Helping Hand Tools v. Usepa ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HELPING HAND TOOLS; ROB No. 14-72553
SIMPSON,
Petitioners,
v.
U.S. ENVIRONMENTAL PROTECTION
AGENCY; GINA MCCARTHY, in her
capacity as Administrator of the U.S.
Environmental Protection Agency;
DEBORAH JORDAN, in her capacity as
Director of the Air Division of U.S.
Environmental Protection Agency
Region IX,
Respondents,
SIERRA PACIFIC INDUSTRIES, INC.,
Respondent-Intervenor.
2 HELPING HAND TOOLS V. USEPA
CENTER FOR BIOLOGICAL No. 14-72602
DIVERSITY,
Petitioner, EPA No.
EPA-R09-OAR-
v. 2012-0634
U.S. ENVIRONMENTAL PROTECTION
AGENCY; GINA MCCARTHY, in her ORDER AND
official capacity as Administrator of AMENDED
the United States Environmental OPINION
Protection Agency; JARED
BLUMENFELD, in his official capacity
as Regional Administrator of Region
9 of the United States Environmental
Protection Agency; DEBORAH
JORDAN, in her official capacity as
Director of the Air Division of
Region 9 of the United States
Environmental Protection Agency,
Respondents,
SIERRA PACIFIC INDUSTRIES, INC.,
Respondent-Intervenor.
On Petitions for Review of an Order of the
United States Environmental Protection Agency
Argued and Submitted July 19, 2016
San Francisco, California
Filed September 2, 2016
Amended December 23, 2016
HELPING HAND TOOLS V. USEPA 3
Before: Susan P. Graber and Richard C. Tallman, Circuit
Judges, and Nancy G. Edmunds,* Senior District Judge.
Opinion by Judge Tallman
SUMMARY**
Environmental Law
The panel denied a petition for review of a decision of the
United States Environmental Protection Agency granting
Sierra Pacific Industries, Inc. a prevention of significant
deterioration permit for construction of a new biomass-
burning power plant at its lumber mill in California.
The panel held that the EPA did not act arbitrarily or
capriciously in granting a prevention of significant
deterioration permit to Sierra Pacific.
Addressing petitioner Helping Hands Tools’ claims that
the EPA was required to consider solar power and a greater
natural gas mix as clean fuel control technologies in the best
available control technology (“BACT”) analysis for
pollutants subject to Clean Air Act regulation, the panel held
that because the EPA properly took the requisite hard look at
Sierra Pacific’s proposed design and the key purpose of
*
The Honorable Nancy G. Edmunds, Senior United States District
Judge for the Eastern District of Michigan, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 HELPING HAND TOOLS V. USEPA
burning its own biomass waste, the EPA reasonably
concluded that consideration of solar or increased natural gas
would disrupt that purpose and redefine the source.
Addressing petitioner Center for Biological Diversity’s
claims raised in response to the supplemental greenhouse gas
BACT analysis, the panel deferred to the agency’s
determination because EPA was largely relying on its own
guidance, acting at the frontiers of science.
COUNSEL
Kevin P. Bundy (argued), San Francisco, California; Brendan
R. Cummings, Joshua Tree, California; Anna Moritz,
Woodinville, Washington; as and for Petitioner Center for
Biological Diversity.
Andrew S. Kingdale (argued), Law Office of Andrew S.
Kingdale, San Francisco, California, for Petitioners Helping
Hand Tools and Robert Simpson.
Dustin J. Maghamfar (argued); John C. Cruden, Assistant
Attorney General; Environmental Defense Section,
Environment & Natural Resources Division, Washington,
D.C.; Brian Doster, Mark Kataoka, Nora Greenglass, and
John Krallman, United States EPA, Office of General
Counsel, Washington, D.C.; Kara Christenson, United States
EPA, Region IX, Office of Regional Counsel, San Francisco,
California; for Respondents.
Joseph R. Palmore (argued), Marc A. Hearron, and Lena
Hughes, Morrison & Foerster LLP, Washington, D.C.;
HELPING HAND TOOLS V. USEPA 5
William M. Sloan, Morrison & Foerster LLP, San Francisco,
California; for Respondent-Intervenor.
Roger R. Martella, Jr., Joel F. Visser, and James R.
Wedeking, Sidley Austin LLP, Washington, D.C., for Amici
Curiae American Wood Counsel and National Alliance of
Forest Owners.
ORDER
The opinion filed on September 2, 2016, is amended as
follows:
1. On page 28 of the slip opinion, “The environmental
impact report (“EIR”) prepared by EPA . . .” is changed to,
“The environmental impact report (“EIR”) prepared by a
consultant for the Shasta County Department of Resource
Management . . .”
2. On page 28 of the slip opinion, “EPA therefore
conducted the EIR assuming . . .” is changed to, “The
consultant therefore conducted the EIR assuming . . .”
3. On page 30 of the slip opinion, “The Bioenergy BACT
Guidance EPA applied to the greenhouse gas emissions from
Sierra Pacific’s new facility is rational and thoroughly
consistent with EPA’s prior guidance” is changed to, “The
Bioenergy BACT Guidance, as applied by EPA to the
greenhouse gas emissions from Sierra Pacific’s new facility,
is rational and is consistent with EPA’s prior practice.”
With these amendments, the panel has voted to deny
Center for Biological Diversity’s petition for panel rehearing.
6 HELPING HAND TOOLS V. USEPA
Judges Graber and Tallman have voted to deny Helping
Hand Tools’ petition for rehearing en banc and Judge
Edmunds so recommends.
The full court has been advised of Helping Hand Tools’
petition for rehearing en banc and no judge has requested a
vote on whether to rehear the matter en banc. Fed. R. App. P.
35.
The petition for panel rehearing and the petition for
rehearing en banc are DENIED. No further petitions for
panel rehearing or rehearing en banc will be entertained.
IT IS SO ORDERED.
OPINION
TALLMAN, Circuit Judge:
Helping Hand Tools (“Helping Hand”) and Center for
Biological Diversity (“Center”) petition for review of a final
decision of the United States Environmental Protection
Agency (“EPA”) granting Sierra Pacific Industries (“Sierra
Pacific”) a prevention of significant deterioration (“PSD”)
permit for construction of a new biomass-burning power plant
at its lumber mill in California. Plaintiffs contend that EPA
issued the PSD permit in violation of the Clean Air Act,
42 U.S.C. §§ 7401–7671q. This is the first time we have
reviewed EPA’s doctrine of “redefining the source.” It also
appears to be the first time that EPA’s framework for
evaluating the best available control technology for
greenhouse gas emissions from facilities burning biomass
HELPING HAND TOOLS V. USEPA 7
fuels is considered by any circuit in the United States. We
hold that EPA did not act arbitrarily or capriciously in
granting a PSD permit to Sierra Pacific pursuant to that
framework.
I
Sierra Pacific owns and operates a lumber manufacturing
facility in Anderson, California, situated at the northern end
of the Central Valley in Shasta County. On March 29, 2010,
Sierra Pacific filed an application for a PSD permit with EPA
in order to construct a new cogeneration1 unit at its mill. The
new unit was designed to burn biomass fuels2 in a boiler to
produce steam used to turn turbine blades to generate 31
megawatts of electricity and to heat existing lumber dry kilns.
Fuel for the unit would come primarily from wood wastes
from Sierra Pacific’s own lumber mills, as well as other
readily available sources of agricultural and urban wood
wastes. The new boiler replaces a smaller existing boiler at
the Anderson Facility. The smaller boiler could burn only
60,000 bone-dry tons (“BDT”)3 of the 160,000 BDT of wood
waste the Anderson Facility annually produces. The new
1
Cogeneration units produce both electrical power and heat. See, e.g.,
In re N. Mich. Univ. Ripley Heating Plant, 14 E.A.D. 283, 285 (E.A.B.
2009).
2
Used interchangeably with the terms “bioenergy” and “biogenic,”
biomass fuels include wood waste such as chips and bark from sawmill
operations, forest residue, agricultural residue, crops, grasses, standing
trees, and waste from landfills or water treatment. 76 Fed. Reg. 43,490-
01, 43,493 (July 20, 2011).
3
A BDT is 2,000 pounds of wood pulp with a zero percent moisture
content.
8 HELPING HAND TOOLS V. USEPA
boiler has the increased capacity to burn up to 219,000 BDT
of wood waste. Additionally, the boiler will utilize natural
gas for the limited purpose of startup, shutdown, and flame
stabilization.4
To understand the process by which Sierra Pacific sought
approval by EPA to build the new boiler and the resulting
litigation that ensued first requires an examination of the
statutory and regulatory framework underlying the permitting
process and then an examination of how EPA employed that
process with Sierra Pacific’s particular permit application.
A
The Clean Air Act establishes a comprehensive program
for controlling and improving air quality. As part of this
program, 42 U.S.C. §§ 7470–7479 require new and modified
major emitting facilities, like Sierra Pacific’s new boiler, to
seek a PSD permit prior to construction. Id. § 7475(a).
These permits are required in geographical regions designated
to meet particular national ambient air quality standards. Id.
§ 7471. Critically, in order to obtain a PSD permit, the
applicant must demonstrate that the proposed facility utilizes
the best available control technology (“BACT”) for every
pollutant subject to regulation by the Clean Air Act. Id.
§ 7475(a)(4). BACT is defined as
4
Flame stabilization is necessary when optimal operations of the boiler
are upset by fuel variability, such as from burning wet wood waste fuel.
At these times, the optimal combustion of the wood waste is not occurring
and natural gas is used to stabilize combustion and to maximize efficiency
by returning the boiler to desired high temperature operations.
HELPING HAND TOOLS V. USEPA 9
an emission limitation based on the maximum
degree of reduction of each pollutant subject
to regulation . . . from any major emitting
facility, which [EPA], on a case-by-case basis,
. . . determines is achievable for such facility
through application of production processes
and available methods, systems, and
techniques, including fuel cleaning, clean
fuels, or treatment or innovative fuel
combustion techniques for control of each
such pollutant.
Id. § 7479(3). In every case-by-case analysis, EPA will
consider “energy, environmental, and economic impacts and
other costs.” Id.
In 1990, in the absence of any clear guidance from
Congress on how to evaluate BACT for a particular pollutant,
EPA developed a five-step, “top-down” approach. See
Environmental Protection Agency, New Source Review
Workshop Manual, Chapter B (1990) (hereinafter “NSR
Manual”). PSD permit applicants must engage in this
analysis for every regulated pollutant with a significant
emissions increase. Id. at B.4.
Briefly, the top-down analysis begins at Step 1 when the
applicant lists all available control technologies. Id. at B.5.
Control technologies are those technologies that have “a
practical potential for application to the emissions unit and
the regulated pollutant under evaluation.” Id. This list is
meant to be comprehensive and include all options applicable
to the particular pollutant even though the option may be
eliminated in later steps. Id. at B.5–7. At Step 2, the
applicant eliminates any technically infeasible options and
10 HELPING HAND TOOLS V. USEPA
must clearly document why the particular control option
cannot be used. Id. at B.7. At Step 3, the applicant ranks the
remaining control options against each other in order of
overall effectiveness. Id. at B.7–8. Then, based on this
ranking, at Step 4, the applicant evaluates each control option
to consider the energy, environmental, and economic impacts.
Id. at B.8. If the top candidate is unfavorable for any of these
reasons, then the applicant evaluates the impacts of the next
available control option. Id. at B.8–9. The most effective
control option that is not eliminated at Step 4 is then chosen
as BACT at Step 5. Id. at B.9.
EPA supplemented the top-down approach as it applied
to greenhouse gases5 in March 2011 when it issued new
guidance.6 See Environmental Protection Agency, PSD and
Title V Permitting Guidance for Greenhouse Gases (2011)
(hereinafter “GHG Permitting Guidance”). At the same time,
EPA issued more specific BACT guidance for carbon dioxide
emissions from facilities that use biomass as a primary fuel
source. See Environmental Protection Agency, Guidance for
Determining Best Available Control Technology for
Reducing Carbon Dioxide Emissions from Bioenergy
5
“Greenhouse gases” are considered a single pollutant comprised of the
aggregate of carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.
6
Though the extent to which EPA can require particular facilities to
comply with BACT requirements for greenhouse gases has been heavily
litigated, the Supreme Court recently held that “EPA’s decision to require
BACT for greenhouse gases emitted by sources otherwise subject to PSD
review is” permissible. Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427,
2448 (2014). The cogeneration power plant proposed by Sierra Pacific is
such a facility and neither party disputes EPA’s authority to regulate
greenhouse gas emissions from that facility.
HELPING HAND TOOLS V. USEPA 11
Production (2011) (hereinafter “Bioenergy BACT
Guidance”). The Bioenergy BACT Guidance describes how
each step of the five-step BACT analysis should be
approached when a facility proposes to use mostly biomass
as a fuel. Id. at 10–11. It does not supersede prior guidance,
id. at 4, and agencies must still consider each PSD application
on a case-by-case basis, id. at 5.
EPA promulgated a more particular BACT framework
because carbon dioxide emissions from biomass fuels
participate in the carbon cycle differently than other fuels,
and biomass fuel stocks replenish more quickly than fossil
fuel stocks. Id. at 6. Trees are a classic example of this
phenomenon in nature. The short regenerative time means
that new growing plant matter, biomass carbon stocks, can
absorb excess carbon dioxide from the atmosphere more
quickly than fossil fuel carbon stocks. Id. Additionally,
photosynthesis from a well-managed biomass carbon stock,
such as a well-managed forest, can act as a carbon sink,
thereby decreasing the net carbon dioxide released from
burning biomass as fuels. Id. “Biogenic [carbon dioxide]
emissions are distinct from other regulated pollutants at
bioenergy facilities because, unlike other pollutants and other
[greenhouse gases], [carbon dioxide] emissions can
participate directly in the global carbon cycle through
photosynthesis.” Id. at 7. Therefore, EPA modified the steps
of the traditional BACT analysis in particular ways to account
for the unique properties of biomass.
Of particular relevance, at Step 1, EPA notes that “it will
be important to address the extent to which the BACT
analysis for [greenhouse gases] should include” an evaluation
of other fuel types. Id. at 15. However, if utilization of
biomass is the primary purpose of the project, then the agency
12 HELPING HAND TOOLS V. USEPA
can rely on that purpose to determine that another fuel would
redefine the project. Id. If a facility relies primarily on
biomass as fuel, the options at Step 1 “may be limited to (1)
utilization of biomass fuel alone, (2) energy efficiency
improvements, and (3) carbon capture and sequestration.” Id.
Skipping to Step 4,7 the Bioenergy BACT Guidance notes
that the traditional Step 4 analysis is “an environmental,
economic, and energy impacts analysis that includes both
direct and indirect (i.e., collateral) considerations.” Id. at 18.
EPA emphasizes that indirect environmental impacts and
benefits are better suited to analysis in Step 4, id. at 21, and
burning different biomass fuel stocks will not have a
differential impact on emissions at the facility but at the
forest or region where the biomass fuel is taken, id. at 22.8
7
Steps 2 and 3 are conducted in the same manner as promulgated in the
NSR Manual. Bioenergy BACT Guidance at 16–17.
8
To illustrate the point, burning a dead tree that has fallen in the forest,
instead of a live tree, will have a different impact on the environment.
Burning the dead tree releases the same amount of carbon dioxide into the
atmosphere that would be released anyway as the tree decomposed. But
the emissions occur faster and at the facility, not in the forest. Burning the
live tree, which uses carbon dioxide for photosynthesis, removes a carbon
dioxide absorbing source from the forest and also releases carbon dioxide
emissions at the facility. The facility emits carbon dioxide in either case
but the environmental impact at the forest—the benefit of removing a
carbon dioxide emitting decomposing tree or the harm in removing a
carbon dioxide absorbing live one—are an indirect result of burning
biomass fuel at the facility. However, a comparison of different biomass
fuel stocks, such as comparing the effects of burning mill waste to the
effects of burning a dead tree, is a much more technical endeavor that
EPA is actively trying to calculate at present. Bioenergy BACT Guidance
at 23. The problem, according to the agency, is the current inability of the
available science to quantify the tradeoff. Id. Where the agency is acting
on the frontiers of developing science, our deference is at its highest level.
HELPING HAND TOOLS V. USEPA 13
In holding that facilities like Sierra Pacific’s were subject
to PSD permit requirements for greenhouse gas emissions,
the Supreme Court expressly refrained from deciding whether
to approve or endorse EPA’s current approach for
determining BACT for greenhouse gases. Util. Air
Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2449 (2014). To
our knowledge, no other court has evaluated EPA’s approach.
We examine it here as it was used to grant Sierra Pacific its
PSD permit.
B
EPA’s consideration of Sierra Pacific’s permit application
took place in two phases. During the first phase in September
2012, EPA proposed to issue a PSD permit to Sierra Pacific
that required the use of add-on control technologies and
inherently lower-emitting controls as BACT for the pollutants
analyzed. EPA did not consider BACT for greenhouse gases
because it was not then required.9 EPA accepted Sierra
Pacific’s cap on natural gas use of no more than 10% of the
total fuel required, because it was to be used only for limited
purposes during startup, shutdown, and flame stabilization.
After public comment, EPA issued the PSD permit, and
Helping Hand petitioned the Environmental Appeals Board
(“the Board”) for review. On July 18, 2013, the Board
Baltimore Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87,
103 (1983).
9
At the time, EPA had issued a rule deferring regulation of biogenic
carbon sources in order to examine the science behind biogenic carbon
dioxide emissions from stationary sources like power plants. See Ctr. for
Biological Diversity v. EPA, 722 F.3d 401, 407 (D.C. Cir. 2013). The
District of Columbia Circuit later vacated this rule. Id. at 412.
14 HELPING HAND TOOLS V. USEPA
remanded the PSD permit to EPA for further proceedings on
a single ground—that EPA had abused its discretion in not
holding a public hearing. The Board held that EPA did not
abuse its discretion in approving the permit on all other
issues, two of which are relevant to the current petition before
us.
First, the Board held that EPA did not abuse its discretion
by declining to consider the inclusion of solar power as a fuel
source or a greater percentage of natural gas because it would
impermissibly redefine the source. In making this
determination, the Board reviewed the administrative record
and determined that the primary purpose of the project was to
allow Sierra Pacific “to put to use the hundreds of thousands
of bone-dry tons of wood waste the company has in the
Shasta County region, for the production of lumber and
electricity.” The Board then held that “requiring [Sierra
Pacific] to burn fewer tons of wood waste so that it could
generate solar power or burn more natural gas instead would
plainly disrupt the project’s ‘basic business purpose’ of using
as much surplus biomass as possible” to get rid of the
byproduct and to generate steam to dry lumber in kilns and
produce electricity for use on site and for sale to the electrical
grid.
Second, the Board held that EPA did not abuse its
discretion in limiting the mix of fuel to 90% biomass and
10% natural gas. The Board held that Sierra Pacific’s prudent
use of natural gas for startup, shutdown, and flame
stabilization was a valid reason to limit the quantity of natural
gas used and “not evidence of a project design ‘derived for
reasons of air quality permitting.’”
HELPING HAND TOOLS V. USEPA 15
The second phase of consideration occurred when, just a
few days before the Board’s decision, the District of
Columbia Circuit vacated EPA’s rule deferring BACT
determinations for greenhouse gases emitted from facilities
like Sierra Pacific’s boiler. See Ctr. for Biological Diversity
v. EPA, 722 F.3d 401, 412 (D.C. Cir. 2013). As a result, EPA
conducted a supplemental BACT analysis on Sierra Pacific’s
new biomass facility. EPA considered public comments on
the supplemental analysis, and the Center contended that EPA
could not consider the burning of biomass fuel alone as a
control option at Step 1 and should have directly compared
the environmental impacts of different biomass fuel stocks at
Step 1.
EPA nonetheless issued a final PSD permit notice on
April 25, 2014. The Center appealed to the Board and the
Board dismissed for lack of jurisdiction because, in its July
2013 decision, the Board specifically stated that, pursuant to
40 C.F.R. § 124.19(l)(2)(iii), it would not require or accept an
appeal after the remand. Helping Hand and the Center then
filed the petitions for review now before us. Because all
available administrative remedies have been exhausted, we
have jurisdiction under 42 U.S.C. § 7607(b)(1).10
10
Though not disputed by EPA, because this is the first time the case is
before an Article III court, Helping Hand and the Center must establish
standing. See Sierra Club v. EPA, 762 F.3d 971, 976 (9th Cir. 2014). We
are satisfied that, through the declarations of its members, both Helping
Hand and the Center have associational standing to bring the current
petition. See id. at 976–78 (discussing that “[a]n association has standing
to bring suit on behalf of its members when its members would otherwise
have standing to sue in their own right” and further discussing the factors
demonstrating that the individual members had standing to pursue Clean
Air Act claims (internal quotation marks omitted)).
16 HELPING HAND TOOLS V. USEPA
II
EPA’s decision is reviewed under the Administrative
Procedure Act and may be set aside only if it is “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A); see Alaska
Dep’t of Envtl. Conservation v. EPA, 540 U.S. 461, 496–97
(2004). EPA must “articulate[] a rational connection between
the facts found and the choice made.” Sierra Club v. EPA,
346 F.3d 955, 961 (9th Cir. 2003) (alteration in original)
(quoting Ariz. Cattle Growers’ Ass’n v. U.S. Fish & Wildlife,
273 F.3d 1229, 1236 (9th Cir. 2001)).
“[W]e do not simply review whether it was arbitrary or
capricious” for the Board to reject a petitioner’s claims that
EPA clearly erred. Citizens for Clean Air v. EPA, 959 F.2d
839, 845–46 (9th Cir. 1992). “Rather, we conduct a
deferential review of the entire agency action,” including
whether approval of the PSD permit is based on a clearly
erroneous finding of fact or conclusion of law. Id. at 846.
III
First, we address the claims raised by Helping Hand that
EPA was required to consider solar power and a greater
natural gas mix as clean fuel control technologies in the
BACT analysis. This is an issue of first impression in our
circuit, but our opinion is guided by well-reasoned decisions
of the Board and the Seventh Circuit. Because EPA properly
took the requisite hard look at Sierra Pacific’s proposed
design and the key purpose of burning its own biomass waste,
we hold that EPA reasonably concluded that consideration of
solar or increased natural gas would disrupt that purpose and
redefine the source.
HELPING HAND TOOLS V. USEPA 17
A
Though failure to consider all available control
alternatives in a BACT analysis constitutes clear error, EPA
does not have to consider control alternatives that would
“redefine the source.” See, e.g., In re Desert Rock Energy
Co., 14 E.A.D. 484, 526 (E.A.B. 2009); see also NSR Manual
at B.13. In essence, a control alternative redefines the source
if it requires a complete redesign of the facility. In a classic
and simple example, a coal-burning power plant need not
consider a nuclear fuel option as a “cleaner” fuel because it
would require a complete redesign of the coal-burning power-
plant. See Sierra Club v. EPA, 499 F.3d 653, 655 (7th Cir.
2007). Considering control technologies is rarely so simple,
however, and EPA engages in a two-step process to
determine whether a control technology will redefine the
source.
First, “the permit applicant initiates the process and . . .
defines the proposed facility’s end, object, aim or
purpose—that is the facility’s basic design.” In re Prairie
State Generating Co., 13 E.A.D. 1, 22 (E.A.B. 2006), aff’d
sub nom Sierra Club, 499 F.3d 653; accord Desert Rock, 14
E.A.D. at 530; In re N. Mich. Univ. Ripley Heating Plant, 14
E.A.D. 283, 301–02 (E.A.B. 2009) (hereinafter “NMU”).
The purpose must be “objectively discernable.” Prairie State,
13 E.A.D. at 22. Additionally, the applicant’s proposed
definition “must be for reasons independent of air permitting”
and cannot be motivated by cost savings or avoidance of
risks. Id. at 23 n.23; see also Desert Rock, 14 E.A.D. at 530;
NMU, 14 E.A.D. at 302 n.28.
Second, EPA takes a “hard look” at the proposed
definition to determine which design elements are inherent to
18 HELPING HAND TOOLS V. USEPA
the applicant’s purpose and which elements can be changed
to reduce pollutant emissions without disrupting the
applicant’s basic business purpose. Desert Rock, 14 E.A.D.
at 530 (remanding a permit back to the agency because it
failed to take a “hard look” when the agency determined a
particular technology would redefine the source even though
the applicant had considered the technology in its
application); see also Prairie State, 13 E.A.D. at 25–26;
NMU, 14 E.A.D. at 302. This determination and “[r]efining
[of] the statutory definition of ‘control technology’ . . . to
exclude redesign is the kind of judgement by an
administrative agency to which a reviewing court should
defer.” Sierra Club, 499 F.3d at 655. Our examination of
this two-step process for Sierra Pacific’s PSD permit is
guided significantly by the reasoning of our sister circuit in
Sierra Club in which it denied the petition arising from
Prairie State.
When a fuel source is co-located with a facility, EPA
need not consider in the BACT analysis fuel sources that are
not readily available, because it would redefine the source.
Prairie State, 13 E.A.D. at 28. In Prairie State, Prairie State
Generating Company filed an application for a PSD permit
with EPA to build a coal-burning electrical plant in southern
Illinois. Id. at 4–5. The proposed facility was a “mine-
mouth” plant in which the plant is located at the site of the
coal mine which fuels it. Id. at 16. However, the mine only
produced high-sulfur coal, which emits more sulfur dioxide
pollution than low-sulfur coal from other outlying mines. Id.
at 15. EPA did not list low-sulfur coal as a control
technology in Step 1 of the BACT analysis, however, because
low-sulfur coal would have to be shipped in by rail from long
distances. Id. EPA explained that “it would be inconsistent
HELPING HAND TOOLS V. USEPA 19
with the scope of the project to use coal from other regions of
the country.” Id. at 16.
In making this determination, EPA noted that “the project
that must be addressed when evaluating BACT is the project
for which an application has been submitted.” Id. In this
instance, the construction of a “mine-mouth” plant. Id. EPA
found that “use of a particular coal supply is an inherent
aspect of the proposed project.” Id. EPA broadly considered
alternative coal supplies but rejected a more detailed analysis
because it was beyond the scope of the project. Id. at 18.
The ultimate dispute before the Board lay in determining
how to define the basic purpose of the project and whether
Prairie State could include use of coal from a particular
source as part of that purpose. Id. at 21–22. “The permit
issuer must be mindful that BACT, in most cases, should not
be applied to regulate the applicant’s objective or purpose for
the proposed facility.” Id. at 23. The Board specifically
rejected petitioners’ assertion that the facility’s business
purpose must be viewed broadly as the production of
electricity from coal because “we have frequently recognized
that an electric generating facility’s purpose may be more
narrowly defined.” Id. at 25. The Board held that, in
defining the scope of a project, EPA could consider if a
particular fuel source was an inherent part of the project
design. See id. (“It has also been long-standing EPA policy
that certain fuel choices are integral to the electric power
generating station’s basic design.” (citing NSR Manual at
B.13)).
Additionally, the Board rejected the petitioners’ argument
that a purpose that includes a particular fuel source “would
allow a permit applicant to avoid all BACT review by
20 HELPING HAND TOOLS V. USEPA
including its preferred fuel . . . and hide behind the claim that
requiring anything different would unlawfully ‘redefine’ the
proposed source.” Id. at 27. Because Prairie State could
narrowly define its purpose as burning a particular fuel
source, EPA needed only to review the facility proposed, and
that meant reviewing a facility that burned co-localized high-
sulfur coal. The Board examined EPA’s review of the
proposed facility and was satisfied that EPA had taken a hard
look at whether further emissions reductions were possible.
Id. Therefore, the Board concluded, EPA did not err when it
“determined that consideration of low-sulfur coal, because it
necessarily involves a fuel source other than the co-located
mine, would require Prairie State to redefine the fundamental
purpose or basic design of its proposed Facility” and, as a
result, EPA properly rejected low-sulfur fuel from Step 1 of
the BACT analysis. Id. at 28.
In denying the petition arising out of Prairie State, the
Seventh Circuit noted that the Board and EPA were
struggling to draw the line between where “control
technology ends and redesign of the ‘proposed facility’
begins.” Sierra Club, 499 F.3d at 655. The court noted that
if EPA had to consider all clean fuels, it would be required to
consider a nuclear plant rather than a coal-fired one, and it
was clearly not required to do that. See id. (“That approach
would invite a litigation strategy that would make seeking a
permit for a new power plant a Sisyphean labor, for there
would always be one more option to consider.”). Because it
was not as clear cut, the Seventh Circuit characterized its case
as lying on the borderline between control technology and
redesign. Id. at 656.
That borderline, defining the distinction between
considering alternative fuels to be control technologies or to
HELPING HAND TOOLS V. USEPA 21
redefine the facility, is a product of EPA’s framework for
evaluating BACT. The Seventh Circuit therefore held that “it
makes sense to let the EPA, the author of the underlying
distinction, draw it, within reason.” Id. at 655. In the facility
proposed in Sierra Club, the court noted that, in isolation, the
difference between low-sulfur and high-sulfur coal as a fuel
source is a difference in control technology. Id. at 657. But
“the difference between a plant co-located with a coal mine
and a plant that obtains its coal from afar” is a difference in
design. Id. Therefore, the Seventh Circuit upheld the BACT
determination because EPA reasonably drew the line between
control technology and redefining the source. Id.
The reasoning of Prairie State and Sierra Club has been
applied to subsequent cases from the Board. In NMU,
relating to the construction of a power plant on a college
campus, the Board remanded a PSD permit back to the
agency when it rejected the assertion that considering a
different proportion of a coal and wood fuel mix would
impermissibly redefine the source. 14 E.A.D. at 301–03.
Particularly, the Board noted that NMU locked onto a
particular fuel combination without any logic or data to
justify the choice. Id. at 303; see also id. at 297 (“[A]lthough
the record reflects that other coal . . . will produce the lowest
sulfur emissions, [the agency] proceeds without explaining
why these sources are unavailable or not technologically
feasible.”). Notably relevant to the current appeal, NMU did
not fully analyze the possibility of natural gas as a fuel source
when the permit application stated that it would be used for
boiler startup and as a backup fuel source. Id. at 297 n.17;
see also In re Cash Creek Generation LLC, 2009 WL
7513857 (E.P.A. 2009) (remanding the permit to the
applicant because the record was insufficient to justify a
determination that an exclusive use of natural gas, a
22 HELPING HAND TOOLS V. USEPA
secondary fuel for the project, would impermissibly redefine
the source).
B
Adopting the two-step analysis promulgated by the Board
and approved by the Seventh Circuit, we must now determine
whether EPA erred in determining that using solar power or
a greater natural gas mix in Sierra Pacific’s proposed facility
would impermissibly redefine the source.
First, we look at how Sierra Pacific itself defined its
facility. In its application description, Sierra Pacific
explicitly stated that it intended to build a power plant “that
would burn biomass fuels in a boiler to produce steam that
would be used to generate electricity and to heat existing
lumber dry kilns at the facility.” Sierra Pacific then went on
to define more particularly that its biomass fuel source would
come from the existing Sierra Pacific mills, in-forest
materials from timberlands owned by Sierra Pacific, and
other readily available sources of agricultural and urban wood
wastes. Sierra Pacific would use natural gas only for the
limited purposes of startup, shutdown, and flame
stabilization. Capped at 10%, Sierra Pacific estimated its
annual usage of natural gas to be significantly below that
limit.
Next, we must determine if EPA took the appropriate
“hard look” at how Sierra Pacific defined the facility and
whether EPA appropriately determined that the burning of
biomass was an inherent element of the facility or whether it
could be changed to reduce emissions. In the PSD permit
issued by EPA, the project description stated that fuel for the
power plant would be generated on-site or received from
HELPING HAND TOOLS V. USEPA 23
other local sources to produce steam in the new facility. The
steam was then to be used to dry lumber and to power a steam
turbine to generate electricity for use onsite or for sale to the
northern California power grid.
Helping Hand argues that the Board improperly deferred
to Sierra Pacific’s purpose of “burning biomass ‘as much as
possible’” and read “clean fuels” out of the Clean Air Act.
Sierra Pacific’s purpose, according to Helping Hand, is only
to generate steam for lumber drying kilns and to make
electricity. However, Sierra Pacific’s purpose need not be so
limited, see Prairie State, 13 E.A.D. at 25, and Helping Hand
concedes that “Sierra Pacific arguably can have a basic
business purpose of ‘primarily’ burning a dirtier fuel that is
readily available to it.” Just as the Prairie State facility was
co-located with its fuel source, a high-sulfur coal mine, Sierra
Pacific’s facility is co-located with its fuel source, waste from
its lumber manufacturing operations. Therefore, EPA took a
“hard look” at the record and how Sierra Pacific defined its
facility and reasonably determined that use of a co-located
fuel source was an inherent part of the facility’s design.
Having determined that biomass fuel was an inherent part
of the design, we finally examine whether the two proposed
alternative clean fuels were control alternatives that should
have been considered or would impermissibly redefine the
source, keeping in mind the deference EPA must be afforded
in making such a determination. Like the petitioners in
Sierra Club, Helping Hand essentially argues that “if a plant
is capable—with redesign—of burning a clean fuel, it must
undergo a ‘best available control technology’ analysis.”
499 F.3d at 656. Requiring a solar component just because it
is a cleaner fuel than biomass is the same as requiring Sierra
Pacific to consider the nuclear option. See id. Sierra Pacific
24 HELPING HAND TOOLS V. USEPA
and EPA are not required to take on the “Sisyphean” task of
considering every possible clean fuel alternative. See id. at
655. Therefore, EPA properly dismissed solar as a control
technology.
The Board noted, correctly, that consideration of a greater
natural gas mix was a closer question. Sierra Pacific’s
proposed project falls on the borderline discussed in Sierra
Club. However, unlike the applicant in Sierra Club, Sierra
Pacific is not considering two fuel sources as control options:
one an off-site “clean” fuel, one an on-site “dirty” fuel. In
this instance, Sierra Pacific has access to two on-site fuel
sources: “clean” natural gas and “dirty” biomass. Though
this typically would suggest that Sierra Pacific must consider
a greater mix of natural gas, even when an alternative fuel is
available, it need not be considered at Step 1 if it disrupts the
business purpose. GHG Permitting Guidance at 28
(“[G]reater utilization of a fuel that the applicant is already
proposing to use in some aspect of the project design should
be listed as an option in Step 1 unless it can be demonstrated
that such an option would disrupt the applicant’s basic
business purpose for the proposed facility.”). Here, a greater
use of natural gas would disrupt Sierra Pacific’s intent to burn
the biomass waste it produces from mill operations.11
Notably, unlike the facilities in NMU and Cash Creek,
Sierra Pacific does not propose to use natural gas as a
“secondary” or backup fuel source but only for strictly
limited purposes. And unlike the facilities in NMU and Cash
Creek, Sierra Pacific gave valid reasons for imposing a 10%
11
This conclusion is supported by evidence in the record that Sierra
Pacific produces more waste than could be consumed by the proposed
generator.
HELPING HAND TOOLS V. USEPA 25
cap: that its purpose was to burn as much of its own biomass
waste as possible, and that it expected to burn much less than
10% natural gas because it was being used for such a limited
purpose. Burning natural gas is therefore incidental to Sierra
Pacific’s business purpose of using its on-site source of
biomass as fuel for the new facility. Declining to consider
greater use of an incidental fuel is not arbitrary, capricious, or
an abuse of discretion.12
Drawing the line between control technology and
redefining the source is a technical determination to which a
court should defer to EPA, see Sierra Club, 499 F.3d at 655,
and there was sufficient justification in the record for EPA to
determine that primarily burning biomass from Sierra
Pacific’s own wood waste, a co-localized source, was an
inherent aspect of the facility’s design. Requiring EPA and
Sierra Pacific to consider solar power, a completely different
fuel source, or a greater percentage of natural gas, an
12
Petitioners seize upon Sierra Pacific’s admission that it limited natural
gas to 10% to avoid the nitrous oxide limiting requirements of the New
Source Performance Standards (“NSPS”). See 40 C.F.R. § 60.44b(d).
Limiting natural gas to avoid a nitrous oxide emission limit is not a design
decision “independent of air permitting.” The Board erroneously held that
such a self-imposed cap was acceptable because it was “federally
enforceable.” Deciding whether or not to impose a cap of 10% natural gas
to avoid NSPS requirements does not exclude consideration of greater
utilization of natural gas in the BACT analysis. See NSR Manual at B.12
(“The only reason for comparing control options to an NSPS is to
determine whether the control option would result in an emissions level
less stringent than the NSPS.”). Though troubling, this error does not
ultimately undermine the key fact that Sierra Pacific’s basic business
purpose and facility design is to use a co-localized source of biomass fuel,
its own wood wastes, to generate steam and electricity for its mill and
limited use of natural gas is incidental to that purpose. For that reason,
any error in justifying the 10% cap is harmless.
26 HELPING HAND TOOLS V. USEPA
incidental fuel source, would redefine the source. EPA did
not act arbitrarily or capriciously and Helping Hand’s petition
is denied.
IV
Next we address the claims raised by the Center in
response to the supplemental greenhouse gas BACT analysis.
The Center contends that EPA could not consider burning of
biomass fuel alone as a control option at Step 1 and that it
erred in weighing the effects of different biomass fuel stocks
at Step 4 instead of directly comparing them at Step 1.
Because EPA was largely relying on its own guidance, acting
at the frontiers of science, we defer to the agency’s
determination. See Baltimore Gas & Elec. Co. v. Nat. Res.
Def. Council, Inc., 462 U.S. 87, 103 (1983).
A
We review questions of statutory interpretations of the
Clean Air Act by the two-step process of Chevron U.S.A. Inc.
v. Natural Resources Defense Council, Inc., 467 U.S. 837,
842–43 (1984). See Vigil v. Leavitt, 381 F.3d 826, 833–34
(9th Cir. 2004). If Congress has not directly spoken to the
precise issue, or the statute is silent or ambiguous, the court
must determine if the agency’s construction is permissible.
Chevron, 467 U.S. at 842–43. When Congress has not
provided clear guidance in a statute, an agency may fill the
gap and its construction is to be given “controlling weight
unless . . . arbitrary, capricious, or manifestly contrary to the
statute.” Id. at 844 (deferring to EPA’s interpretation of
“source” in the Clean Air Act); see also EPA v. EME Homer
City Generation, L.P., 134 S. Ct. 1584, 1603–07 (2014)
HELPING HAND TOOLS V. USEPA 27
(deferring to EPA’s interpretation of “amount” in the Good
Neighbor Provision of the Clean Air Act).
“[T]he weight that we are to give an administrative
interpretation not intended by an agency to carry the general
force of law is a function of that interpretation’s
thoroughness, rational validity, and consistency with prior
and subsequent pronouncements.” Wilderness Soc’y v. U.S.
Fish & Wildlife Serv., 353 F.3d 1051, 1068 (9th Cir. 2003)
(en banc). However, when an agency is acting “within its
area of special expertise, at the frontiers of science,” the court
should “be at its most deferential.” Baltimore Gas & Elec.
Co., 462 U.S. at 103; see also Nat’l Wildlife Fed’n v. U.S.
Army Corps of Eng’rs, 384 F.3d 1163, 1174 (9th Cir. 2004)
(“Where scientific and technical expertise is necessarily
involved in agency decision-making, . . . a reviewing court
must be highly deferential to the judgment of the agency.”).
What level of deference we must show EPA’s BACT
guidance is unclear. The publications are not intended to
carry the force of law because EPA must still analyze each
application on a case-by-case basis. However, all the
publications were promulgated by EPA in order to bring
meaning to the BACT statute which Congress has not defined
any further than it did in 42 U.S.C. § 7479(3). EPA
promulgated these policies specifically to carry out
Congress’s intent. We need not resolve the issue here,
however, because, as discussed below, under either standard
EPA’s actions were neither arbitrary nor capricious.
B
Ultimately, the Center’s concerns are not particular to the
Sierra Pacific permit but attack the Bioenergy BACT
28 HELPING HAND TOOLS V. USEPA
Guidance. The Bioenergy BACT Guidance builds on the
NSR Manual that EPA has used for decades and proposes a
more detailed analysis for a particular pollutant—greenhouse
gas emissions from biomass fuels—because the emissions
from this particular fuel source have unique environmental
consequences. Nothing prohibits EPA from refining its top-
down BACT approach for particular pollutants—particularly
when the refinement is heavily dependent upon the agency’s
own scientific expertise. Following the Bioenergy BACT
Guidance is therefore thorough, rational, and consistent with
EPA’s prior practice. See Wilderness Soc’y, 353 F.3d at
1068. And as explained above, we must defer to EPA agency
expertise and not disturb the analysis set forth in the
Bioenergy BACT Guidance.
In particular, the Center contends that utilization of
biomass fuel alone cannot be considered a control technology
for the burning of biomass fuel at Step 1 of the BACT
analysis because it does not “control” biomass emissions.
EPA argues, however, that the option is used as a baseline to
which all other options are compared and is not inconsistent
with the traditional top-down approach. Moreover, EPA did
not ultimately choose this option but selected other control
technologies including: combustion of specific biomass fuel
stocks; energy efficient design, operation, and maintenance;
and employing good combustion practices and efficient
operation as a cogeneration unit. In the end, EPA chose the
same control measures as five other facilities. Providing a
baseline in the BACT analysis does not make the ultimate
determination arbitrary, capricious, or even unreasonable.
The Center further argues that the effect of burning
different biomass fuel stocks should be considered at Step 1
of the analysis. EPA does not disagree in theory. But EPA
HELPING HAND TOOLS V. USEPA 29
currently lacks the scientific data at this time to make such a
quantitative determination and is actively collecting the data
to do in the future the type of analysis desired by the Center.
See Bioenergy BACT Guidance at 23. Furthermore, because
the same amount of carbon dioxide will be released at the
facility no matter which biomass fuel stock is burned, any
difference in environmental consequences is indirect. Id. at
22. Therefore, consistent with the NSR Manual, these
indirect environmental impacts and benefits are better suited
to analysis in Step 4.
Acknowledging the differences in the environmental
impact of different biomass fuel stocks, however, EPA
responded to the Center’s comment by clarifying the fuel
restrictions in the final permit. Notably, Sierra Pacific and
EPA were particularly proactive in ensuring the appropriate
fuel restrictions were written into the PSD permit. Sierra
Pacific’s initial application contemplated the use of co-
localized mill waste as well as in-forest materials from Sierra
Pacific’s timber operations and other readily available
agricultural and urban wood wastes.
The environmental impact report (“EIR”) prepared by a
consultant for the Shasta County Department of Resource
Management noted that there were different estimates of the
type of biomass fuel blend Sierra Pacific planned on using,
ranging from 100% mill wastes to a blend supplementing mill
wastes with biomass from forest-harvesting operations,
forest-thinning operations, agricultural waste from the
Sacramento Valley, and urban wood waste. The consultant
therefore conducted the EIR assuming a “worst-case”
scenario in which 35% of the biomass used was not co-
localized with the facility. The supplemental Statement of
Basis and Ambient Air Quality Impact Report also assumed
30 HELPING HAND TOOLS V. USEPA
a biomass fuel mix of 75% mill residue and 25% in-forest
residues, agricultural residues, and urban wood residues.
Based on the EIR, EPA drafted a PSD permit restricting
fuel to “clean cellulosic biomass” allowing Sierra Pacific to
burn an extensive list of biomass fuels at the facility. Sierra
Pacific commented on the draft asking for more restrictive
limitations on the types of biomass fuel it would be allowed
to use in its facility because it was more consistent with the
original application. EPA adopted Sierra Pacific’s
modifications in another draft of the permit, which was then
further modified in response to the Center’s comments.
Though it was not prepared at the time to compare the
environmental impacts of sawmill residue versus other
biomass wastes, EPA ensured that Sierra Pacific would not
log timber solely for the purpose of using it as biomass for
the new facility. EPA limited Sierra Pacific to only the
particular biomass fuels readily available to the facility: mill
residues, untreated wood debris from urban areas such as
pallets and crates, agricultural crops and residues, forest
residues, and non-merchantable forest biomass. The only
trees that can be burned in Sierra Pacific’s facility, therefore,
are those that would be removed from the forest anyway as
part of Sierra Pacific’s ongoing forest management and
forest-thinning operations.
Though the Center argues that EPA is equipped to
proceed with a quantitative analysis of different biomass fuel
stocks at Step 1, EPA says it cannot do that based on the
current state of the science. Because the agency is acting at
the frontiers of science, we must defer. See Baltimore Gas &
Elec., 462 U.S. at 103. The Center does not clearly explain
how EPA’s analysis here is not thorough, rational, and
HELPING HAND TOOLS V. USEPA 31
consistent with EPA’s prior guidance on BACT. Sierra
Pacific is restricted to the forms of biomass waste readily
available to it and cannot clear cut forests just to produce
electricity for its lumber mills. EPA did consider the
environmental impacts of different biomass fuel stocks, just
not in the manner or the level of detail the Center would
prefer. Because we must defer to EPA’s interpretation of
BACT and its scientific expertise, EPA’s analysis is not
arbitrary, capricious, or an abuse of discretion, and we deny
the Center’s petition.
V
Sierra Pacific’s application went through an extensive
process to issue a reasoned PSD permit for its new biomass
burning boiler. EPA properly defined the project and rejected
control technologies that redefined the project with thoughtful
and reasonable explanations. The Bioenergy BACT
Guidance, as applied by EPA to the greenhouse gas emissions
from Sierra Pacific’s new facility, is rational and is consistent
with EPA’s prior practice. The guidance relies extensively on
the continually evolving analysis of the environmental effect
of different biomass fuels in the ever-developing field of
climate-change science. It is not our place to interfere with
EPA’s expertise when the record shows that its endeavors
were reasonable.
Costs are awarded to Respondents.
The petitions for review are DENIED.