whether is necessary to regulate e p a found that it's necessary to regulate because existence of public health harms an offense appropriate to regulate the exact same reason the existence of public health harms so it's interpretation well i'm not sure that that's quite a said my understanding of what e p a said is that it's necessary because of public health harms that it's appropriate because there are technologies that can redress or remedy those public health harms so on the one hand it said that it said that the phrase appropriate went to the nature of the harms the phrase the phrase necessary went to the nature of the harms the phrase appropriate went to the existence of technologies kagan when they relied on the availability controls they did that only after having already said we must find it's appropriate if a health hazard exists so they've already tournaments that the health hazard is a necessary and sufficient condition so the existence of controls or sure if you turn to the you are petition appendix volume one good page one ninety six this is the text of the final rule says we must find at the top of the page we must find it appropriate to regulate e g use understood clean or exception one twelve if we determine that a single hap emitted from e g use poses a hazard to public health or environment he said we must regulate the phrase must regulate means that when you get back to the availability of controls then there's nothing left to be done you've already said that we have to do it so the ability of controls isn't doing any additional work must find it's appropriate to regulate means that the other well the illusion that they didn't that they didn't look at the availability of technologies is that what you're saying that they thought that the bill of bill or the of technologies was itself irrelevant to the time the terminations that your argument we're not same it was relevant they thought well i guess logically irrelevant they taught that it's something they did look at something when they did the utility study they examine the availability in trolls but then they said regardless of whether or not controls are available if a health hazard exists we have to regulate so if i could give an example i'm sorry i thought they said it only if it was necessary congress was motivated not listing the sources because it didn't know whether the check knowledge that was going to be put in place to control acid rain would reduce the haps sufficiently so that regulation wasn't necessary or listening wasn't necessary i had a different understanding of appropriate and necessary appropriate if there were haps but necessary only if those taps were not sufficiently controlled by the other technology the necessary both of them looked at whether or not there was going to be an ongoing harm because both necessary and appropriate turned on utility study utility study was something that examined what health hazards would remain after all the other regulations that are to be a health hazard could have been lowered down so that no no standards were necessary or they determine how severe the severity of the health hazard the severity went into terming whether or not a public health hazard existed at all so they looked at the effects the only place they looked at severity in the final rule was a term in whether or not a public hazard existed once there were enough health effects that there was a public health hazard and they said we must regulate the fact that they've said we must regulate it's necessary to regulate is exactly the same as what they said with we step back a little bit i mean that kind of language is used all over the us code and indeed that kind of language is used in our constitution the necessary and proper clause and as i understand what courts have done with that kind of language but they haven't insisted that there be separate defined meanings for each of those words when john marshall was doing this in mcculloch in fact he starts off with the word necessary and then he says no this is a phrase is and we have to understand what the phrase as a whole meehan's and why shouldn't we similarly say this idea that you know you can catch them in a redundancy or a superfluity it's just not right because it's a complete  two words and said something could be necessary and proper and what more should said was that necessary doesn't mean absolutely indispensable which means useful that's quite different from saying that proper has no has no role to play can be necessary that is useful to the federal government and yet not proper so so what do you get it's a pick what it means i mean i thought in a in our agency  repeatedly say if a term is ambiguous and there's no legal definition of appropriate it's contextual yes but by definition if you're saying a word that's not self  appropriate manner and i told you we're going to the library and everyone would know that i had let's be quite i look at this statute and i see them doing the first part the point at issue and the barry next provision says in four years instead of three do a mercury study that includes cost i'm looking at it could very fairly safely say one study doesn't use the word cost the other does the first one where congress has given broad discretion to an agency told them to look at all of the circumstances and the agency has said we're going to ignore was an important part of the problem and that's why in the way the judge kavanaugh looked at it this is a problem under chevron step one two or under the state farm doctrine because agencies are supposed to not ignore an essential part of the problem is that engage in reasoned decision making but i think what justice can spread this getting at general instrument is you know sometimes what we've done is we've looked at silence and we've said that given that silence cost considerations are precluded right so that's the example in whitman sometimes we've said silence still allows agency discretion they can do what they want with it but it's s from our most closely analogous case which is whitman to say not only is this cost considerations you know not precluded it's it's require when there's silence as to that subject of congress wanted to require something and clearly congress required this and other places congress knows how to require consideration of costs to get from silence to this notion of a requirement seems to be a pretty big jump in just s g don't think it is silent but it tells the agency to look at all of the circumstances in a material circumstance make context the question of agency has to answer his should we regulate under the section costs are part of the relevant material for my t v show i agree with the premise that where when congress says nothing about cost the agency is entitled to disregard cost i would think it's classic arbitrary capricious agency action for an agency to command perform a study of the hazards to public health reasonably anticipated to occur as a result of the missions by electric utility steam generating units so the study that was directed to be if it finds regulation is appropriate and necessary after considering the results of the study so if the study is directed only a public health hazard doesn't talk about  it doesn't talk at all about cost just public health hazards why in the world would one assume that congress was thinking about cost why didn't it do as it did with mercury make sure the study tells us how much control is going to cost but it didn't do that it just said tell us if there are public health hazards in your honor didn't limit the considerations the e p a was supposed to look at only the consider the results of the study it doesn't say they can't consider everything else in the world appropriate seems to suggest that they may consider other stuff so there's a state are supposed to look at it that that's not the end of it in sr supposed to do something else that second step me that the very salient feature of the statutes that we have to interpret may be the most salient feature is that congress chose to treat powerplants differently from other sources it could have treated them the same way and if it had done that then the listing decision would not have taken into account costs would have been based on emissions right or if it was an area source it would have been based on a fact of health along so what if anything can we infer from that from the fact that congress pointedly decided to treat power plants differently i think we can tell that they're trying to create a different regime they're trying to do something different here than they did elsewhere and then with trying to create a different regime but the reason is pretty clear on its face they were trying to create a different regime because they thought that the acid rain program might have a real impact on what these electric utilities were doing so they said wait and see and let's see how the acid rain program works and let's see if we still have a problem to solve and that's the reason why they put the electric utilities in a different category isn't it and that highlights wh costs are significant the acid rain program in particular was an economically based approach that was determined to regulate in a cost effective manner but the point is that the acid rain program didn't do what they the congress thought it might have done and it was still left with this issue of continuing harm from the electric utilities and then once that happened it seems to need that it's natural to take a look at the rest of the statute and to say let's regulate in a similar way to the way all other industries are being regulated but if they had wanted to do it the same way there would have been no need to use the phrase necessary or appropriate they could have just simply gone to the ten ton threshold emissions that apply to major sources of the response analysis because the various sources so the fact that they use different criteria here and one as opposed to criteria is listed in seventy four top see they could have but they might have thought you know let's take a look at the acid rain program let's take a look at the problem that still remains if any and let's give the discretion to the agency at that point because it will be years down the road in a different set of circumstances but the discussion includes looking at the entire problem i mean again the language in the belief that the acid rain program would be sufficient at some point in time to bring emissions from power plants but world a lot of all that would result in there being listed if they were other sources why would it be necessary to enact a separate provision asking whether it's necessary and appropriate to regulate them they could just see how that can be the explanation yes or they could just had a three year delay if that's all they were trying to do as opposed to and then go through the ordinary system because they didn't know they thought it might stand for what it might not they were going to wait and see it depended on how the industry responded to that regulatory requirements of the acid rain program that still doesn't explain your honor why they chose to use different criteria as opposed to just reiterating the criteria that are under seventy four twelve c under the ordinary thing that applies to every other source they're still trying to treat the actual chiles differently and would like to return to one point about the acid rain program which is that again if you're addressing emissions from electric utilities in a program that's specifically targeting electric utilities as they did in the acid rain program and that was entirely based on cost effectiveness it makes little sense that a look at what's remaining after you've are done that and then to say in this area of diminishing marginal utility we're going to say costs are irrelevant that's backwards cost would be especially relevant when you think area what's left over when this data refers to the emissions standards for the twelve percent of the best performing plants how old they are so plants that were built in two thousand five hundred sample might have been built such a way that they have technology where it is cost effective to include certain control measures but if you look at the plant was built in one nine hundred sixty imposing the same control measures on other plans is something that would be a lot more expensive it's the difference between renovating your house and building it certainly in the first rule or call could but mandated based from which the government must operate it is and it's an interest and i put it seems to me and we'll have no electricity i magine that were so could the e p a under their current theory take account of that well i guess the answer you want to say is no but they say yes they can what about the straw percent rule you know how does that well on a little bit earlier in the statute it says the administrators may distinguish among classes types and sizes of sources so if you really had a situation you could say look seventy five percent of the generators in united states are this really o technology and they'll go out of business and e p a could say it's a different class ok i mean if that were really true so don't they have through that provision in the t no i think no they don't why not the reason the costs are not directly relevant the first one is was explained up to twelve percent so the words as you exhibit the example you gave shows that some might be able to have  twenty percent of the generators for whatever reason can eat this pretty easily the next eighty percent will require the entire gross national product to me suppose that were the situation you i guess could go to e p a and say create a bat second group a separate class a separate type for that's the reason it's so expensive and therefore the twelve percent doesn't apply to them because they're in a separate class now my question is can you legally make that argument and they will take it into account and that's what i want to yes or no answer to and i think the answer may be yes in the future wait because i still want to know a fact i won and the fact that i want to know if you're familiar with this record is did anyone on your side of the issue asked the agency to take costs into account brutally roughly crudely or did they all say we want a cost benefit analysis i would like your characterization of the record on that point because reading what they've said about it's about cost benefit analysis that paragraph so that gave me the idea that maybe everyone interested in cost asked for a cost benefit analysis and i think the answer is that we asked them to consider costs we thought a cost benefit analysis is the ordinary way that a reasoned agency decision making happens after some vague sense of what the costs are but by doing in analysis and they've said their entire position here is that we don't need to do that because costs are relevant that's not something we have to consider understand as i am and also and as i understand what happens listing and standards are the only thing that you can generally appeal from it's only a final agency action and it's where the when the standard situation and i thought it was at the issuance of the standards that the government sometimes breaks up the sources and the amount of emissions that each type of source that justice briar's talking about can happen so i think the listing is just a y broad category because we've had plenty of cases in this court where we've looked at the agency saying this type of source meets these standards that type of source meets another standard isn't that the way it works well that highlights why they're not treating this as a separate listing versus regulatory decision they did both exact same time here same time they made the necessary an appropriate finding they also promulgated emission standards that shows this isn't simply a typical listing standard cleaner a context to be given power plants are the most regulated source category under the clean air act both before and on to not be an after the nineteen arguments the court has talk about some of the problems it's not only the title for us of deposition program is subject to this program except for electric power plants ya know what it shows is that before the other industries e p a estimated in two thousand and ten that for all other industries this earth toxics program would have post compliance costs about eight hundred forty million dollars all these other programs for power plants would impose compliance costs e p a estimated in two thousand and eleven about ten point four billion the single regulation on the account six imposes annual costs of nine point six billion and what does one get for it there are three standards at issue here and i think this is important to understand some of the questions that have been asked there's a regulation for mercury there's a regulation for nonmilitary metals and there's a regulation for acid bassus most of the costs here the majority about five billion annually are associated with the acid gas regulation which the agency has concluded presents no public health risks no public health concern the agency said that all our modeling has consistently shown that power plant related exposures are at least an order of magnitude b conservatively determined safe level now in the title for the program congress addressed pollution with acidification potential and required reductions of nine million tons a year at about a cost of one to one point four billion congress treated power plants differently that asked whether it is inappropriate to impose further regulation of a specific type whether it's appropriate to oppose regulation under the section on the most  to mitigate certain dramatic or onerous costs on certain segments of the industry but that's not an unknown provision of any kind and indeed it seems to me that the provision very much cuts against your argument because lay in some ways can't even figure out the costs until it makes those categorization decisions that the aggregate costs not just within each category but the aggregate costs obviously depending on how a categorizes and subcategorize is so you would have the e p a make the cost calculation before it really can given the structure of the statute your honor the cost does factor into a variety of determinations that are made as part of the regulatory process when the e p a issued its notice of regulatory finding in december of two thousand and ten and it said this is non final e p a confirmed again and this is a page five opticians appendix but there is no final m one a determination or listing and we are going to take comment on that as part of the rule making to examine and seventy first rugby emission standards so as part of that the agency addresses issues related to level of control subcategory each sub categorization and at the end of the room i can comes out with a regulation that has certain characteristics and consequences and where this regulation but then one day says it is going right to the study address whether such regulation under the section is appropriate and necessary for regulatory regime if as e p a has explained here their view of the statute is not to focus on whether such regulation is appropriate but whether the listing of power plants under subsection c is appropriate just like every other fo saying well you know if we're going to divide things into categories and since it's too expensive for certain eighty percent of power plants that that don't have waterfalls nearby we're going to exempt them from these minimum ultimately subcategorize the power industry with respect to one limited set of sources lignite sources with respect to the mercury standard but otherwise u p s position is once listed it triggers an obligation to issue emission standard costs very dramatically so you're having the e p a consider costs before the e p a can know what the costs are your honor if i can respond to that before the other question at the other end of the bench  subsection as one of the provisions that requires notice and comment rule making under the special clean air act procedures and this is why the agency explained that there is no final end one day until the end of the process until notice and comment and we've taken so a that it should subcategorize the source and it decided to subcategorize just one piece of it so what you're really saying to us is  it's not the listing it's the way they've set up their admission standards that i disagree with because they could help decided that there were subcategories that didn't require standard at all i'm presuming that they could have said anybody by the water doesn't have to do more because they're already twelve percent they're part of the twelve percent we're going to cost by everybody else that's not by the water concept your honor i imagine they could have subcategories regular entire industry but that's not what they did in this world making and with respect to certain of the regulation so they didn't do it but put your asking us your this is so most of this is a challenge to regulation that's only piecemeal because you are arguing that they should have considered costs but they obviously did before they issued the standards you can't look at the standards and the emissions in the case and and the listing in a case like this in isolation just in sort of my what if i could try the answer to that question once again b subsection then one of the question is whether after considering the results of the study and i note that the study also looks at alternative control strategies for any admissions that may warrant regulation the agency determines such regulation is appropriate and necessary so the focus of the determination is not on on the listing and whatever may flow from that but the regulation that the agency decides to apply to address the remaining public health hazard be difficult because they're so hypothetical it isn't true that fifty percent of the industry will use up fifty old with books mystic product etc but they wrote this in a way that sounds as if even if that had been true they wouldn't have taken it into account so what they said is e p a does not believe it is appropriate to consider cost when determining whether e g is ok you see the problem so for me and but the u s g s telling us don't worry maybe they should have written knowing what we know and what is undisputed so far we don't think that the cost problem is big enough for us to warrant a cost benefit analysis or other consideration ok then they take it into account so there's no problem if it's within it's a reason now they didn't like that so that's why i'm looking to see is the it's really the s g but i mean is there really a different way that they could eliminate this horrible scenario if it existed which it did you understand what i'm driving at a very trying to get a best answer on that and and i want to emphasize that this is not an argument about whether or not to regulate mercury where there's been an identified public health risk that's one of the regulatory regime that has been defined here under section seventy first twelve which the government says is the listing that applies to all other source categories and the d three minimum controls technology standards that apply to all other source categories is the right way to do it regardless of how you subcategorize it's going to have tremendous impacts as a result of acid gas regulation and for a pollutant that presents no public health risk and other ways that we can't uphold an agency we want to ground they didn't adopt below riek that's correct so is your understanding correct that this is not an argument a basis for decision that they adopted below that's correct your honor my understanding of the basis for the decision below is that costs are irrelevant you know determination under and one day whether or not or whether to regulate the source category under the typical subsection seventy four twelve regime that applies to other little exactly right mr brown now i mean that the agency at that point in time was only answering the very first question the very threshold issue and at that point the agency said costs were irrelevant the cost become relevant later in the analysis and in a variety of ways through the twelve and a half percent to twelve percent through that categorization and so categorization through the determination whether to raise standards even higher so costs costs costs later but as to this particular thing the agency said yes here we don't consider costs we could but we don't want to because they were all this potential for costs to come in afterwards and your honor it's cost cost cost under the statutory criteria that congress provided for setting the three control technology standards and then having to fund those standards at the end of the process a regulatory context in the clean air act that it demands a cost benefit analysis your honor when you say in any context that's so broad i don't think that i can say that it would require cost benefit in any context but in a specific context here where the focus is on whether such regulation is appropriate and necessary but regulation has certain characteristics and consequences that we've talked about this morning co benefits that are in the regulatory impact analysis were not considered as part of the regular toward terminations for good reason because there are important questions regarding their legal importance and relevance on the proper standard and what i mean your honor context of that proceeding the agency found that the low levels of exposure for these co benefits oh did not produce effects or risks that were regulatory significance because they are too uncertain so there are serious questions about legal relevance general rule mr chief justice in may please the court e p a s interpretation of section seventy four twelve and one a should be a farm for three basic reasons first it is the most natural and certainly a permissible reading of the statutory text which directs e p a to focus on health concerns and doesn't mention costs second it harmonizes the provision with section seventy four twelve structure and design because it applies the same regulatory logic to power plants the congress directed e p a to apply to regulate hazar separation from every other type of source and that is decide whether to list for regulation based on health and environmental hazards alone and consider cost in setting emission standards and third as a matter of common sense and sound government practice it was certainly appropriate for e p a to list power plants for regulation based soley on health and environmental hazards because that reflects the the approach congress chose not only in seventy four twelve in this writer to program but in all of the major regulatory programs under interpretation of the statute was a didn't provide for the consideration across at the listing stage but under chevron if you adopted a regulation that said appropriate and necessary allows us to consider cost do you think that would be appropriate i think the phrase appropriate and necessary doesn't by its terms preclude the e p a from considering cost but under chevron what the e p a has got to do is explain that the justification for its reading of a stat right now if it isn't you're dealing with a term i don't think this capacious as appropriate and since you could have issued a regulation allowing the consideration of costs as appropriate you're saying that the agency deliberately tied its hands and said we're not going to consider something we're going to issue a rule saying we can't consider something that we could consider otherwise you know i think the best way to think about this mr chief justice is what the agency did was decide that it was appropriate to approach the question of whether to regulate power plants in the same manner that congress found it was not only appropriate but mandate to make relevant question not that i understand you i mean for they could have done that but i think it's unusual for an agency to say when they want to do something that that's the only thing we could do agencies usually like to maintain for themselves as much discretion as they can and it strikes me as unusual maybe the agency could go ahead and consider and not consider cost but the say that we're prohibited from prince considering costs under the phrase appropriate it strikes me as very unusual set i don't think so mr chief justice it said since they were prohibited from considering costs it said we are not going to consider costs at the listing stage in making a decision about whether power play should be listed for regulation under section seventy what i thought the rule was that the phrase appropriate and necessary did not allow them to consider costs and the appropriate and necessary kosta the question of whether power plant should be listed for regulation under section seventy four twelve which would  don't think the statutory text unambiguously for bids them from considering costs but they determine that the best reading in the statutory tax is that power plants because after the study was conducted that congress required it e p a determine the power plants are no differently situated than any other source of hazardous air pollutants regulated under section seventy four twelve and four if i may mr and for every other source of house's air pollutants what congress mandated as appropriate was that you do not consider costs when you side whether to regulate you only consider health and environmental effects and then you do consider costs under section seventy four twelve the new set the emissions standard as i can see how is that consistent with this statutory scheme if your argument is that the only reason for doing this is that it wants to treat power plants the same as other sources and we know that that's what congress didn't want  of the separate provision for power plants i agree justice alito the congress proposed different treatment for power plants but that doesn't answer the question that just asks the question the question is what different treatment that congress prescribe now what to what petitioners are arguing is that what congress prescribe and mandated was a cost benefit analysis that does not apply to any other source of hazardous pollutants but that is not what the text of the statute says and it's not what the history reflects with the text of the statute says in and one a is that even though for every other source regulation would proceed immediately for power plants there was uncertainty about whether power plants emitted hazardous pollutants at a level that would cause problems whether the was made a judgment about that it was to decide whether to list power plants for regulation as a pro quo was appropriate necessary listen for regulation this is what i don't understand about your position that congress is decision to treat power plants differently it seems to me reflects the fact that congress wanted at least to hold open the possibility that power plants would not be listed even if their emissions exceeded the levels that would result in listing for other sources i don't see another reason why they would differently well i think i will if you can just continue these rats you may disagree with that but that seems to me that that's a unnecessary inference from the statutory scheme if that is the case what factor might congress have thought would justify allowing the power plants to we meant more than would be permitted if they were other sources now petitioners have an explanation which is costs and they say that power plants have have to bear a lot  of costs that other sources don't have to bear in particular the title for a program they remissions might exceed the otherwise permissible limit because they have participated in the cap and trade program so they have contributed to the reduction in emissions in that way in a way that wouldn't be reflected in their in their own emissions so what that that is the explanation cost is what's missing i don't know what the what your explanation is so i know you accept the premise but i can't accept the premise because both the text of and one eight and the legislative history tell you what considerations congress left open and they were all related to the possibility of health hazards no one did the argument that your honor just posed is not in the legislative history and it's not in the tax and if congress really thought that then what they would have said to e p a is take that puts a pause button take the three years and study don't subject them to the same schedule as everybody else and study the cost problem they would have expressly told e p a to study costs and they did not do that if all they were concerned about was health why wouldn't they impose on power plants the same standard that's imposed on areas sources will be just ask e p a determine whether there is i forget the exact term but it is there are an effect on public health a significant effect on public health whatever if so list i think they came very close to that because what they said that first of all they they told a p a to make a judgment after considering the results of the study and they told d p a to study things that went to health hazards and so that comes very close it seems to me in the reason i think it used the appropriate and necessary language rather than the language your honor suggests is because i think congress when it was legislating here in andy understood that there might well be uncertainty at the end of this of the analysis that congress directed p p a to undertake there might be uncertainty about the projected effects of the acid rain regulations because i do i do think it's important i think that's what the legislative history said i do want to clear up a misconception about that i think which is that that the way these acid rain regulations unfolded they were put in place in one thousand nine hundred eight the same time as seventy four twelve but they were to unfold over a ten year period five years until the first stage and then five more years until the second stage so e p a was going to have to make a long term projection here about which there could be some one certainty and so i think what congress was saying was x you can you may need to exercise your judgment here  a did exercise its judgment because it concluded if you there are two parts to this argument one is who are they thinking of the word appropriate if it wasn't cost or at i see your answer to that i think about that but the second which i think your argument very much depends on in my mind anyway is don't worry because there is a way to take into account costs so if in fact i mean you know it's a lot of money nine billion dollars and if you divide it by the population you have thirty dollars a person or a family of four of one hundred twenty dollars that's a lot of money for people for some people and you say gee you couldn't take it into account ever it was it had been five hundred you know begins to look a little irrational to say i'm not taking into account at all but you say never fear because they will take it into account when they set standards and at that point i read the thing about the quote percent i've got the word similar source which then can refer me back to the categorization of two things earlier as i say maybe and then i have aside from that hey here's what you do when you regulating you look at the top twelve generators and thought the minimum standard so they might want to say hey that's not right i mean it's right it says it but if you go to the bottom fifty generators you're going to see it's not going to cost one hundred twenty dollars per family it's going to cost a thousand dollars a family and we have the e p a saying we want even look at that at that point i begin to say oh my goodness why why  even look at it you could say it isn't true but why don't you look at it so and now the answer seems to me to be in that word similar source and the classes in the subclasses because were there such an argument maybe the a could say don't worry if there was such an argument which there isn't we have the power here under the statute to take it into account now you know where that argument came from from discussion and thought in my chambers now maybe it came out of the briefs too but is what i say right can the e p a take that into account or do they have to just blindly say if it's the top twelve that's for everybody no matter what the cost in which case they can't take it into account ever except for the word appropriate now that's the argument right i'm putting you got it my argument i want to i'm court got it for me i'm going to keep make three points in response to it the first one goes to the empirical situation in this case but then i'm going to get to the theoretical question you asked the first is this nine trillion is a big number this is an industry with three hundred sixty billion dollars a year in annual revenues so you're talking about two two and a half percent annual revenues of annual revenues and what congress and what e p a concluded when it you just doesn't talk about profit right but it's well this is a cost and the cost is about two and a that you've taken cost into account which is what they say they wouldn't do and then but then now let me talk about the way e p a under this regime does take costs now count the first point i would make is that the situation that you're on to describe the hypotheticals are quite unusual one in the normal case the twelve percent rule it's a technology forcing rule the kind that your honor discussed in in your concurring opinions and whitman and in entergy it's that kind of a rule and for and in the normal case it's not going to have that effect it's means  that this percentage of the industry has been able to meet this without an operator an economic matter and the congress is trying to force to the rest of the industry to catch up and as we know from multiple experiences as your honor identify with respect to catalytic converters and  motor vehicles and with respect to acid rain it turned out that the cost was in vastly lower on industry than e p a anticipated it would be that the there's a very great tendency to overestimate cost in that situation but then the third point is your honest point about subcategories and section seventy four twelve c one which is the provision that governs the listing of categories it mentions the availability of subcategories in fact the last sentence of it and then you generate the standard based on things in the category but i think the spaniards are automatic there are certain minimum is once they find on the basis of the state of the study that these things should be  thought they're there is an automatic requirement imposed on them which is the reason they're complaining that the requirement of it depends on how you categorize and so if there were a situation of interest which if there were a situation in which one segment of the industry was so vastly different from another segment of the industry in terms of its economics in terms of its technology then e p a would have the authority to break those into two separate subcategories and then if you don't calculate the best performing twelve percent which is what the standard is until you know it's the best performing talkers out of the people you've put in the carriage the language does that the language does that is the first three which says the maximum degree that is deemed to chiva bull not less stringent than the emission control that is achieved in practice by the best controlled similar source as determined by the administrator and that's what allows him to break it into categories and apply the minimum to the similar sort am i right at all correct and e p a did that in this case it broke out power plants that generate power burning natural gas and it said that's a separate on the record where can you point me into the record where this argument was made or considered by the agency well posted just as briers chambers was it's a very important principle of administrative law that we will only uphold a rule based but it's on its i guess what i would say but it's not a lot of the argument you want the us the agency must have rested its decision on the point the i think that the agency in the order on being challenge here did use the approach but beyond that whether or not it would be one thing if this right case in which you had a situation in which e p a for a first a situation in which fifty percent or seventy five percent were go face vastly on economic consequences but this case didn't present that situation e p a made a judgment about general a little can i simplify your answer for you yes i believe you did that just all right basically you have consistently in your brief and so has the other respondents basically said at the listing stage we don't consider cos we consider it later and everybody gave a few  s whether this example was given or not is irrelevant the issue here was do you have to do it at listing it's only some of my colleagues here who are concerned that when you issue standards you never consider cost and and that's exactly right the question here is whether e p a has got to conduct a cost benefit analysis when it does the listing and the what the logic of the statute of seventy four twelve does adequately game is over and no i don't think it is justice kennedy for several reasons first that up the the standard under section seventy four twelve day for setting emissions emission standards once you decided to list that as your honest question to my friend gentleman strong pointed out that does take cost into account in the sense that a segment of the industry can operate economically choose and i don't agree i didn't understand that i thought that there were he said everyone in the category has to match the performance of the best twelve percent of what we did the categories come from and i'm i really don't want to take the fact that your your friend on the other usually have arguments on both sides this is an argument i never heard of and i'm not sure it's right i think what but i certainly didn't didn't know the agency to say oh we're just listing but we're you know we're going to  do stand your point about the focus or non focus on subcategories but the point that we're just listing we say that over and over again in our brief and in fact that the petitioners concede and this is at page five and six of the  other side say the six million benefits nine point six billion cost you respond with a different calculation that looks too i call them collateral extra larry benefits and then the argument is raised that that's it's not quite proper because you're using your the haploid to lation to get at the criteria pollutants that you otherwise would have to go through a much more difficult process to regulate in other words you can't regulate the criteria pollutants through the hap program so you get ok here we've got this tiny bit of mercury and so we're going to regulate and that's how we're going to get additional regulation of the criteria pollutants and so it's sort of an end run around the restrictions that would otherwise give you less control over the regulation what you're let me address that it's there are several points and i actually need to make all of them i think to make this clear the first point is that that's not an argument that any party has r one of the and it was  hazardous pollute and here e p a has concluded that these sources emit mercury at levels set on safe i don't think petitioners dispute that and by the unambiguous terms of section seventy four twelve the e p a is under an obligation to regulate all hazardous pollutants that the source emits and that and that's the d c circuit in a case called national mine fifteen years ago i understand i understand how the end run works i wasn't questioning it's not just questioning legitimacy of it because what they would say ok you found you know happy that you want to list but you want to consider only the benefits of regulating that you should consider the bootstrapped what benefit is that should be addressed through the under stress the next point i would make mr chief justice is that it's not an enron and it's not a bootstrap this is a well except regulating the circuits regulating the circuits is a well recognized methodology that and in fact the very argument that your honor is probably positing here as an enron is one that was made in the same national lyme case to the d c circuit fifteen years ago on a d c circuit project so e p a is doing here basically what the d c circuit the normal way which you read about issue that i think raises the red flag at least is that there's such a tiny proportion to benefit from the how progressive and such a disproportionate amount of benefit that would normally be get the many many billions of your members how much of that is a source of thirty three to ninety billion dollars ninety billion the benefit from mercury is what four million well so you say we get to regulate this we get the regulated because there's a forty billion dollar impact  when we do that we get to regulate thirty five billion in a way that gives us thirty five billion dollars in costs on the other side so i understand the idea that you can have you know it's a good thing if you're regulation also benefits in other ways but when it's such a  disproportion you begin to wonder whether it's an illegitimate way of avoiding the different quite different limitations on e p a that apply in the criteria so i don't i really don't think that i understand the petitioners have put the case that way mr chief justice i don't think that's a fair way to put it did with respect to mercury was quantify one of the public health benefits it did not quantify many of the other public health benefits if you look in the joint appendix i think this is about page nine ten to about page nine forty this page after page of charts listed the other benefits that come from regulating mercury and the hazardous substances that it didn't try to quantify cause of the reason it didn't quite try to quantify it because quantifying those kinds of benefits can be very difficult and challenging and frankly that is one of the key reasons that congress adopted not only in seventy four twelve but on to the next program on a motor vehicle program and the new source performance tina program the approach it good of not taking costs into consideration at the listing stage but only at the regulatory chase countless about that natural gas you were cut off earlier e p a reached the conclusion that they would have us that natural gas power plants would be a separate category and because they didn't generate public health problems at the level that would whole or in part on cost is that right and i i think i think it's more subtle than that i think that if i think it's not just that provision it's numerous provisions within seventy four twelve that allow for sub categorization but i think that if there is such a vast difference in the tech not in the in the technologies that the group of entities is using that there be that bastard difference and costs that there might well be a basis to treat them as a different subcategory so now i'm sort of said we're not going to take into account costs with regard to the listing well they could have said we're going to take into account costs as to whether some categories should be listed and other categories shouldn't what they said was that we think it is appropriate with respect to power plants not to consider costs at listing and to consider costs at the admission standards setting and the reason we think i appropriate is because that is the standard that is the regulatory logic that congress deems not only appropriate but mandatory for every other source category and so one would have to conclude then congress said was mandatory and therefore necessarily appropriate for every other category was inappropriate and even patients course if i have to say that that is yes so i understood their argument entirely and i did not understand it to say  place other regulations that set out the criteria for creating the subcategories i'm not aware that they are not i just don't know the answer that you're so well without them we really don't know to what extent if any costs are taken into account in creating subcategor what i do i think that i can i do think that if it's it's going to be based on differences in technology in operation i think from what you might be able to infer across but that's hypothetical in this case because this is not a case in which he needed to confront that question except with respect to natural gas fired power plants which they do find to be so different that they were that they all they wanted different treatment because it didn't have a kind of problem of justice briar's hypothetical race the you didn't have that kind of problem you didn't need to face this issue in this case and so we didn't if i could just make this point is i think this quote he was quite critical of given that seventy four twelves regulatory logic provides for listing based on health the mission standard setting based on on on cost including consideration of cost and based on the and given that that's exactly the same logic under the next program it's exactly the same logic or the motor vehicle program it's exactly the same logic under the new source performance standards program that if congress intended to mandate the e p a to cut so deeply against the grain and make such a radically different approach with respect to this one category of source material has an effect on health but it may find that a limiting it will have other effects that are even more deleterious to health could that cost be taken into account i think if i may answer mr chief justice i think chief justice and may please the court we agreed with the government that the e p a was not required to undergo agent a cost benefit analysis before making the initial listing decision to regulate hazardous pollutants emitted by power plants from power but plying the not appropriate and necessary standard and i certainly want to go into the beginning clearly congress did think that power plants needed to be treated differently but what did they give them they gave them a three year pause in which the e p a was instructed to take account of the health effects of the particular pollutants emitted by power plants that did this under an appropriate and necessary standard and if i could address the issue of what those two words mean in the reading of the e court to pages two twenty six and two twenty seven of the national mining association separatist appendix i don't think it's necessary to read from it but what the e p a said consistently throughout this record is we look at two things there was a claim made in the legislative history that these chemicals are simply not harmful enough to require any further regulation that there are effects are negligible and they looked at that issue under the appropriateness rubric and he said these are harmful chemicals particularly mercury in addition under the appropriateness rubric they looked at the question of whether or not there were technologies available to regulate them the necessary rubric was used to look at the post clear act post acid rain the health effects that  said a these are harmful chemicals harmful pollutants and b under necessary they will continue to be harmful after the acid rain program is kicked in and that's how the court the e p a so are the two different words and it's a perfectly logical way for them to they claim everybody that concedes a necessary means that there will still be health problems after the acid rain program kicks in the appropriate needs the appropriate was in intended to meet the claim made by the industry that these chemicals already  they were directed to study the issues that were then supposed to control the listing decision where the health effects of the pollutants a come out of these power plants and they then deferred the issue of considering the cost to the second stage just as occurs with every single other source of the same hundred eighty nine hazardous pollutants that they were dealing with if i could post here just clarify one thing about what happened at that listing stage natural gas fired plants were not turned into a category they looked at the health effects of natural gas fired plants and said we are exempting them entirely from regulation under this section under the the appropriate and necessary standard because they simply don't emit these chemicals in more than trace amounts and there's simply nothing for us to regulate so the natural gas plants get taken out at the listing stage we then have coal fired and oil fired plants as to which they begin to apply the subsection d standards standards which were designed by congress to limit the emission regulation to reasonable amounts designed because the floors are in fact limited to what has already been achieved by comparable plants in the same category though there was some question raised about whether or not this categorization was something that e p a recognized it could use to affect the emission standards and make them reasonable in fact mr brownell acknowledged they did use create a category separate category of coal burning plants that burn lignite because it turns out that none of the lignite plants could meet the standards that would otherwise a have applied it with respect to mercury if they were in the category with the other coal fired plants but then through this whole process look at the issue of categorization they started out with two coal fired categories they ended up with this right there with one oil fired category in the final rule there are four separate categories of oil fired plants that depending on what they burn and how they operate so this whole process of separating out these categories to a produce a mission standards that make sense and are practicable was built into that process under subsection d could you just clarify for me that the categori on happens after the lesson is that correct yes sure i know what they listed was all clear fired plants and all oil fired plants but no natural gas plants they then go to the question of what emission standards should occur with respect to other sources that sometimes years after the listing decision is made but they then have a process of saying what are our categories going to be what we have to put out we have to get information at that point one of the top twenty percent of the category would in fact are there emissions you have to cut they have to report in they make  allows you to you know to reduce some people and not to reduce others that applies to requirements above the minimum snow the run of the the minimums are the things that are set by mathematical calculation from the categories everything else above the minimum says done taking cost into account under de to express lee yes so the only thing that is done using not express consideration of cost but consideration of cost indirectly but basing the regulations on what the top twelve percent are doing is the minimum and the minimum so then letter depending on what category she was stablish that is the way that the regulation has worked for all of the sources that they regulated that is the practical mechanism that just from from my own for mr smith it's just you categorize one way the minimum is again here you categorize another way the minimum sarette there is correct you can make a huge difference in terms of what the minimums are right and there's a notice and comment process they put out proposed categories that tell them what we the empirically what we found about what the top ten percent twelve percent are doing they then get compensated they end it as they happened here they make different categories in the final rule how justing how can we tell the degree to which costs are taken into account if they are at all without knowing what the criteria are for creating these subcategories units and statute that they create the categories and applying this twelve percent i don't know like category then they get comment about how we are not the but what happens then is the people to come and say we are so different from that category we have these special problems we need our own separate category and it's a rule making after the rule making that applies to the a few pages later they have the statute so not surprisingly you i read the statute and reading the statute leads me to think it works along the lines you just set that's good if you did have the most expensive set of generators in the world you would ask e p a to create a separate category for them in which case the top twelve percent would no longer be in your category and you wouldn't have to do it that's about one with what i'm asking is if that you think it's the system that's what i read in the statute the s g thinks that's the system but is there a treatise is there a a an explanation that e t a is put out so that it is clear that it was not made up but it's clear that this is the system that they follow would you refer me to a source your own or the only source that i can refer you to perhaps the government can supply something after is the notice of proposed rule making in the final rule in which all of this categorization process is laid out in adopts that when somebody says you're not considering cost that's a bad thing we're going to go to the supreme court if you don't consider cost and he says owner we're going to consider costs we're going to consider cost when we categorize the power plants is there a reference to the administrative record where there's something like that well they certainly said your honor in the proposed rule making that we interpret the listing decision as being something that would that is based only on health and not on the list and decision is not based on cost but i want to know if there's anything there that says but don't worry because we're going to consider cost through the categorization process i don't know whether they said that explicitly that was so implicit in the whole system this is a system that's been operation for other sources for since one thousand nine thousand work when you're talking about it in ministry of record your honor they gave everybody the opportunity to to attack the categories that they in fact proposed based on the op argument that they were impractical for them but i thought it is a shame was that you didn't need to consider cost of the first half and that that would categories they categories coal fired plants into various categories and that was all done through an ore notice and comment process which led them to different emission standards are you saying that if that was done based on course it sure was done and what was feasible for these different technologies recognize that something like ninety percent of that nine point six billion nine point six percent of the ninety percent of the capital cost which is most of that nine point six billion has now already been spent in industry is not experience the kinds of up people's that are being described the route takes effect in the middle of april and so the idea that the result here was somehow ludicrous or outlandishly expensive is belied by the fact that the industry is bringing itself into fu instead of going to jail is that it is complete i mean only one for one ludicrous but it had to be done but the other thing i would say is the idea that the four point six million dollars benefit is the proper competitor is wrong on so many different levels first of all that that was a single one single health benefit related to mercury they didn't because the nine billion dollars a year recurring annually are you saying that most of this is a capital investment most of the o has been able to do this the situation now is we're ready to finally have national standards which mean that's not the states that have been regulating in this area very strenuously won't continue to have mercury flowing across state lines as they have and we have this billion that they are referring to mercury the agency did not want to find all of the other cost for the other haps correct actually it didn't quantify many if not most of the  the thirty billion to the ninety billion that is particulate reduction and some of the particulate that is produced is in fact haps it is not mercury metals that go out in the form of particles it is mercury that sometimes go out it goes out in the form of particles it is the acid gases which when they get out in the atmosphere turn into particles because they go in they become aerosolized they go into your lungs as tiny droplets so all of those are in fact being taken care of in the controls of particula it is true that in the control of those haps you use the same technology and you wind up controlling a lot of other kinds of articulated it primarily says so for dioxide which causes premature deaths and so when they did the decision i thought the e p a either the e p a s position was doesn't matter how much the benefit or how much the costs exceed the benefits we just will not take costs into account at the listing stage that's correct your honor they did not they did not consider the cost benefit analysis that the listing states that's based on their reasonable quite reasonable i think interpretation of the statute that stat statute which with respect to every other sources conceded you don't do that the cost benefit analysis upfront and the statute came out of a period of regulatory paralysis of twenty years where the e p a just wasn't regulating effectively and congress came in and said we're going to force regulation of these chemicals that are being spewed into the environment and causing all these health effects it gave one benefit to the power plant industry and said you have three years you could prove that there wasn't there aren't really health effects that are serious but it didn't give them the benefit of having a cost benefit analysis done up front or create all the discretion in the world on the part of e p a simply rule that's been promulgated and despite any sub categorization that happened there's still ninety six billion dollars in costs that are being imposed an annual basis asking us that it wasn't the question presented is the question  presented that not that you have to take that into account at listing but that somehow that ratio makes any admission standards wrong the question is whether you didn't if you if for some people it's really not back breaking to do it the question is whether costs have to be considered under and one when you're regulating let utilities and that's one thing i'd like you to say it does when you're regulating at the admission standard i say that it's being done i guess if you think about this what happens under seven four twelve c is you get a listing decision first stage then you've got a floor standard and you've got an above the floor standard that's in there but you're taking out the cat regulation is appropriate necessary that's the language in the statute says is such regulation appropriate and necessary so it's not just well it's going to listen it's looking at what's actually going to happen so that's why it's that's why they did both at the same time why they made that the same time they publish the emission standards they were looking at the cost of head because they don't know what the costs are going to be to figure out if such regular you saying that they were going to make the clock the categorisation decision without taking into account cos any categorization they've done has already been done they didn't consider cause didn't consider that's correct and again at return one of the big picture principles which is this is in ministry of law ok so does this turns or falls on what the agency actually did below so they've already actually made terminations they've said costs are not relevant they've ignored an important part of the regulatory problem and they've adopted i'm sorry they propose categories and everybody had the opportunity to say it's wrong category correct history and argue why it's the wrong category in the categories have been and i and some people submitted complaints about cost relative to their technology in their kind supplants correct  y so it's not true that they proposed them but everybody gets a chance to tell them these are this technology is different from the others or this kind of plant  final rule has been issued i'm talking joining the rule making process the room making process does permit the agency to consider the cost of technology they've been sitting up categorizations they've adopted the exact opposite position which is the cost do not matter well as we just heard i thought we just heard that say the lignite people i can't remember the that's the right name but they said look we have special ways of producing this our stuff and they're much more expensive so please don't put us in the same category as you put the other people in ok for the purposes of figuring the best twelve percent and the agency said right ok separate did that happen yes there are lies and how we do that without considering costs because the basis was the lignite people were saying our costs are more expensive we don't know how they i don't know how they did it but they've said throughout that we're not considering costs