WildEarth Guardians v. U.S. Envtl. Prot. Agency

770 F.3d 919

WILDEARTH GUARDIANS ; Heal Utah ; National Parks Conservation Association; Powder River Basin Resource Council ; Sierra Club; Petitioners

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY ; Gina McCarthy, Administrator, United States Environmental Protection Agency, Respondents.

Public Service Company of New Mexico ; PacifiCorp; New Mexico Environment Department ; Basin Electric Power Cooperative; State of Wyoming; Utah Associated Municipal Power System ; Utah Division of Air Quality; City of Albuquerque, Intervenors

and

American Coalition for Clean Coal Electricity, Amicus Curiae.

Nos. 12–9596

13–9502

13–9506

13–9507

13–9508

13–9509

13–9510.

United States Court of Appeals, Tenth Circuit.

Oct. 21, 2014.

Jenny K. Harbine, Earthjustice, Bozeman, Montana (John Barth, Hygiene, CO, and Ashley D. Wilmes, WildEarth Guardians, Boulder, CO, with her on the briefs), for Petitioners.

Chloe H. Kolman, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C. (Stephanie J. Talbert, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C., Robert G. Dreher, Acting Assistant Attorney General, United States Department of Justice, Environment & Natural Resources Division, Washington, D.C.; M. Lea Anderson, of Counsel, United States Environmental Protection Agency, Washington, D.C.; Matthew C. Marks, Of Counsel, United States Environmental Protection Agency, Washington, D.C.; Brian Tomasovic, Of Counsel, United States Environmental Protection Agency, Dallas, TX; Sara L. Laumann, of Counsel, United States Environmental Protection Agency, Denver, CO, with her on the brief), for Respondent.

E. Blain Rawson, Ray Quinney & Nebeker, P.C., Salt Lake City, UT (Emily Smith Loeffler, Quinney & Nebeker, P.C., Salt Lake City, UT, Michael G. Jenkins, Assistant General Counsel, PacifiCorp Energy with him on the brief), for Intervenor PacifiCorp Energy.

Matthias L. Sayer, Assistant Attorney General, Wyoming Office of Attorney General, Cheyenne, WY (Jay A. Jerde, Deputy Attorney General, Wyoming Office of Attorney General, Cheyenne, WY, with him on the brief), for Intervenor State of Wyoming.

Christopher L. Colclasure, Holland & Hart LLP, Denver, CO, for Intervenor Basin Electric Power Cooperative.

Richard L. Alvidrez and Robert H. Clark, Miller Stratvert P.A., Albuquerque, NM; Kallie H. Kuehl, Corporate Counsel, Albuquerque, NM, on the brief for Intervenor Public Service Company of New Mexico.

Jeffrey M. Kendall, General Counsel and William G. Grantham, Assistant General Counsel, for New Mexico Environment Department, on the brief for Intervenor New Mexico Environment Department.

Carol Parker, Assistant City Attorney and Adelia W. Kearny, Deputy City Attorney, Albuquerque, NM, on the brief for Intervenor City of Albuquerque.

H. Michael Keller and Mary Jane E. Galvin–Wagg, Van Cott, Salt Lake City, UT; Mason Baker, General Counsel, Salt Lake City, UT, on the brief for Intervenor Utah Associated Municipal Power Systems.

John E. Swallow, Utah Attorney General and Christian C. Stephens, Assistant Attorney General, Salt Lake City, UT; Craig W. Anderson, Division Chief and Assistant Attorney General, Environment Division, Utah Attorney General's Office, Salt Lake City, UT, on the brief for Intervenor Utah Division of Air Quality.

Paul M. Seby and Marian C. Larsen, Seby Larsen LLP, Denver, CO, on the brief for Amicus Curiae American Coalition for Clean Coal Electricity.

Before BACHARACH, SEYMOUR, and MURPHY, Circuit Judges.

Opinion

BACHARACH, Circuit Judge.

This appeal grows out of the Clean Air Act. In an effort to comply with the statute, three states (New Mexico, Utah, and Wyoming), one city (City of Albuquerque), and one county (Bernalillo County) adopted a regional cap-and-trade program regulating sulfur-dioxide emissions over the Colorado Plateau.¹ Under this program, each participant obtained a ceiling on sulfur-dioxide emissions. If the ceiling was met, polluters would get allocations of sulfur dioxide that could be emitted. With these allocations, polluters had a choice. They could use the allocations or cut emissions and trade the unused portions of the allocations.

The program required approval of the Environmental Protection Agency. In determining whether to approve the program, the EPA had to apply its regulations. Under these regulations, states could satisfy the Clean Air Act by ensuring installation of the best available retrofit technology in all eligible major sources that contributed to visibility impairment. This mode of compliance is referred to as “BART.” States affecting visibility over the Colorado Plateau were allowed to use an alternative program in lieu of BART. But this alternative program had to be better than BART in improving air visibility.

New Mexico, Utah, Wyoming, the City of Albuquerque, and Bernalillo County persuaded the EPA that the trading program would yield better results than BART because:

• the program covered polluters that would not have been subject to BART,

• the program encompassed emissions from new sources, which would not have been subject to BART, and

• the program encouraged polluters to expedite equipment upgrades and to operate below full capacity.

Five environmental groups filed petitions for review,² arguing that the EPA should not have approved the trading program. To decide these petitions, we must determine whether the EPA acted arbitrarily and capriciously in finding that the trading program was better than BART. We conclude that the EPA's decision was neither arbitrary nor capricious. Thus, we deny the petitions for review.

I. The Clean Air Act and the EPA's Regulatory Framework

The petitions require an understanding of the statutory and regulatory requirements for alleviation of air pollution.

A. Statutory Requirement for EPA Guidelines

The Clean Air Act requires the EPA to establish regulations to ensure “reasonable progress” toward the improvement in visibility and “compliance with the requirements of [42 U.S.C. § 7491 ].”³ 42 U.S.C. § 7491(a)(4). In light of this requirement, the EPA had to establish regulations requiring states to develop implementation plans to improve visibility and adopt, maintain, and enforce air quality standards. Id. §§ 7410(a)(1), 7491.

Under the statutory scheme, the EPA would then review the state implementation plans to ensure compliance with the Clean Air Act and implementing regulations. Id. §§ 7410(a)(3)(B), 7492(e)(2) ; see Oklahoma v. EPA, 723 F.3d 1201, 1204 (10th Cir.2013). Once approved, state implementation plans would be enforceable as federal law. 42 U.S.C. §§ 7413, 7604.

States implementing the BART requirement do so in two steps: (1) identify the sources subject to BART, and (2) determine the particular technologies required for individual sources. 40 C.F.R. § 51.308(e)(1) ; see Util. Air Regulatory Grp. v. EPA, 471 F.3d 1333, 1335–36 (D.C.Cir.2006). In considering the required technologies, states must consider five factors for each BART-eligible source:

(1) the costs of compliance;

(2) the energy and nonair quality environmental impacts of compliance;

(3) the existing pollution control technologies already in place;

(4) the remaining useful life of the source; and

(5) the improvement in visibility anticipated from the use of given technologies.

42 U.S.C. § 7491(g)(2).

B. Regulations Governing the Colorado Plateau

Congress also enacted legislation requiring the EPA to establish a visibility transport commission to study regional haze in the Grand Canyon and to recommend curative action. 42 U.S.C. § 7492(f).

To comply, the EPA established the Grand Canyon Visibility Transport Commission, which would “assess scientific, technical, and other information related to adverse visual air quality impacts from potential or projected emissions growth from sources located in the Transport Region.” Joint App. at 71. Upon completion of this assessment, the Transport Commission would report to the EPA on appropriate measures to improve visual air quality on the Colorado Plateau. Id.⁴

1. The Grand Canyon Visibility Transport Commission

The Transport Commission analyzed the effects of regional haze in sixteen Class I areas⁵ affected by pollution in nine states (Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, and Wyoming).⁶ 42 U.S.C. § 7492(c)(1) ; Final Rule, Regional Haze Regulations, 64 Fed.Reg. 35,714, 35,770 (July 1, 1999).

Based on this analysis, the Transport Commission recommended a regional cap-and-trade program for sulfur dioxide that would go into effect when participating states exceed an emissions target. Joint App. at 56. Details of the program would be worked out later.

The functions of the Transport Commission were passed on to the Western Regional Air Partnership, which continued the study and recommended a plan. Id. at 190. The plan included:

(1) milestones to measure reductions in regional emissions of sulfur dioxide, and

(2) a trading program for the nine states.

The trading program acted as a “backstop,” which would be triggered only if the milestones were reached.

2. The Regional Haze Rule

In 1999, the EPA adopted the Transport Commission's recommendations in its Regional Haze Rule, 40 C.F.R. §§ 51.308, 51.309. This rule requires states to develop programs that assure reasonable progress toward meeting the national goal of addressing visibility impairment in Class I areas. 40 C.F.R. § 51.300(a). Sections 51.308 and 51.309 create two methods of compliance.

Under the first method, states can submit an implementation plan containing emission limitations applying BART for each BART-eligible source impairing visibility in a Class I area. 40 C.F.R. § 51.308(e).

The second method is authorized in 40 C.F.R. § 51.309. Through this method, states could use the Transport Commission's cap-and-trade program if participants would expect better results than they would have had under BART regulations. The cap-and-trade program is known as the “309 program.”⁷

The 309 program establishes voluntary...