South Coast Air Quality Manage v. EPA , 882 F.3d 1138 ( 2018 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 14, 2017 Decided February 16, 2018
No. 15-1115
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT,
PETITIONER
v.
ENVIRONMENTAL PROTECTION AGENCY, ET AL.,
RESPONDENTS
NATIONAL ENVIRONMENTAL DEVELOPMENT ASSOCIATION'S
CLEAN AIR PROJECT, ET AL.,
INTERVENORS
Consolidated with 15-1123
On Petitions for Review of a Final Action
of the Environmental Protection Agency
Megan E. Lorenz Angarita argued the cause for petitioner
South Coast Air Quality Management District. With her on the
briefs were Kurt R. Wiese and Barbara Baird.
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Seth L. Johnson argued the cause for Environmental
Petitioners. With him on the briefs was David S. Baron.
Kelvin J. Dowd and Andrew B. Kolesar III were on the
brief for amicus curiae Ventura County Air Pollution Control
District in support of petitioner South Coast Air Quality
Management District.
Heather E. Gange, Trial Attorney, U.S. Department of
Justice, argued the cause for respondents. With her on the brief
was John C. Cruden, Assistant Attorney General at the time the
brief was filed.
Seth L. Johnson argued the cause for Environmental
Movant-Intervenors. With him on the brief was David S.
Baron.
Megan E. Lorenz Angarita, Kurt R. Wiese, and Barbara
Baird were on the brief for amicus curiae South Coast Air
Quality Management District in support of respondent’s
opposition to Sierra Club’s argument regarding reasonably
available control technology in Case No. 15-1123.
Leslie Sue Ritts was on the brief for intervenor for
respondent National Environmental Development
Association's Clean Air Project in support of U.S.
Environmental Protection Agency.
Before: GARLAND, Chief Judge, ROGERS, Circuit Judge,
and SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
SENTELLE.
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SENTELLE, Senior Circuit Judge: In this consolidated
proceeding, we consider petitions for review of an
Environmental Protection Agency (“EPA”) final rule entitled
“Implementation of the 2008 National Ambient Air Quality
Standards for Ozone: State Implementation Plan Review
Requirements,” 80 Fed. Reg. 12,264 (Mar. 6, 2015). In Case
No. 15-1115, petitioner South Coast Air Quality Management
District (“South Coast”) contends that the EPA incorrectly
concluded that precedent of this Court requires emissions
reductions that demonstrate reasonable further progress all
come from within the nonattainment area. In Case No. 15-
1123, petitioners Sierra Club, Conservation Law Foundation,
Downwinders at Risk, and Physicians for Social Responsibility
(Los Angeles) (“Environmental Petitioners”) contend that in
enacting the Final Rule, the EPA acted arbitrarily and
capriciously in its revocation of 1997 National Ambient Air
Quality Standards and relaxation of previously applicable
requirements under the Clean Air Act.
For the reasons stated below, we deny South Coast’s
petition for review, and grant in part and deny in part that of
the Environmental Petitioners.
I. BACKGROUND
A. The Clean Air Act Framework
The Clean Air Act (“CAA” or “Act”) directs the EPA to
set National Ambient Air Quality Standards (“NAAQS”) for
air pollutants “allowing an adequate margin of safety . . .
requisite to protect the public health.” 42 U.S.C. § 7409(b)(1).
The CAA also requires the EPA to establish air quality control
regions and designate them as “attainment” for “any area . . .
that meets” the NAAQS, “nonattainment” for “any area that
does not meet” the NAAQS, and “unclassifiable” for “any area
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that cannot be classified on the basis of available information.”
§ 7407(d)(1)(A).
The EPA must classify each area “designated
nonattainment for ozone” as “marginal,” “moderate,”
“serious,” “severe,” or “extreme” based on the degree to which
the ozone level in the area exceeds the NAAQS. § 7511. “An
area that exceeds the NAAQS by a greater margin is given
more time to meet the standard but is subjected to progressively
more stringent emissions controls for ozone precursors,
namely, volatile organic compounds (VOCs) and oxides of
nitrogen (NOx).” Natural Res. Def. Council v. EPA (NRDC
2009), 571 F.3d 1245, 1250 (D.C. Cir. 2009).
The Act places on the states “the primary responsibility for
assuring air quality” by submitting state implementation plans
(“SIPs”) that specify how they will achieve and maintain
compliance with the NAAQS. 42 U.S.C. § 7407(a). States
must formally adopt SIPs through state notice and comment
rulemaking and then submit the SIPs to the EPA for approval.
§ 7410(a). For those areas designated as “nonattainment,” SIPs
must show how the areas will achieve and maintain the relevant
NAAQS. Id.
A nonattainment area may be redesignated to attainment if
the EPA (1) has determined that the area has attained the
applicable NAAQS; (2) has fully approved the applicable SIP
under § 7410(k); (3) has determined that the attainment is due
to permanent and enforceable emissions reductions; (4) has
fully approved a § 7505a “maintenance plan,” which
demonstrates that the area will maintain the NAAQS for at least
10 years after the redesignation, see § 7505a(a); and (5) has
determined that the state containing the area seeking
redesignation has met all applicable SIP requirements.
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§ 7407(d)(3)(E). Areas redesignated as attainment are referred
to as “maintenance areas.”
B. SIPs for Nonattainment Areas
As is relevant to this case, the Clean Air Act requires SIPs
for nonattainment areas to include the following provisions:
1. Reasonable Further Progress
SIPs for nonattainment areas “shall require reasonable
further progress.” § 7502(c)(2). “Reasonable further progress”
is defined as “such annual incremental reductions in emissions
of the relevant air pollutants as are required by this part or may
reasonably be required by [the EPA] for the purpose of
ensuring attainment of the applicable [NAAQS] by the
applicable date.” § 7501(1). The Clean Air Act requires an
area in a moderate or greater degree of nonattainment to reduce
emissions of VOCs by fifteen percent in the first six years after
November 15, 1990. § 7511a(b)(1)(A). For areas in a serious
or greater degree of nonattainment, subsequent reductions in
VOC emissions must average three percent per year over each
consecutive three-year period until the area reaches attainment.
§ 7511a(c)(2)(B).
2. Reasonably Available Control
Technology
SIPs for ozone nonattainment areas must also “provide for
the implementation of all reasonably available control
measures as expeditiously as practicable (including such
reductions in emissions from existing sources in the area as
may be obtained through the adoption, at a minimum, of
reasonably available control technology).” § 7502(c)(1). For
nonattainment areas classified as moderate and above, SIPs
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must “require the implementation of reasonably available
control technology” with respect to all major sources of VOCs
in the area and any sources that emit VOCs in the area that are
covered by a control technique guideline. § 7511a(b)(2). The
reasonably available control technology requirement also
applies to major sources of NOx. § 7511a(f).
3. New Source Review
SIPs governing nonattainment areas must require permits
for the construction of new or modified sources of air pollution.
§§ 7502(c)(5), 7503, 7410(a)(2)(C). The goal of New Source
Review is to require permits to ensure that new or modified
sources will not exacerbate the pollution problem in the
nonattainment area. § 7503(a)(1)(A), (a)(2), (c). New Source
permits for major sources of VOCs require the proposed source
(1) to comply with the lowest achievable emissions rate and
(2) to obtain pollution offsets representing equal or greater
reductions of a pollutant at issue in the area. Id.
4. Conformity
The Act mandates that nonattainment and maintenance
areas are subject to “conformity requirements,” so that “[n]o
department, agency, or instrumentality of the Federal
Government shall engage in, support in any way or provide
financial assistance for, license or permit, or approve, any
activity which does not conform to an implementation plan.”
§ 7506(c)(1), (5). Federally funded projects must “conform”
to SIPs, meaning that the projects will not “cause or contribute
to any new violation,” “increase the frequency or severity of
any existing violation,” or “delay timely attainment of any
standard or any required interim emission reductions or other
milestones in any area.” § 7506(c)(1)(B). These areas are also
subject to the more specific transportation conformity
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requirements, whereby federal agencies may not “approve,
accept or fund any transportation plan, program or project
unless” it conforms to an applicable SIP. § 7506(c)(2). With
respect to transportation conformity requirements, the EPA is
responsible for promulgating, and periodically updating,
“criteria and procedures for demonstrating and assuring
conformity in the case of transportation plans, programs, and
projects.” § 7506(c)(4)(B).
5. Contingency Measures
SIPs must include contingency measures that take effect
automatically “if the area fails to make reasonable further
progress, or to attain the [NAAQS] by the attainment date.”
§§ 7502(c)(9), 7511a(c)(9).
C. Anti-Backsliding Measures for Revoked NAAQS
The Clean Air Act requires the EPA to “complete a
thorough review” of each NAAQS every five years and “make
such revisions . . . and promulgate such new standards as may
be appropriate.” § 7409(d)(1). In promulgating new standards,
if the EPA relaxes a NAAQS, it shall promulgate anti-
backsliding measures for all areas that have not attained that
standard as of the date of the relaxation. § 7502(e). The anti-
backsliding measures “shall provide for controls which are not
less stringent than the controls applicable to areas designated
nonattainment before such relaxation.” Id.
D. Ozone NAAQS
In 1979, the EPA promulgated the first ozone NAAQS
based on a one-hour average concentration of 0.12 parts per
million (ppm). Revisions to the NAAQS for Photochemical
Oxidants, 44 Fed. Reg. 8202, 8202 (Feb. 8, 1979). In 1997,
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after determining that the one-hour NAAQS was inadequate to
protect public health, the EPA promulgated a new NAAQS
based on an eight-hour average of 0.08 ppm. NAAQS for
Ozone, 62 Fed. Reg. 38,856, 38,858 (July 18, 1997). Although
the EPA replaced the one-hour NAAQS with an eight-hour
NAAQS, it determined that it would continue to enforce the
one-hour NAAQS until “an area has attained air quality that
meets the 1-hour standard.” Implementation of Revised Air
Quality Standards for Ozone and Particulate Matter, 62 Fed.
Reg. 38,421, 38,424 (July 18, 1997). In a 2004 rule, the EPA
revoked the one-hour NAAQS effective June 15, 2005. Final
Rule to Implement the 8-Hour Ozone NAAQS—Phase 1, 69
Fed. Reg. 23,951, 23,951 (Apr. 30, 2004). This Court held that
the EPA has the “authority to revoke the one-hour standard so
long as adequate anti-backsliding provisions are introduced.”
South Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882, 899
(D.C. Cir. 2006), clarified on denial of reh’g, 489 F.3d 1245
(D.C. Cir. 2007).
In 2008, the EPA determined that the 1997 NAAQS was
inadequate to protect public health. The EPA therefore
promulgated a new NAAQS of 0.075 ppm of ozone averaged
over eight hours. NAAQS for Ozone, 73 Fed. Reg. 16,436,
16,436 (Mar. 27, 2008). “The 2008 ozone NAAQS retains the
same general form and averaging time as the 0.08 ppm
NAAQS set in 1997, but is set at a more stringent level.”
Implementation of the 2008 NAAQS for Ozone: State
Implementation Plan Requirements, 80 Fed. Reg. 12,264,
12,265 (Mar. 6, 2015).
E. The Final Rule
On March 6, 2015, the EPA finalized a rule that “revises
existing regulations and guidance as appropriate to aid in the
implementation of the 2008 ozone NAAQS.” 80 Fed. Reg. at
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12,265. As part of the Final Rule, the EPA revoked the 1997
NAAQS “for all purposes and establish[ed] anti-backsliding
requirements for areas that remain designated nonattainment
for the revoked NAAQS.” Id.
II. STANDARD OF REVIEW
We will not set aside EPA action under the Clean Air Act
unless we determine that such action is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law.” 42 U.S.C. § 7607(d)(9)(A). The EPA’s interpretation of
the Clean Air Act is reviewed under the familiar two-step
framework of Chevron U.S.A., Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984), whereby we first
look to the statute’s language to determine if Congress has
“directly spoken to the precise question at issue.” Id. at 842.
If Congress has directly spoken to the precise question, then we
must “give effect to the unambiguously expressed intent of
Congress.” Id. at 843. If, however, “the statute is silent or
ambiguous with respect to the specific issue,” we defer to the
EPA’s interpretation of the Act so long as it “is based on a
permissible construction of the statute.” Id.
Under those standards, we review in turn the cross-
petitions of South Coast and the Environmental Petitioners.
III. SOUTH COAST’S PETITION
We begin with the simpler of the two petitions, that of
South Coast. South Coast petitions this Court to invalidate the
EPA’s interpretation of the CAA in the Final Rule that “states
may not take credit for VOC or NOx reductions occurring from
sources outside the nonattainment area for purposes of meeting
the 15 percent [rate-of-progress] and 3 percent [reasonable
further progress] requirements.” 80 Fed. Reg. at 12,273. South
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Coast argues that the EPA was not required to interpret “in the
area” in the context of the reasonable further progress
requirement to mean “in the nonattainment area.” See 42
U.S.C. § 7511a(b)(1)(B). In promulgating the Final Rule, the
EPA explained that in light of this Court’s decision in NRDC
2009, 571 F.3d at 1256, “there is no legal basis” for “allowing
states to credit reductions achieved at sources outside the
nonattainment area.” 80 Fed. Reg. at 12,273. South Coast
counters that our decision in NRDC 2009 does not mandate the
EPA’s interpretation. Instead, South Coast contends that
because downwind nonattainment areas are impacted by
emissions from upwind areas, the EPA could reasonably
interpret “in the area” in the context of the reasonable further
progress requirement to mean the “transport couple area”—“a
larger area consisting of the nonattainment area in question
plus the upwind area from which emission reductions would be
obtained.”
The text here is unambiguous. The Clean Air Act requires
nonattainment areas that are classified as moderate or above to
plan for “reasonable further progress” measured from “baseline
emissions,” which are defined as “the total amount of actual
VOC or NOx emissions from all anthropogenic sources in the
area during the” baseline year. 42 U.S.C. § 7511a(b)(1)(A),
(b)(1)(B), (c)(2)(B), (d), (e). These statutory provisions refer
to only one area, “the area.” Further, the term appears in a
section entitled “Moderate Areas,” not a greater area.
§ 7511a(b); see also § 7511(c)(1).
South Coast contends that limiting the phrase “in the area”
to nonattainment areas would produce absurd results.
According to South Coast, it may be impossible for certain
areas to achieve the necessary emissions reductions. Where the
purpose of the Clean Air Act is served by interpreting “in the
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area” to mean “transport couple area,” South Coast argues that
the statutory language is ambiguous.
However, the Clean Air Act provides for an alternative to
reducing emissions of pollutants by fixed percentages.
§ 7511a(b)(1)(A)(ii), (c)(2)(B). Nonattainment areas may
reduce emissions by less than 15 percent if they (1) implement
controls on a broader range of new and existing stationary
sources and (2) include in their SIP “all measures that can
feasibly be implemented in the area, in light of technological
achievability” and “measures that are achieved in practice by
sources in the same source category in nonattainment areas of
the next higher category.” § 7511a(b)(1)(A)(ii). Likewise,
nonattainment areas may reduce emissions by less than three
percent if the SIP “includes all measures that can feasibly be
implemented in the area, in light of technological
achievability” and “measures that are achieved in practice by
sources in the same source category in nonattainment areas of
the next higher classification.” § 7511a(c)(2)(B)(ii).
Moreover, states may also ask the EPA to approve new
boundaries for air quality control regions. See 42 U.S.C.
§ 7407(b)-(c). In light of the alternatives provided for in the
Clean Air Act, South Coast has failed to meet the
“exceptionally high burden” required to demonstrate absurdity.
Friends of Earth, Inc. v. EPA, 446 F.3d 140, 146 (D.C. Cir.
2006).
In sum, considering the grammar and context of
§ 7511a(b)(1)(B), we hold at Chevron step one that “in the
area” unambiguously refers to baseline emissions within the
nonattainment area. Accordingly, we deny South Coast’s
petition.
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IV. ENVIRONMENTAL PETITIONERS’
PETITION
Environmental Petitioners petition this Court to vacate
several parts of the Final Rule. We take each challenge in turn.
A. Waiver of Statutory Attainment Deadlines
Associated with the 1997 NAAQS
Environmental Petitioners seek to invalidate the Final
Rule’s revocation of the 1997 NAAQS. 80 Fed. Reg. at 12,296.
They argue that by revoking the 1997 NAAQS, the Final Rule
arbitrarily waives the obligation to attain the 1997 NAAQS by
the statutory deadline. The EPA counters that the Clean Air
Act authorizes revocation of a superseded NAAQS so long as
adequate anti-backsliding measures are in place.
We have already held that the EPA may revoke a previous
NAAQS in full “so long as adequate anti-backsliding
provisions are introduced.” South Coast, 472 F.3d at 899. But
in the Final Rule, the EPA failed to introduce adequate anti-
backsliding provisions.
Pursuant to the Clean Air Act, anti-backsliding provisions
“shall provide for controls which are not less stringent than the
controls applicable to areas designated nonattainment before
such relaxation.” 42 U.S.C. § 7502(e). Penalties for not
meeting attainment deadlines such as fees and activation of
contingency measures are unambiguously “controls” because
they are “designed to constrain ozone pollution.” South Coast,
472 F.3d at 902-03. Likewise, reclassification is also a control
because it is “designed to constrain ozone pollution.” See id.
Areas that fail to timely attain are required to reclassify and be
subject to more stringent emissions controls. 42 U.S.C.
§§ 7511(b)(2), 7511a(i). If the EPA were allowed to remove
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the deadlines that trigger those penalties, “a state could go
unpenalized without ever attaining” the NAAQS. South Coast,
472 F.3d at 902-03.
The Final Rule provides that “the EPA is required to
determine whether an area attained the 1-hour or 1997 ozone
NAAQS by the area’s attainment date solely for anti-
backsliding purposes to address an applicable requirement for
nonattainment contingency measures and CAA section 185 fee
programs.” 80 Fed. Reg. at 12,315. But the Final Rule
specifically waives the obligation “to reclassify an area to a
higher classification for the 1997 ozone NAAQS” based on a
failure to meet the 1997 NAAQS attainment deadlines. Id. As
a result, the Final Rule allows areas that fail to timely attain to
avoid being subject to more stringent emissions controls.
Therefore, the Final Rule relaxed the controls applicable to
areas designated nonattainment under the 1997 NAAQS in
contravention of the anti-backsliding requirement.
Accordingly, we grant this part of Environmental Petitioners’
petition and vacate the Final Rule as to the waived statutory
attainment deadlines associated with the 1997 NAAQS.
B. Removal of Anti-Backsliding Requirements
for Areas Designated Nonattainment Under
the 1997 NAAQS
Environmental Petitioners also seek to invalidate other
provisions of the Final Rule that they allege contravene the
Clean Air Act’s anti-backsliding requirements. The Final Rule
provides for three procedures by which areas designated
nonattainment under the 1997 NAAQS may remove certain
anti-backsliding requirements and shift other requirements
from the active portion of their SIPs to the contingency
measures portion. 80 Fed. Reg. at 12,299-12,304.
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1. Orphan Nonattainment Areas
The first procedure applies to areas designated attainment
for the 2008 NAAQS, but nonattainment for the 1997 NAAQS.
Id. at 12,301-12,302. Environmental Petitioners refer to these
areas as “orphan nonattainment areas.” For orphan
nonattainment areas, “states are not required to adopt any
outstanding applicable requirements for the revoked 1997
standard.” Id. at 12,302. Under the Final Rule, orphan
nonattainment areas “are not subject to transportation or
general conformity requirements.” Id. at 12,300. In addition,
orphan nonattainment areas are no longer required to retain
New Source Review programs in their SIPs. Id. at 12,299.
Instead, these areas are subject to Prevention of Significant
Deterioration (“PSD”) requirements. Id. States may also
request that other anti-backsliding requirements be shifted to
their list of contingency measures based on initial 2008
designations. Id. at 12,314. Finally, the Final Rule does not
require orphan nonattainment areas to submit maintenance
plans under § 7505a, and deems the requirement for
maintenance under § 7410(a)(1) to be satisfied by the area’s
approved Prevention of Significant Deterioration SIP. Id. at
12,302, 12,314.
(a) Environmental Petitioners argue that elimination of
New Source Review and conformity in orphan nonattainment
areas violates the anti-backsliding requirements. The EPA
argues that the Final Rule lawfully lifts the requirement for
New Source Review and conformity for orphan nonattainment
areas because the 2008 NAAQS is more stringent than the 1997
NAAQS. According to the EPA, areas that have attained the
2008 NAAQS have necessarily attained the 1997 NAAQS.
This Court previously held that New Source Review is
unambiguously a “control” under § 7502(e). South Coast, 472
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F.3d at 901-02. Environmental Petitioners also contend that
conformity is a “control” under § 7502(e). The EPA does not
address general conformity requirements, but argues that our
decision in South Coast does not require transportation
conformity as an anti-backsliding control. According to the
EPA, in South Coast we held that only existing motor vehicle
emissions budgets are required anti-backsliding controls, not
the conformity requirement itself.
The Final Rule provides that 1997 nonattainment areas are
“no longer . . . required to demonstrate transportation
conformity for the 1997” NAAQS after the 1997 NAAQS is
revoked. 80 Fed. Reg. at 12,284. Pursuant to the Final Rule,
“the latest approved or adequate emission budgets for a
previous ozone NAAQS . . . would continue to be used in
conformity determinations for the 2008 ozone NAAQS until
emission budgets are established and found adequate or are
approved for the 2008 ozone NAAQS.” Id. But the Final Rule
provides that areas “designated attainment for the 2008 ozone
NAAQS are not subject to transportation or general conformity
requirements regardless of their designation for the 1997 ozone
NAAQS at the time of revocation of that NAAQS.” Id. at
12,300.
The EPA is correct that South Coast held only that “one-
hour conformity emissions budgets constitute ‘controls’ under
section 172(e).” 472 F.3d at 904. Furthermore, on rehearing,
we clarified that our decision with respect to conformity
determinations “speaks only to the use of one-hour motor
vehicle emissions budgets as part of eight-hour conformity
determinations until eight-hour motor vehicle emissions
budgets are available.” South Coast Air Quality Mgmt. Dist. v.
EPA, 489 F.3d 1245, 1248 (D.C. Cir. 2007). But our decision
that emissions budgets constitute controls does not preclude
that “conformity” requirements in general are controls.
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Conformity requirements are designed to constrain ozone
pollution as they have the “purpose of eliminating or reducing
the severity and number of violations of the [NAAQS] and
achieving expeditious attainment of such standards.” 42
U.S.C. § 7506(c)(1)(A). Therefore, conformity requirements
also are unambiguously “controls” under § 7502(e).
Although orphan nonattainment areas were originally
designated attainment under the 2008 NAAQS, they have
never been redesignated to attainment pursuant to
§ 7407(d)(3)(E) under the 1997 NAAQS. The EPA may not
permit termination of New Source Review and conformity in
the absence of formal redesignation under § 7407(d)(3)(E).
See Natural Res. Def. Council v. EPA, 643 F.3d 311, 322-23
(D.C. Cir. 2011) (rejecting final rule that allowed attainment of
the 1997 NAAQS to permit termination of the fees control for
the one-hour NAAQS). As we stated in our prior South Coast
opinion, “EPA is required by statute to keep in place measures
intended to constrain ozone levels—even the ones that apply to
outdated standards—in order to prevent backsliding.” South
Coast, 472 F.3d at 905. Accordingly, we grant Environmental
Petitioners’ petition and vacate the Final Rule as to the removal
of New Source Review and conformity controls from orphan
nonattainment areas.
(b) Environmental Petitioners argue that permitting states
to shift other anti-backsliding requirements to contingency
measures violates the Clean Air Act. The EPA responds that
states must continue implementing all such measures in
previously approved SIPs unless the EPA approves requests to
amend SIPs to convert such requirements into contingency
measures. For the same reasons that the EPA may not permit
states to eliminate New Source Review and transportation
conformity, the EPA also may not permit states to shift other
anti-backsliding requirements to their list of contingency
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measures without complying with the statutory requirements
for redesignation. Therefore, we grant Environmental
Petitioners’ petition and vacate the Final Rule as to permitting
states to move anti-backsliding requirements for orphan
nonattainment areas to their list of contingency measures based
on initial 2008 designations.
(c) Likewise, without requiring nonattainment areas to
meet the requirements for reattainment under § 7407(d)(3)(E),
the EPA improperly waived the requirement that states adopt
outstanding applicable requirements for the revoked 1997
NAAQS. Therefore, we grant Environmental Petitioners’
petition and vacate the Final Rule as to waiving the requirement
that states adopt outstanding applicable requirements for the
revoked 1997 NAAQS.
(d) Environmental Petitioners argue that the Final Rule
impermissibly waives the maintenance requirements under
§ 7410(a)(1) for orphan nonattainment areas. The Final Rule
allows approved Prevention of Significant Deterioration SIPs
to satisfy the obligation to submit a maintenance plan under
§ 7410(a)(1). 80 Fed. Reg. at 12,302. Prevention of
Significant Deterioration SIPs bar the construction of major
sources of emissions without compliance with certain statutory
requirements. See § 7475(a).
The Final Rule also does not require orphan nonattainment
areas to submit a maintenance plan under § 7505a. 80 Fed.
Reg. at 12,302. The EPA contends that there is no statutory
requirement for a separate maintenance plan for orphan
nonattainment areas. However, one of the five requirements
for redesignation under § 7407(d)(3)(E) is that the EPA
“approve[] a maintenance plan for the area as meeting the
requirements of section 7505a of this title.”
§ 7407(d)(3)(E)(iv). Therefore, the Final Rule is inconsistent
18
with the clear text of § 7407(d)(3)(E) in waiving the § 7505a(a)
maintenance plan requirement for orphan nonattainment areas.
Environmental Petitioners also appear to contend that even
with a § 7505a maintenance plan, the Final Rule would violate
the maintenance requirement under § 7410(a)(1) because
§ 7410(a)(1) requires something more than a Prevention of
Significant Deterioration SIP and a § 7505a maintenance plan.
Specifically, Environmental Petitioners argue that a SIP for an
orphan nonattainment area must include a plan to ensure that
pollution from existing sources and new sources not subject to
the PSD requirements does not cause those areas to fall into
violation of the 2008 NAAQS. According to Environmental
Petitioners, without such safeguards, existing measures have
proved insufficient to provide for continuing attainment of the
2008 NAAQS.
Section 7410(a)(1) provides that SIPs must provide for
“implementation, maintenance, and enforcement” of the
NAAQS. The statute clearly requires “maintenance”
provisions to be included in SIPs, but the statute does not
require a separate SIP component entitled “maintenance plan.”
In fact, the statute provides no guidance for what SIPs must
include in order to comply with the § 7410(a)(1) maintenance
requirement beyond the criteria laid out in § 7410(a)(2).
Environmental Petitioners do not allege the agency has
eliminated § 7410(a)(2)’s requirements. Therefore, the Final
Rule will be upheld so long as it is neither unreasonable nor
arbitrary.
The EPA justified the rule by explaining that a § 7471
“PSD SIP, in conjunction with the other already-existing
statutory and regulatory provisions . . . are generally sufficient
to prevent backsliding, and to satisfy the requirement for
maintenance under” § 7410(a)(1). 80 Fed. Reg. at 12,302.
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According to the EPA, the “control measures implemented by
these areas and included in their SIPs have already produced
sufficient emissions reductions to achieve air quality that
attained the 1997 ozone NAAQS, and resulted in an attainment
designation for the more stringent 2008 ozone NAAQS.” Id.
The EPA therefore concluded that “the burden of developing
an approvable [§ 7410(a)(1)] maintenance plan for the 2008
ozone NAAQS would outweigh any compensating benefit for
an area that is already attaining that NAAQS and that is subject
to prior nonattainment requirements which are already
incorporated into the SIP and have been sufficient to bring the
area into attainment of both the 1997 and 2008 standards.” Id.
The EPA adequately explained why measures that
achieved attainment of both the 1997 NAAQS and the 2008
NAAQS should be adequate to maintain the same 2008
NAAQS that has already been attained. The EPA also
thoughtfully responded to comments that suggested the
measures on which the EPA relies are insufficient to satisfy the
§ 7410(a)(1) maintenance requirement. Under these
circumstances, the EPA’s determination is neither
unreasonable nor arbitrary.
Environmental Petitioners contend that the EPA has not
addressed comments that identified examples of orphan
nonattainment areas that purportedly were in fact not attaining
the 2008 NAAQS. These comments were not raised in regard
to the § 7410(a)(1) maintenance requirement. Instead, they
appear to have been raised in response to other alleged
shortcomings with the proposed rule. Moreover, the EPA
appears to have addressed those arguments in its response to
comments. Response to Comments on Implementation of the
2008 NAAQS for Ozone: SIP Requirements (Feb. 13, 2015) at
133. In any event, the comments are directed toward
enforcement issues with the current NAAQS, not issues with
20
the underlying rule. Accordingly, the EPA’s decision not to
implement a separate § 7410(a) maintenance plan is neither
arbitrary nor unreasonable.
Therefore, we grant Environmental Petitioners’ petition
and vacate the Final Rule with respect to the EPA’s waiving of
the § 7505a(a) maintenance plan requirement for orphan
nonattainment areas, and we deny Environmental Petitioners’
petition with respect to the § 7410(a)(1) maintenance
requirement’s application to orphan nonattainment areas in
other respects.
2. Formal Redesignation
The second procedure by which areas designated
nonattainment under the 1997 NAAQS may remove certain
anti-backsliding requirements and shift other requirements
from the active part of their SIPs to the contingency measures
part involves areas designated nonattainment under both the
2008 NAAQS and the 1997 NAAQS. 80 Fed. Reg. at 12,303-
04. The Final Rule allows states to seek formal redesignation
to attainment based on the 2008 NAAQS with an approved
maintenance plan that addresses the current and revoked
NAAQS. Id. at 12,304. Under this procedure, states may
terminate and remove any applicable anti-backsliding
requirements, including New Source Review requirements,
from the active part of their SIPs. Id.
The EPA properly subjected these areas to anti-
backsliding requirements when the 1997 NAAQS was revoked
because they were still in nonattainment at the time of
revocation. See § 7502(e). The Act is ambiguous as to whether
such areas must retain these anti-backsliding requirements after
they are successfully redesignated as attainment areas under the
2008 NAAQS. Unlike orphan nonattainment areas, these areas
21
have met the statutory requirements for redesignation under
§ 7407(d)(3)(E). Therefore, these areas have shown, for
example, that “the[ir] improvement in air quality is due to
permanent and enforceable reductions in emissions resulting
from implementation of the applicable implementation plan.”
§ 7407(d)(3)(E)(iii). Although these areas may not have been
redesignated with respect to the 1997 NAAQS, by meeting the
statutory requirements for redesignation with respect to the
2008 NAAQS, they necessarily also meet the less restrictive
requirements for redesignation under the 1997 NAAQS.
Accordingly, it is reasonable for these areas to shed their anti-
backsliding controls by virtue of meeting the five statutory
criteria for redesignation. Therefore, we deny Environmental
Petitioners’ petition with respect to this aspect of the Final
Rule.
3. Redesignation Substitute
The third procedure by which areas designated
nonattainment under the 1997 NAAQS may remove certain
anti-backsliding requirements and shift other requirements
from the active part of their SIPs to the contingency measures
part also involves areas designated nonattainment under both
the 2008 NAAQS and the 1997 NAAQS. This procedure
allows states “to submit a redesignation substitute request for a
revoked NAAQS.” 80 Fed. Reg. at 12,304. The redesignation
substitute request “is based on” the Clean Air Act’s “criteria
for redesignation to attainment” under § 7407(d)(3)(E), 80 Fed.
Reg. at 12,305, but it does not require full compliance with all
five conditions in § 7407(d)(3)(E). The Clean Air Act
unambiguously requires nonattainment areas to satisfy all five
of the conditions under § 7407(d)(3)(E) before they may shed
controls associated with their nonattainment designation. The
redesignation substitute lacks the following requirements of
§ 7407(d)(3)(E): (1) the EPA has “fully approved” the
22
§ 7410(k) implementation plan; (2) the area’s maintenance
plan satisfies all the requirements under § 7505a; and (3) the
state has met all relevant § 7410 requirements. 80 Fed. Reg. at
12,305. Because the “redesignation substitute” does not
include all five statutory requirements, it violates the Clean Air
Act. Therefore, we grant Environmental Petitioners’ petition
and vacate the Final Rule as to the “redesignation substitute.”
C. Baseline Year
The Clean Air Act measures Reasonable Further Progress
by using a baseline year as the starting point. Nonattainment
areas must reduce emissions of pollutants by fixed percentages
compared to the pollutant level in a baseline year. 42 U.S.C.
§ 7511a(b)(1)(A), (B). The initial baseline year under the
statute is 1990, id., but the statute does not define baseline years
for future NAAQS. In the Final Rule, the EPA defined the
baseline year as 2011, which is the “calendar year for the most
recently available triennial emission inventory at the time [rate-
of-progress/reasonable further progress] plans are developed.”
80 Fed. Reg. at 12,272. The Final Rule also allows states to
select an alternative baseline year between 2008 and 2012 if
they provide appropriate justification. Id.
Environmental Petitioners argue that this rule is unlawful
because the Clean Air Act requires the baseline year to be the
year of designation/classification, which in the case of the 2008
NAAQS is 2012. While an initial baseline year of 1990 is
specified by statute, the Clean Air Act is silent regarding future
baseline years. Therefore, this question is governed by
Chevron step two. The Reasonable Further Progress
requirement ensures that states make regular emissions
reductions to achieve timely attainment. See § 7511a. To
monitor their progress in achieving regular emissions
reductions, states are required to prepare an emissions
23
inventory every three years. § 7511a(a)(3)(A). The EPA’s
selection of 2011 as the baseline year is reasonable because it
is tied to the three-year statutory cycle for emissions
inventories. Id. Therefore, we deny Environmental
Petitioners’ challenge to the setting of 2011 as the baseline
year.
With respect to selection of an alternative baseline year
between 2008 and 2012, the EPA has failed to provide a
statutory justification. The “EPA must ‘ground its reasons for
action or inaction in the statute,’ rather than on ‘reasoning
divorced from the statutory text.’” Natural Res. Def. Council
v. EPA (NRDC 2014), 777 F.3d 456, 468 (D.C. Cir. 2014)
(quoting Utility Air Regulatory Grp. v. EPA, 134 S. Ct. 2427,
2441 (2014)). The EPA based its creation of the alternative
baseline year option on the convenience of allowing
nonattainment areas to receive credit for emissions reduction
measures adopted prior to the baseline year. Because the EPA
has no statutory basis for the alternative baseline year
provision, we grant Environmental Petitioners’ petition and
vacate the Final Rule as to the alternative baseline year option.
D. Fifteen-Percent Rule
The Clean Air Act requires an area in a moderate or greater
degree of nonattainment to reduce emissions of VOCs by
fifteen percent within six years of the baseline year. 42 U.S.C.
§ 7511a(b)(1)(A). The Final Rule interprets this requirement
as meaning that “an area that has already met the 15 percent
requirement for VOC under either the 1-hour ozone NAAQS
or the 1997 ozone NAAQS (for the first 6 years after the
[reasonable further progress] baseline year for the prior ozone
NAAQS) would not have to fulfill that requirement again.” 80
Fed. Reg. at 12,271; see also id. at 12,276. The Environmental
Petitioners argue that the rule is unlawful because the
24
interpretation allows areas to avoid actually achieving
emissions reductions to satisfy the fifteen-percent requirement.
The Final Rule does not require nonattainment areas that
have previously revised their SIPs to address the Clean Air
Act’s fifteen-percent requirement to revise their SIPs again. If
an area fails to achieve this reduction according to their plan, a
petitioner may file for injunctive relief or the EPA may pursue
an enforcement action. Environmental Petitioners argue that
the Final Rule allows nonattainment areas to omit the fifteen-
percent requirement even if they never previously achieved a
fifteen-percent reduction. The EPA has represented that the
provision at issue in this case is the same as that at issue in
NRDC 2009, 571 F.3d 1245. In NRDC 2009, the EPA rule
allowed areas that had revised their SIPs to include a fifteen-
percent VOC emissions reduction to not be subjected to a
second fifteen-percent requirement under the new NAAQS. Id.
at 1261. We held that “the EPA reasonably resolved a statutory
ambiguity under step 2 of the framework set out in Chevron.”
Id. at 1262. We accept the EPA’s representation that the
fifteen-percent requirement in the Final Rule is the same as the
provision at issue in NRDC 2009. Therefore, because the
EPA’s interpretation is permissible, we deny Environmental
Petitioners’ challenge to the fifteen-percent reduction plan
waiver.
E. Area-Wide Emissions Reductions
The Clean Air Act requires nonattainment areas to achieve
“such reductions in emissions from existing sources in the
area” as can be achieved by the adoption of Reasonably
Available Control Technology (“RACT”). 42 U.S.C.
§ 7502(c)(1). The Final Rule allows nonattainment areas to
satisfy the NOx RACT requirement by using averaged area-
wide emissions reductions. 80 Fed. Reg. at 12,278-79. Thus,
25
“states may demonstrate as part of their NOx RACT SIP
submittal that the weighted average NOx emission rate from all
sources in the nonattainment area subject to RACT meets NOx
RACT requirements.” Id. at 12,278. Environmental
Petitioners argue that this rule violates the clear terms of the
Clean Air Act, which require each individual source to meet
the NOx RACT requirement.
They contend that § 7511a(b)(2) requires implementation
of RACT with respect to “all” major sources, and “all” means
“each one of.” Section 7511a(b)(2) requires states to submit
revisions to SIPs “to include provisions to require the
implementation of reasonably available control technology
under section 7502(c)(1) of this title with respect to each of”
three specific categories of VOC sources, including “all . . .
major stationary sources of VOCs that are located in the area.”
Pursuant to § 7511a(f), that plan provision applies to “major
stationary sources” of NOx. Section 7511a(b)(2) refers to “all”
“major stationary sources” and requires implementation of
RACT “with respect to” that entire category of sources. The
statute does not specify that “each one of” the individual
sources within the category of “all” “major sources” must
implement RACT. Environmental Petitioners argue that the
only reasonable dictionary definition of “all” when used with a
plural noun (major stationary sources) is “each one of.”
Instead, when used to refer to a plural noun, the word “all” may
express an aggregate and be defined as the “whole number or
sum of.” Black’s Law Dictionary 74 (6th ed. 1990). This
definition is consistent with the categorical approach taken by
the EPA. In short, the plain language—in the context of the
interrelationship between §§ 7511a(b)(2) and 7502(c)(1)—
does not mandate RACT for each individual source.
Therefore, as discussed above, we cannot strike down the
EPA’s reasoned interpretation of the ambiguous term at
26
Chevron step one, see Section II, supra. We must instead
uphold the EPA’s interpretation, provided it is reasonable,
under Chevron step two. See Chevron, 467 U.S. at 842-43.
We further note that § 7511a(b)(2) refers to § 7502(c)(1),
which provides that SIP “provisions shall provide for the
implementation of all reasonably available control measures as
expeditiously as practicable (including such reductions in
emissions from existing sources in the area as may be obtained
through the adoption, at a minimum, of reasonably available
control technology).” § 7502(c)(1). Section 7502(c)(1) does
not require reductions from each individual major source.
Instead, it requires “reductions in emissions from existing
sources in the area,” and other than mandating that
implementation be as “expeditious[] as practicable,” the
section is ambiguous as to how areas are required to achieve
those reductions.
The EPA’s interpretation reasonably allows nonattainment
areas to meet RACT-level emissions requirements through
averaging within a nonattainment area. Therefore, we deny
Environmental Petitioners’ petition as to the EPA’s
construction of the RACT requirement.
F. Waiving Requirements for Areas Designated
Maintenance Under the 1997 NAAQS
Environmental Petitioners seek to have us invalidate
several provisions of the Final Rule that apply to areas
designated attainment for the 2008 NAAQS after being
designated maintenance areas under the 1997 NAAQS
(“orphan maintenance areas”).
27
1. Elimination of Transportation
Conformity
As with orphan nonattainment areas, the Final Rule
declares that orphan maintenance areas are “no longer . . .
required to demonstrate transportation conformity for the 1997
ozone NAAQS after the 1997 ozone NAAQS is revoked.” 80
Fed. Reg. at 12,284. Environmental Petitioners argue that the
elimination of transportation conformity in orphan
maintenance areas violates the Clean Air Act. Section
7506(c)(5) provides that conformity requirements apply to
“(A) a nonattainment area and each pollutant for which the area
is designated as a nonattainment area; and (B) an area that was
designated as a nonattainment area but that was later
redesignated . . . as an attainment area and that is required to
develop a maintenance plan under section 7505a.”
We previously explained that the EPA lacks the authority
to revoke transportation conformity for orphan nonattainment
areas. See Section IV.B.1(a), supra. The EPA argues that it
is permitted to remove conformity requirements for orphan
maintenance areas because such areas became attainment areas
for the 1997 NAAQS prior to the date on which it was revoked.
As a result, the EPA argues that these areas are not subject to
anti-backsliding requirements, so there is no statutory
requirement that they maintain the transportation conformity
requirement. We disagree.
In contrast to nonattainment areas, which § 7506(c)(5)
references by their status as “nonattainment area[s],”
maintenance areas are referenced by previous events: “an area
that was designated as a nonattainment area but that was later
redesignated . . . as an attainment area and that is required to
develop a maintenance plan under section 7505a.”
§ 7506(c)(5) (emphases added). Although the Final Rule
28
revoked the 1997 NAAQS, it cannot revoke the statutory status
of orphan maintenance areas. Even after revocation of the
1997 NAAQS, an orphan maintenance area is “an area that was
designated as a nonattainment area but that was later
redesignated . . . as an attainment area.”
It is irrelevant that this previous designation and
redesignation occurred before the prior NAAQS was revoked
because nothing in the Clean Air Act allows the EPA to waive
this unambiguous statutory requirement. Moreover, the Act
clearly contemplates new NAAQS being promulgated within
ten years of an area’s redesignation to attainment because the
statute requires the EPA to review NAAQS every five years
and to “promulgate such new standards as may be appropriate.”
§ 7409(d)(1). Therefore, the revocation of the 1997 NAAQS
does not waive the unambiguous mandate that conformity
requirements apply to orphan maintenance areas. Accordingly,
we grant Environmental Petitioners’ petition as to the
elimination of transportation conformity in orphan
maintenance areas.
2. Section 7410(a)(1) Maintenance Planning
Requirement
Environmental Petitioners contend that the Final Rule
unlawfully waives the § 7410(a)(1) maintenance planning
requirement for the 2008 NAAQS. 80 Fed. Reg. at 12,301.
The Final Rule provides that an orphan maintenance area’s
§ 7505a(a) maintenance plan for the revoked 1997 NAAQS
and the state’s approved Prevention of Significant
Deterioration SIP satisfy the area’s obligations for maintenance
of the 2008 NAAQS under § 7410(a)(1) of the Clean Air Act.
80 Fed. Reg. at 12,301, 12,314. Environmental Petitioners
argue the Prevention of Significant Deterioration SIP is the sole
maintenance plan requirement for the 2008 NAAQS, and it
29
only addresses pollution from very large sources. According
to Environmental Petitioners, the EPA has no statutory
authority to waive the § 7410(a)(1) maintenance requirement.
The EPA justified its rule on the ground that orphan
maintenance areas have already been redesignated to
attainment for the 1997 NAAQS and designated attainment for
the more stringent 2008 NAAQS. 80 Fed. Reg. at 12,301.
According to the EPA, “[a]ny further [§ 7410(a)(1)]
maintenance plan requirement under the 2008 . . . NAAQS
would be unnecessarily burdensome.” Id. Although the
§ 7505a(a) maintenance plans for orphan maintenance areas
“were established for maintenance of the 1997 . . .
NAAQS, . . . they also provide a foundation for maintenance
of the 2008 . . . NAAQS, which, in combination with other
active requirements for the 2008 ozone NAAQS, contribute to
maintenance of the new standard.” Id. The Final Rule
explained that “no additional measures beyond the prior
[§ 7505a(a)] maintenance plans and the PSD plans for the 2008
[NAAQS] should be necessary to provide for maintenance in
those areas.” Id.
We previously addressed the alleged waiver of the
§ 7410(a)(1) maintenance requirement with respect to orphan
nonattainment areas. See Section IV.B.1(d), supra. As we
explained, § 7410(a)(1) does not provide clear requirements as
to what SIPs must include in order to comply with the
§ 7410(a)(1) maintenance requirement beyond the criteria laid
out in § 7410(a)(2). As with orphan nonattainment areas, with
respect to orphan maintenance areas, the EPA adequately
explained why no additional measures beyond the § 7505a(a)
maintenance plans and the Prevention of Significant
Deterioration plans for the 2008 NAAQS are necessary to
provide for maintenance of the 2008 NAAQS. Therefore, we
deny Environmental Petitioners’ petition with respect to the
30
§ 7410(a)(1) maintenance requirement’s application to
“orphan maintenance areas.”
3. Elimination of Second Maintenance Plan
Environmental Petitioners challenge the Final Rule’s
elimination of the requirement that orphan maintenance areas
prepare a second maintenance plan under § 7505a(b). 80 Fed.
Reg. at 12,301. Section 7505a(b) provides that “8 years after
redesignation of any area as an attainment area,” states “shall
submit . . . an additional revision of the” maintenance plan “for
10 years after the expiration of the 10-year period referred to in
subsection (a).” The EPA argues that the requirement for a
second 10-year maintenance plan is based on an area’s
designation status under an operative NAAQS. When the 1997
NAAQS was revoked, the orphan maintenance areas’
designations as maintenance under the 1997 NAAQS were
revoked as well.
The statutory requirement for a second maintenance plan
is unambiguous. § 7505a(b). And the Clean Air Act clearly
contemplates new NAAQS being promulgated within eight
years of an area’s redesignation to attainment because the
statute requires the EPA to review NAAQS every five years
and to “promulgate such new standards as may be appropriate.”
§ 7409(d)(1). Therefore, the revocation of the old NAAQS
does not waive the unambiguous requirement for second
maintenance plans under § 7505a(b). Accordingly, we grant
Environmental Petitioners’ petition and vacate the Final Rule
provision waiving the second 10-year maintenance plan for
“orphan maintenance areas.”
31
V. Conclusion
For the reasons set forth above, we deny South Coast’s
petition for review and grant in part and deny in part the
Environmental Petitioners’ petition. Specifically, we grant
Environmental Petitioners’ petition and vacate as to (1) waiver
of the statutory attainment deadlines associated with the 1997
NAAQS; (2) removal of New Source Review and conformity
controls from orphan nonattainment areas; (3) grant of
permission to states to move anti-backsliding requirements for
orphan nonattainment areas to their list of contingency
measures based on initial 2008 designations; (4) waiver of the
requirement that states adopt outstanding applicable
requirements for the revoked 1997 NAAQS; (5) waiver of the
§ 7505a(a) maintenance plan requirement for orphan
nonattainment areas; (6) creation of the “redesignation
substitute”; (7) creation of an alternative baseline year option;
(8) elimination of transportation conformity in orphan
maintenance areas; and (9) waiver of the requirement for a
second 10-year maintenance plan for orphan maintenance
areas. In all other respects, Environmental Petitioners’ petition
is denied.
So ordered.