only we don't expect you to bring up any arguments in rebuttal they have not previously been addressed either by you or your opponent and with that we called the first patient the day and that's environmental integrity project versus united states environmental protection it please the court my name is eric schaffer and i peer for the existence of this matter i'd like to briefly summarize a type may the conflict between the flexible permit rules and the major modification requirements of federal law and then explain why we don't think they've been resolved in the rules that would like you to uphold a major modification is triggered by physical change that significantly increases actual emissions under section one sixty five of the clean air act you can't even begin to construct a major modification until you get a major new source review permit and i think everybody does agree with that in contrast once you get a flexible permit you can make an unlimited number of modifications as long as you don't increase the maximum allowable emissions under the flexible permit those are based on the maximum potential to admit the maximum capacity of the units under the flexible public cap so those allowable missions are can be and are several times higher than the actual emissions from those facilities and we put examples of that in the record a a document forty six starting in page twenty one just explaining that gap and that gap between actual and allowable admissions is is what creates the conflict and that that can be what is your concern about  that they say addresses these major modifications i want to be really clear about the type i'm talking about we don't dispute that when you come in for a permit any major modifications you have planned there on the board you can't use the flexible opinion is going beyond that and we're looking at the language of the text which which says when you apply in order to get a permit you have to show that your emissions meet new source review so that's what you do at the time of the permit it seems also clear that any new source of new emission limits you've got then you've got to comply with that so going forward obligation we're talking about what's what happens seven eight years down the road when you start a major modification you have to come in and get a permit for th a i just want to point out has not adopted a broad reading of section seven eleven and they do not argue they say they agree with our reading of it that it goes beyond what you need to demonstrate at the time you apply for a permit the earlier decision also cited section seven fifteen as providing that if there's a more stringent federal limit that conflicts with a flexible permit limit then the federal limit controls and that's fair enough it does get we do get into the question of well as the state had to decide which one is more stringent before you even get to that section seven fifteen c one says that stringen test does not apply to modifications that do not require a permit amendment under the come it will be as i understand it is i understand the breach you have no argument or you're not arguing against the the section seven eleven first we had read the court's decision as not extending that beyond two to requiring you to apply for a major new source review permit for some modification  it is that you are challenging and what it what kind of relief do you want we think our problem can be resolved with a very specific reference and it can be a single sentence that says after you get a flexible permit if you have a later major modification that's not covered by that permit major modification pops up you gotta come in and apply for a major new source review permit that's what now texas had clearly say that in the earlier opinion that the regulation made clear that that it did not apply to any major source and that what we said you did relying on section seven eleven and that if i'm reading that correctly there has to be language and you're cited section seven eleven and section seven and usa and ok what section are you're alive and well we don't think the requirement to get a permit for major modification is there and what we're dealing with now is the rationale e p a has put before they were not ron any thing of then your interpretation of seven eleven is that correct maybe have read your decision incorrectly but they do not say that they rely on section seven twenty one and that's new and we're now looking at the section seven twenty one permit amendment was and saying where in there is the major modification that increases actual emissions far above what the federal rules require that's made long after you get a permit that was a complaint that the e p a made in the last in the in the in this doesn't cut it you can justify it no rationale i mean it and e p a has come back with that rationale it's not relying on section seven eleven it's looking at seven twenty one but is that an issue of the e p a could have raised at that time i mean why didn't fighting we address that did they not raise it or did we not get we ignored their argument with respect to that and where do you come to your interpretation that he did not extend that and that it should be extended now notwithstanding the fact that it always before the court early well you know as far as our position we thought the court had a perfectly reasonable basis for remanding the rule and we understood that after remaining it's not a do over e p a has to come back with a rationale that that makes sense and that is obviously lawful and they do not have to follow exactly the court's reading of each provision they have they can come in and articulate a different reason why it doesn't work or why they think the requirement to get a permit for a later modification a new source review permit is somewhere else in the rules and that seems to be what they've done here we don't need a new don't you need a new permit when you've proposed to do a major market so don't you need a new permit when you've proposed to do a major modification of absolutely we argue that you absolutely do but not under the flexible chemicals that's the problem we present flexible permit was the amendment requirements permit amendment requirements once they already have a permit we don't think tell you if you have a major modification you got a co we think the language in the rules that it is relying on don't figure that requirement and i just want to be clear this isn't about what e p a will tell you but what the state will do when it gets an application it's whether you have to come in with that application in the first place and we're looking at the language of the permit amendment requirements and we're saying where in that paragraph does it require you to come in if you've got a significant increase in actual missions and get a permit i mean it sounds like it's nitpicking the last decision is right it sounds to me like well your honor i don't i don't know what else to say other than what i mean it's how i mean not you know i i'm smiling about it because i mean it is a lot of you know legal mumbo jumbo and it's hard to put it down where it's it's clearly understood by somebody like me what you're really talking about if i can just return to the saying section seven eleven that's what you do when you apply for a permit section seven twenty one that's what makes you come in for an amendment that's their rationale is it right or wrong there  instance in which the opinion that we drafted in the regulations of the e p a is not written as presented the kind of problem that you are concerned about we do we put permits in the record three flexible permits that just reading the plain language of the permits authorized major new source review authorized rather major modifications and say in the language of those perm you don't have to comply with new source review until just before you complete those projects such an one sixty five says you can't begin construction you can't begin construction until you have that new source of your permit in hand and you've satisfied all the carmine's coming in at the tail end of construction and saying well now we're going to decide whether you've satisfied requirements that apply before you begin construction that is absolutely not what section one sixty five says you have to do still you've not i mean you've not been agreed to by in the form of pollution that is not covered by regulation i'm not quite sure how to answer that other than to say we have given examples again in in the other would you well i mean you're not saying that that air has become more polluted as a result of this regulation is i'm sure what you said except what you've said is that we are worried that you are now tag and the determination of pollution at the end of the construction instead of the standards apply even in areas where the air quality is very very good they are mechanical they basically say you can't begin to instruction except as an agent of the case you have it up to the state of the question language that says you may not circumvent major news source if you recall we don't argue with that you can't u p a can or didn't have a rational reason for saying this program is only limited to minor sources we're we're not coming back on that again we read the section seven eleven the reference in that court used to say hey these requirements are covered as applying at the permit application stage that is what e p a is saying we that as saying modifications that come up long after the permit has issued the flexible permit has been obtained you've got to come in and get a major new source of your major new source of your permit for that but that's not how adopt that waiting if they say section seven eleven covers that that would satisfy if they say it covers these after the fact modifications we wouldn't be here my question was if if the rule is that you cannot use this  fact a major modification using this minor permitting system would that we had satisfactory rule for you and i thought that's what you're striving for that is what we're striving for well then the answer there is that would be please the court alan greenberg on behalf of respondent environmental protection agency e p a acted reasonably and in court in accordance with the clean air act when it approved texas flexible permit program the citizen groups primarily challenge e p a s approval based on an argument previously decided by this court specifically does texas is flexible permit program allows sources to evade compliance with major new source review requirements and e p a reasonably answer that question no because the flexible permit program focuses on minor new source review e p a s decision is well supported by three reasons first the regulatory text of the flexible permit program precludes sources from the bating news major new source review second the prior decision of this court found that the flexible permit program does not allow evasion of major new source review and third the state of texas has consistently asserted that the flexible permit program is solely a minor new source  now that's first of all your honor e p a just recently approved the flexible permit program that is now going to be in conformance with the clean air act and going forward a and the state of texas are in agreement that this program consistent with the prior decision of this court will not allow evasion of major new source review are you saying to the turning to the regulatory text e p a is relying on section seven eleven and contrary to petitioners counsel's argument if you look at the federal register notice that approve this program e p a cites to seven eleven h and i which are the two provisions that require an oem or an owner of a facility or a source to demonstrate that each facility will comply with applicable requirements of non a and prevention of significant deterioration review those are the two components of major new source review and the court relied on those in the prior decision those sections rule and seven eleven are addressed applications for a permit now that section seven eleven combined with seven twenty one addresses the issue of major modifications a major modification by definition is a significant increase in the missions and the program the flexible permit program addresses significant increases in the missions in section seven twenty one so this flexible permit for vision seven twenty one requires owners that are making a change that will result in significant increases in emissions that's the major modification language significant increases in the missions that would place the source out of compliance with major n s r that's owner of the permit has to seek an amendment to the facts of the permit to become compliant and because that modification triggers obligation to seek an amendment we circle back to seven eleven because an amendment requires an application and the application under seven eleven requires compliance with major new source review so through the amendment process that major modification would require the only owner to comply with major new source review requirements to the extent there's any ambiguity in that mapping of seven twenty one and seven eleven section seven fifteen another section that this court relied upon in its prior decision noted that if there's any if there's more than one rule regulation or flexible permit condition that applies then the most stringent shall govern and be the standard under which compliance is measured compliance with major and s r is a condition of a flexible permit that's set up by section seven eleven so therefore if major n s are is the most their engine standard it will govern and a source for facility will have to apply for and undertake major new source review prior to going forward with construction of a major modification second your honor this court's prior decision supports e p a s approval e p a cited it in its room making that approve the decision as this court is well aware this court held that if the flexible permit program does not allow major n s our evaluation because it affirmatively requires compliance with major and s r and all of the sections that the court relied upon in this prior decision are in the c flexible permit program that e p a approved and therefore the prior decision of this court this persuasive authority third your honor texas has consistently stated that th flexible permit program is a minor and as our program and the test texas register publications explain repeatedly that the flexible permit program is a minor  our program and onerous cannot circumvent circumvent major and as our requirements it did in order to when he makes his application for a modification whether it's going to involve a major sure will he would need to hear she would need to do that your honor because if the owner is about to undertake a modification that owner would need to decide is this going to fall within the category of minor  modifications that won't exceed the allowable cap in which case the owner doesn't need to seek further permit amendments or if your review i mean i'm not sure exactly what your poem is concerned about but i mean is just up to the owner to decide well the owner does have to make what's called the applicability determination like any owner of a facility that's going to modify his or her source the owner has to say well what regulations apply to what i'm about to do if what i'm about to do is going to increase emissions significantly then i have to see potentially an amendment to the permit particularly if it's going to trigger the thresholds for major new source review if the owner looks at what he or she intends to undertake as a modification of the source and calculates that the emission increases are not going to exceed have what if the owner makes a mistake and it turns out that it is a major commission as opposed to the manner that it had calculated would result what you see didn't have to undo what has done well that's an and forstmann issue your honor if the owner does not comply with the quiet requirements of the clean air act they're in violation of the clean air act and would be subject to an enforcement action whether that shut it to and including shut me down or penalties or maybe simply the state of texas has the lead and forstmann authority maybe depending on the severity of the violation the state contact them and says this is what you have to do to come into compliance and the person doesn't whether they're subject to a penalty is subject to enforcement discretion i mean survey is some significance to the argument so that at the end there's no problem in terms of enforcement i mean is that the point they're making that's the point they're making and my response to your honor is that this decision is made up front by the owner who has to look at the modifications that the owners and attending to undertake decide whether it meets the threshold for a major modification is one and he is the one that's got to pay the generally that i think there's two issues here that implicit in your question there's the issue of the owner looks at it says my emissions don't meet the threshold and therefore i don't need a major and a star review but then once the installs the equipment finds out hoops i estimated incorrectly that would be one scenario the other would be someone who up front calculated the number said  the threshold but guess what i'm not going to do a major and as our view which would be an obvious violation and the owner would be subject to the consequences in the form or there would be a potential enforcement action and  would be up to the what what i'm really getting to ask us posies point are the consequences of his mistake so stringent there would be real incentive for him to avoid such a mistake or are the consequences so light that he would say well i don't care because i'm willing to pay the penalties i'm willing to do this because i want to accomplish the particular goal of these modifications on me the consequences are significant your honor they are significant there are significant penalties that can be assessed there's also significant injunctive relief that can be obtained through an enforcement action and it's obviously a case by case basis depending on the facts of the case how significant the penalties are if i'm building a large client and likely to be a major source is it a should get a permit before he goes on line if his activities are going to trigger that asshole it is not required to have the permit at any point in time before he comes on line versus e p a answers all the issues that are before the court today for over twenty years texas has used the flexible permit program and for over twenty years texas has consistently said that it is a minor new source review program that affirmatively requires compliance with major new source review this court in its twenty two of opinion agreed with texas and the holding in that case that them flexible permit program does not allow evaluation of major new source review should be applied in this case now the flexible permit allows a company to have one permit that covers all its still a days and let me answer a few of your question if a company has a major modification if they're going to be making new construction or they're going to be modifying facilities they have to at that point determine what the increase in emissions is going to be when they determine that if it is fitting the definition of major modification they are required to go through a major new source review and comply with texas rules for major new source review here to be you a major if you don't fit the definition of modification they talked about the definition modification and you don't fit the definition of modification because your ear increase is going to stay below your flexible cap then you never go to major modification that's not how it works if you have the definition of major modification you must comply with major new source review we disagree we disagree that of course disagree with the petitioners position that you're never going to have to get a permit if you have a mate that you can invade that's what this court held in two thousand and twelve and that's the him holding that should be applied here at the time of the previous case texas tied to this case that but these three permits don't show that there is a major event of major new source review and this court's holding would require hold operators in texas to not doing so the way that operator if they have  if they have to comply with major new source review they have to come to t c q for pre approval as a practical measure they bring an application to t c if t c q has questions they ask those questions those questions are answered and then the person when they go through major new source review either prevention of significant deterioration or the non attainment review which are the two components of major new source review when they go through that major new source review they  a new permit an additional permit so they got the flexible permit and then they get a permit with a new number for the major new source review so the way it works there is no way of asian a major new source review as a practical measure a noted this q has the enforcement authority if they would determine that someone who should have gotten a major permit did not get a permit they could bring action and how what would what would be the penalty of that not only are there civil penalties for violating the state's implementation program but in addition the state could see conjunctive really so if you have gone forward and made a modification you didn't go through major new source review and that modification has resulted in emissions that should have been subject to major new source review the state could seek injunctive really for you to quit using that new that modification of you to change that modification to bring those emissions down so there's opinion looked at those three provisions of the texas administrative code and determined that the texas commission on environmental quality the state agency that oversees the flexible permit program that t could with these three provisions of the texas administrative code there was affirmative compliance i mean it was a minor new source review program that affirmatively required compliance with a major new source review the provisions seven fifteen that the court looked at said the most stringent conditions would apply those three provisions of the texas administrative code that the court relied on in the twenty to of opinion are still there and the court can rely on those that go again to find that s approval of texas is flexible permit program was correctly done the program is a minor new source review program and does not allow invasion of major new source review this  the the provision the operator looks at the situation when they think they're going to have an missions they make a pre approval they must have a permit before they began operating here are wanting the state to do is to guarantee that someone will comply with the law we can't guarantee that we can enforce it if they disagree thank you michigan i wish to share for you have some time for  so you're on as our understanding of the major modification requirements and the federal rules at fifty one point six two six and this statutory requirements themselves are you have to show that major modifications are subject to new source review in your state implementation plan you can't rely on promises about enforcing something if you can't demonstrate that you have this in the rules relying on the permit amendment rules for approval they were lying on section seven twenty one they are again sort of cooking that section seven fifteen in talking about this idea that if you know the more stringent federal requirement applies section seven fifteen c one says the entire section including sealab in this stringency language does not apply to modifications that don't require a permit and then the other important  want to make is that sub part g which is where the flexible permit rules are that's an alternative to sub part b it's not that you have to comply with both simultaneously if you go to the flexible commodore your inflexible permit land and those rules control now were part g e reaches out and grabs part b requirement and reference that references that pulls it in then you're ok there's a lot of talk about major modification there is a definition of major modifications it's in sub part b in that death and it's in that definition it says this is expressed limited to sub parts b and c it's not applied to  you have to reach out and grab it so we don't understand how you can read from an amendment rules that have a lot of stuff about changing climate representations and say well major modification requirements that happen after you get a permit it's somewhere in there it's in there by default there is no default if you're operating under sup part g permits the rules say the rules for amending your palm that are governed by subchapter be by the flexible permit rules there isn't you can't fall back on september be a that's not there so there needs to be an explicit reference so you're relying on a permanent process that really is about allowable emissions and doesn't say anywhere what you have to do t perhaps collaborated on an interpretation of these rules they're coming in making different arguments using different sections the basis that a p a articulate for prove all that's important that's important what bothered us and the reason we're here at all is their reliance on section seven twenty one which we think is pegged to allowable emissions and e p a seems to say that in its discussion of the rules and that's that's not be basis for deciding whether or not you've had a major modification it's difficult to enforce the standards we bought a number of major modification requirements but when you were authorized in the program it says you can make all the modifications you want as long as they don't bust the maximum allowable misson levels it does seem that somewhere in there you ought to be able to find a few words to say unless you have a major modification that increases actual missions then you'd best come in before construction begins thank you john ok mr sheppard thank you share we call the next case of the day