Nw. Envtl. Def. Ctr. v. Cascade Kelly Holdings LLC

155 F.Supp.3d 1100

Northwest Environmental Defense Center, Center for Biological Diversity, and Neighbors for Clean Air, Plaintiffs,

v.Cascade Kelly Holdings LLC, d/b/a Columbia Pacific Bio-Refinery, and Global Partners LP, Defendants.

Case No. 3:14-cv-01059-SI

United States District Court, D. Oregon.

Signed December 30, 2015

Janette K. Brimmer, Earthjustice, 705 Second Avenue, Suite 203, Seattle, WA 98104; Moneen S. Nasmith, Earthjustice, 48 Wall Street, 19th Floor, New York, NY 10005; Andrew M. Hawley, Northwest Environmental Defense Center, 10015 SW Terwilliger Boulevard, Portland, OR 97219. Of Attorneys for Plaintiffs.

Jay T. Waldron, Brien J. Flanagan, and Sara C. Cotton, SCHWABE, WILLIAMSON & WYATT, P.C., 1900 Pacwest Center, 1211 SW Fifth Avenue, Portland, OR 97204. Of Attorneys for Defendants.

OPINION AND ORDER

Michael H. Simon, District Judge.

Plaintiffs Northwest Environmental Defense Center, the Center for Biological Diversity, and Neighbors for Clean Air (collectively “Plaintiffs”) bring action under the citizen suit provision in § 304 of the Clean Air Act (“CAA”), 42 U.S.C. § 7604. The defendants are Cascade Kelly Holdings LLC, doing business as Columbia Pacific Bio-Refinery (“CPBR”), and Global Partners LP (collectively “Defendants”). Plaintiffs allege that Defendants began construction and operation of a crude oil transloading terminal in Clatskanie, Oregon, (the “Facility”) without first obtaining a federal Prevention of Significant Deterioration (“PSD”) permit under § 165 of the CAA, 42 U.S.C. § 7475. The Court has bifurcated the liability and penalty portions of Plaintiffs' claims and now considers only Plaintiffs' request for relief enjoining Defendants from further construction and operation of the Facility without a PSD permit. From October 6 to October 8, 2015, the Court held a bench trial.

Plaintiffs' position is that Defendants are required under the CAA to have a PSD permit because the Facility has the potential to emit 100 tons per year or more of volatile organic components, which contribute to the creation of ozone in the atmosphere. Facilities that meet or exceed the 100 tons-per-year threshold must comply with more rigorous pollution control requirements than facilities that do not meet this threshold. Instead of the PSD permit that Plaintiffs contend Defendants should have obtained, Defendants obtained a different permit that allows the Facility to emit no more than 78 tons per year of volatile organic components. Plaintiffs argue that because of inaccurate emissions calculations and unrealistic assumptions, Defendants cannot possibly comply with the regulatory limit of 78 tons per year of the relevant pollutant. Plaintiffs further argue that Defendants lack the technology to measure the precise amount of pollutants the Facility actually emits. For these reasons, Plaintiffs argue, the Facility must have a PSD permit to operate lawfully and Defendants' current permit is insufficient. Whether Plaintiffs are correct is the question now before the Court.

Notably, Plaintiffs brought this lawsuit before Defendants obtained any permit for new construction at the Facility. Indeed, it appears that Plaintiffs' lawsuit may have prompted Defendants to seek and obtain the permit that they received from State of Oregon's Department of Environmental Quality (“DEQ”). By filing this lawsuit and then participating in the public comment process on draft permits for the Facility sought by Defendants, Plaintiffs helped protect the environment by ensuring that Defendants' current permit limits Defendants to processing only 20 percent of the Facility's maximum throughput capacity, at least without first obtaining a PSD permit, and contains other environmentally protective restrictions on the Facility's operations. Thus, regardless of whether Plaintiffs prevail on the specific question now before the Court, Plaintiffs have already played an important role in ensuring that Defendants comply with applicable federal and state laws and environmental regulations. And that is one of the key roles that Congress envisioned for the citizen suit provision of the CAA.

The Court has considered Plaintiffs' argument and evidence that Defendants have a razor-thin margin of error for complying with the emissions limit of 78 tons per year of volatile organic compounds stated in its DEQ-issued permit. Additionally, the Court has considered Plaintiffs' argument that DEQ, which determined as part of the state permitting process that the Facility will emit no more than 78 tons per year of the relevant pollutants, could have imposed additional monitoring and recordkeeping requirements on Defendants. Had CPBR relied on any more generic emissions assumptions in its potential-to-emit calculations and had DEQ imposed any less stringent monitoring or testing provisions, the Court might have reached a different conclusion than it now does. Notwithstanding Plaintiffs' concerns about Defendants' compliance and DEQ's permitting process, the Court finds that Plaintiffs did not meet their burden in this case. Plaintiffs have not proven by a preponderance of the evidence that Defendants inaccurately calculated the Facility's potential to emit, which is the foundation of the DEQ-issued permit. Thus, Plaintiffs have not shown that the Facility will emit at least 100 tons per year of volatile organic components, which is the threshold that would render Defendants subject to the more demanding PSD permitting requirements.

The Court has jurisdiction over this matter under 42 U.S.C. § 7604 and 28 U.S.C. §§ 2201 and 2202.¹ Having weighed and evaluated all of the evidence in the same manner that it would instruct a jury to do and having fully considered the legal arguments of counsel, the Court makes the following Findings of Fact and Conclusions of Law pursuant to Federal Rule of Civil Procedure 52(a).

FINDINGS OF FACT²

The Court finds the following facts by a preponderance of the evidence. Because the factual allegations underlying this controversy relate to the CAA and its related regulations, the Court begins with an examination of the applicable statutory and regulatory framework.

A. General Provisions of the CAA

Congress enacted the 1970 CAA “to protect and enhance the quality of the Nation's air resources” and “promote the public health and welfare and the productive capacity of [the Nation's] population.” 42 U.S.C. § 7401(b)(1). The CAA creates “a federal framework for ensuring the nation's air quality.” California v. United States , 215 F.3d 1005, 1007 (9th Cir.2000). Congress, however, gave “[e]ach State ... the primary responsibility for assuring air quality within the entire geographic area comprising such State.” 42 U.S.C. § 7407(a). By requiring the Environmental Protection Agency (“EPA”) to work with the states, the CAA sets up “a model of cooperative federalism to achieve the statute's environmental goals.”

Ass'n of Irri tated Residents v. U.S. E.P.A. , 790 F.3d 934, 937 (9th Cir.2015).

The CAA requires EPA to formulate national ambient air quality standards (“NAAQS”) for air pollutants. 42 U.S.C. §§ 7408 -7409. EPA has thus far issued NAAQS for six pollutants: (1) particulate matter; (2) sulfur dioxide; (3) nitrogen oxides (with sulfur dioxide as the indicator); (4) carbon monoxide; (5) lead; and (6) ozone. Util. Air Regulatory Grp. v. E.P.A. , –––U.S. ––––, 134 S.Ct. 2427, 2435, 189 L.Ed.2d 372 (2014) ; 40 C.F.R. pt. 50 (2015). The NAAQS for ozone include ozone precursors, which are compounds that contribute to the formation of ozone in the atmosphere, such as non-methane organic gases and volatile organic compounds (“VOCs”). See 40 C.F.R. §§ 51.100(s), 52.21(b)(50). NAAQS set the maximum permissible airborne concentrations for the listed pollutants. 42 U.S.C. §§ 7408(a), 7409(a) ; Whitman v. Am. Trucking Ass'ns , 531 U.S. 457, 465, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001).

Each state has primary responsibility for implementing the NAAQS within its borders by developing a State Implementation Plan (“SIP”), which is “subject to EPA review and, if inadequate, disapproval.” Hall v. U.S. E.P.A. , 273 F.3d 1146, 1153 (9th Cir.2001) ; see 42 U.S.C. § 7410. Every SIP must “include enforceable emission limitations and other control measures, means, or techniques” to attain the NAAQS, “as well as schedules and timetables for compliance.” 42 U.S.C. § 7410(a)(2)(A). If EPA approves a SIP, the SIP “has ‘the force and effect of federal law.’ ” Safe Air For Everyone v. U.S. E.P.A. , 488 F.3d 1088, 1097 (9th Cir.2007) (quoting Trs. for Alaska v. Fink , 17 F.3d 1209, 1210 n. 3 (9th Cir.1994) ).

1. PSD Program

The CAA also requires that states designate the areas within their borders that are in “attainment” and “nonattainment” of the NAAQS for each listed air pollutant. 42 U.S.C. § 7407(d)(1)(A). Attainment areas and nonattainment areas are subject to different regulations. For areas that do not meet the NAAQS (nonattainment areas), Congress created New Source Review (“NSR”) to prevent the addition of new sources of pollution. Id. §§ 7501-7515. For areas that meet the NAAQS (attainment areas), Congress enacted the PSD program. See id. §§ 7470-79. The federal PSD program is designed “to assure that any decision to permit increased air pollution in [an attainment area] is made only after careful evaluation of all the consequences of such a decision and after adequate procedural opportunities for informed public participation in the decisionmaking process.” Id. § 7470(5).

As part of the program, “[n]o major emitting facility on which construction is commenced after August 7, 1977, may be constructed in any area to which this part applies unless—(1) a [PSD] permit has been issued for such proposed facility in accordance with this part setting forth emission limitations for such facility which conform to the requirements of this part.” Id. § 7475(a). EPA has clarified in its regulations: “No new major stationary source or major modification ... shall begin actual...