Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-03-01005/USCOURTS-caDC-03-01005-0/pdf.json

Parties Involved:
Bluewater Network
Intervenor for Respondent
Environmental Defense
Intervenor for Respondent
Environmental Protection Agency
Respondent
International Snowmobile Manufacturers Association
Petitioner

Document Text:

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

–————

No. 03-1003 September Term, 2003

Filed On: July 30, 2004

BLUEWATER NETWORK,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY AND

CHRISTINE TODD WHITMAN, ADMINISTRATOR, U.S. ENVIRONMENTAL

PROTECTION AGENCY,

RESPONDENTS

INTERNATIONAL SNOWMOBILE MANUFACTURERS ASSOCIATION,

INTERVENOR

Consolidated with

03-1004, 03-1005, 03-1249

–————

BEFORE: EDWARDS, SENTELLE, and TATEL, Circuit Judges.

O R D E R

Upon consideration of respondents’ motion to clarify remand, and the opposition thereto, it is

ORDERED that the motion to clarify remand be granted.

It is

FURTHER ORDERED that the opinion filed June 1,

2004, be amended as follows:

USCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 1 of 36
2

Page 34, delete the last paragraph of the opinion, and

insert in lieu thereof:

For the reasons set forth above, we grant in part

and deny in part each of the two petitions for review.

We hereby vacate the NOx standard on the ground

that EPA lacks statutory authority to regulate NOx

emissions under § 213(a)(4). We hold that the

Agency acted within its statutory authority in promulgating the CO and HC standards under

§ 213(a)(3) and (a)(4), respectively. However, we

remand the CO and HC standards for EPA to

clarify the analysis and evidence upon which the

standards are based. Specifically, we direct EPA to

clarify (1) the statutory and evidentiary basis of the

Agency’s assumption that the standards must be

sufficiently lenient to permit the continued production of all existing snowmobile models, and (2) the

analysis and evidence underlying the Agency’s conclusion that advanced technologies can be applied to

no more than 70% of new snowmobiles by 2012. We

uphold the CO and HC standards in all other respects.

Per Curiam

FOR THE COURT:

 Mark J. Langer, Clerk

 BY:

 Michael C. McGrail

 Deputy Clerk

USCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 2 of 36
Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 12, 2004 Decided June 1, 2004

No. 03-1003

BLUEWATER NETWORK,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY AND

CHRISTINE TODD WHITMAN, ADMINISTRATOR, U.S. ENVIRONMENTAL

PROTECTION AGENCY,

RESPONDENTS

INTERNATIONAL SNOWMOBILE MANUFACTURERS ASSOCIATION,

INTERVENOR

Consolidated with

03-1004, 03-1005, 03-1249

On Petitions for Review of an Order of the

Environmental Protection Agency

James S. Pew argued the cause for petitioners Bluewater

Network and Environmental Defense. With him on the

briefs was Jennifer R. Kefer.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 3 of 36
2

Eric B. Wolff argued the cause for petitioner International

Snowmobile Manufacturers Association. With him on the

briefs were Stuart A. Drake and Granta Y. Nakayama.

Stephen E. Crowley and Kent E. Hanson, Attorneys, U.S.

Department of Justice, argued the cause for respondents.

With them on the brief were John C. Cruden, Deputy Assistant Attorney General, and Michael J. Horowitz, Attorney,

U.S. Environmental Protection Agency.

James S. Pew and Jennifer R. Kefer were on the brief for

intervenors Bluewater Network and Environmental Defense.

Stuart A. Drake, Granta Y. Nakayama, and Eric B. Wolff

were on the brief for intervenor International Snowmobile

Manufacturers Association.

Before: EDWARDS, SENTELLE, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge EDWARDS.

EDWARDS, Circuit Judge: In November 2002, the Environmental Protection Agency (‘‘EPA’’ or ‘‘Agency’’) issued a final

rule establishing emissions standards for snowmobiles and

certain other ‘‘nonroad’’ vehicles. See Control of Emissions

From Nonroad Large Spark–Ignition Engines, and Recreational Engines (Marine and Land–Based), 67 Fed. Reg.

68,242 (Nov. 8, 2002). The snowmobile standards at issue in

this case – promulgated under § 213 of the Clean Air Act

(‘‘CAA’’ or ‘‘Act’’), 42 U.S.C. § 7547 (2000) – regulate emissions of three pollutants: carbon monoxide (‘‘CO’’), hydrocarbons (‘‘HC’’), and oxides of nitrogen (‘‘NOx’’).

The CO standard was adopted under § 213(a)(3). Under

this provision, EPA must regulate CO and certain ozoneprecursor emissions from a category of engines if, and only if,

the Agency finds that such emissions ‘‘cause, or contribute to’’

CO or ozone concentrations in more than one area that has

failed to attain the relevant national ambient air quality

standard (‘‘NAAQS’’). Where the Agency makes such a

finding – as it did for snowmobiles with respect to CO

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emissions – it must adopt standards reflecting ‘‘the greatest

degree of emission reduction achievable’’ through the application of technology that ‘‘will be available,’’ taking cost and

other factors into account.

EPA regulated HC and NOx emissions under § 213(a)(4),

which is directed at pollution problems other than CO and

ozone. This provision authorizes EPA – upon making certain

findings – to adopt such standards as the Agency ‘‘deems

appropriate,’’ again based on technology that will be available

and taking cost and other factors into account. Of crucial

importance for this case, § 213(a)(4) only permits regulation

of ‘‘emissions not referred to in’’ § 213(a)(2), which expressly

mentions emissions of CO, volatile organic compounds, and

NOx.

The Agency based its standards on the expected application

of two ‘‘advanced’’ technologies to snowmobiles: direct injection two-stroke engines and four-stroke engines. EPA estimated that compliance with the final phase of its standards –

effective in 2012 – would require the use of these engines in

70% of all new snowmobiles. The Agency found that broader

application would not be possible by 2012, because of resource

constraints on manufacturers and the magnitude of the investment required to apply the technologies to the wide

variety of snowmobile models on the market.

Petitioner International Snowmobile Manufacturers Association (‘‘ISMA’’) challenges EPA’s authority to promulgate the

standards. ISMA argues that EPA lacks authority to issue

the CO standard, because the Agency’s finding that snowmobiles contribute to CO pollution in more than one area that

has failed to attain the NAAQS is based on an impermissible

interpretation of the statute and is arbitrary and capricious.

ISMA claims, in addition, that the statute bars EPA from

regulating HC and NOx emissions under § 213(a)(4), because

those emissions are ‘‘referred to’’ in § 213(a)(2).

Petitioners Bluewater Network and Environmental Defense (collectively ‘‘Bluewater’’) challenge what they consider

to be the excessive leniency of the standards. Bluewater’s

principal claim is that EPA’s determination that advanced

USCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 5 of 36
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technologies cannot be applied to all new snowmobiles by

2012 is premised on an impermissible interpretation of the

statute and is arbitrary and capricious. Bluewater also raises

a host of other challenges to the regulation, including the

claim that EPA improperly refused to base its standards on

the application of catalyst technology.

We grant in part and deny in part each of the two petitions

for review. First, we hold that EPA acted within its statutory authority in promulgating the CO and HC standards under

§ 213(a)(3) and (a)(4), respectively. Accordingly, we reject

ISMA’s challenges to those standards. However, we agree

with ISMA that EPA lacks authority to regulate NOx emissions under § 213(a)(4), because such emissions are ‘‘referred

to’’ in § 213(a)(2). We therefore vacate the NOx standard.

In response to Bluewater’s petition, we remand the CO and

HC standards for EPA to clarify the analysis and evidence

upon which the standards are based. Specifically, we direct

EPA to clarify (1) the statutory and evidentiary basis of the

Agency’s assumption that the standards must be sufficiently

lenient to permit the continued production of all existing

snowmobile models, and (2) the analysis and evidence underlying the Agency’s conclusion that advanced technologies can

be applied to no more than 70% of new snowmobiles by 2012.

We reject Bluewater’s remaining claims.

I. BACKGROUND

A. Factual Background

The snowmobile industry is relatively concentrated, with

four manufacturers producing 99% of all snowmobiles, or

‘‘sleds,’’ sold in the United States. These manufacturers offer

various types of sleds designed for different applications –

including high-performance trail riding, high-performance offtrail riding, mountain riding, touring, and entry-level riding –

with multiple engine models available for each type. As a

result, most of the major manufacturers offer 30 to 50 different engine-snowmobile model combinations. Highperformance models, with very high power-to-weight ratios,

dominate current sales. See 67 Fed. Reg. at 68,273.

USCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 6 of 36
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The vast majority of snowmobiles now on the market use

carbureted two-stroke engines. In comparison with fourstroke engines, carbureted two-stroke engines generally are

simpler in design and have lower manufacturing costs. They

also burn an air-fuel mixture that is comparatively rich in

fuel. This makes them less fuel-efficient than four-stroke

engines, but gives them a higher power-to-weight ratio, allows

them to start more easily in cold weather, and permits them

to run at cooler temperatures (which reduces engine wear) –

all important advantages for snowmobiles. See 65 Fed. Reg.

76,797, 76,803–04 (Dec. 7, 2000) (advance notice of proposed

rulemaking).

Because of their design characteristics, carbureted twostroke engines emit comparatively high levels of CO and HC,

see id., both of which can contribute to harmful air pollution.

Elevated CO levels can cause a number of health problems

associated with reduced delivery of oxygen to the body’s

tissues, including impairment of visual perception, work capacity, manual dexterity, learning ability, and performance of

complex tasks. 67 Fed. Reg. at 68,245. HC emissions can,

inter alia, cause visibility impairment (or ‘‘haze’’) due to fine

particulate matter (‘‘PM’’) pollution; specifically, HC emissions contain fine PM and can also contribute to the formation of ‘‘secondary’’ fine PM in the atmosphere. Id. at 68,254.

Like virtually all internal combustion engines, snowmobile

engines emit volatile organic compounds (‘‘VOCs’’) – most of

which are hydrocarbons – and NOx. VOCs and NOx are the

primary precursors of ground-level ozone, which can cause a

number of severe respiratory problems. 65 Fed. Reg. at

76,798. Ground-level ozone is formed through a complex

chemical reaction of VOCs and NOx in the atmosphere.

Because this reaction occurs only in the presence of heat and

sunlight, elevated ground-level ozone concentrations are primarily a warm-weather phenomenon. See id.

B. Statutory Context

Recognizing the significant and growing role of unregulated

emissions from ‘‘nonroad’’ engines in causing air pollution,

Congress enacted § 213 of the Clean Air Act as part of the

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1990 amendments to the Act. See Pub. L. No. 101–549,

§ 222, 104 Stat. 2399, 2500–02 (1990) (codified at 42 U.S.C.

§ 7547); see also S. REP. No. 101–228, at 103–04 (1989)

(discussing the policy rationale for regulating nonroad engine

emissions). Section 213 authorizes EPA to set emissions

standards for ‘‘nonroad engines and vehicles,’’ a broad grouping including farm and construction equipment, lawn and

garden equipment, airport service equipment, marine engines,

and recreational vehicles such as off-road motorcycles, allterrain vehicles, and snowmobiles.

Under § 213’s multi-step scheme, EPA must first complete

a study to determine whether emissions from nonroad engines ‘‘cause, or significantly contribute to, air pollution which

may reasonably be anticipated to endanger public health or

welfare.’’ 42 U.S.C. § 7547(a)(1). Based on the results of

this study, EPA must then determine whether emissions of

CO, NOx, and VOCs from new and existing nonroad vehicles

or engines collectively are ‘‘significant contributors to ozone

or carbon monoxide concentrations in more than 1 area which

has failed to attain the national ambient air quality standards

[NAAQS] for ozone or carbon monoxide.’’ 42 U.S.C.

§ 7547(a)(2). (For convenience, we refer to areas which have

failed to attain the NAAQS as ‘‘nonattainment areas.’’)

If EPA makes a finding of significant contribution for

nonroad engines under § 213(a)(2), the Agency is required

under § 213(a)(3) to promulgate standards for those individual ‘‘classes or categories’’ of new nonroad engines whose

emissions, in EPA’s judgment, ‘‘cause, or contribute to’’ CO

or ozone concentrations in more than one CO or ozone

nonattainment area. 42 U.S.C. § 7547(a)(3). These standards must

achieve the greatest degree of emission reduction achievable through the application of technology which [EPA] determines will be available

TTT, giving appropriate consideration to the cost

of applying such technology within the period of

time available to manufacturers and to noise,

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energy, and safety factors associated with the

application of such technology.

Id. In setting these standards, EPA is directed to ‘‘first

consider standards equivalent in stringency to standards for

comparable [onroad] motor vehicles or engines (if any)’’ regulated under § 202 of the Act. Id.

Section 213(a)(4) provides EPA with an alternative basis of

regulatory authority. Under this provision, if EPA determines that nonroad engine emissions ‘‘not referred to’’ in

§ 213(a)(2) ‘‘significantly contribute to air pollution which

may reasonably be anticipated to endanger public health or

welfare,’’ EPA may promulgate emissions standards it

‘‘deems appropriate’’ for individual categories or classes of

nonroad engines that EPA determines ‘‘cause, or contribute

to, such air pollution.’’ 42 U.S.C. § 7547(a)(4). These standards likewise must be based on technology that EPA determines will be available, giving appropriate consideration to

cost, noise, energy, and safety factors. Id.

C. Regulatory History

In November 1991, EPA completed the ‘‘Nonroad Engine

and Vehicle Emission Study’’ called for in § 213(a)(1). Based

on this study, EPA made a final determination pursuant to

§ 213(a)(2) that emissions from nonroad engines significantly

contribute to CO and ozone concentrations in more than one

nonattainment area. 59 Fed. Reg. 31,306, 31,307 (June 17,

1994). EPA further found, under § 213(a)(4), that PM emissions from nonroad engines significantly contribute to air

pollution that may reasonably be anticipated to endanger

public health or welfare. See id. at 31,318.

On December 7, 2000, EPA issued a final finding under

§ 213(a)(3) that emissions from the category of large sparkignition (‘‘large-SI’’) engines and the lesser included category

of land-based recreational vehicles (which includes snowmobiles, offroad motorcycles, and all-terrain vehicles) each contribute to ozone and CO concentrations in more than one

nonattainment area. 65 Fed. Reg. 76,790, 76,791 (Dec. 7,

2000). EPA also found, pursuant to § 213(a)(4), that the

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large-SI and land-based recreational vehicle categories each

contribute to PM air pollution that may reasonably be anticipated to endanger the public health or welfare. Id. EPA

indicated that it would consider further whether it should

regulate snowmobile emissions of ozone precursors, because

ozone is less of a concern during cold weather, when snowmobiles are used. Id.

On November 8, 2002, EPA promulgated a final rule establishing emissions standards for large-SI engines and landbased recreational engines, including snowmobiles. 67 Fed.

Reg. 68,242 (Nov. 8, 2002) (‘‘Final Rule’’). Only the snowmobile exhaust emissions standards are at issue in this case.

The Final Rule established a CO emissions standard for

snowmobiles pursuant to § 213(a)(3). In discussing the need

for this standard, EPA referred to its December 2000 finding

that the land-based recreational vehicle category – in which

snowmobiles are included – contributes to CO concentrations

in more than one CO nonattainment area. Id. at 68,248.

EPA further found that, even when considered separately

from other land-based recreational vehicles, snowmobiles contribute to such pollution. Id. at 68,248–49. The Agency

determined that regulation of snowmobile emissions of ozone

precursors under § 213(a)(3) was inappropriate, because

snowmobiles are operated in cold weather and are therefore

unlikely to contribute to ozone pollution. See Summary and

Analysis of Comments (‘‘SAC’’) at II–24, V–31, reprinted in

Joint Appendix (‘‘J.A.’’) 92, 110; see also 66 Fed. Reg. 51,098,

51,154 (Oct. 5, 2001) (notice of proposed rulemaking).

EPA promulgated HC and NOx emissions standards under

§ 213(a)(4). The Agency found that snowmobile emissions

contribute significantly to haze in a number of relatively

pristine protected areas, known under the CAA as ‘‘Class I’’

areas, including at least eight national parks. 67 Fed. Reg. at

68,252–54. This phenomenon is the result of increased ambient concentrations of fine PM. Id. EPA offered two

grounds for regulating snowmobile HC emissions as a means

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of controlling fine PM pollution. First, HC emissions themselves contain fine PM and contribute to the formation of

secondary fine PM in the atmosphere. Id. at 68,254. Second, EPA determined that HC emissions provide a good

proxy for regulating fine PM emissions from snowmobiles,

because the technologies for reducing HC emissions also

reduce PM emissions and direct regulation of PM is more

difficult. Id. Although the rule is unclear on this point, EPA

appeared to base its authority to regulate NOx emissions

under § 213(a)(4) on its finding that NOx contributes to the

formation of secondary PM. See id. at 68,254 n.30, 68,255.

EPA based its emissions standards on two ‘‘advanced’’

technologies that it determined would be available for snowmobiles in the foreseeable future: (1) direct injection (‘‘DI’’)

two-stroke engines, which replace air-fuel carburetion with

direct injection of fuel into the cylinder, and (2) four-stroke

engines. Id. at 68,272. The Agency predicted that DI twostroke engines could reduce HC emissions by 70–75% and CO

emissions by 50–70%. Four-stroke engines could reduce HC

emissions by 70–95%, and could reduce CO emissions by 50–

80% for low-power applications and 20–50% for high-power

applications. Id. EPA did not view either technology as

obviously superior. DI two-stroke engines would likely produce lower CO emissions than comparably powered fourstroke engines, but four-stroke engines would yield greater

reductions in HC emissions. Four-stroke engines would likely produce more pure power, whereas DI two-stroke technology might be preferable for applications requiring a powerful,

but lighter and more compact, engine. Id.

In setting emissions standards, EPA framed the regulatory

question as ‘‘how broadly [these] technolog[ies] can be practically applied across the snowmobile fleet in the near term,

taking into account factors such as the number of engine and

snowmobile models currently available, and the capacity of

the industry to perform the research and development efforts

required to optimally apply advanced technology to each of

these models.’’ Id. at 68,273. EPA concluded that, ‘‘at least

in theory,’’ there was no purely technological barrier to the

application of these technologies to all new snowmobiles by

2012. Id. However, the Agency identified a number of factors

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that would limit the speed with which such technologies could

be applied to all snowmobiles models, including resource

constraints on manufacturers, the fact that not all manufacturers produce their engines in-house, and the design and

development work required to optimize advanced technologies

for each model. Id.

Taking these factors into account, the final rule requires

that snowmobile engines meet successively more stringent

emissions standards in three phases. In Phase 1, manufacturers would be required to reduce CO and HC emissions by

30% relative to current baseline emissions. Half of all snowmobile sales would have to meet the Phase 1 standards by

model year 2006, and all would have to meet them by model

year 2007. EPA estimated that compliance with the Phase 1

standards would require application of advanced technologies

to approximately 10% of new snowmobiles, with cleaner carburetion and other technologies applied to the remainder.

Id. at 68,271.

In Phase 2, effective for the 2010 model year, manufacturers would be required to achieve a 50% reduction in HC

emissions relative to baseline and a 30% reduction in CO

emissions relative to baseline. Id. at 68,273. In Phase 3,

effective for the 2012 model year, manufacturers must achieve

a nominal 50% reduction relative to baseline for both CO and

HC. This standard requires percentage reductions in CO

and HC that together add up to 100%, e.g., 60% for HC and

40% for CO. However, emissions for each pollutant may not

exceed the level permitted under the Phase 2 standards. Id.

at 68,274. EPA predicted that the Phase 2 and 3 standards

would require application of advanced technologies to 50%

and 70% of new snowmobiles, respectively, with less advanced

technologies applied to the remainder. Id. at 68,271, 68,273.

The Phase 3 standards also require engines to meet a NOx

standard (actually a HC v NOx standard), which caps NOx

emissions at or near existing levels. Id. at 68,274.

The three-phase scheme is summarized in the following

table:

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EPA noted that it believed that it would be feasible at some

point after 2012 to apply advanced technologies to all new

snowmobiles and that catalysts or other exhaust aftertreatment devices might become available at some future time.

The Agency stated that it had considered setting a standard

reflecting application of advanced technologies to 100% of new

snowmobiles, but did not believe that this was feasible by

2012. EPA indicated that in the future it would consider

promulgating more stringent standards to be applied in a

fourth phase. The Agency declined to do so in this rulemaking, however, in order to monitor the development of new

technologies in response to the Phase 1 through 3 standards.

Id.

Bluewater and ISMA filed separate petitions for review of

the snowmobile standards, and the petitions were consolidated in the instant case.

II. ANALYSIS

A. Standard of Review

Under § 307(d)(9) of the Clean Air Act, we review the

Final Rule to determine, inter alia, whether EPA’s action is

‘‘in excess of statutory jurisdiction, authority, or limitations,

or short of statutory right,’’ or is ‘‘arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.’’

42 U.S.C. § 7607(d)(9); see also Ethyl Corp. v. EPA, 51 F.3d.

1053, 1064 (D.C. Cir. 1995) (noting that review under the

CAA’s ‘‘arbitrary and capricious’’ standard is the same as that

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required by the Administrative Procedure Act, 5 U.S.C.

§ 706(2)(A)). Our review under the ‘‘arbitrary and capricious’’ standard is narrow and does not permit us to substitute our policy judgment for that of the Agency. Rather, we

are principally concerned with ensuring that EPA has ‘‘examine[d] the relevant data and articulate[d] a satisfactory explanation for its action including a rational connection between

the facts found and the choice made,’’ that the Agency’s

‘‘decision was based on a consideration of the relevant factors,’’ and that the Agency has made no ‘‘clear error of

judgment.’’ Motor Vehicle Mfrs. Ass’n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 43 (1983) (internal citations and

quotation marks omitted).

We review EPA’s interpretations of the CAA under the

standard established by Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), and its

progeny. Under this standard, we first employ the traditional tools of statutory construction to determine whether Congress has spoken to the precise question at issue. Id. at 842–

43 & n.9. ‘‘If the intent of Congress is clear, that is the end

of the matter; for the court, as well as the Agency, must give

effect to the unambiguously expressed intent of Congress.’’

Id. at 842–43. However, where the statute is ambiguous and

the Agency has acted within its delegated authority, we will

defer to the Agency’s interpretation if it is reasonable. Motion Picture Ass’n of Am., Inc. v. FCC, 309 F.3d 796, 801

(D.C. Cir. 2002) (citing Chevron, 467 U.S. at 843–44). Such

deference is appropriate only where the agency acts pursuant

to an express or implied congressional delegation of authority

to regulate in the area at issue and the Agency’s action has

the ‘‘force of law.’’ Id. (citing United States v. Mead Corp.,

533 U.S. 218, 226–27 (2001)).

B. EPA’s Authority to Regulate CO Under § 213(a)(3)

Section 213(a)(3) requires EPA to regulate CO emissions

from an individual ‘‘class or category’’ of nonroad engines if,

and only if, the Agency first determines that such emissions

‘‘cause, or contribute to’’ CO concentrations in more than one

area that has failed to attain the NAAQS for CO. 42 U.S.C.

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§ 7547(a)(3). In the Final Rule, EPA based its authority to

issue the snowmobile CO standard on two such ‘‘contribution’’

findings: the December 2000 finding for the land-based recreational vehicle category in which snowmobiles are included, and the Final Rule’s finding for snowmobiles considered

as a separate category.

ISMA challenges EPA’s authority to issue the CO standard

under § 213(a)(3) on three grounds, arguing (1) that EPA’s

contribution findings are premised on an impermissible interpretation of the ‘‘cause, or contribute to’’ language in

§ 213(a)(3); (2) that the snowmobiles-only CO contribution

finding in the Final Rule is arbitrary and capricious; and (3)

that EPA improperly grouped snowmobiles with land-based

recreational vehicles for purposes of its December 2000 contribution finding. We reject each of these claims and, accordingly, uphold EPA’s authority to promulgate the CO standard.

1. EPA’s Interpretation of ‘‘Contribute’’

The relevant portions of the Act read as follows:

(a) Emissions standards

(1) The Administrator shall conduct a study of

emissions from nonroad engines and nonroad

vehicles (other than locomotives or engines used

in locomotives) to determine if such emissions

cause, or significantly contribute to, air pollution

which may reasonably be anticipated to endanger public health or welfare. Such study shall be

completed within 12 months of November 15,

1990.

(2) After notice and opportunity for public hearing, the Administrator shall determine within 12

months after completion of the study under

paragraph (1), based upon the results of such

study, whether emissions of carbon monoxide,

oxides of nitrogen, and volatile organic compounds from new and existing nonroad engines

or nonroad vehicles (other than locomotives or

engines used in locomotives) are significant contributors to ozone or carbon monoxide concenUSCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 15 of 36
14

trations in more than 1 area which has failed to

attain the national ambient air quality standards

for ozone or carbon monoxide. Such determination shall be included in the regulations under

paragraph (3).

(3) If the Administrator makes an affirmative

determination under paragraph (2) the Administrator shall, within 12 months after completion

of the study under paragraph (1), promulgate

(and from time to time revise) regulations containing standards applicable to emissions from

those classes or categories of new nonroad engines and new nonroad vehicles (other than

locomotives or engines used in locomotives)

which in the Administrator’s judgment cause, or

contribute to, such air pollution. Such standards

shall achieve the greatest degree of emission

reduction achievable through the application of

technology which the Administrator determines

will be available for the engines or vehicles to

which such standards apply, giving appropriate

consideration to the cost of applying such technology within the period of time available to

manufacturers and to noise, energy, and safety

factors associated with the application of such

technology. In determining what degree of reduction will be available, the Administrator shall

first consider standards equivalent in stringency

to standards for comparable motor vehicles or

engines (if any) regulated under section 7521 of

this title, taking into account the technological

feasibility, costs, safety, noise, and energy factors associated with achieving, as appropriate,

standards of such stringency and lead time. The

regulations shall apply to the useful life of the

engines or vehicles (as determined by the Administrator).

(4) If the Administrator determines that any

emissions not referred to in paragraph (2) from

new nonroad engines or vehicles significantly

contribute to air pollution which may reasonably

be anticipated to endanger public health or welUSCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 16 of 36
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fare, the Administrator may promulgate (and

from time to time revise) such regulations as

the Administrator deems appropriate containing

standards applicable to emissions from those

classes or categories of new nonroad engines

and new nonroad vehicles (other than locomotives or engines used in locomotives) which in

the Administrator’s judgment cause, or contribute to, such air pollution, taking into account

costs, noise, safety, and energy factors associated with the application of technology which the

Administrator determines will be available for

the engines and vehicles to which such standards apply. The regulations shall apply to the

useful life of the engines or vehicles (as determined by the Administrator).

42 U.S.C. § 7547(a)(1)-(4) (also referred to as §§ 213(a)(1),

213(a)(2), 213(a)(3), 213(a)(4)).

We begin by examining EPA’s interpretation of the language of § 213(a)(3), because that interpretation provides the

basis for the disputed contribution findings. ISMA argues

that § 213(a)(3) requires a finding that an individual category

of vehicles ‘‘significantly contributes’’ to CO concentrations in

more than one nonattainment area. EPA rejected that reading, stating that § 213(a)(3) ‘‘does not require a finding of

‘significant contribution,’ but merely ‘contribution,’ for individual categories of nonroad engines.’’ 65 Fed. Reg. at

76,791; see also 59 Fed. Reg. at 31,309 (explaining the basis

of EPA’s interpretation). We agree with the Agency: Congress clearly did not intend to require an affirmative finding

of ‘‘significant’’ contribution from individual vehicle categories

in order to trigger regulation under § 213(a)(3).

We begin our interpretation of the provision with the

‘‘assumption that legislative purpose is expressed by the

ordinary meaning of the words used.’’ Sec. Indus. Ass’n v.

Bd. of Governors, 468 U.S. 137, 149 (1984) (quoting Russello

v. United States, 464 U.S. 16, 21 (1983)). The ordinary

meaning of ‘‘contribute’’ supports EPA’s reading. As used in

this context, ‘‘contribute’’ means simply ‘‘to have a share in

any act or effect,’’ WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 496 (1993), or ‘‘to have a part or share in producing,’’ 3

USCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 17 of 36
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OXFORD ENGLISH DICTIONARY 849 (2d ed. 1989). Standing

alone, the term has no inherent connotation as to the magnitude or importance of the relevant ‘‘share’’ in the effect;

certainly it does not incorporate any ‘‘significance’’ requirement.

More important, the language and structure of § 213 as a

whole make quite clear that Congress did not intend to

require a finding of ‘‘significant contribution’’ for individual

vehicle categories. Twice in the provision, Congress drew a

distinction between the ‘‘significant contributor’’ finding required for all new and existing nonroad vehicles, and the

‘‘cause, or contribute to’’ finding for an individual category of

new nonroad vehicles. Under § 213(a)(2), EPA must determine whether all new and existing nonroad vehicles are

‘‘significant contributors’’ to CO concentrations in more than

one CO nonattainment area. If EPA makes this finding,

§ 213(a)(3) then requires the Agency to set standards for CO

emissions from each individual category of new vehicles that

‘‘cause, or contribute to, such air pollution.’’ This same

distinction between the ‘‘significant contributor’’ finding for

all nonroad vehicles and the ‘‘cause, or contribute to’’ finding

for an individual category of new nonroad vehicles is mirrored

in § 213(a)(4). In addition, § 213(a)(1) expressly directs EPA

to complete a study to determine whether all nonroad vehicles

‘‘cause, or significantly contribute to’’ harmful air pollution.

42 U.S.C. § 7547(a)(1) (emphasis added).

‘‘[I]t is a general principle of statutory construction that

when ‘Congress includes particular language in one section of

a statute but omits it in another section of the same Act, it is

generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.’ ’’ Barnhart v.

Sigmon Coal Co., 534 U.S. 438, 452 (2002) (quoting Russello,

464 U.S. at 23). The repeated use of the term ‘‘significant’’ to

modify the contribution required for all nonroad vehicles,

coupled with the omission of this modifier from the ‘‘cause, or

contribute to’’ finding required for individual categories of

new nonroad vehicles, indicates that Congress did not intend

to require a finding of ‘‘significant contribution’’ for individual

vehicle categories.

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This interpretation is consistent with § 213’s structure and

purpose. The ‘‘significant contributor’’ finding required for all

nonroad engines can be understood as a threshold determination that the overall regulatory program is justified. See 58

Fed. Reg. 28,809, 28,811–13 (May 17, 1993) (discussing the

basis of the significance determination). Emissions from

individual categories of new vehicles will necessarily make a

lesser contribution to air pollution than will emissions from all

new and existing nonroad engines. However, as we noted in

Michigan v. EPA, 213 F.3d 663, 684 (D.C. Cir. 2000), ‘‘unlike

bologna, which remains bologna no matter how thin you slice

it, significant contribution may disappear if emissions activity

is sliced too thinly.’’ Unless each individual vehicle category

that makes some nontrivial contribution to pollution is subject

to regulation, it is unlikely that the ‘‘significant’’ cumulative

effect of emissions from all nonroad vehicle categories can

effectively be controlled.

ISMA’s arguments in support of its position are untenable.

ISMA first contends that § 213(a)(3) somehow incorporates

paragraph (a)(2)’s ‘‘significant contributor’’ language, because

paragraph (a)(3) refers back to paragraph (a)(2) by means of

the phrase ‘‘cause, or contribute to, such air pollution.’’ But

the phrase ‘‘such air pollution’’ clearly refers to ‘‘ozone or

carbon monoxide concentrations in more than 1 area which

has failed to attain’’ the NAAQS, and bears no plausible

relation to the ‘‘significant contributor’’ language in paragraph (a)(2). See 42 U.S.C. § 7547(a)(2), (3).

ISMA also cites a Senate Committee report referring to

proposed language from a Senate bill that would have required EPA first to list categories of nonroad engines, and

then to promulgate regulations for each category found to

‘‘contribute significantly’’ to certain pollution. See S. 1630,

101st Cong. § 217 (1989), reprinted in 5 A LEGISLATIVE HISTORY OF THE CLEAN AIR ACT AMENDMENTS OF 1990, at 7906, 8044–45

(Comm. Print 1993) (‘‘LEGISLATIVE HISTORY’’); S. REP. No. 101–

228, at 103–05 (1989). The Senate provision in question was

dropped in favor of a House amendment, see Chafee–Baucus

Statement of Senate Managers, S. 1630, The Clean Air Act

Amendments of 1990, reprinted in 1 LEGISLATIVE HISTORY, at

880, 896–97, and the discussion of the proposed language in

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the Senate report is therefore irrelevant. The House Committee report discussing the provision that was ultimately

enacted provides no commentary on § 213(a)(3)’s ‘‘cause, or

contribute to’’ language. See H.R. REP. No. 101–490, at 309–

10 (1990).

Finally, ISMA argues that EPA’s interpretation leads to an

absurd result, because it permits promulgation of national

regulations for a vehicle category on the basis of a finding

that this category makes an insignificant contribution to the

relevant pollution. No such issue is presented in this case,

however, because EPA’s contribution findings, discussed at

greater length below, clearly involve more than a de minimis

contribution.

2. Snowmobiles-Only Contribution Finding

In the Final Rule, EPA found that emissions from snowmobiles, considered as a separate category, contribute to CO

concentrations in more than one area designated by EPA as a

‘‘nonattainment’’ area for CO. 67 Fed. Reg. at 68,248–49.

ISMA now challenges that finding, claiming that it lacks

adequate evidentiary support and is premised on an improper

interpretation of the statute. We reject these claims and

uphold EPA’s finding.

EPA’s snowmobiles-only finding is based primarily on

data from the State of Alaska, estimating that snowmobile

operation for engine maintenance, loading, and unloading

contributes 0.3 tons/day of CO emissions to the Fairbanks

nonattainment area and 0.34 tons/day of CO emissions to the

Anchorage nonattainment area. Id. at 68,248. For Fairbanks, this contribution was equivalent to 1.2% of the total

daily CO inventory for 2001. Id. EPA further found that

there is a snowmobile trail located within the Spokane,

Washington, nonattainment area, and that snowmobile operation on that trail contributes to CO concentrations there.

Id. The Agency also noted that there are snowmobile trails

located in close proximity to a number of other CO nonattainment areas and that there is evidence – primarily from

Michigan and Alaska – that snowmobiles are ridden on

roads as well as trails. Id. This evidence is adequate to

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support EPA’s contribution finding, at least as to the Anchorage, Fairbanks, and Spokane nonattainment areas.

ISMA levels a number of challenges against EPA’s finding,

each of which falls short. Citing this court’s decisions in

Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), and Appalachian Power Co. v. EPA, 251 F.3d 1026 (D.C. Cir. 2001),

ISMA first argues that contribution must be demonstrated

through modeling or analysis showing transport of the emissions to the relevant area. But EPA’s contribution finding in

the instant case is based on emissions within the nonattainment areas, so no question of transport is implicated. Michigan and Appalachian Power Co. are inapposite: Both cases

involved EPA’s attempt to impose regulatory requirements

on upwind areas of a State without the requisite finding that

these specific areas in fact made any measurable contribution

to pollution in downwind areas. See Appalachian Power Co.,

251 F.3d at 1040; Michigan, 213 F.3d at 683–84.

ISMA also contends that EPA was not entitled to rely on

Alaska’s data in making the contribution finding, because

those data are estimates of expected snowmobile emissions,

rather than actual measured emissions. We see nothing

improper in EPA’s reliance on Alaska’s data, which in the

case of Fairbanks were confirmed by a National Research

Council study, see 67 Fed. Reg. at 68,248. Nothing in the

statute requires direct empirical measurements, and nothing

in the record suggests that Alaska’s estimates are otherwise

unreasonable.

Finally, ISMA challenges EPA’s decision to base its contribution finding on whether the areas in question are designated by EPA as ‘‘nonattainment’’ areas, rather than on whether

the area is currently attaining the NAAQS. The Clean Air

Act imposes numerous requirements for redesignation of an

area from nonattainment to attainment status, including EPA

approval of a state maintenance plan that will ensure attainment of the NAAQS for the decade following redesignation.

See 42 U.S.C. § 7407(d)(3); see also 57 Fed. Reg. 13,498,

13,561–64 (Apr. 16, 1992) (discussing EPA procedures governing redesignation). Accordingly, attainment of the NAAQS

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does not automatically result in redesignation. While Fairbanks has not yet attained the NAAQS for CO, Spokane and

Anchorage are currently attaining the NAAQS for CO but

continue to be designated as ‘‘serious nonattainment’’ areas.

See 66 Fed. Reg. 44,060 (Aug. 22, 2001) (Spokane); 66 Fed.

Reg. 36,476 (July 12, 2001) (Anchorage). The other areas

mentioned in EPA’s snowmobiles-only contribution finding –

Fort Collins, Colorado, and Medford, Oregon – have been

redesignated as attainment areas for CO. See 68 Fed. Reg.

43,316 (July 22, 2003) (Fort Collins); 67 Fed. Reg. 48,388

(July 24, 2002) (Medford).

This issue turns on the meaning of the language in

§ 213(a)(2) referring to emissions contributing to CO concentrations in ‘‘more than 1 area which has failed to attain’’ the

NAAQS for CO, 42 U.S.C. § 7547(a)(2) (emphasis added).

The phrase ‘‘has failed to attain’’ – stated in the present

perfect tense – is ambiguous with regard to whether it applies

to an area that failed to attain the NAAQS in the past but is

currently attaining the standard. EPA’s interpretation of the

phrase to refer to an area’s attainment designation status,

rather than whether it currently is attaining the NAAQS, is

reasonable. Current attainment does not demonstrate that

an area will continue in attainment, and areas often experience ‘‘relapse.’’ See 67 Fed. Reg. at 68,248 n.7. Areas not

yet redesignated ‘‘have failed to attain’’ the NAAQS, and may

reasonably be considered to be at risk of relapse – due, in

part, to any emissions contributing to the relevant pollution –

until the steps necessary for redesignation have been taken.

3. Grouping of Snowmobiles With Land–Based Recreational Vehicles

ISMA also challenges EPA’s decision to group snowmobiles

with the land-based recreational vehicle category for purposes

of the Agency’s December 2000 contribution finding. ISMA

claims that the grouping is unreasonable, because snowmobiles are operated in different parts of the country and at

different times of the year than other recreational vehicles.

The relevance of this claim is uncertain in light of our

decision to uphold the snowmobiles-only contribution finding,

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which appears to provide an adequate basis for promulgating

the CO standards under § 213(a)(3). However, because EPA

purported to rely in part upon the December 2000 finding

when issuing the standards, see id. at 68,248; SAC at II–24,

J.A. 92, we address – and reject – ISMA’s claim.

EPA raises a threshold concern as to whether ISMA’s

challenge to the Agency’s grouping decision is timely. We

find that it is. Although EPA first made the grouping

decision in the December 2000 finding, the Agency reopened

that decision in the rulemaking under review in this case.

‘‘ ‘[W]hether an agency has in fact reopened an issue’ is

dependent upon ‘the entire context of the rulemaking including all relevant proposals and reactions of the agency,’ and

not just the agency’s stated intent.’’ Appalachian Power Co.,

251 F.3d at 1033 (quoting Pub. Citizen v. Nuclear Regulatory

Comm’n, 901 F.2d 147, 150 (D.C. Cir. 1990)). More specifically, ‘‘if an agency’s response to comments ‘explicitly or

implicitly shows that the agency actually reconsidered the

rule, the matter has been reopened.’’’ Id. (quoting PanAmSat Corp. v. FCC, 198 F.3d 890, 897 (D.C. Cir. 1999)). Such is

the case here.

In the notice of proposed rulemaking, EPA directed virtually all of its discussion of the health effects of CO pollution to

emissions from snowmobiles alone. See 66 Fed. Reg. at

51,105–06. ISMA and Polaris Industries submitted comments, based on a study by a consulting group, challenging

the reasonableness of grouping snowmobiles with other landbased recreational vehicles for purposes of the CO finding

and requesting that EPA reconsider its December 2000 finding. EPA considered these comments on the merits and

responded, in part, with a new defense of the grouping: i.e.,

that, ‘‘even if [the Agency] did review snowmobile contribution separately, there is no question that they’’ meet the

contribution criteria. SAC at II–24, J.A. 92. This was not a

case in which parties merely ‘‘comment[ed] on matters other

than those actually at issue [and] goad[ed the] agency into a

reply.’’ See Am. Iron & Steel Inst. v. EPA, 886 F.2d 390, 398

(D.C. Cir. 1989), cert. denied, 497 U.S. 1003 (1990). Rather,

EPA put the basis of its finding in play by offering new

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evidence linking snowmobiles to CO nonattainment, and the

comments went directly to the basis of EPA’s authority to

issue the snowmobile standards. Most important, EPA’s

response to these comments clearly indicates that it actually

reconsidered – and therefore reopened to challenge – its

grouping decision for purposes of the CO contribution finding.

On the merits, we find nothing improper in this decision.

EPA has discretion to define reasonable ‘‘categories or

classes’’ of vehicles under § 213(a)(3). See Engine Mfrs.

Ass’n v. EPA, 88 F.3d 1075, 1097–98 (D.C. Cir. 1996). In this

case, the Agency reasonably found that engines used in

snowmobiles and other land-based recreational vehicles have

similar characteristics, including combustion cycle, fuel usage

patterns, power rating, and equipment type. See 65 Fed.

Reg. at 76,791; 66 Fed. Reg. at 51,148. EPA ultimately

concluded that snowmobiles should not be grouped with other

land-based recreational vehicles for purposes of regulating

ozone precursors, because snowmobiles are operated in cold

weather and ozone is a warm-weather phenomenon. SAC at

II–24, V–31, J.A. 92, 110. But this has no bearing on the

reasonableness of the grouping for purposes of CO contribution, because peak CO concentrations typically occur during

the colder months of the year, see id.; 66 Fed. Reg. at 51,105.

ISMA offers no support for its assertion that snowmobiles

and other recreational vehicles are not operated in the same

parts of the country. We therefore uphold as reasonable

EPA’s decision to group snowmobiles with other land-based

recreational vehicles for purposes of the December 2000 CO

contribution finding.

C. EPA’s Authority to Regulate HC and NOx Under

§ 213(a)(4)

EPA promulgated the HC and NOx standards under

§ 213(a)(4), which authorizes the Agency to regulate emissions ‘‘not referred to in paragraph (2)’’ if such emissions

contribute to air pollution which may reasonably be anticipated to endanger the public health or welfare. Paragraph (2)

directs the Agency to determine ‘‘whether emissions of carbon monoxide, oxides of nitrogen, and volatile organic comUSCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 24 of 36
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pounds from new and existing nonroad engines or nonroad

vehicles TTT are significant contributors to ozone or carbon

monoxide concentrations in more than 1’’ nonattainment area.

42 U.S.C. § 7547(a)(2). ISMA argues that EPA lacks authority to regulate HC and NOx emissions under § 213(a)(4),

because they are referred to in § 213(a)(2). We reject this

claim as to HC, but we agree that EPA exceeded its statutory

authority in issuing the NOx standard. Accordingly, we

hereby vacate the latter standard.

1. HC Standard

The only ‘‘emissions’’ identified in § 213(a)(2) are CO, NOx,

and VOCs. ISMA argues that § 213(a)(2) nevertheless ‘‘refers to’’ HC, because it mentions ozone, of which HC is a

precursor, and VOCs, which consist primarily of HC. We

disagree. First, ozone is not an ‘‘emission,’’ but rather an

ambient pollutant formed through reactions between chemical

precursors in the atmosphere, so paragraph (a)(2)’s reference

to ozone is irrelevant here. Second, VOCs and HC are not

coterminous. While HC and VOCs overlap in parts, they are

distinct: Not all VOCs are hydrocarbons, and not all HC

emissions are VOCs. See SAC at II–26, J.A. 94. It is true

that EPA has in the past used HC as a surrogate for

regulating VOCs, see id., but it did not do so here. Rather,

EPA regulated HC emissions as a means of controlling fine

PM emissions and pollution. The Agency reasonably determined that regulating HC would control PM pollution both

because HC itself contributes to such pollution, and because

HC provides a good proxy for regulating fine PM emissions.

67 Fed. Reg. at 68,254. Based on the foregoing, we conclude

that EPA has the authority to regulate HC emissions under

§ 213(a)(4).

2. NOx Standard

Section 213(a)(2) expressly and undeniably refers to NOx,

and we therefore conclude that EPA lacks authority to regulate NOx emissions under § 213(a)(4). EPA resists this conclusion by arguing that the phrase emissions ‘‘referred to in

paragraph (2)’’ means ‘‘emissions of carbon monoxide, oxides

of nitrogen, and volatile organic compounds from TTT nonroad

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engines TTT [that] are significant contributors to ozone or

carbon monoxide concentrations in more than one [ozone or

CO nonattainment area].’’ SAC at II–26, J.A. 94; see also 65

Fed. Reg. at 76,790. In other words, EPA reads § 213(a)(4)

to allow it to regulate any emissions meeting (a)(4)’s contribution criteria – including CO, NOx, and VOCs – so long as they

are being regulated for the purpose of addressing pollution

problems other than CO or ozone nonattainment. See id.

The Agency’s interpretation is untenable, for several reasons.

First, EPA’s interpretation runs counter to the plain meaning of the phrase ‘‘emissions TTT referred to in paragraph

(2).’’ The most natural reading of the phrase is ‘‘emissions of

carbon monoxide, oxides of nitrogen, and volatile organic

compounds.’’ See 42 U.S.C. § 7547(a)(2). EPA’s reading, by

contrast, requires a strange contortion of § 213(a)(2)’s language – omitting several key words and supplying others.

Had Congress intended the meaning and result which EPA

urges, it would have said so more clearly. We therefore find

EPA’s reading of the language to be implausible on its face.

In addition, the sole discussion of the relevant language in

the legislative history contradicts EPA’s reading. In addressing the language ultimately enacted, the House Committee report states:

Paragraph (4) of revised section 213(a) provides

that if the Administrator determines that emissions from nonroad vehicles not specifically

mentioned in paragraph (2) (which lists CO,

VOCs, and NOx) significantly contribute to air

pollution which may reasonably be anticipated

to endanger public health or welfare, the Administrator may promulgate such regulations as

he deems appropriateTTTT

H.R. REP. No. 101–490, at 309–10 (1990) (emphasis added).

This confirms that the drafters intended the phrase ‘‘emissions TTT referred to in paragraph (2)’’ to mean simply

emissions of CO, NOx, and VOCs, without regard to whether

such emissions do or do not significantly contribute to CO or

ozone concentrations in more than one nonattainment area.

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EPA protests that the reading of § 213(a)(4) that we adopt

today leaves a ‘‘gap’’ in its regulatory authority. It precludes

the Agency from addressing pollution problems, other than

CO or ozone nonattainment, caused by CO, VOCs, and NOx

emissions from nonroad engines – for instance, the potential

contribution of NOx emissions to haze or acid deposition. We

agree that § 213 would likely permit more comprehensive

pollution control if Congress had drafted § 213(a)(4) to authorize regulation of these emissions. But Congress has not

done so. Because NOx is an ‘‘emission referred to’’ in

§ 213(a)(2), we hold that EPA lacks statutory authority to

regulate NOx under § 213(a)(4). We therefore vacate the

NOx standard.

D. Scope of Implementation of Advanced Technologies

Having disposed of ISMA’s claims, we now turn to Bluewater’s primary challenge to the Final Rule. Section 213(a)(3)

requires EPA to set standards that

achieve the greatest degree of emission reduction achievable through the application of technology which the Administrator determines will

be available for the engines or vehicles to which

such standards apply, giving appropriate consideration to the cost of applying such technology

within the period of time available to manufacturers and to noise, energy, and safety factors

associated with the application of such technology.

42 U.S.C. § 7547(a)(3). EPA based its standards on two

advanced technologies: DI two-stroke engines and fourstroke engines. The Agency estimated that its Phase 3

standards, effective for the 2012 model year, would require

implementation of these technologies in 70% of all new snowmobiles. It declined to set standards requiring full implementation of these technologies, finding that a number of

factors – including the effort required to apply advanced

technologies to the variety of snowmobile models – made this

infeasible within the regulatory lead time.

Bluewater claims that EPA improperly assumed that

§ 213(a)(3) requires the Agency to set standards at a level

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sufficiently lenient to allow continued production of all existing snowmobile models. Bluewater appears to read the

provision to instead mandate 100% implementation of technologies that EPA has determined ‘‘will be available,’’ subject

only to the proviso that the standards must permit continued

production of vehicles satisfying ‘‘basic demand.’’ See Bluewater Br. at 18–19. Alternatively, Bluewater claims that

EPA acted arbitrarily and capriciously by failing to explain

the basis of its conclusion that manufacturers could not

achieve broader application of advanced technology by 2012.

We reject Bluewater’s statutory challenge as articulated,

but we agree that EPA has failed to explain adequately the

basis of its decision to set the standards as it did. Accordingly, we remand the standards for EPA to clarify the analysis

and evidence upon which the standards are premised.

1. Statutory Claim

Section 213(a)(3) is a ‘‘technology-forcing’’ provision, requiring EPA ‘‘to project future advances in pollution control

capability TTT [and] to press for development and application

of improved technology rather than be limited by that which

exists today.’’ Husqvarna AB v. EPA, 254 F.3d 195, 201

(D.C. Cir. 2001) (quoting Natural Res. Def. Council v. EPA,

655 F.2d 318, 328 (D.C. Cir. 1981) (‘‘NRDC’’)). However, the

Agency is not to set standards based solely on a determination that a particular technology ‘‘will be available,’’ as a

matter of pure technological feasibility. Rather, in determining the maximum emissions reduction achievable, EPA must

also give ‘‘appropriate consideration to the cost of applying

such technology within the period of time available to manufacturers and to noise, energy, and safety factors associated

with the application of such technology.’’ 42 U.S.C.

§ 7547(a)(3).

In the Final Rule, EPA found that there was no purely

technological obstacle to the application of DI two-stroke and

four-stroke engines to snowmobiles, which in fact are already

in use in some models. The Agency concluded that, by 2012,

‘‘manufacturers could, at least in theory, apply advanced

technology across essentially their entire product lines.’’ 67

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Fed. Reg. at 68,273. And it is clear that standards reflecting

across-the-fleet application of such technology would result in

significantly greater emissions reductions than the standards

adopted. However, EPA interprets § 213(a)(3)’s reference to

cost and other factors to permit it to set less stringent

standards: Standards reflecting across-the-fleet implementation are not ‘‘achievable’’ by 2012, the Agency contends,

because of manufacturers’ resource constraints and the design and development efforts required to apply new technologies to the variety of different snowmobile models.

We agree that EPA may rely on cost and other statutory

factors to set standards at a level less stringent than that

reflected by across-the-fleet implementation of advanced technologies. This court noted in Husqvarna that ‘‘[t]he overriding goal of [§ 213] is air quality and the other listed

considerations, while significant, are subordinate to that

goal.’’ 254 F.3d at 200. Nevertheless, as the court emphasized in reflecting on very similar language in § 202(l ) of the

CAA, the provision ‘‘does not resolve how the Administrator

should weigh all [the statutory] factors in the process of

finding the ‘greatest emission reduction achievable.’ ’’ Sierra

Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003).

We find nothing in the statute requiring EPA to set

standards at a level of stringency that would require discontinuation of all vehicles other than those satisfying ‘‘basic

demand.’’ Bluewater derives the ‘‘basic demand’’ formula

from our decision in International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 640 (D.C. Cir. 1973), which involved

statutory provisions and regulations that are very different

from those at issue in this case. Instead, the relevant

question here is whether, based on ‘‘appropriate consideration’’ of cost and the other factors enumerated in § 213(a)(3),

EPA could reasonably determine that the standards it

adopted reflect the ‘‘greatest degree of emission reduction

achievable.’’ Nothing in § 213(a)(3) prevents EPA from setting standards sufficiently lenient to permit continued production of all existing models, so long as EPA’s decision is based

upon appropriate consideration of these factors.

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2. ‘‘Arbitrary and Capricious’’ Claim

Although we agree with EPA that the statute permits it to

balance technological feasibility against cost and other factors

in setting standards, we conclude that the Agency has not

adequately explained its exercise of that discretion in this

case.

First, EPA expected that manufacturers would apply advanced technologies on an engine-family-by-engine-family basis, and concluded that, by 2012, advanced technologies could

be applied to models accounting for roughly 70% of new

snowmobiles, but not the remaining models. See 67 Fed.

Reg. at 68,273. Implicit in this conclusion is an assumption

that no existing models could be eliminated. In other words,

EPA assumed that manufacturers could not discontinue or

replace any of the models – collectively accounting for roughly 30% of new snowmobiles – to which advanced technology

could not be applied by 2012. That assumption, if it is to

stand, must be grounded in ‘‘appropriate consideration’’ of the

relevant statutory factors. EPA argues before this court that

its position was based on cost considerations. However, we

can find nothing in the record indicating that the Agency

evaluated or reached any conclusions as to the cost of discontinuing models to which advanced technology could not be

applied by 2012. Absolute certainty and precision on this

point are not required, but a reasonable explanation clearly is

necessary. Accordingly, we direct the Agency on remand to

clarify the statutory and evidentiary basis of its position.

Second, even assuming that EPA correctly concluded that

no models could be discontinued, the Agency failed to explain

adequately how it arrived at the specific standards adopted.

EPA did articulate several general reasons for its conclusion

that greater emissions reductions could not be achieved by

2012. Most important, EPA found that, because of the wide

variety of snowmobile models, the design and development

work necessary to apply advanced technologies to all models

would require significant time and investment. Id. The

Agency noted that snowmobile manufacturers are ‘‘resource

constrained,’’ and that those relying on external engine supUSCA Case #03-1005 Document #824839 Filed: 06/01/2004 Page 30 of 36
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pliers would find it more difficult to undertake rapid development of new technologies. Id.

This generalized discussion of the limiting factors does not

explain how the Agency arrived at the specific conclusion that

emissions reductions corresponding to application of advanced

technologies to 70% of new snowmobiles were the most that

could be achieved by 2012. The Agency’s explanation of its

reasoning could just as well support standards corresponding

to 30% or 100% application in that time frame. And we find

nothing in the record before us explaining the analysis and

evidence underlying EPA’s conclusions.

We emphasize that we do not view the standards adopted

as facially unreasonable, nor have we found evidence in the

record contradicting the Agency’s ultimate decision. But in

order to determine whether that decision reflects a ‘‘rational

connection between the facts found and the choice made,’’

Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43, a reasonable

explanation of the specific analysis and evidence upon which

the Agency relied is necessary. ‘‘With its delicate balance of

thorough record scrutiny and deference to agency expertise,

judicial review can occur only when agencies explain their

decisions with precision, for ‘[i]t will not do for a court to be

compelled to guess at the theory underlying the agency’s

actionTTTT’ ’’ Am. Lung Ass’n v. EPA, 134 F.3d 388, 392

(D.C. Cir. 1998) (quoting SEC v. Chenery Corp., 332 U.S. 194,

196–97 (1947)).

In defense of its limited explanation for its decision, EPA

refers us to a line of cases in which we have deferred to the

Agency’s predictions that a particular control technology will

be available in the future. See Nat’l Petrochemical & Refiners Ass’n v. EPA, 287 F.3d 1130, 1144 (D.C. Cir. 2002);

Natural Res. Def. Council v. Thomas, 805 F.2d 410, 432–34

(D.C. Cir. 1986); NRDC, 655 F.2d at 333. These cases stand

for the proposition that, ‘‘[i]n the absence of theoretical

objections to the technology, the agency need only identify

the major steps necessary for development of the device, and

give plausible reasons for its belief that the industry will be

able to solve those problems in the time remaining.’’ Nat’l

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Petrochemical & Refiners Ass’n, 287 F.3d at 1144 (quoting

NRDC, 655 F.2d at 333).

The issue here is different. In this case, EPA’s decision

does not involve a prediction about the development of a

technology that is not yet available. Rather, it concluded that

technology that is currently available could not be applied to

all models within the available lead time. This decision was

apparently based, not on technological obstacles per se, but

rather on the cost and time required to ‘‘optimize’’ advanced

technology for each snowmobile model on the market. Indeed, it is not clear whether there is any meaningful distinction between time and cost here; it may be that the pace of

implementation is simply a function of the level of investment.

Naturally, there will be some uncertainty in any estimate of

how much money and time is needed to apply advanced

technologies to each model or engine family and, accordingly,

what scope of implementation is actually feasible in the time

available. But this does not excuse EPA from offering any

estimate whatsoever. We can defer to the Agency’s prediction of the feasible pace of implementation only if it has

adequately explained the basis of that prediction. As this

court stated in NRDC, ‘‘[t]he Clean Air Act requires EPA to

look to the future in setting standards, but the agency must

also provide a reasoned explanation of its basis for believing

that its projection is reliable. This includes a defense of its

methodology for arriving at numerical estimates.’’ 655 F.2d

at 328 (citing Int’l Harvester Co., 478 F.2d at 629).

E. Catalyst Technology and Other Claims

1. Catalyst Technology

EPA declined to adopt emissions standards based on the

application of catalyst technology, which is widely used in

exhaust aftertreatment devices to reduce emissions from automobiles and other engines. Bluewater challenges this decision, claiming that it was based on an impermissible interpretation of the statute and is arbitrary and capricious. We

reject this claim.

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As noted above, § 213(a)(3) requires adoption of standards

based on technology that EPA determines ‘‘will be available.’’

Bluewater asserts that EPA violated this mandate by basing

its decision on a finding that catalyst technology is not

already available for snowmobiles. The premise of this argument is unsupported. EPA determined that there were

significant technical barriers to development of catalyst technology for snowmobiles, including difficulties with achieving

full oxidation of ‘‘rich exhaust’’ and overcoming space constraints. See SAC at V–25, J.A. 104. EPA concluded that it

could not, at this time, predict that these hurdles could be

overcome or that such technology would be available by 2012.

Id. Therefore, EPA’s decision was based on the lack of

evidence to support a prediction that catalyst technology ‘‘will

be available’’ within the relevant lead time, not on the mere

fact that such technology is not available now.

Bluewater contends, in the alternative, that EPA’s determination that catalyst technology will not be available by 2012 is

not supported by the record. Bluewater first challenges

EPA’s reliance on the ‘‘rich exhaust’’ barrier to development

of catalyst technology for snowmobiles. Bluewater asserts

that DI two-stroke and four-stroke engines have comparatively low CO and HC emissions and that application of these

engine technologies would therefore eliminate the ‘‘rich exhaust’’ problem. In other words, EPA should have considered standards based on the simultaneous development and

application of advanced engines and catalyst technology. We

cannot agree that EPA’s failure to analyze this scenario was

arbitrary and capricious. Having concluded that advanced

engine technologies alone could not be fully implemented in

the available lead time, the Agency was not required, on its

own motion, to consider whether simultaneous development

and application of catalyst technology would be feasible. Cf.

Nat’l Petrochemical & Refiners Ass’n, 287 F.3d at 1145

(noting that EPA is entitled to some deference in choosing

the technological basis of its standards).

Bluewater also challenges EPA’s position that space constraints posed a barrier to adoption of catalyst technology.

This challenge is premised primarily on EPA’s statements

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elsewhere in the record indicating that space constraints can

be overcome for many large-SI and recreational-vehicle engines. See Regulatory Support Document (‘‘RSD’’) at 3–19,

J.A. 177. But the record indicates that snowmobiles present

some unique problems, see Written Testimony of the Manufacturers of Emission Controls Association at 9, J.A. 272, so

these statements do not present the fatal contradiction suggested by Bluewater. Similarly, Bluewater cites EPA’s finding in an earlier proceeding that catalysts can be built into

handheld lawn and garden equipment engines. We fail to see

how this finding undermines EPA’s conclusion with regard to

snowmobiles, given the significant differences between the

two types of engines and applications, see 67 Fed. Reg. at

68,260; Husqvarna, 254 F.3d at 197 n.1.

2. Remaining Claims

Bluewater raised a number of other claims in its briefs.

We have carefully considered each of these claims and find no

merit in any. We offer our conclusions here in summary

form.

Bluewater claims, based on the December 2000 contribution

finding for land-based recreational vehicles, that EPA was

required to regulate HC and NOx under § 213(a)(3), instead

of (a)(4). Bluewater argues that, once EPA found that the

category including snowmobiles contributes to ozone pollution

in more than one nonattainment area, the Agency was required to regulate snowmobile emissions of ozone precursors

under § 213(a)(3). We disagree. EPA reasonably determined that snowmobiles should be considered separately from

the recreational vehicle category for purposes of the ozone

contribution finding, because snowmobiles are operated in

cold weather and ozone is a warm-weather phenomenon. See

SAC at II–24, V–31, J.A. 92, 110.

Bluewater also contends that, once EPA made a contribution finding for ozone or CO, it was obligated to regulate both

CO and ozone precursors under § 213(a)(3). We seriously

doubt that the statute permits this odd reading, but it certainly does not require it. EPA reasonably interpreted

§ 213(a)(3) to require regulation of ozone precursors under

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that provision only if it had made a finding that the relevant

individual class or category of engines – in this case snowmobiles – contributes to ozone concentrations in more than one

ozone nonattainment area.

In addition, Bluewater argues that EPA improperly failed

to consider the noise and energy impacts of its decision to

adopt standards reflecting continued use of carbureted twostroke engines in up to 30% of new snowmobiles after 2012.

Section 213(a)(3) requires EPA to set standards reflecting the

maximum emissions achievable through adoption of technology that will be available, ‘‘giving appropriate consideration’’

to, inter alia, ‘‘noise [and] energy TTT factors associated with

the application of such technology.’’ EPA clearly met this

requirement by giving consideration to the (undisputedly

positive) noise and energy impacts of basing standards on the

adoption of DI two-stroke and four-stroke engine technologies. See RSD at 4–48, J.A. 189. The statute does not

require EPA to set standards maximizing energy conservation or noise reduction.

Bluewater next claims that EPA violated § 213(a)(3) by

failing to ‘‘first consider standards equivalent in stringency to

standards for comparable [onroad] motor vehicles or engines

(if any) regulated under’’ § 202 of the Act. See 42 U.S.C.

§ 7547(a)(3). In response to comments on this point, EPA

determined that automobiles are not ‘‘comparable’’ to snowmobiles and that the threshold for ‘‘first considering’’ similar

standards therefore was not triggered. See SAC at V–22,

J.A. 101. Bluewater argues that EPA should have considered

whether onroad motorcycles are ‘‘comparable,’’ but this specific claim was not raised in administrative proceedings and

therefore was waived.

Finally, Bluewater argues that EPA acted arbitrarily and

capriciously by failing to adopt standards based on the exclusive application of four-stroke technology, rather than a mix

of DI two-stroke and four-stroke technology. This claim is

baseless. EPA reasonably concluded that DI two-stroke

engines would achieve greater CO emission reductions than

comparably powered four-stroke engines, but would yield

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somewhat lower HC reductions. 67 Fed. Reg. at 68,272.

EPA accordingly concluded that neither technology was obviously superior. In reaching its conclusion, EPA relied on

data from personal watercraft (jet skis) to predict expected

emissions from high-powered four-stroke engines. RSD at 4–

42, J.A. 183. This was appropriate, because EPA reasonably

determined that emissions from the two types of engines

would be similar, and because there were no data on highpowered four-stroke snowmobile engines available at the time

of the rulemaking. See id.; see also, e.g., Am. Iron & Steel

Inst. v. EPA, 115 F.3d 979, 1004–05 (D.C. Cir. 1997) (upholding the Agency’s reliance on a reasonable model to estimate

results where no field data were available).

III. CONCLUSION

For the reasons set forth above, we grant in part and deny

in part each of the two petitions for review. We hereby

vacate the NOx standard on the ground that EPA lacks

statutory authority to regulate NOx emissions under

§ 213(a)(4). We hold that the Agency acted within its statutory authority in promulgating the CO and HC standards

under § 213(a)(3) and (a)(4), respectively. However, we remand the CO and HC standards for EPA to clarify the

analysis and evidence upon which the standards are based.

Specifically, we direct EPA to clarify (1) the statutory and

evidentiary basis of the Agency’s assumption that the standards must be sufficiently lenient to permit the continued

production of all existing snowmobile models, and (2) the

analysis and evidence underlying the Agency’s conclusion that

advanced technologies can be applied to no more than 70% of

new snowmobiles by 2012. We uphold the CO and HC

standards in all other respects.

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