available in
Docket A-83-49.
“Economic Impact Assessment for Revisions to the
EPA Stack Height Regulations,” June 1985.
“Effect of Terrain-Induced Downwash on Determina-
tions of Good-Engineering-Practice Stack Height,” July
1984.
Program Overview
General
The problem of air pollution can be approached in
either of two ways: through reliance on a_ technology-
based program that mandates specific control require-
ments (either control equipment or control efficiencies)
irrespective of ambient pollutant concentrations, or
through an air quality based system that relies on am-
bient air quality levels to determine the allowable rates
of emissions. The Clean Air Act incorporates both ap-
proaches, but the SIP program under section 110 uses an
air quality-based approach to establish emission limita-
tions for sources. Implicitly, this approach acknowledges
76a
and is based on the normal dispersion of pollutants from
their points of origin into the atmosphere prior to meas-
urements of ambient concentrations at ground level.
There are two general methods for preventing viola-
tions of the national ambient air quality standards
(NAAQS) and prevention of significant deterioration
(PSD) increments. Continuous emission controls reduce
on a continuous basis the quantity, rate, or concentra-
tions of pollutants released into the atmosphere from a
source. In contrast, dispersion techniques rely on the dis-
persive effects of the atmosphere to carry pollutant emis-
sions away from the source in order to prevent high con-
centrations of pollutants near the source. Section 123 of
the Clean Air Act limits the use of dispersion techniques
by pollution sources to meet the NAAQS or PSD incre-
ments.
Tall stacks, manipulation of exhaust gas parameters,
and varying the rate of emissions based on atmospheric
conditions (ICS and SCS) are the basie types of dis-
persion techniques. Tall stacks enhance dispersion by
releasing pollutants into the air at elevations high above
ground level, thereby providing greater mixing of pol-
lutants into the atmosphere. The result is to dilute the
pollutant levels and reduce the concentrations of the pol-
lutant at ground level, without reducing the total amount
of pollution released. Manipulation of exhaust gas pa-
rameters increases the plume rise from the source to
achieve similar results. ICS and SCS vary a source’s
rate of emissions to take advantage of meteorologic con-
ditions. When conditions favor rapid dispersion, the
source emits pollutants at higher rates, and when condi-
tions are adverse, emission rates are reduced. Use of
dispersion techniques in lieu of constant emission con-
trols results in additional atmospheric loadings of pol-
lutants and can increase the possibility that pollution
will travel long distances before reaching the ground.
AT Nelle th sm Min 68s Sates —
77a
Although overreliance on dispersion techniques may
produce adverse effects, some use of the dispersive prop-
erties of the atmosphere has long been an important fac-
tor in air pollution control. For example, some stack
height is needed to prevent excessive pollutant concentra-
tiuns near a source. When wind meets an obstacle such
as a hill or a building, a turbulent region of downpath,
wakes, and eddies is created downwind of the obstacle
as the wind passes over and around it. This can force a
plume rapidly to the ground, resulting in excessive con-
centrations of pollutants near the source. As discussed
previcusly, section 123 recognizes these phenomena and
responds by allowing calculation of emission limitations
with explicit consideration of that portion of a source’s
stack that is needed to ensure that excessive concentra-
tions due to downwash will not be created near the
source. This height is called GEP stack height.
Summary of the Court Decision
Petitions for review of EPA’s 1982 regulation were
filed in the D.C. Circuit within the statutory time period
following promulgation of the regulation. On October 11,
1983, the court issued its decision ordering EPA to re-
consider portions of the stack height regulation, revers-
ing certain portions and upholding others. The following
is a summary of the court decision.
The EPA’s 1982 rule provided three ways to determine
GEP stack height. One way was to calculate the height
by using a formula based on the dimensions of nearby
structures. The other two were a de minimis height of
65 meters, and the height determined by a fluid nmiodeling
demonstration or field study. The court endorsed the
formula as a starting point to determine GEP height.
However, it held that EPA has not demonstrated that
the formula was an accurate predictor of the stack height
needed to avoid “excessive concentrations of pollutants
due to downwash. Accordingly, the court directed EPA
78a
to re-examine in three ways the conditions under which
exceptions to the general rule of formula reliance could
be justified.
First, the 1982 rule allowed a source to justify raising
its stack above formula height by showing a 40-percent
increase in concentrations due to downwash, wakes, or
eddies, on the ground that this was the percentage in-
crease that the formula avoided. The court found this
justification insufficient, and remanded the definition to
EPA with instructions to make it directly responsive to
health and welfare considerations.
Similarly, the 1982 rule allowed a source that built a
stack to less than formula height to raise it to formula
height automatically. Once again, the court required
more justification that such a step was needed to avoid
adverse health or welfare effects.
Finally, the court directed EPA either to allow the
authorities administering the stack height regulations to
require modeling by sources in other cases as a check
on possible error in the formula, or explain why the ac-
curacy of the formula made such a step unnecessary.
The 1982 rule provided two formulae to calculate GEP
stack height. For sources constructed on or before Janu-
ary 12, 1979, the date of initial proposal of the stack
height regulations, the applicable formula was 2.5 times
the height of the source or other nearby structure. For
sources constructed after that date, the rule specified a
newer, refined formula, the height of the source or other
nearby structure plus 1.5 times the height or width of
that structure, whichever is less (H+1.5L) . The EPA
based its decision to include two formulae on the unfair-
ness of applying the new formula retroactively. In its
examination of this issue, the court specified four factors
that influence whether an agency has a duty to apply a
rule retroactively. They are:
79a
1. Whether the new rule represents an abrupt
departure from well established practice or merely
attempts to fill a void in an unsettled area of law,
2. The extent to which the party against whom
the new rule is applied relied on the former rule.
3. The degree of burden which a retroactive order
imposes on a party, and
4. The statutory interest in applying a new rule
despite the reliance of a party on the old standard.
719 F.2d at 467 (citations omitted). Applying this anal-
ysis to the two formulae, the court upheld EPA’s basic
decision.
However, the court also held that sources constructed
on or before January 12, 1979, should not be automati-
cally entitled to full credit calculated under the 2.5H
formula unless they could demonstrate reliance on that
formula. The court remanded this provision for revision
to take actual reliance on the 2.5H formula into account.
The statute jlimits stack height credit to that needed to
avoid excessive concentrations due to downwash caused by
“nearby” structures or terrain features. The 1982 regu-
lation defined “nearby” for GEP formula applications
as five times the lesser of either the height or projected
width of the structure causing downwash, not to exceed
one-half mile. No such distance limitation was placed on
structures or terrain features whose effects were being
considered in fluid modeling demonstrations or field stu-
dies. The court held that section 123 explicitly applies
the “nearby” limitation to demonstrations and studies as
well as formula applications, and remanded the rule to
EPA to apply the limitation in both contexts.
The 1982 rule defined “dispersion techniques” as those
techniques which attempt to affect pollutant concentra-
tions by using that portion of a stack exceeding GEP, by
80a
varying emission rates according to atmospheric condi-
tions or pollutant concentrations, or by the addition of a
fan or reheater to obtain a less stringent emission limita-
tion. The court found this definition too narrow because
any technique “significantly motivated by an intent to
gain emissions credit for greater dispersion” should be
barred. 719 F.2d 462. As a result, the court directed
EPA to develop rules disallowing credit for all such dis-
persion techniques unless the Agency adequately justi-
fied exceptions on the basis of administrative necessity or
a de minimis result.
The GEP formulae established in the 1982 rule do not
consider plume rise, on the ground that plume rise is not
significant under downwash conditions. In its review of
this provision, the court affirmed this judgment by EPA.
The 1982 rule addressed pollutant concentrations esti-
mated to occur when a plume impacts elevated terrain by
allowing credit for stack height necessary to avoid air
quality violations in such cases. However, the court ruled
that section 123 did not allow EPA to grant credit for
plume impaction in setting emission limits, and reversed
this part of the regulation.
The preamble to the 1982 regulation provided a 22
month process for State implementation of the regula-
tion. The court found this period to be contrary to sec-
tion 406(d) (2) of the Clean Air Act and reversed it.
The regulation, following the statute, excluded stacks
“in existence” on or before December 31, 1970, from the
GEP requirements. However, the regulation did not pro-
hibit sources constructed after December 31, 1970, from
receiving credit for tying into pre-1971 stacks. Although
the court upheld EPA’s definition of “in existence,” it
noted that EPA had failed to address the tie-in issue.
Accordingly, the court remanded this issue to EPA for
justification,
8la
One other provision of the regulation was challenged
in the Sierra Club suit: The exclusion of flares from the
definition of “stack.” In its review of this provision, the
court held that EPA had acted properly.
Other provisions of the stack height regulations, such
as the de minimis stack height established under § 51.1
(ii) (1), were not challenged in the suit and thus remain
in effect.
Summary of the November 9, 1984, Notice of Proposed
Rulemaking
In the November 9, 1984, notice responding to the
court decision, EPA proposed to redefine the number of
specific terms, including ‘excessive concentrations,”
“dispersion techniques,” “nearby,” and other important
concepts, and proposed to modify some of the bases for
determining GEP stack height. The following is a sum-
mary of the revisions that were proposed.
Excessive Concentrations
The Court of Appeals held that EPA erred in defining
“excessive concentrations” due to downwash, for purposes
of justifying a stack greater than formula height, as
nothing more than a 40-percent increase in pollutant con-
centrations over what would occur in the absence of
downwash. It remanded this issue to EPA to relate the
definition to some absolute level of air pollution that
could be interpreted to endanger health and welfare, and
thus to be “excessive.”
The EPA proposed two alternative approaches to de-
fining “excessive concentrations.” First, EPA requested
comment on whether the 40-percent approach adopted as
part of the 1982 regulation in fact protects against the
dangers to health and welfare envisioned by Congress
when it enacted section 123. In the event that such a
showing could not be made, EPA proposed a two-part
82a
definition of excessive concentrations, requiring that the
downwash, wakes, or eddies induced by nearby structures
or terrain features result in increases in ground-level
pollutant concentrations that:
(a) Cause or contribute to an exceedance of a NAAQS
or applicable PSD increment, and
(b) Are at least 40 percent in excess of concentrations
projected to occur in the absence of such structures or
terrain features.
Definition of GEP Stack Height
EPA proposed to find that the traditional (2.5H) and
refined (H+1.5L) formulae remained proper methods for
calculating GEP stack height except EPA proposed to
revise its regulation to allow EPA, the State or local air
pollution control agency discretion to require a further
demonstration using a field study or fluid model to dem-
onstrate GEP stack height for a source in a case where
it was believed that the formula may not reliably predict
GEP height. In the case of structures that are porous
or aerodynamically smoother than block-shaped struc-
tures, it would require a source to demonstrate the
downwash effects of such structures using a field study
or fluid model before receiving credit for stack height
based on the structures. EPA also proposed generally to
allow sources to raise existing stacks up to formula GEP
height without further demonstrations with the exception
noted above for discretionary modeling.
Reliance on the 2.5H Formula
In its 1982 rules, EPA allowed sources built before
January 12, 1979, the date on which it proposed the
refined H+1.5L formulae, to calculate their emission
limits based on the traditional 2.5H formula that existed
previously. The court approved this distinction, but
ruled that it should be limited to sources that “relied”
A DRS 2 wh
83a
on the traditional formula, suggesting, for example, that
sources that had claimed credit for stacks far taller than
the formula provided could not be said to have “relied”
on it.
In response to the court decision, EPA proposed to
revise its regulation to require that for stacks in exist-
ence on January 12, 1979, sources demonstrate that they
actually relied on the 2.5H formula in the design of
their stacks before receiving credit for that height in
setting their emission limitations. In the proposal, EPA
requested comments on what it should consider as ac-
ceptable evidence of such reliance.
Definition of “Nearby”’
In its 1982 rules, EPA allowed sources that modeled
the effects of terrain obstacles on downwash to include
any terrain features in their model without limiting
their distance from the stack. The court, though per-
suaded that this was a sensible approach, since it al-
lowed the model to best approximate reality, ruled that
Congress had intended a different result, namely that
terrain features beyond 14 mile from the stack should
not be included in the model.
In response, EPA proposed to revise § 51.1 (ii) (3) of
its regulation to limit the consideration of downwash,
wakes, and eddy effects of structures and terrain features
to those features classified as being “nearby” as defined
in §51.1(ii). Under this proposal, structures and ter-
rain features would be considered to be “nearby” if they
occur within a distance of not more than 0.8 km (14
mile) ; terrain features that extend beyond 0.8 km could
be considered if, at a distance of 0.8 km, they achieved a
height greater than or equal to 40-percent of the GEP
stack height calculated by applying the GEP formula to
actual nearby structures. In other words, a terrain fea-
ture would be said to “begin” within 14 mile if it reached
84a
at least the height of nearby buildings within that dis-
tance. Such features could be considered only out to a
distance equal to 10 times the maximum height of the
feature, not to exceed 2 miles.
The EPA proposed two options for distinguishing be-
tween sources constructed before and after the date of
promulgation of these revisions. The first option would
treat both categories of sources the same. The second
option would limit the consideration of terrain for new
sources to only those portions of terrain features that
fall entirely within 0.8 km, thereby removing the possi-
bility of including features extending beyond 1% mile.
Finally, EPA proposed three alternatives for conduct-
ing fluid modeling to evaluate the downwash effects or
nearby terrain features. These alternatives described
various ways of limiting terrain in the model beyond the
proposed distance limitations.
To establish a baseline for comparison, two alterna-
tives would initially model the stack on a flat plane with
no structure or terrain influences. To analyze downwash
effects, the first approach would then insert nearby ter-
rain, with all terrain beyond the distance limit “cut off”
horizontally. The second approach would gradually
smooth and slope the terrain beyond the distance limit,
down to the elevation of the base of the stack.
The third approach would proceed in a somewhat dif-
ferent manner. A baseline would be established by mod-
eling all terrain beyond the distance limit, smoothing
and sloping nearby terrain to minimize its influence. To
analyze downwash effects, the nearby terrain would then
be inserted into the model and the difference in effect
measured to determine appropriate downwash credit for
stack height.
Definition of “Dispersion Techniques”
In the 1982 rules, EPA identified two practices, in ad-
dition to stacks above GEP and ICS/SCS, as having no
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purpose other than to obtain a less stringent emission
limitation. In so doing, it allowed credit for any other
practice that had the result of increasing dispersion.
The court concluded that Congress had intended, at a
minimum, to forbid any dispersion enhancement prac-
tice that was significantly motivated by an intent to ob-
tain additional credit for greater dispersion, and re-
manded the question to EPA for reexamination.
The EPA proposed to revise its definition of “disper-
sion techniques” generally to include, in addition to ICS,
SCS, and stack heights in excess of GEP, any techniques
that have the effect of enhancing exhaust gas plume rise.
Combining several existing stacks into one new stack can
have such an effect. However, such combinations also
often have independent economic and engineering justi-
fication. Accordingly, EPA requested comment on de-
fining the circumstances under which the combining of
gas streams should not be considered a dispersion tech-
nique, and proposed to allow sources to take credit in
emission limitations for such merging where a facility
was originally designed and constructed with merged gas
streams or where the merging occurs with the installa-
tion of additional controls yielding a net reduction in
total emissions of the affected pollutant. The EPA re-
tained exclusions from its definition of prohibited dis-
persion techniques for smoke management in agricul-
tural and silvicultural prescribed burning programs and
also proposed to exclude episodic restrictions on residential
woodburning and debris burning.
New Sources Tied into Pre-1971 Stacks
Section 123 exempts stacks “in existence” at the end
of 1970 from its requirements. EPA’s general approach
to implementing this language was upheld by the court.
However, in its 1982 rule EPA had also allowed this
credit to sources built after that date that had tied into
stacks built before that date. EPA failed to respond to
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comments objecting to this allowance, and so the court
remanded the question to EPA for the agency to address.
Upon reexamination, EPA saw no convincing justifi-
cation for granting credit to these sources. Consequently,
for sources constructed after December 31, 1970, with
emissions ducted into grandfathered stacks of greater
than GEP height and for sources constructed before that
date but for which major modifications or reconstruction
have been carried out subsequently, EPA proposed to
limit stack height credit to only so much of the actual
stack height as conforms to GEP. Sources constructed
prior to December 31, 1970, for which modifications are
carried out that are not classified as “major” under 40
CFR 51.13(j) (i), 51.24(6) (2) (i), and 51.21(6) (2) (i)
would be allowed to retain full credit for their existing
stack heights.
Plume Impaction
In its 1982 rules, EPA allowed stack height credit for
“plume impaction,” a phenomenon that is distinct from
downwash, wakes and eddies. The court, though sympa-
thetic to EPA’s policy position, reversed this judgment
as beyond the scope of the statute. Accordingly, EPA
proposed to delete the allowance of plume impaction
credit from its regulation in compliance with the court
decision. However, EPA also recognized that sources in
complex terrain face additional analytical difficulties
when attempting to conduct modeling to determine ap-
propriate emission limitations. Consequently, EPA re-
quested comment on whether any allowance should be
made for implementation problems that may result from
the application of revised GEP stack height assumptions
and, if so, how such allowance should be made.
State Implementation Plan Requirements
EPA’s 1982 rules gave states a total of 22 months to
revise their rules and to establish source emission limi-
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tations based on new stack height credits. The court
found this, too, to go beyond the language of the statute.
In response, EPA stated in the proposal that States would
be required, pursuant to section 406(d)(2)(b) of the
Clean Air Act, to review their rules and existing emis-
sion limitations, revising them as needed to comply with
the new regulation within 9 months of the date of its
promulgation.
Response to Public Comments on the
November 9, 1984, Proposal
The EPA received over 400 comments during the pub-
lie comment period and at the public hearing, addressing
a number of aspects of the proposed regulation. These
comments have been consolidated according to the issues
raised and are discussed, along with EPA’s responses, in
a “Response to Comments” document included in the rule-
making docket. Certain comments can be characterized
as “major” in that they address issues that are funda-
mental to the development of the finai regulation. These
comments are summarized below, along with EPA’s re-
sponses. Additional discussion of the issues raised and
further responses by EPA can be found in the “Response
to Comments” document.
I. Maximum Control of Emissions
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