Util Air Regu Grp v. EPA

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 United States Court of Appeals
           FOR THE DISTRICT OF COLUMBIA CIRCUIT



Argued November 7, 2006           Decided December 12, 2006

                        No. 05-1353

             UTILITY AIR REGULATORY GROUP,
                       PETITIONER

                             V.

           ENVIRONMENTAL PROTECTION AGENCY,
                     RESPONDENT


          Consolidated with Nos. 05-1354, 05-1357


         On Petitions for Review of a Final Action of
     the United States Environmental Protection Agency


     Peter S. Glaser argued the cause for industry petitioners
Utility Air Regulatory Group in Case No. 05-1353 and Center
for Energy and Economic Development in Case No. 05-1357.
With him on the briefs were Paul M. Seby, Norman W.
Fichthorn, Allison D. Wood, and Mel S. Schulze.

     Ann Brewster Weeks argued the cause for environmental
petitioner National Parks Conservation Association in Case
                              2

No. 05-1354. With her on the briefs were Jonathan F. Lewis
and David W. Marshall.

    Pamela S. Tonglao and Ammie Roseman-Orr, Attorneys,
U.S. Department of Justice, argued the cause for respondent.
With them on the brief were John C. Cruden, Deputy
Assistant Attorney General, and M. Lea Anderson, Attorney,
U.S. Environmental Protection Agency.

     Peter S. Glaser, Paul M. Seby, Norman W. Fichthorn,
Allison D. Wood, and Mel S. Schulze were on the brief for
industry intervenors Utility Air Regulatory Group and Center
for Energy and Economic Development in support of
respondent in Case No. 05-1354.

   Before: GARLAND and BROWN, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
WILLIAMS.

     WILLIAMS, Senior Circuit Judge: In the eastern United
States, the average visual range in most natural parks and
wilderness areas designated as Class I Federal areas, see 42
U.S.C. § 7472(a), is less than 30 kilometers, about 20 percent
of what it would be under natural conditions. See National
Research Council, Protecting Visibility in National Parks and
Wilderness Areas 1 (1993). In order to address this problem,
the Environmental Protection Agency promulgated a Regional
Haze Rule, 40 C.F.R. § 51.308, pursuant to Section 169A of
the Clean Air Act (“CAA”), 42 U.S.C. § 7491. See Regional
Haze Regulations and Guidelines for Best Available Retrofit
Technology (BART) Determinations, 70 Fed. Reg. 39,104
(July 6, 2005) (the “Haze Rule”). The Haze Rule requires that
under specified circumstances states impose best available
retrofit technology (“BART”) on any BART-eligible sources.
                              3

The latter are a specific class of large stationary pollution
sources that “were put in place between August 7, 1962 and
August 7, 1977, and whose operations fall within one or more
of 26 specifically listed source categories.” 70 Fed. Reg. at
39,105/1; see also 40 C.F.R. § 51.301. The regulation calls
for imposition of BART if the source “may reasonably be
anticipated to cause or contribute to any impairment of
visibility in any mandatory Class I Federal area.” 40 C.F.R.
§ 51.308(e)(1)(ii). The Haze Rule also permits states to
reduce haze by alternate means, including a regional
approach, so long as the alternative would be “better-than-
BART”—i.e., would improve visibility more rapidly than
under BART. 40 C.F.R. § 51.308(e)(2). Aspects of the Haze
Rule have been before this court twice before, Center for
Energy and Economic Development v. E.P.A., 398 F.3d 653
(D.C. Cir. 2005) (“CEED”); American Corn Growers Ass’n v.
E.P.A., 291 F.3d 1 (D.C. Cir. 2002) (“Corn Growers”), and
those opinions contain extensive discussions of the rule’s
statutory framework and regulatory history.

     This case involves challenges from multiple groups,
including the Center for Energy and Economic Development
and the Utility Air Regulatory Group (“industry petitioners”),
and the National Parks Conservation Association
(“environmental petitioner”). In its brief, EPA succinctly
summarizes the challenges: “Industry Petitioners generally
challenge the rule as inappropriately requiring States to apply
BART to too many sources, while the Environmental
Petitioner argues that the rule improperly allows States to
exempt too many sources from BART.” Because we believe
the Haze Rule is a reasonable interpretation of CAA § 169A,
we affirm the rule against both sets of challenges.
                               4

                             * * *

    As we explained in Corn Growers, § 169A(a)(1) of the
Clean Air Act established a national goal of preventing and
remedying existing visibility impairment at Class I areas, and
CAA § 169A(b)(2) directs EPA to issue regulations requiring
that states adopt measures—including BART—to make
“reasonable progress” towards meeting this national goal. See
Corn Growers, 291 F.3d at 5-6.

     As outlined in § 169A(b)(2)(A) and implemented by the
Haze Rule, the BART process consists of two steps. First, in
the “Attribution Step” (“Step I”), states must review each
“BART-eligible source” within the state to determine whether
any such source emits “any air pollutant which may
reasonably be anticipated to cause or contribute to any
impairment of visibility in any mandatory Class I Federal
area;” sources that do so are “subject to BART.” See 40
C.F.R. § 51.308(e)(1)(ii). An earlier preamble to the Haze
Rule required states to “find that a BART-eligible source is
‘reasonably anticipated to cause or contribute’ to regional
haze if it can be shown that the source emits pollutants within
a geographic area from which pollutants can be emitted and
transported downwind to a Class I area,” an approach known
as “collective contribution.” Regional Haze Regulations, 64
Fed. Reg. 35,714, 35,740/1 (July 1, 1999). In Corn Growers
we struck down such guidance as “inconsistent with the Act’s
provisions giving the states broad authority over BART
determinations.” 291 F.3d at 8 (emphasis added). In doing
so, however, we did not foreclose the states themselves from
deciding to take a collective approach in the Attribution Step,
see id. at 18 (Garland, J., dissenting on other grounds), and the
current rule identifies “collective contribution” as only one of
at least three different approaches that a state may take in
meeting its obligations under CAA § 169A(b)(2)(A). See 70
Fed. Reg. at 39,117/2. Under the current Haze Rule, a state
                               5

can complete the Attribution Step by using collective
attribution, by demonstrating that, cumulatively, none of its
BART-eligible sources contributes to visibility impairment, or
by analyzing each source’s individual contribution. Id. States
“may also use other reasonable approaches for analyzing the
visibility impacts of an individual source or group of sources.”
70 Fed. Reg. at 39,162/1.

     The second step outlined in § 169A(b)(2)(A), the
“Determination Step” (“Step II”), requires states to determine
the particular technology that an individual source “subject to
BART” must install.            That determination requires
consideration of five factors: “the cost of compliance, the
energy and nonair quality environmental impacts of
compliance, any existing pollution control technology in use
at the source, the remaining useful life of the source, and the
degree of improvement in visibility which may reasonably be
anticipated to result from the use of such technology.” 42
U.S.C. § 7491(g)(2); see also 40 C.F.R. § 51.308(e)(1)(ii); 70
Fed. Reg. at 39,163/3. In Corn Growers, we held that these
five factors “were meant to be considered together by the
states,” 291 F.3d at 6, but that EPA could not require the
states to evaluate the improvement factor collectively while
mandating that the other four factors be evaluated separately
for each individual source. Compare id. at 8 with id. at 8-9.

    BART is not, however, the sole means by which states
can meet their obligations under the Clean Air Act. The Haze
Rule also permits states

    to implement or require participation in an emissions
    trading program or other alternative measure rather than
    to require sources subject to BART to install, operate, and
    maintain BART. Such an emissions trading program or
    other alternative measure must achieve greater reasonable
                               6

    progress than would be achieved through the installation
    and operation of BART.

40 C.F.R. § 51.308(e)(2). We affirmed the use of such “better
than BART” approaches in CEED, though we objected to the
particular program under review there. See CEED, 398 F.3d
at 660. We said nothing about how better-than-BART might
be measured.

     After our CEED decision, EPA introduced the following
test to evaluate whether a BART-alternative achieves “greater
reasonable progress” than BART:

         If the distribution of emissions is not substantially
    different than under BART, and the alternative measure
    results in greater emission reductions, then the alternative
    measure may be deemed to achieve greater reasonable
    progress. If the distribution of emissions is significantly
    different, the State must conduct dispersion modeling
    ....      The modeling would demonstrate “greater
    reasonable progress” if both of the following two criteria
    are met:

             (i) Visibility does not decline in any Class I
        area, and

             (ii)    There is an overall improvement in
        visibility, determined by comparing the average
        differences between BART and the alternative over
        all affected Class I areas.

40 C.F.R. § 51.308(e)(3).

    On March 10, 2005, EPA issued the Clean Air Interstate
Rule (“CAIR”), requiring reductions in emissions of sulfur
dioxide and nitrogen oxides in 28 eastern states and the
                              7

District of Columbia. 70 Fed. Reg. 25,162 (May 12, 2005);
see also 70 Fed. Reg. at 39,106/3. CAIR imposes specified
emissions reduction requirements on each affected state, and
enables states to meet the requirements by means of cap-and-
trade programs. 70 Fed. Reg. at 39,106/3. In conjunction with
the introduction of CAIR, EPA amended the Haze Rule to add
a new regulation—contested here—providing that “[a] State
that opts to participate in the Clean Air Interstate Rule cap-
and trade . . . program . . . need not require affected BART-
eligible EGUs [electric generating units] to install, operate,
and maintain BART.” 40 C.F.R. § 51.308(e)(4); 70 Fed. Reg.
39,156/3]; see also 70 Fed. Reg. 39,138-39 (noting that the
CAIR-for-BART comparison is to be evaluated under the
standards enumerated in § 51.308(e)(3)); 70 Fed. Reg.
39,142/3 (same).

     In adopting the current version of § 51.308(e)(4), EPA
provided analyses demonstrating that CAIR would achieve
greater overall emission reductions than BART, and would
make greater reasonable progress according to the two-
pronged visibility test outlined in § 51.308(e)(3)—i.e., that
CAIR would result in a greater aggregate visibility
improvement (than BART) averaged over all Class I areas
without reducing visibility at any individual area. See 70 Fed.
Reg. at 39,136; see also Technical Support Document for the
Final Clean Air Interstate Rule, March, 2005, at
http://www.epa.gov/cair/pdfs/finaltech04.pdf (“CAIR TSD”).
In doing so, however, EPA also noted that the “determination
that CAIR makes greater reasonable progress than BART for
EGUs is not a determination that CAIR satisfies all reasonable
progress requirements in CAIR affected States . . . . [A state]
cannot assume that CAIR will satisfy all of its visibility-
related obligations.” 70 Fed. Reg. at 39,143/3. In particular,
despite the rule changes reflecting CAIR, the EPA retained a
regulation specifying that states must establish reasonable
                                8

progress goals “[f]or each mandatory Class I Federal area
located within [a] State,” and that such goals must “provide
for an improvement in visibility for the most impaired days
. . . and ensure no degradation in visibility for the least
impaired days . . . .” 40 C.F.R. § 51.308(d)(1) (emphasis
added).

     On October 13, 2006, EPA once again promulgated
revisions to the Haze Rule—revisions for some reason not
called to our attention by any of the lawyers in this case. See
Revisions to Provisions Governing Alternative to Source-
Specific Best Available Retrofit Technology (BART)
Determinations, 71 Fed. Reg. 60,612 (Oct. 13, 2006). Those
revisions largely appear to respond to this court’s decision in
CEED. For example, the new rule both clarifies the process
by which BART-alternatives are to be compared to BART and
provides minimum elements for cap-and-trade programs
adopted in lieu of BART. Id. at 60,612. But as the new rule
does not become effective until December 12, 2006, and was
not briefed or even mentioned by counsel, its specifics are not
under consideration here. Our own perusal hasn’t uncovered
any changes undermining our conclusions; in fact, in at least
one instance (discussed below), the new rule corresponds with
concessions that EPA made at oral argument but not in its
original briefs to this court.


                             * * *

     Industry petitioners argue that EPA acted contrary to
statutory authority in two respects: first, by authorizing a state
to infer, from evidence that its BART-eligible sources
collectively contribute to visibility impairment in at least one
Class I area, that all such sources may reasonably be
anticipated to cause or contribute to visibility at such an area,
without a source-by-source analysis—i.e., by authorizing the
                               9

use of collective attribution—and, second, by issuing
mandatory guidelines for the states’ attribution determinations
for power plants exceeding 750 megawatts (“MW”). We
reject both arguments.

     Industry petitioners claim that the collective attribution
process allows states virtually to skip the Attribution Step;
“once a State finds that a single BART-eligible source in the
State affects visibility in a Class I area, other BART-eligible
sources in the State may be swept into the BART
Determination process without any analysis as to their effect
on visibility.” This is true, but because the substance of the
impact issue remains open in Step II, it is of little consequence
(with one exception, described below).

     Industry petitioners’ valid concern is that collective
attribution will force sources to install BART even when such
installations would serve no purpose whatsoever. But this
fear is unwarranted. As EPA openly conceded at oral
argument, if an individual source is found subject to BART in
Step I because of collective attribution, that source can
nonetheless challenge the necessity of installing BART in
Step II—and have the impact issue resolved de novo. See
Transcript of Oral Argument at 19-20. Recall that Step II
involves the weighing of five factors, the last of which is the
visibility impact of imposing BART. If that impact is zero
because the source does not contribute to visibility
impairment in the first place, then the source need not impose
BART, regardless of the results dictated by the other four
factors or the use of collective attribution in Step I. Counsel
for EPA, commenting in oral argument on the passage in
EPA’s description of the BART determination process that
industry found most alarming (“States, as a general matter,
must require owners and operators of greater than 750 MW
power plants to meet these BART emission limits,” 70 Fed.
Reg. at 39,131/3), repeatedly confirmed that a finding of zero
                              10

impact at this stage would trump the four remaining factors
and excuse the application of BART. See Transcript of Oral
Argument at 17. (This interpretation is in part paralleled in
the October 13 revisions to the Haze Rule: “Where a State
takes this approach [i.e., collective attribution], the
opportunity for assessing source-by-source visibility impact
would still remain at the next step of setting the benchmark—
the BART determination analysis.” 71 Fed. Reg. at 60,615/2.)
We adopt counsel’s interpretation as our own understanding
of the interplay between Steps I and II of the Haze Rule and
between the impact criterion and the other factors.

     That individual sources found subject-to-BART under
collective attribution can nonetheless challenge the necessity
of installing BART at the Determination Step does not render
collective attribution a meaningless exercise. By setting a low
threshold above which sources “may reasonably be
anticipated to cause or contribute to any impairment,” CAA
§ 169A(b)(2)(A), collective attribution essentially places on a
source itself the burden of demonstrating that it doesn’t
contribute to visibility impairment. At oral argument, counsel
for industry disclaimed any legal quarrel with EPA’s
assignment of the burden. See Transcript of Oral Argument at
12, 24. We find EPA’s interpretation reasonable as against
industry’s challenges.

     Industry petitioners’ second argument is that EPA’s
guidelines for state attribution determinations for power
plants exceeding 750 MW are mandatory for the states,
contrary to industry’s reading of the statute. But the industry
briefs point to no such mandatory language. It is surely true
that several elements of the Haze Rule purport to establish
mandatory guidelines as to the Determination Step of the
process. See, e.g., 70 Fed. Reg. at 39,131/3. Moreover, some
passages identified in the briefs are ambiguous as to the force
of EPA’s provisions. See, e.g., 70 Fed. Reg. at 39,123 (“In
                              11

the unlikely case that a State were to find that a 750 MW
power plant’s predicted contribution to visibility impairment
is within a very narrow range between exemption from or
being subject to BART, that the State can work with EPA
. . . .”). 70 Fed. Reg. at 39,123/2. EPA’s brief, though not
focusing on this passage, argued that these attribution
guidelines were “advisory, not mandatory, as to all sources,
including 750 megawatt power plants.” There appears to be
no language in the rule which contradicts this claim; having
defended the regulations on the basis that they are advisory
here, EPA cannot later rely on a reading that they are
mandatory. Of course states must still meet EPA’s explicit—
if rather general—requirement of a State Implementation Plan
(“SIP”) that can satisfy the statute’s reasonable progress
criterion, as construed by EPA. See 42 U.S.C. § 7491(b)(2)
(requiring states to submit SIPs containing emission limits,
schedules of compliance, and other measures necessary to
make reasonable progress toward meeting the national
visibility goal). But we do not understand industry to argue
that such indirect compulsion violates the statute.


                            * * *

     The environmental petitioner argues that EPA’s
substitution of CAIR for BART contravenes the language and
structure of the Clean Air Act because it cannot guarantee
“reasonable progress” at all Class I areas. This argument is
predicated on a belief that the Clean Air Act requires that
BART-alternatives such as CAIR “do better” than BART at
each individual Class I area (as opposed to simply in the
aggregate), and, evidently, on every type of day (best days,
worst days, etc.).

     EPA’s preliminary response is that environmental
petitioner lacks standing because it has not been (and will not
                               12

be) injured by the CAIR-for-BART rule. But EPA’s own
evidence shows the likelihood that states will adopt CAIR and
that CAIR will be less effective at a few areas on some days.
When CAIR was first introduced EPA noted that “[b]ased on
our experience . . . we anticipate that States will choose to
require EGUs to participate in the cap and trade programs
administered by EPA.” 69 Fed. Reg. 4,566, 4,586/3 (Jan. 30,
2004). EPA’s technical analysis of CAIR then went on to
predict that, at three (out of 156) Class I areas, such
participation would result in visibility improvements on the
best 20% of days that are less than the expected improvements
at those areas under BART. See CAIR TSD 18. (The same
analysis shows equal or superior visibility at all Class I areas
on the 20% worst days. See id. at 23.)

     Those findings, of course, do not in themselves show that
petitioners’ members will travel to the parks likely to be
negatively impacted by the CAIR-for-BART Rule. Indeed,
petitioner’s affidavits do not clearly indicate that its members
visit every park, let alone that they visit the three operative
parks on the best 20% of days. But given the organization’s
large membership—over 320,000 members in all 50 states—
we find it reasonable to infer that at least one member will
suffer injury-in-fact. We do so with some hesitation,
however. While some judicial opinions purport to reject
reliance on mathematical likelihood, see, e.g., Sargent v.
Mass. Accident Co., 29 N.E.2d 825, 827 (Mass. 1940) ( “It
has been held not enough that mathematically the chances
somewhat favor a proposition to be proved”), that viewpoint
overlooks the reality that all empirical issues are matters of
probability. But it is at least an imposition for a party to force
courts to rely on statistical inference when the party
presumably has better evidence within easy reach—here, a
member’s affidavit showing a high individualized probability
of future visits to a particular park (presumably based on a
                               13

pattern of past visits). Cf. United States v. Veysey, 334 F.3d
600, 605 (7th Cir. 2003). Nevertheless, the size of petitioner’s
membership appears large enough here to indicate substantial
probability of injury.

     Having found that petitioner has standing, we nonetheless
squarely reject its claim that the Clean Air Act requires EPA
to ensure that any BART-alternative improves visibility at
least as much as BART at every Class I area and in all
categories of days. The plain language of the Act imposes no
such mandate, and EPA’s refusal to read one in is reasonable.

     As we said in Corn Growers, “[t]he statutory goal
enunciated in [CAA] § 169A(a)(1) is quite clear: ‘the
prevention of any future, and the remedying of any existing,
impairment of visibility.’” 291 F.3d at 10 (citing 42 U.S.C.
§ 7491(a)(1)). In order to meet this goal, the Clean Air Act
specifically calls for regulations to assure that “reasonable
progress” is made by the states. 42 U.S.C. § 7491(a)(4).
Because “reasonable progress” is nowhere defined in the Act
itself, we review EPA’s interpretation of the term under the
standard framework of Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837 (1984), and
defer to the agency’s interpretation so long as it is reasonable.

     Recall that under the Haze Rule reasonable progress
means that “[f]or each mandatory Class I Federal area . . .
[states] must provide for an improvement in visibility for the
most impaired days . . . and ensure no degradation in visibility
for the least impaired days over the same period.” 40 C.F.R.
§ 51.308(d)(1) (emphasis added). Moreover, unless there is
some reasonable excuse, this progress must be sufficient to
attain natural visibility conditions at every single Class I area
by 2064. 40 C.F.R. § 51.308(d)(1)(ii). Indeed, EPA
emphasized in its briefs that because “the regulatory scheme
as a whole (and all the regulations promulgated pursuant to it)
                              14

must be designed to achieve the goal [of reasonable progress]
at every Class I area,” EPA Br. at 66 (emphasis added), states
must, if CAIR is substituted for BART and is not likely to
achieve that goal, take “other measures as necessary to
achieve reasonable progress goals including at each Class I
area,” id. at 67 (emphasis added). Thus, EPA not only agrees
with petitioner that CAA § 169A(a)(1)’s declaration of a
“national goal” that includes “the remedying of any existing[]
impairment of visibility . . . [that] results from manmade air
pollution” implies a need for ubiquitous improvement over
time (emphasis added), but it has adopted regulations
manifesting that goal.

     Nonetheless, the Clean Air Act leaves wide discretion
about how the goal is to be achieved. Notwithstanding the
Act’s discussion of BART in § 169A(b), we have already held
in CEED that EPA may leave states free to implement BART-
alternatives so long as those alternatives also ensure
reasonable progress. 398 F.3d at 660. Moreover, nothing in §
169A(b)’s “reasonable progress” language requires at least as
much improvement at each and every individual area as
BART itself would achieve (much less improvement at each
area at every instant); and EPA’s requirement of some
improvement at all areas on the worst days, coupled with no
degradation at any area on the best days, 40 C.F.R.
§ 51.308(d)(1), appears a reasonable notion of reasonable
progress. Finally, EPA allows use of a BART alternative only
if it combines aggregate improvement (relative to BART)
with universal, area-specific absence of degradation, 40
C.F.R. § 51.308(e)(3); on this metric CAIR-for-BART is far
better than BART. 70 Fed. Reg. at 39,138-39,142.

     Petitioner also appears to argue that the origin of CAIR in
other clean air programs precludes EPA’s decision to allow
states the CAIR option in fulfillment of § 169A. But
petitioner identifies no language requiring EPA to impose a
                              15

separate technology mandate for sources whose emissions
affect Class I areas, rather than piggy-backing on solutions
devised under other statutory categories, where such solutions
meet the statutory requirements.

    The petitions for review are therefore

                                                Denied.