State of Michigan, Michigan Department of Environmental Quality and State of West Virginia, Division of Environmental Protection v. U.S. Environmental Protection Agency, New England Council, Inc., Intervenors

Dissenting opinion filed by Circuit Judge Sentelle.

Under the Clean Air Act the Environmental Protection Agency promulgates national ambient air quality standards ("NAAQS") for air pollutants, and states must then adopt state implementation plans ("SIPs") providing for the implementation, maintenance, and enforcement of the NAAQS;such plans are then submitted to EPA for approval. See Clean Air Act ("CAA") S 110(a)(1), 42 U.S.C. S 7410(a)(1) (1994). Even after a SIP is approved, EPA may at a later time call for SIP revisions if the Administrator finds a SIP inadequate to attain or maintain the NAAQS, to meet the dictates of pollutant transport commissions, or "to otherwise comply with any requirement of this chapter." CAA S 110(k)(5), 42 U.S.C. S 7410(k)(5).

In October 1998 EPA issued a final rule mandating that 22 states and the District of Columbia revise their SIPs to mitigate the interstate transport of ozone.1 See Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone ("Final Rule"), 63 Fed. Reg. 57,356 (1998). The statutory hook for EPA's action was a 1990 amendment to the Clean Air Act which requires that SIPs contain "adequate provisions" prohibiting

any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to non attainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary am-bient air quality standard.

CAA S 110(a)(2)(D)(i)(I), 42 U.S.C. S 7410(a)(2)(D)(i)(I) (1994). EPA uniformly required that each state reduce nitrogen oxides (NOx--an ozone precursor) by the amount accomplishable by what EPA dubbed "highly cost-effective controls," namely, those controls EPA found capable of removing NOX at a cost of $2000 or less per ton. Numerous petitions for review challenge various aspects of EPA's decision.

In Part I we reject the following claims: that EPA could not call for the SIP revisions without convening a transport commission; that EPA failed to undertake a sufficiently state-specific determination of ozone contribution; that EPA unlawfully overrode past precedent regarding "significant" contribution; that EPA's consideration of the cost of NOx reduction violated the statute; that EPA's scheme of uniform controls is arbitrary and capricious; that CAA S 110(a)(2)(D)(i)(I) as construed by EPA violates the nondelegation doctrine.

In Part II we hold that the record does not support including Wisconsin in the SIP call, nor does it support creating NOx budgets based on the entire emissions of Missouri or Georgia. We reject the claim thatSouth Carolina was improperly included in the SIP call.

In Part III we reject the claim that EPA impermissibly intruded on the statutory rights of states to fashion their SIPs. We also reject the claim that EPA violated the Regulatory Flexibility Act.

In Part IV we reject the claim that EPA arbitrarily revised the definition of a "NOx budget unit." We reject all of the claims raised by the Council of Industrial Boilers save one: we hold that EPA failed to provide adequate notice of a change in the definition of an electric generating unit. We also hold that EPA did not provide adequate notice of a change in the control level assumed for large, stationary internal combustion engines, but we reject the claim that EPA failed to follow its own standards in defining such engines. Finally, we uphold EPA's limits on early reduction credits, and EPA's use of a 15% multiplier for calculating emissions from low mass emission units.

We note at the outset that one challenge has been stayed. In 1979, EPA set the acceptable level for ozone in the ambient air at 0.12 parts per million ("ppm"), averaged over intervals of one hour. This standard is commonly known as the "1-hour standard." By 1997, EPA had concluded that the 1-hour standard no longer adequately protected public health. See National Ambient Air Quality Standards for Ozone, 62 Fed. Reg. 38,856 (1997). Pursuant to the agency's statutory mandate to review and revise NAAQS as appropriate, 42 U.S.C. S 7409(d)(1), EPA promulgated a new, more stringent "8-hour standard" which limits ozone levels to 0.08 ppm, averaged over an 8-hour period. See 62 Fed. Reg. 38,856 (codified at 40 C.F.R. § 50.10).

EPA has undertaken the phasing out of the 1-hour standard on an area-by-area basis, mandating that the standard would no longer apply to an area once it is "determine[d] that the area has air quality meeting the 1-hour standard." 40 C.F.R. S 50.9(b). The call for SIP revisions in question here requires the covered upwind states to submit SIP revisions pursuant to the 8-hour standard even though EPA was not designating any 8-hour nonattainment areas prior to July 1999. See 63 Fed. Reg. at 57,370; Transportation Equity Act for the 21st Century, Pub. L. No. 105-178, § 6103, 112 Stat. 107, 465 (1998) (providing that states submit suggested designations no later than July 1999 and EPA finalize those designations no later than July 2000). EPA maintains that it has the authority to include the 8-hour standard in the current S 110(a)(2)(D)-specific SIP call pursuant to its authority under S 110(a)(1). Section 110(a)(1) provides that

[e]ach State shall ... adopt and submit to [EPA], within3 years (or such shorter period as [EPA] may prescribe)after the promulgation of a national primary ambient air quality standard (or any revision thereof) ..., a plan which provides for implementation, maintenance, and enforcement of such primary standard in each air quality control region (or portion thereof) within such State.

42 U.S.C. S 7410(a)(1).

State and Industry/Labor petitioners initially attacked the challenged SIP call on the basis that EPA exceeded its statutory authority and acted arbitrarily in basing the SIP call on the 8-hour standard when the agency had not yet designated any areas as being in nonattainment under the new standard. After petitioners' final briefs were submitted, we held in American Trucking Ass'ns, Inc. v. EPA, 175 F.3d 1027, reh'g granted in part, den'd in part 195 F.3d 4 (D.C. Cir. 1999), that the new NAAQS based on the 8-hour standard was derived from a construction of the Clean Air Act that rendered the relevant provision an unconstitutional delegation of legislative power and remanded the case to the agency. See id. at 1033-40. Seizing on this holding, petitioners added in their reply briefs that if this court does not accept the contention in their original briefs as to why EPA impermissibly reliedon the 8-hour standard, then we should hold that American Trucking means that EPA cannot rely on the 8-hour standard because it was promulgated in violation of the non-delegation doctrine.

Regardless, EPA moved to stay consideration of the issues involving the 8-hour standard because the agency has stayed the 8-hour findings contained in the challenged SIP call. We granted the motion. Because EPA's stay removes the 8-hour findings as a basis for the SIP call, we will resolve only the issues involving the 1-hour standard.

States have the primary responsibility to attain and maintain NAAQS within their borders. See CAA S 107(a), 42 U.S.C. S 7407(a). When EPA concludes that an "implementation plan for any area is substantially inadequate to attain or maintain the relevant [NAAQS], to mitigate adequately the interstate pollutant transport described in section [176A] or [184], or to otherwise comply with any requirement of this chapter," the CAA requires EPA to order a state to revise and correct its SIP "as necessary" ("SIP call"). CAA S 110(k)(5), 42 U.S.C. S 7410(k)(5). One such "requirement of this chapter," is the "good neighbor provision" of section 110(a)(2)(D). As amended, section 110(a)(2)(D) requires that a SIP "contain adequate provisions"

(i) prohibiting, consistent with the provisions of this sub-chapter, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard ... [and]

(ii) insuring compliance with the applicable requirements of sections [126] and [115] ... (relating to interstate and international pollution abatement).

42 U.S.C. S 7410(a)(2)(D) (emphasis added). Section 126(b) enables an individual state or a political subdivision of a state to petition EPA to make a "finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of [§ 110(a)(2)(D)(ii)]." 42 U.S.C. S 7426(b). EPA may make or deny such a finding. See id. Section 115 pertains to petitions made by foreign countries. See 42 U.S.C. S 7415.

Title I, the subchapter referenced in section 110(a)(2)(D), also includes sections 176A and 184, the provisions referenced in section 110(k)(5). In 1990, Congress added a provision to section 176A stating that EPA "may" establish an interstate air pollution transport region whenever EPA "has reason to believe that the interstate transport of air pollutants from one or more States contributes significantly to a violation of a national ambient air quality standard in one or more other States." 42 U.S.C. S 7506a(a). The section also provides that whenever EPA "establishes a transport region ... [EPA] shall establish a transport commission." 42 U.S.C. S 7506a(b)(1). Among other things, a section 176A commission is to assess the interstate transport situation in the relevant transport region, assess interstate pollution mitigation strategies, and recommend to EPA measures necessary "to ensure that the plans for the relevant States meet the requirements of [section 110(a)(2)(D)]." 42 U.S.C. S 7506a(b)(2). In addition, section 176A permits a transport commission to request that EPA "issue a finding under [section 110(k)(5)] ... that the implementation plan for one or more of the States in the transport region is substantially inadequate to meet [section 110(a)(2)(D) requirements]." 42 U.S.C. S 7506a(c). After public comment, EPA has the authority to approve, approve in part, or disapprove such a request. See id.

In part, section 184, an ozone-specific provision, establishes an ozone transport region in the northeast ("NOTR") and sets the deadline for convening the transport commission required as a result of NOTR's establishment. See 42 U.S.C. S 7511c(a). The section also requires that "[i]n accordance with [section 110] ... each State included [or subsequently included] within a transport region established for ozone shall submit a State implementation plan or revision" regarding vehicle inspection programs and volatile organic compounds control technology. 42 U.S.C. S 7511c(b). In addition, section 184 contains provisions giving states within an established transport region the opportunity to use their section 176A-established transport commission to help develop additional ozone control measures. See 42 U.S.C. S 7511c(c).

Efforts to control states' upwind contributions to ozone pollution continued to fall short during the early 1990s. In 1995, upon the recommendation of the Environmental Council of the States, thirty-seven states and representatives from EPA, industry, and environmental groups formed a national work-group called the Ozone Transport Assessment Group ("OTAG") to study and devise solutions to the interstate ozone transport problem. See 62 Fed. Reg. 60,318, at 60,319;EPA, Ozone Transport Assessment Group Executive Report, EPA Document No. A 95-56, Doc. No. II-G-05 ("Executive Report") at ii. More specifically, OTAG's purpose was to "identify and recommend a strategy to reduce transported ozone and its precursors, which, in combination with other measures, will enable attainment and maintenance of the ozone standard in the OTAG region." Executive Report at ii.OTAG concluded that upwind states needed to reduce NOx emissions in order to address the transport problem. However, the OTAG members could not agree on specific control measure recommendations. See 62 Fed. Reg. at 60,320. In response to OTAG's efforts, EPA engaged in further analysis and devised the SIP call challenged here.

Industry/Labor petitioners argue that the CAA required EPA to convene a transport commission pursuant to sections 176A/184 prior to issuing the challenged SIP call. EPA concedes that OTAG was not a statutorily-mandated 176A/184 transport commission as defined in the CAA. If a transport commission is required, EPA would be bound by statute to follow certain procedures in establishing and executing its commission obligation. However, we hold that the CAA does not require EPA to establish such a commission.

Industry/Labor petitioners contend that the reference to the transport commission provisions in section 110(k)(5) and the mandate of section 110(a)(2)(D) that SIP requirements be consistent with Title I provisions obligated EPA, prior to issuing the SIP call, to create a transport commission guided by the terms in sections 176A and 184 of the statute. Industry/Labor petitioners also note that sections 176A and 184 reference both sections 110(a)(2)(D) and 110(k)(5). See 42 U.S.C. SS 7506a(b)(2), (c), 7511c(c)(5). From this hodgepodge of largely unrelated cross-references, Industry/Labor petitioners argue that EPA can only issue a section 110(k)(5) SIP call to enforce section 110(a)(2)(D)'s requirement after forming a 176A/184 transport commission. We disagree.

As a threshold matter, subsections 176A(a) and (b)(1) make clear that EPA must establish a transport commission if the agency exercises its discretion to create a transport region pursuant to section 176A(a). See 42 U.S.C. §§ 7506a(a), (b)(1). However, EPA can address interstate transport apart from convening a 176A/184 transport commission as subsection (a) provides that EPA "may" establish a transport region and subsection (b)(1) only requires a transport commission upon the establishment of a transport region because "[w]henever the Administrator establishes a transport region under subsection (a) ..., the Administrator shall establish a transport commission." Moreover,the relevant section 184 requirements apply to states within established transport regions. See 42 U.S.C. S 7511c(a)-(c). Thus, Industry/Labor petitioners cannot reason around the determinative statutory language contained in section 176A. Statutory construction is not an exercise in picking apart a complex statute and piecing the parts back together in a manner to effect a particular end. Ideally, a statute's directive concerning a certain issue will be plain and clear. Just so here.

Section 110(a)(2)(D)(I)(i) requires that the relevant offending emissions be "emissions activity within the State." Several petitioners charge that EPA did not sufficiently analyze each particular state in determining which states contributed unduly to ozone downwind.

In issuing its Notice of Proposed Rulemaking ("NPRM"), EPA relied on data collected from OTAG. The data were multi-state and regional in nature and were framed as a model of how ozone was transported downwind from 12 different regions that covered the eastern half of the United States. See Final Rule, 63 Fed. Reg. at 57,382. The OTAG regions do not track state boundaries, so several states are split between regions. EPA also relied upon the NOx emissions of the individual states. See id. at 57,383-84. A potential shortcoming of the NPRM's approach was that it was too multi-state in nature. EPA knew how much NOx each state was emitting, but a state's emissions as a share of total emissions do not necessarily correspond proportionately to its share in the creation of ozone in downwind states.OTAG's multi-state modeling of such downwind transportation painted with a rather broad brush.

We need not pass judgment on whether the evidence and approach of the NPRM would have supported the final rule. After receiving comments regarding the insufficiently state specific analysis of the NPRM, EPA performed state-specific modeling. Id. at 57,384. According to EPA, this confirmed the results of the regional modeling. Id.

The two types of state-specific modeling go by the names UAM-V and CAMx. In the UAM-V approach, the researchers model an affected downwind area to establish a base case, and then "zero-out" a particular source state. Thus with UAM-V it can be estimated what ozone concentrations would be like if a particular state contributed no ozone or ozone precursors. The CAMx modeling, on the other hand, is a source apportionment analysis which tracks modeled ozone from its precursors (NOx and volatile organic compounds (VOCs)) through the formation of ozone and subsequent migration. Whereas UAM-V tells modelers how much ozone is missing when one state is zeroed out, CAMx models an ozone concentration and provides apportionment, i.e., who sent what. An advantage of the CAMx model used by EPA was that, unlike the UAM-V modeling, with CAMx EPA could isolate man-made emissions, or ozone creation based on reactions between man-made and biogenic emissions. UAM-V modeling was less discriminating.

Petitioners really do nothing more than quibble with the state-specific modeling. For example, Industry/Labor petitioners argue that zero-out modeling is inappropriate because it models an impossible scenario--the elimination of all manmade NOx emissions; but they do not suggest how much this characteristic is likely to distort the results. State petitioners charge that sometimes the results of the two models were inconsistent, with, for example, the CAMx showing a larger migration of ozone from a state than the UAM-V showed for all man-made NOx in that state. EPA itself noted this infrequent inconsistency. See id. at 57,385. Neither criticism affords ground for non-expert judges to find a material likelihood of serious error. See Appalachian Power Co. v. EPA, 135 F.3d 791, 802 (D.C. Cir. 1998).

Petitioners complain that EPA did not provide the data sooner. EPA made the new modeling available on the Internet six weeks prior to the final rule, published its availability in the Federal Register a month before the final rule, and during that time received and responded to questions and comments regarding the modeling. Other than what we have already mentioned, petitioners have evidently not been able to identify further flaws in the modeling used, and thus have failed to show any prejudice from EPA's timetable. Personal Watercraft Indus. Ass'n v. Department of Commerce, 48 F.3d 540, 544 (D.C. Cir. 1995).

Section 110(a)(2)(D)(i)(I) applies only to states that "contribute significantly" to nonattainment in a downwind state. Petitioners make essentially four arguments challenging EPA's determination of "significance": (1) EPA acted contrary to precedent; (2) EPA considered forbidden factors, namely, costs of reduction; (3) EPA irrationally imposed uniform NOx controls on the states; (4) EPA's determination was so devoid of intelligible principles as to violate the nondelegation doctrine.

Before the 1990 amendments to the Clean Air Act, S 110(a)(2)(E)(I) directed the EPA to insist on SIP provisions adequate to prevent sources within a state from emitting air pollution that would "prevent attainment or maintenance [of primary or secondary standards] by any other State." 42 U.S.C. S 7410(a)(2)(E) (1982) (emphasis added). In a number of decisions EPA found, with approval of the courts, that various emissions of a particular state, having a proportionate impact on some downwind state greater than the impacts involved here, did not meet that standard. See New York v. EPA, 852 F.2d 574 (D.C. Cir. 1988); Air Pollution Control Dist. of Jefferson County v. EPA, 739 F.2d 1071 (6th Cir. 1984); New York v. EPA, 716 F.2d 440 (7th Cir. 1983); New York v. EPA, 710 F.2d 1200 (6th Cir. 1983); Connecticut v. EPA, 696 F.2d 147 (2d Cir. 1982). According to the states, these decisions, and what they claim to be Congress's implicit endorsement in the 1990 amendments, bar EPA from regarding the ozone emissions here as "significant" within the meaning of S 110(a)(2)(D)(i)(I). Thus the states would equate the old standard--"prevent attainment"--with the new standard: "contribute significantly to non-attainment."

Nothing in the text of the new section or any other provision of the statute spells out a criterion for classifying "emissions activity" as "significant." Nor did EPA, under the then-existing provision, bind itself to any criterion. Further, given EPA's finding as to the cumulative effects of the pollutants that generate ozone, EPA might well be able to distinguish this case from the sulfur dioxide cases that the states have cited. See 63 Fed. Reg. at 57,359 ("The chemical reactions that create ozone take place while the pollutants are being blown through the air by the wind, which means that ozone can be more severe many miles away from the source of emissions than it is at the source."). But the states point to nothing suggesting any prior adoption by EPA of any binding concept of how much was too much, so the claim falls short at the threshold.

Petitioners claim S 110(a)(2)(D)(i)(I) does not permit EPA to take into consideration the cost of reducing ozone. The full section provides that SIPs must contain provisions adequately prohibiting any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to non-attainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard.42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added).

Before reviewing the petitioners' attacks we must first describe how EPA went about the business at hand. It first determined that 23 jurisdictions are "significant" contributors to downwind nonattainment. 63 Fed. Reg. 57,398. In making this listing EPA drew lines based on the magnitude, frequency, and relative amount of each state's ozone contribution to a nonattainment area. For example, in one calculation it looked at the number of NOx parts per billion ("ppb") that a candidate state's emissions made to exceedances in specific downwind locations (examined as a proportion of those exceedances). Indiana was found to contribute at least 2 ppb to 4% of the 1-hour ozone exceedances in New York City, and was deemed a "significant contributor" to nonattainment there. On the other hand, Alabama, Georgia, Massachusetts, Missouri, South Carolina, Tennessee, and Wisconsin were not deemed "significant contributors" to New York City nonattainment because none of these states ever contributed more than 2 ppb to a 1-hour exceedance in that area. Although EPA looked at other measures, e.g., the percentage contribution of a state's emissions to total concentrations in a specified area, no one quarrels either with its use of multiple measures, or with the way it drew the line at this stage.

Although the dividing line was a very low threshold of contribution, in the end EPA's rule called for termination of only a subset of each state's contribution. EPA decided that the 23 "significant contributors" need only reduce their ozone by the amount achievable with "highly cost-effective controls." 63 Fed. Reg. at 57,403. Thus, once a state had been nominally marked a "significant contributor," it could satisfy the statute, i.e., reduce its contribution to a point where it would not be "significant" within the meaning of S 110(a)(2)(D)(i)(I), by cutting back the amount that could be eliminated with "highly cost-effective controls." EPA's design was to have a lot of states make what it considered modest NOx reductions, uniformly limited to ones that could be achieved (in EPA's estimate) for less than $2000 a ton. As a result, naturally, the ultimate line of "significance," whether measured in volume of NOx emitted or arriving in nonattainment areas, would vary from state to state depending on variations in cutback costs.

State and Industry/Labor petitioners argue that this approach runs afoul of S 110(a)(2)(D), which they read as prohibiting any consideration of costs or cost-effectiveness in determining what contributions are "significant." So far as appears, none of the states proposes that EPA, if reversed, must require complete extirpation of their NOx emissions. Rather, the gamble--at least of the small contributors--is evidently that if EPA were barred from considering costs, it would never have included such states. Because the attacks from the states and Industry/Labor are somewhat dissimilar and have shifted back-and-forth between the opening briefs, reply briefs, and oral argument, a summary of the relevant differences and vacillations is in order. We note that no party makes any claim that EPA was either confined to adopting rules whose benefits exceeded their costs, or permitted to use that criterion in selecting its final rule.2 Nor has it been argued thatthe term "significant" required consideration of costs.

State petitioners initially argued that it was "arbitrary and unlawful" for EPA to make cost effectiveness a "controlling factor" or "linchpin" in the determination of significant contribution under § 110(a)(2)(D). Thus EPA's error, as the states would have it, was in considering costs too much: "Petitioning States do not claim that there is no role for cost considerations; Petitioning States simply stress that EPA must establish a definition of significance that is dominated by air quality factors, as air quality is the sole factor mentioned in the statute." Reply Br. of Petitioning States at 4. In support of this position, State petitioners cited our en banc decision in Natural Resources Defense Council v. EPA, 824 F.2d 1146, 1163 (D.C. Cir. 1987) (en banc), where we held that a statutory mandate for EPA to set a standard with an "ample margin of safety to protect the public health" did not preclude the consideration of costs and technological feasibility, but that these concerns could not be the "primary consideration."

At oral argument, counsel for the states abandoned this position and decided that the statute flatly prohibits EPA from considering costs at all. Transcript of Oral Argument at 14-17. Indeed, counsel eventually went so far as to claim that if faced with two states, one of which could eliminate all relevant emissions at a trivial cost, while the other could eliminate none at a cost of less than $5000 a ton, EPA must mandate the same cutback for each. Id. at 16-17.

We should note here that the consequence of this position is not so extreme as it sounds. EPA's rule allows ton-for-ton emissions trading between firms based on allowances determined by each state. See 63 Fed. Reg. 57,456. Obviously the firms with the highest emission reduction costs will, if permitted by their states, buy up pollution allowances from firms that are granted allowances because they have over controlled for NOx--firms, obviously, with low reduction costs. If transaction costs were zero, the only effect of the initial assignment of cutbacks would be distributional: firms would make only the cheaper cutbacks, but firms with high emission-reduction costs would buy allowances from those with low costs and thereby transfer wealth to them. See Ronald H. Coase, The Problem of Social Cost, 3 J. L. & Econ. 1 (1960). But transaction costs notoriously are not zero;3 so the likely effect of the proposed statutory interpretation would be that any aggregate cutback would be achieved at considerably higher cost than under EPA's reading of S 110(a)(2)(D)(i)(I), with absolutely no offsetting environmental benefit to the public. Of course we are able to assume the existence of EPA's allowance trading program only because no one has challenged its adoption. As the program seems to have no rationale other than cost reduction, see 63 Fed. Reg. at 57,457, it would presumably be invalid under petitioners' proposed reading of S 110(a)(2)(D)(i)(I), in which case the states' position really is as extreme as it sounds.

Returning to the positions of the parties, we find Industry/Labor engaging in a migration comparable to that of the states, though in the opposite direction. In its opening and reply brief Industry/Labor argued that "S 110(a)(2)(D) requires consideration of only air quality impacts in determining the significance of any contribution." However, at oral argument Industry/Labor offered a construction of the statute that seemed to restore to EPA via § 110(k)(5) what it would take away via S 110(a)(2)(D). Industry/Labor claimed that costs could be considered when EPAdetermines if a SIP is "adequate" under § 110(k)(5). Transcript of Oral Argument at 28. The states actually offered this same reading of S 110(k)(5) in their reply brief (back when they thought EPA could consider costs) but appeared to abandon it at oral argument in favor of a flat prohibition on EPA cost considerations. The argument that costs may be considered under § 110(k)(5) seems to concede that the structure of the statutory scheme manifests no intention to bar the consideration of costs.

And so we are indeed presented with the question whether S 110(a)(2)(D) bars consideration of costs, but it is presented to us with the caveat that costs can be considered later on in the process, and accompanied by a false start by the states, who initially said that EPA could consider costs, just not too much. Against this backdrop, it would be at the very least ironic for us to say there is "clear congressional intent to preclude consideration of cost" under S 110(a)(2)(D). See Natural Resources Defense Council v. EPA, 824 F.2d 1146, 1163 (D.C. Cir. 1987) (en banc).

For convenience we repeat the statutory language. Section 110(a)(2)(D)(i)(I) provides that SIPs must contain provisions adequately prohibiting

any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard.

42 U.S.C. S 7410(a)(2)(D)(i)(I) (emphasis added). By its terms the statute is focused on "amounts" of "emissions activity" that "contribute significantly to nonattainment." The fundamental dispute is over the clarity of the phrase "contribute significantly." Must EPA simply pick some flat "amount" of contribution, based exclusively on health concerns, such that any excess would put a state in the forbidden zone of "significance"?4 Or was it permissible for EPA to consider differences in cutback costs, so that, after reduction of all that could be cost-effectively eliminated, any remaining "contribution" would not be considered "significant"? In deciding on the permissible ceiling, EPA used "significant" in the second way.

The term "significant" does not in itself convey a thought that significance should be measured in only one dimension-here, in the petitioners' view, health alone. Indeed, "significant" is a very odd choice to express unidimensionality; consider the phrase "significant other." In some contexts, "significant" begs a consideration of costs. In finding a threshold requirement of "significant risk" in S 3(8) of the Occupational Health and Safety Act, 29 U.S.C. S 652(8), a plurality of the Supreme Court understood a "significant" risk as something more than a "mathematical straitjacket," and held that "[s]ome risks are plainly acceptable and others are plainly unacceptable." Industrial Union Dept., AFL-CIO v. American Petroleum Institute ("Benzene"), 448 U.S. 607, 655 (1980) (plurality opinion). The plurality withheld judgment on whether the Act required a "reasonable correlation between costs and benefits," id. at 615, but the upshot of inserting the adjective "significant" was a consideration of which risks are worth the cost of elimination. OSHA has since interpreted S 3(8) and regulation of "significant risk" to require "cost-effective protective measures" and set standards with an eye toward "the costs of safety standards [being] reasonably related to their benefits." See International Union v. OSHA (Lockout/Tag out II), 37 F.3d 665, 66869 (D.C. Cir. 1994) (quoting OSHA's final rule). OSHA's reaction to the term "significant" seems to confirm what some commentators have asked rhetorically: "[C]an an agency sensiblydecide whether a risk is 'significant' without also examining the cost of eliminating it?" Stephen G. Breyer, Richard B. Stewart, Cass R. Sunstein & Matthew L. Spitzer, Administrative Law and Regulatory Policy 65 (4th ed. 1999).

Petitioners conspicuously fail to describe the intellectual process by which EPA would determine "significance" if it may consider only health. EPA has determined that ozone has some adverse health effects--however slight--at every level. See National Ambient Air Quality Standards for Ozone, 62 Fed. Reg. 38,856 (1997). Without consideration of cost it is hard to see why any ozone-creating emissions should not be regarded as fatally "significant" under § 110(a)(2)(D)(i)(I). Perhaps EPA might (under such a rule) let the upwind states off at the stringency level of the programs imposed on non-attainment areas, but petitioners do not explain how "significance" can exclude cost but admit equity.

Although the ambiguity of the word "significant" and the implications of a health-only reading are potentially fatal flaws in petitioners' theory (aside from their own inability to discern the "plain language" consistently), the most formidable obstacle is the settled law of this circuit. It is only where there is "clear congressional intent to preclude consideration of cost" that we find agencies barred from considering costs. NRDC, 824 F.2d at 1163; see also George E. Warren Corp. v. EPA, 159 F.3d 616, 622-24 (D.C. Cir. 1998), reh'g granted,