By Deborah Quick
The U.S. Environmental Protection Agency (EPA) adopted a final rule, governing pollutant emissions from coal- and gas-fired utility boilers. The rule set non-numerical standards for operation of the boilers during start-up and shut-down, as opposed to numerical limits during production. Environmental requested reconsideration of the rule, objecting both on the substance of the non-production rule, and that the agency’s support for the rule was not disclosed prior to the comment period. The D.C. Circuit Court of Appeals held that reconsideration was required on procedural grounds. [Chesapeake Climate Action Network v. U.S. Environmental Protection Agency, 952 F.3d 310 (D.C. Cir. Mar. 13, 2020).]
Background
The federal Clean Air Act (42 U.S.C. § 7401 et seq., CAA) regulates the emission of hazardous air pollutants (HAP) by, inter alia, existing “major sources” including utility boilers at coal-fired and oil-fired power plants. See § 7412(a)(10).
EPA must set HAP emission limits in the form of numerical limits whenever “feasible,” § 7412(d)(2), (h)(4), and limits for major sources must be capped at the “the maximum degree of reduction in emissions” that EPA deems “achievable,” § 7412(d)(2). EPA’s determination of what is “achievable” is often referred to as a “MACT” standard, as in “maximum achievable control technology.”
Quoting U.S. Sugar Corp. v. EPA, 830 F.3d 579, 594 (D.C. Cir. 2016). MACT standards are established in a two-step process. First, EPA must set a “MACT floor” defining for each source at a level that “ensures that all HAP sources at least clean up their emissions to the level that their best performing peers have shown can be achieved.” Ibid. For the utility boilers at issue in this case:
“. . .the MACT floor cannot be less stringent than the average emissions limits achieved by the best performing 12 percent of existing sources in that category or subcategory. Ibid., citing 42 U.S.C. § 7412(d)(3)(A). . . .Second, EPA may exercise its discretion ‘to require an even greater reduction in emissions, taking into account costs, health effects, environmental effects, and energy requirements.’” Nat. Res. Def. Council v. EPA, 529 F.3d 1077, 1079 (D.C. Cir. 2008) (citing § 7412(d)(2)).
Congress provided, however, that where numerical MACT standards are not “feasible,” EPA may instead impose “work practice” standards. 42 U.S.C. §7412(h):
“[N]umerical MACT standards are not feasible (and thus ‘work practice’ standards may be used) when ‘the application of measurement methodology to a particular class of sources is not practicable due to technological and economic limitations.’ § 7412(h)(2)(B). However, work practice standards must be, ‘in the Administrator’s judgment,’ consistent with numerical MACT requirements, § 7412(h)(1), i.e., ‘the maximum degree of reduction in emissions’ that EPA deems ‘achievable. . .’” § 7412(d)(2).
In addition, the D.C. Circuit has previously held that EPA has the “flexibility” to:
“. . .regulate a HAP indirectly, by controlling a proxy, or ‘surrogate,’ instead of the pollutant itself. . . . so long as the resulting rules are reasonably calculated to control the relevant HAPs to the extent the statute demands.” Citing Sierra Club v. EPA, 884 F.3d 1185, 1190 (D.C. Cir. 2018).
Procedurally, EPA’s adoption of MACT standards, whether of the numeric or work standard variety follows a familiar path. Following Federal Register notice of the proposed rule and a public comment period, reconsideration of the rule on showing by the commenter that:
“(1) ‘it was impracticable to raise such objection within such time or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review),’ and (2) ‘such objection is of central relevance to the outcome of the rule.’” 42 U.S.C. § 7607(d)(7)(B).
In this case, EPA’s initial final rule included work standards MACT for utility boiler start-up and shut-down periods. EPA re-opened a public comment period in response to a petition for reconsideration, and eventually made some amendments to its work standards non-production MACT before adopting it as a final rule. Plaintiffs again requested reconsideration, EPA refused, and plaintiffs brought this judicial challenge.
The D.C. Circuit’s Decision
EPA distinguishes between when utility boilers are starting-up or shutting-down (i.e., non-production operation), and when they are producing energy, and set separate MACT standards for each period. EPA initially proposed numerical MACTs for both production and non-production periods. However, numerous commenters criticized the basis for the non-production period numerical MACTs. EPA’s final rule, therefore, established work practice standards for non-production periods. As EPA explained:
“. . .there were almost no HAP data for startup and shutdown periods and almost all of the data failed to meet our data quality requirements. Thus, we do not have sufficient data on emissions that occur during startup and shutdown on which to set emission standards.”
Plaintiffs pointed out that EPA had failed to provide adequate support for the impracticability of numerical standards as required by 42 U.S.C. section 7412(h)(2)(B). In addition, per the commenters the non-production work practice standards were not “consistent with numerical MACT requirements, § 7412(h)(1),” and EPA failed to provide evidence they would match “the maximum degree of reduction in emissions” that EPA deems “achievable” via numerical standards. 42 U.S.C. section 7412(d)(2).
The Issue of Reconsideration under Section 7607
The D.C. Circuit focused on whether petitioners were entitled to reconsideration under section 7607(d)(7)(B) , i.e.:
“(1) ‘it was impracticable to raise such objection within [the public comment period] (but within the time specified for judicial review),’ and (2) ‘such objection is of central relevance to the outcome of the rule.’” 42 U.S.C. §.
As for the first element, the Court found that it was not possible for petitioners to have earlier-commented on the non-production MACT standards final rule because the regulations in that final rule were not a “logical outgrowth” of the proposed rule, quoting Clean Air Council v. Pruitt, 862 F.3d 1, 10 (D.C. Cir. 2017):
“A final rule is the ‘logical outgrowth’ of a proposed rule if ‘interested parties should have anticipated that the change was possible, and thus reasonably should have filed their comments on the subject during the notice-and-comment period.’ A final rule ‘fails the logical outgrowth test’ if ‘interested parties would have had to divine the agency’s unspoken thoughts, because the final rule was surprisingly distant from the proposed rule.’”
Principally, the court criticized EPA’s reliance on a list of “best performing power plants” to support the final rule, including its failure to disclose prior to the comment period that it would do so or its criteria for compiling the list.
Even if reliance on any “best performing sources” could be considered a logical outgrowth, EPA’s process for identifying those best performing sources was certainly not. To hold otherwise would place the unreasonable burden on commenters not only to identify errors in a proposed rule but also to contemplate why every theoretical course of correction the agency might pursue would be inappropriate or incorrect. It was simply impracticable for Petitioners to predict how EPA would cure the missing “best performer” component and then submit preemptive attacks on such hypothetical solutions.
Further, the issue of whether numerical standards could feasibly be imposed during non-production hours easily meets the test of being “of central relevance to the outcome of the rule.’” 42 U.S.C. § 7607(d)(7)(B).
Conclusion and Implications
Timing matters in administrative law. An agency detour or deviation from the previously-controlling logic of a regulatory regime presented late in the agency decision-making process inevitably undermines the defensibility of the resulting agency action.
