Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-01237/USCOURTS-caDC-12-01237-0/pdf.json

Parties Involved:
Environmental Protection Agency
Respondent
Sierra Club
Petitioner

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 3, 2013 Decided August 20, 2013 

No. 11-1131 

NATIONAL ASSOCIATION OF CLEAN WATER AGENCIES, 

PETITIONER

v. 

ENVIRONMENTAL PROTECTION AGENCY AND GINA 

MCCARTHY, ADMINISTRATOR, EPA, 

RESPONDENTS

MAXWEST ENVIRONMENTAL SYSTEMS, INC., ET AL., 

INTERVENORS

Consolidated with 11-1167, 11-1185, 12-1236, 12-1237 

On Petitions for Review of a Final Rule of the 

United States Environmental Protection Agency 

Jeffrey A. Knight argued the cause for 

petitioners/respondents-intervenors National Association of 

Clean Water Agencies, et al. With him on the briefs were 

Peter H. Wyckoff and Steven A. Hann. 

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 James S. Pew argued the cause for petitioner Sierra 

Club. With him on the briefs was Jonathan A. Wiener. 

 Lisa Sharp argued the cause for intervenor MaxWest 

Environmental Systems Inc. With her on the briefs was D. 

Cameron Prell. 

Michele L. Walter and Martha C. Mann, Attorneys, 

U.S. Department of Justice, argued the causes and filed the 

brief for respondents. 

 Jonathan A. Wiener argued the cause for respondentintervenor Sierra Club. With him on the brief was James S. 

Pew. 

 

Steven A. Hann, Jeffery A. Knight, and Peter H. 

Wyckoff were on the brief for respondents-intervenors 

National Association of Clean Water Agencies, et al. 

 

 Before: GARLAND, Chief Judge, BROWN, Circuit 

Judge, and SENTELLE, Senior Circuit Judge. 

 Opinion for the Court filed by Senior Circuit Judge

SENTELLE. 

SENTELLE, Senior Circuit Judge: In March 2011, the 

Environmental Protection Agency (“EPA”) issued a final rule 

establishing emission standards for sewage sludge 

incinerators under § 129 of the Clean Air Act, 42 U.S.C. § 

7429. See Standards of Performance for New Stationary 

Sources and Emission Guidelines for Existing Sources: 

Sewage Sludge Incineration Units, 76 Fed. Reg. 15,372 (Mar. 

21, 2011). Determining that sewage sludge incinerators were 

“solid waste incineration unit[s]” as defined in § 129(g)(1), 

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the EPA promulgated “maximum achievable control 

technology” (“MACT”) standards for two subcategories of 

sewage sludge incinerators. 

The Clean Air Act cabins EPA’s discretion in setting 

MACT standards, requiring EPA to base the standards on the 

emissions achieved by the best-performing existing 

incinerators. See 42 U.S.C. § 7429(a)(2). But acting under 

pressure of a court order to establish the MACT standards by 

a set deadline, EPA took a targeted approach to collecting 

emissions data and used several different methods to estimate 

the emissions levels achieved by existing incinerators. See 76 

Fed. Reg. at 15,386. 

The petitioners challenge several different aspects of the 

rulemaking. Petitioners National Association of Clean Water 

Agencies and Hatfield Township Municipal Authority 

(collectively, “NACWA”) challenge EPA’s authority to 

regulate sewage sludge incinerators under § 129, asserting 

that sewage sludge incinerators do not fall within the scope of 

§ 129(g)(1)’s definition of “solid waste incineration unit.” 

Petitioners NACWA and Sierra Club seek review of the 

sewage sludge incinerator emission standards, challenging 

several aspects of EPA’s methodology for estimating the 

emission levels achieved by the best performing units. In 

addition to these petitioners, MaxWest Environmental 

Systems, developer of a proprietary biosolids management 

process, intervenes to challenge EPA’s treatment of its 

technology in the sewage sludge incinerator rule. 

For the reasons stated below, we deny NACWA’s 

petition for review as to EPA’s authority to regulate sewage 

sludge incinerators under § 129. As to the petitioners’ 

challenges to EPA’s methodology in setting emission 

standards, we agree that in some respects EPA has not 

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adequately established that its estimations are reasonable, and 

so remand parts of the sewage sludge incinerator rule to EPA 

for further proceedings without vacating the current standards. 

We otherwise deny the petitions for review, and will not 

consider intervenor MaxWest’s arguments as they are not 

within the scope of issues raised by the petitioners. 

I. BACKGROUND 

A. Statutory Background 

The Clean Air Act requires EPA to set emission 

standards for polluting sources “to protect and enhance the 

quality of the Nation’s air resources.” 42 U.S.C. § 

7401(b)(1). Section 112 of the Clean Air Act, 42 U.S.C. § 

7412, requires EPA to set emission standards for a list of 

hazardous air pollutants emitted by major sources and area 

sources. Id. § 7412(d). Section 129 is more specific, 

directing EPA to establish emission standards for a list of nine 

pollutants emitted by solid waste incineration units. Id. § 

7429(a). Subject to certain exceptions not relevant to this 

case, § 129 defines a “solid waste incineration unit” as “a 

distinct operating unit of any facility which combusts any 

solid waste material from commercial or industrial 

establishments or the general public (including single and 

multiple residences, hotels, and motels).” Id. § 7429(g)(1). 

 

Under § 129, the standards established by EPA must 

reflect “the maximum degree of reduction” in the emissions 

of a list of pollutants1

 that EPA, “taking into consideration the 

 

1

 Specifically, § 129 requires EPA to set numerical emission 

limitations for: “particulate matter (total and fine), opacity (as 

appropriate), sulfur dioxide, hydrogen chloride, oxides of nitrogen, 

carbon monoxide, lead, cadmium, mercury, and dioxins and 

dibenzofurans.” § 129(a)(4). 

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cost of achieving such emission reduction, and any non-air 

quality health and environmental impacts and energy 

requirements, determines is achievable for new or existing 

units” in each category of sources. Id. § 7429(a)(2). EPA 

refers to these standards as the “maximum achievable control 

technology” standards, abbreviated as the MACT standards. 

Northeast Maryland Waste Disposal Authority v. EPA, 358 

F.3d 936, 939–40 (D.C. Cir. 2004). 

Congress set parameters governing EPA’s establishing of 

the MACT standards, which EPA has implemented through a 

two-step process. First, EPA sets a baseline level of 

stringency for emissions controls known as the MACT floor. 

For new units, the MACT floor is the level of emissions 

control “that is achieved in practice by the best controlled 

similar unit,” as determined by EPA. 42 U.S.C. § 7429(a)(2). 

For existing units, the MACT floor is “the average emissions 

limitation achieved by the best performing 12 percent of 

units” in each category. Id. Second, EPA determines whether 

more stringent “beyond-the-floor” MACT standards are 

achievable, taking into consideration the factors listed in § 

129(a)(2). 

The Clean Air Act makes promulgating MACT standards 

under § 112 and § 129 mutually exclusive. Id. § 7429(h)(2). 

Although the statutory directive on setting MACT standards is 

virtually identical under § 112 and § 129, EPA’s decision to 

regulate a source under one section rather than the other has 

practical consequences. For example, the list of pollutants for 

which EPA must set MACT standards differs between the two 

sections. Compare id. § 7412(b) (list of hazardous air 

pollutants), with id. § 7429(a)(4) (list of nine pollutants for 

which EPA must set MACT standards for solid waste 

incinerators). The stringency of regulation for sources 

covered under these sections can also differ, depending on the 

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type of source. Under § 129, all solid waste incinerators 

within § 129(g)(1)’s definition of “solid waste incineration 

unit” are subject to the MACT standards that EPA establishes 

for that category of incinerator. See id. § 7429(a). In 

contrast, the MACT standards established under § 112 are 

mandated only for “major sources,” defined as sources that 

have the potential to emit ten tons per year or more of any 

hazardous air pollutants, or twenty-five tons per year or more 

of any combination of hazardous air pollutants. See id. § 

7412(a)(1), (d)(5). 

For sources that are not “major sources”—defined in § 

112(a)(1) as “area sources”—EPA is given the discretion to 

establish standards providing “for the use of generally 

available control technologies or management practices . . . to 

reduce emissions of hazardous air pollutants.” Id. § 

7412(d)(5). The generally available control technology 

standard is not governed by the same statutory requirements 

as the MACT standard, giving EPA more flexibility in 

regulating area sources. Because EPA determined in 2002 

that no sewage sludge incinerator emitted hazardous air 

pollutants at such a level as to qualify as a major source, the 

generally available control technology standard would apply 

to sewage sludge incinerators if EPA regulated them under § 

112. See National Emission Standards for Hazardous Air 

Pollutants: Revision of Source Category List Under Section 

112 of the Clean Air Act, 67 Fed. Reg. 6,521, 6,523. (Feb. 

12, 2002). Sewage sludge incinerators also would not be 

subject to monitoring and siting review requirements, which 

are mandated by § 129 but not by § 112. See 42 U.S.C. § 

7429(a)(3), (c). 

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B. Regulatory Background 

Publicly-owned treatment works, owned by 

municipalities or regional authorities, are responsible for 

managing all sewage that enters into the sanitary sewer 

system. Publicly-owned treatment works first treat the 

wastewater, creating sewage sludge in the process, then use 

various methods to dispose of the sewage sludge. Many 

publicly-owned treatment works use sewage sludge 

incinerators to dispose of sewage sludge. EPA’s inventory of 

sewage sludge incinerators stood at 204 at the time of the 

rulemaking. 76 Fed. Reg. at 15,387. 

EPA proposed emission standards for sewage sludge 

incinerators in October 2010, asserting its authority under § 

129 to regulate “other categories of solid waste incineration 

units.” See 75 Fed Reg. at 63,263; 42 U.S.C. § 7429(a)(1)(E). 

EPA began to develop these standards after the District Court 

for the District of Columbia determined that EPA was failing 

to discharge its non-discretionary duty under provisions of § 

112, and ordered EPA to do so. See 75 Fed. Reg. at 63,264. 

Although the specific § 112 obligations with which EPA had 

failed to comply are not relevant to this petition, the district 

court determined that § 112 required EPA to set emission 

standards for sewage sludge incinerators.2

 See Sierra Club v. 

Jackson, 1:01-CV-1537, EFC No. 84 at 23 (D.D.C. filed Aug. 

2, 2006); Sierra Club v. Jackson, 1:01-CV-1537, ECF No. 

150 at 6–8 (D.D.C. filed Jan. 20, 2011). After granting EPA 

multiple motions to extend the deadline for issuing sewage 

 

2

 The § 112 obligations were to identify and regulate certain area 

sources that account for 90 percent or more of aggregate air 

emissions of 30 hazardous air pollutants identified by EPA under § 

112(k)(3)(B)(i)–(ii). See Sierra Club v. Jackson, No. 1:01-CV1537, ECF No. 80 (D.D.C. filed Mar. 31, 2006); see also 42 U.S.C. 

§ 7412(c)(3), (k)(3)(B). 

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sludge regulations, the district court ultimately required EPA 

to promulgate the final rule by February 21, 2011. Id., ECF 

No. 150, at 25. 

1. Proposed Rule 

On October 14, 2010, EPA issued a proposed rule 

proposing emission standards for sewage sludge incinerators. 

See Standards of Performance for New Stationary Sources & 

Emission Guidelines for Existing Sources: Sewage Sludge 

Incineration Units, 75 Fed. Reg. 63,260. In the preamble, 

EPA explained that although it had stated in other rules its 

intent to regulate sewage sludge incinerators under § 112, it 

was proposing to regulate sewage sludge incinerators under § 

129 in light of our ruling in Natural Resources Defense 

Council v. EPA, 489 F.3d 1250 (D.C. Cir. 2007). See id. at 

63,263 (citing Standards of Performance for New Stationary 

Sources and Emission Guidelines for Existing Source: Other 

Solid Waste Incineration Units, 70 Fed. Reg. 74,870 (Dec. 16, 

2005)). 

In the proposed rule, EPA established two subcategories 

of sewage sludge incinerators: multiple hearth incinerators 

and fluidized bed incinerators. Id. at 63,268. EPA found that 

these were the only two types of incinerators used to combust 

sewage sludge, and determined subcategorization was 

warranted because the combustion design for these two types 

of incinerators varied significantly. Id. 

In proposing the MACT standards for the subcategories 

of incinerators, EPA extensively discussed the methodology it 

used to derive the MACT floors. See id. at 63,269–75. To 

select which units to survey for emissions data, EPA 

identified units equipped with the control technology that it 

believed would achieve the lowest emissions possible for the 

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§ 129 pollutants. Id. at 63,270. EPA stated that using control 

technologies to select best-performing units was sufficient 

because municipalities were already required to limit the 

concentration of pollutants in sewage sludge under Clean 

Water Act regulations. Id. (citing 40 C.F.R. pt. 503). These 

preexisting regulations, EPA explained, caused incinerators to 

“burn a relatively homogeneous waste,” thus rendering 

control technologies a suitable proxy for targeting the bestperforming units from which to collect emissions data. Id. 

For its dataset, EPA surveyed 9 municipalities, and 

supplemented the results of that study with data from State 

environmental agencies’ public databases, yielding emissions 

information from 5 fluidized bed incinerators and 20 multiple 

hearth incinerators, although EPA acknowledged that not 

every test contained information on all nine § 129 pollutants. 

Id. Because 12 percent of the existing incinerator population 

based on EPA’s then-current count of incinerators was 7 

fluidized bed incinerators and 20 multiple hearth incinerators, 

EPA acknowledged that it did “not have actual emissions test 

data for the population of units that represent the bestperforming 12 percent,” for every pollutant. Because EPA 

interpreted § 129 to require a MACT floor dataset 

representative of the best-performing 12 percent of 

incinerators, EPA concluded it needed to determine whether 

its data from fewer than 12 percent of incinerators could 

represent the best-performing 12 percent. Id. 

EPA addressed this issue by explaining that it could use 

“statistical techniques to determine the minimum number of 

observations needed to accurately characterize the distribution 

of the best performing 12 percent of units in each 

subcategory.” Id.; see Memorandum from Eastern Research 

Group, Inc. to Amy Hambrick, U.S. EPA, at 7–9 (Jan. 2011) 

(“Revised MACT Floor Memo”). Based on this statistical 

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analysis, EPA concluded that it had collected enough 

observations to conclude that the dataset it used met “the 

minimum size needed to characterize the population of 12 

percent of the best-performing units for all pollutants, when 

late-arriving data are included.” 75 Fed. Reg. at 63,271. 

Nevertheless, EPA requested “that commenters provide 

additional emissions stack test data and supporting 

documentation, as that may enable us to establish a final 

MACT floor based on a more complete data set.” Id. at 

63,270. 

The proposed rule also discussed EPA’s methods for 

addressing variability in the emissions data it collected. EPA 

bases its MACT standards on short-term emissions test data, 

which are not always “representative of the range of operating 

conditions that the best-performing facilities face on a day-today basis.” Id. at 63,269. Therefore, EPA believed it needed 

to account for variability in emissions performance. Id. EPA 

explained that for two or more tests at a single incinerator 

under what appear to be the same operating conditions, 

“[v]ariations in emissions may be caused by different settings 

for emissions testing equipment, different field teams 

conducting the testing, differences in sample handling or 

different laboratories analyzing the results.” Id. And 

emissions may even vary within a single test, as each test 

comprises at least three separate test runs, and each test run 

captures only a snapshot of an incinerator’s performance. Id. 

To address this variability, EPA proposed using a 

statistical tool it terms the “upper prediction limit.” For future 

observations of emissions from an incinerator, the upper 

prediction limit “is the upper end of a range of values that 

will, with a specified degree of confidence, contain the next 

(or some other pre-specified) randomly selected observation 

from a population.” Id. Thus, a 99 percent confidence-level 

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upper prediction limit “represents the value which one can 

expect the mean of future 3-run performance tests from the 

best-performing 12 percent of sources to fall below, with 99 

percent confidence, based upon the results of the independent 

sample of observations from the same best-performing 

sources.” Id. at 63,271. 

EPA’s proposed MACT floor methodology also 

addressed “non-detect data,” which are emission testing data 

too low for the testing equipment to accurately detect. Id. at 

63,272. Rather than estimate that non-detect data was at the 

“method detection level,” i.e., “the minimum concentration of 

a pollutant that can be measured with confidence that the level 

is greater than zero,” EPA Br. at 61 n.20, EPA used a 

different test to determine the MACT floor. Id. at 63,273. 

Under the test, EPA multiplied what it termed the 

“representative method detection level” by three, and 

compared that value to the MACT floor that EPA calculated 

using all data, including non-detect data. Id. If three times the 

representative method detection level was less than the 

calculated MACT floor, EPA would conclude that the MACT 

floor calculation adequately addressed measurement 

variability; if not, EPA would use the three-times value “to 

ensure that the MACT floor emission limit accounts for 

measurement variability and imprecision.” Id. 

For new source MACT floors, EPA explained that it 

would base the floors “on the best-performing single source 

for each regulated pollutant, with an appropriate accounting 

for emissions variability.” Id. at 63,274. Thus, EPA 

identified the lowest emitting incinerator with at least three 

test runs, and applied the 99 percent upper prediction limit. 

Id. While EPA proposed a new source MACT floor for 

fluidized bed incinerators, it did not propose a new source 

MACT floor for multiple hearth incinerators. Id. at 63,272. 

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Instead, it proposed that all new incinerators—including 

multiple hearth incinerators—meet the emission limits for the 

best-performing fluidized bed incinerator, explaining that 

industry information suggested that future units constructed 

would likely be fluidized bed incinerators and that industry 

information demonstrated that new fluidized bed incinerators 

“have more efficient combustion characteristics resulting in 

lower emissions.” Id. at 63,272, 63,274. 

In discussing whether to set “beyond-the-floor” MACT 

standards for existing sources, EPA determined that for most 

of the § 129 pollutants, no additional control technologies 

were available that would cost-effectively reduce emissions. 

Id. at 63,275, 63,277. For mercury, EPA concluded that using 

activated carbon injection with some form of particulate 

matter control for multiple hearth incinerators would be a 

cost-effective option for achieving beyond-the-floor emission 

reductions, noting that these combined control technologies 

would also control for dioxins and dibenzofurans. Id. at 

63,276–77. For fluidized bed incinerators, EPA concluded 

that “[i]n light of the technical feasibility, costs, energy, and 

nonair quality health and environmental impacts” discussed in 

the rule, it was not reasonable to establish beyond-the-floor 

MACT standards for new and existing fluidized bed 

incinerators. Id. at 63,277. 

EPA also proposed monitoring requirements for all new 

and existing sewage sludge incinerators. Id. at 63,277–82. In 

relevant part, EPA proposed initial and annual emissions 

performance tests for most pollutants, with continuous 

monitoring as an alternative, and control device parameter 

monitoring for certain control technologies. Id. at 63,277. 

EPA specifically required continuous emissions monitoring 

for carbon monoxide on new sewage sludge incinerators, 

although continuous emissions monitoring for carbon 

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monoxide remained optional for existing incinerators, and 

optional for all other pollutants. Id. at 63,278, 63,281. 

2. Final Rule 

EPA promulgated the final rule setting emission limits 

for sewage sludge incinerators on March 21, 2011. 76 Fed. 

Reg. 15,372. The final rule remained substantially similar to 

the proposed rule, regulating sewage sludge incinerators 

under § 129 and generally adopting the methodology for 

setting the MACT floors stated in the proposed rule. Id. at 

15,382–92. 

The final rule did contain a few substantive changes. 

While EPA had proposed setting all new incinerator MACT 

floors on the best-performing fluidized bed incinerator, in the 

final rule it decided to set a separate MACT floor for new 

multiple hearth incinerators. Id. at 15,384. EPA explained 

that it had been persuaded by comments pointing out that 

under the proposed regulations, any source that exceeded a 

threshold in modification costs would be considered a new 

unit. See 40 C.F.R. § 60.4775 (defining a new sewage sludge 

incinerator as a unit that “[c]ommenced modification after 

September 21, 2011”); 40 C.F.R. § 60.4930 (defining 

modification as “a change to an existing [sewage sludge 

incinerator] later than September 21, 2011 and that meets one 

of two criteria”). Because it did not want to discourage 

municipalities from modifying multiple hearth incinerators, 

and because there was otherwise no technical reason why 

municipalities could not build new multiple hearth 

incinerators, EPA explained it decided to establish separate 

new incinerator MACT floors. 76 Fed Reg. at 15,384. 

In setting the new multiple hearth incinerator MACT 

floors, EPA’s upper prediction limit analysis on what it 

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deemed the best-performing multiple hearth incinerators 

yielded MACT floors for two pollutants that were less 

stringent (i.e., a higher emission limit) than what it had 

calculated for existing multiple hearth incinerators. EPA set 

the new multiple hearth incinerator floors for these two 

pollutants—hydrogen chloride and sulfur dioxide—at the 

same level as existing multiple hearth incinerator floors, 

reasoning that new incinerator MACT floors could not be less 

stringent than existing incinerator MACT floors. Id. at 

15,388–89. 

EPA also deviated from the proposed rule by deciding 

not to set beyond-the-floor standards for any pollutants. Id. at 

15,380. In the final rule, EPA explained that the cost of 

requiring the additional contemplated control technology to 

reduce mercury was $80,000 to $100,000 per pound removed, 

and that, based on this cost and other factors, it determined 

that beyond-the-floor standards were no longer appropriate. 

Id. at 15,394. 

EPA also made minor changes to its MACT floor dataset, 

such as reducing its inventory of incinerators to 204, and 

consequently, reducing the numbers of incinerators needed to 

represent 12 percent to 18 multiple hearth incinerators and 8 

fluidized bed incinerators. Id. at 15,387. Although the 

reduction in inventory decreased the number of incinerators 

necessary to represent 12 percent, EPA still did not have 

emissions data from 12 percent of incinerators for certain 

pollutants. While commenters attempted to supplement that 

dataset by submitting emissions stack test data that EPA 

requested in the proposed rule, EPA rejected that data because 

commenters had not substantiated it with emission test 

reports. Id. 

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In the final rule, EPA candidly noted that its MACT floor 

methodology—including the emissions testing dataset from 

less than 12 percent of incinerators—was motivated in part by 

the impending court-ordered deadline to establish emission 

standards. EPA explained that “given the court-ordered 

deadline for EPA to issue the final [sewage sludge 

incinerator] rule, it was not possible to undertake the timeconsuming process of sending an [information collection 

request] to all the affected [sewage sludge incinerators] 

consistent with the requirements of the [Paperwork Reduction 

Act].” Id. at 15,386. 

EPA also responded to comments criticizing EPA for not 

using data available to it to set MACT floors, including data 

about variability in sewage sludge metal concentrations 

collected from the Clean Water Act regulations. EPA 

responded that the upper prediction limit and its survey of 

units from nine different states adequately accounted for 

variability. Id. at 15,391. EPA further stated that it “did not 

have sufficient information at proposal to consider if it were 

appropriate to incorporate variability based on sludge 

content,” explaining that the data commenters submitted was 

not adequately supported and therefore insufficient to clarify 

the effect of sewage sludge variability on emissions. Id. 

Sierra Club and NACWA filed petitions for 

reconsideration of EPA’s final rule. EPA denied both 

petitions. See 77 Fed Reg. 25,087 (Apr. 27, 2012). Sierra 

Club filed a petition for review in this court. NACWA, joined 

by the Hatfield Township Municipal Authority, also filed a 

petition for review. We have consolidated all petitions for 

review. 

 

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II. NACWA’S AND SIERRA CLUB’S PETITIONS 

FOR REVIEW 

A. EPA’S AUTHORITY TO REGULATE SEWAGE SLUDGE 

INCINERATORS

We first address NACWA’s contention that EPA violated 

the Clean Air Act by setting emission standards for sewage 

sludge incinerators under § 129 rather than § 112. 

Specifically, NACWA asserts that § 129(g)(1)’s definition of 

“solid waste incineration unit” excludes sewage sludge 

incinerators. 

Section 129(g)(1) defines a solid waste incineration unit 

as “a distinct operating unit of any facility which combusts 

any solid waste material from commercial or industrial 

establishments or the general public (including single and 

multiple residences, hotels, and motels).” 42 U.S.C. § 

7429(g)(1). In interpreting the phrase “solid waste material 

from commercial or industrial establishments or the general 

public,” EPA explained in its final rule that “[s]ewage sludge 

clearly originates from the general public, including 

residential and commercial facilities. Simply because the 

waste is treated at a [publicly-owned treatment work] prior to 

combustion does not change the original source of the sewage 

sludge.” 76 Fed. Reg. at 15,383. 

In contrast to EPA’s interpretation, NACWA argues that 

the words “from . . . the general public” “refer only to the 

proximate source of the solid waste material in question,” 

covering, for example, trash a municipality collects from a 

house and transports to a municipal incinerator, but not a 

waste product that the municipality itself creates. NACWA 

Br. at 21–22. Because the sewage sludge incinerated by a 

publicly-owned treatment work is the product of the treatment

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of domestic sewage, NACWA asserts that sewage sludge 

comes from the publicly-owned treatment work, and not 

“from . . . the general public” that produces the domestic 

sewage. Id. at 19 

Because NACWA asks us to review EPA’s construction 

of § 129 as authorizing EPA to regulate sewage sludge 

incinerators under the category of “other . . . solid waste 

incineration units,” see 76 Fed. Reg. at 15,383 (citing 42 

U.S.C. § 7429), we apply Chevron v. NRDC to determine 

whether EPA is entitled to deference in its interpretation. See 

467 U.S. 837, 842 (1984). Under Chevron, we first determine 

whether the statute unambiguously forbids EPA’s 

interpretation. Id. at 842–43. If the statute is silent or 

ambiguous, we then question whether EPA’s interpretation is 

based on a permissible construction of the statute. Id. at 843. 

 At first glance, the definition of solid waste incineration 

units in § 129(g)(1) appears ambiguous, a reality even 

NACWA acknowledges. See NACWA Br. at 21 (“Read 

alone, the word ‘from’ does not reveal whether it refers to the 

proximate source of the material or whether it refers instead to 

a distant ‘original’ source of the material.”); see also Oral 

Arg. Tr. at 5:19–23, 7:4–10, 10:5–19 (conceding that, without 

any other context, § 129 “would carry the meaning that EPA 

has ascribed to it”). Among the dictionary definitions of 

“from” is “a function word to indicate the source or original 

or moving force of something: as . . . the place of origin, 

source, or derivation of a material or immaterial thing.” 

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 913 

(1981). Thus, W.B. Yeats may proclaim, “All creation is 

[from] conflict,” and not necessarily mean that creation 

springs directly from conflict rather than through intermediate 

consequences of conflict, while one who states that a man 

“took a dime [from] his pocket” could only be understood to 

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mean that the dime originated from a specific location on a 

specific person. Id. Because the word “from” in § 129(g)(1) 

may be susceptible to either sense of the word, we agree with 

both parties that the phrase “from . . . the general public,” 

standing alone, is textually ambiguous. Cf. Environmental 

Defense Fund v. EPA, 167 F.3d 641, 652 (D.C. Cir. 1999) 

(Williams, J., dissenting) (explaining that the phrase “comes 

from” is ambiguous—for example, “A layabout who says he 

‘comes from a hardworking family’ can be telling the truth 

even if all his relatives are dead.”). 

But textual ambiguity is not the end of the matter, as we 

have held that “a statute may foreclose an agency’s preferred 

interpretation despite such textual ambiguities,” an analysis 

we undertake by “exhaust[ing] the traditional tools of 

statutory construction to determine whether a congressional 

act admits of plain meaning.” Catawba County v. EPA, 571 

F.3d 20, 35 (D.C. Cir. 2009); Arizona Public Service Co. v. 

EPA, 211 F.3d 1280, 1287 (D.C. Cir. 2000). Thus, although 

both NACWA and EPA acknowledge § 129(g)(1)’s apparent 

textual ambiguity, both parties also argue that the statute 

unambiguously resolves in their favor. EPA relies on our 

opinion in NRDC v. EPA, 489 F.3d 1250 (D.C. Cir. 2007), in 

which we interpreted the definition of “solid waste 

incineration unit” to be very broad, while NACWA relies 

primarily on the words surrounding “from” and on the overall 

structure of the Clean Air Act and the Clean Water Act. 

We begin with NACWA’s argument that “from . . . the 

general public” requires a proximate cause interpretation, lest 

the words “general public” become superfluous. NACWA 

asserts that because all waste has its origin in the general 

public at some point, Congress could have simply defined a 

solid waste incinerator as “a unit . . . which combusts any 

solid waste material” without having to add “from 

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19 

commercial or industrial establishments or the general 

public.” See 42 U.S.C. § 7429(g)(1). But even if we take as 

true NACWA’s assertion that all solid waste “originates” 

from the general public, and NACWA’s assertion that EPA’s 

interpretation of § 129(g)(1) would therefore cover all units 

that incinerate solid waste (except those specifically excluded 

in § 129(g)(1)), the “‘preference for avoiding surplusage 

constructions is not absolute.’” Amoco Products Co. v. 

Watson, 410 F.3d 722, 734 (D.C. Cir. 2005) (quoting Lamie v. 

U.S. Trustee, 540 U.S. 526, 536 (2004)). In some cases, 

redundancy may reflect the broad purpose of a congressional 

statute. See Babbitt v. Sweet Home Chapter of Communities 

for a Greater Oregon, 515 U.S. 687, 698 n.11 (1995). 

Although defining a covered incinerator as one that 

combusts solid waste “from commercial or industrial 

establishments or the general public” suggests some limitation 

on the coverage of § 129(g)(1) based on the source of the 

waste, the extent of that limitation is unclear. Congress may 

have intended to define solid waste incinerators to exclude 

specific categories of incinerators beyond the express 

exceptions listed in § 129(g)(1); for example, incinerators 

combusting waste directly produced by state or local 

government sources. But it also may have intended to give 

the definition of § 129(g)(1) a broad scope, with “the general 

public” functioning as something akin to a catchall. Thus, the 

fact that the three broad categories of sources of solid waste 

listed in § 129(g)(1)—commercial and industrial 

establishments, and the general public—may be surplusage 

under EPA’s original source interpretation does not 

unambiguously mean that Congress intended for the word 

“from” to have NACWA’s proximate source interpretation. 

In any event, if Congress indeed unambiguously intended to 

exclude municipal sewage sludge incinerators from the 

definition of § 129(g)(1), it chose a strange way to go about it. 

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NACWA also asserts as factually incorrect EPA’s 

statement that “[s]ewage sludge clearly originates from the 

general public, including residential and commercial 

facilities,” arguing that sewage sludge does not “originate” 

until a publicly-owned treatment work treats raw sewage. 

NACWA Br. at 22–24. In support of this argument, NACWA 

cites EPA regulations in which EPA recognized that sewage 

sludge results from wastewater treatment and is distinct from 

domestic sewage, and to a Clean Water Act provision from 

which one may infer that the production of sewage sludge is, 

by statutory definition, part of a publicly-owned treatment 

work. See 33 U.S.C. § 1292(2)(A); 40 C.F.R. §§ 60.4930, 

60.5250; Joint Appendix 986–87. 

NACWA’s argument, however, fails to address how 

EPA’s original source interpretation of “from”—i.e., that the 

general public is a “but-for” cause of sewage sludge—renders 

the treatment facility that creates sewage sludge relevant. For 

example, one could say “bread comes from fields of wheat,” 

and be understood, or say “bread comes from the baker,” and 

also be understood. The fact that several intermediate 

processes had to occur to produce the bread—transporting 

wheat from the field, adding different ingredients to produce 

dough, or heating the dough in an oven—does not negate the 

validity of a sentence that uses “from” to link the bread to the 

source of an important ingredient. As we noted above, 

WEBSTER’S, supra 17, at 913, at least one dictionary defines 

“from” as a function word used to indicate, among other 

meanings, “the place of origin, source or derivation of a 

material or immaterial thing.” (emphasis added). Thus, the 

fact that the sewage sludge may not exist in that form until 

treated at a publicly-owned treatment work does not 

unambiguously invalidate EPA’s original source 

interpretation that sewage sludge is from the general public, 

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21 

even if EPA’s interpretation is some steps removed. While it 

is also true that other EPA regulations recognize that sewage 

sludge is distinct from domestic sewage, these regulations are 

not dispositive of EPA’s interpretation of § 129(g)(1). Put 

differently, the fact that EPA determined in other regulations 

that sewage sludge and domestic sewage are distinct does not 

preclude EPA from recognizing that sewage sludge would not 

exist but for domestic sewage, and does not prevent EPA 

from interpreting “from . . . the general public” as meaning 

the original, but-for source of sewage sludge. 

In addition to its textual arguments, NACWA asserts that 

EPA’s interpretation of § 129(g)(1) conflicts with § 112(e)(5), 

which states that EPA “shall promulgate standards pursuant to 

subsection (d) of this section applicable to publicly owned 

treatment works (as defined in title II of the Federal Water 

Pollution Control Act) not later than 5 years after November 

15, 1990.” NACWA argues that when § 112(e)(5) is read in 

conjunction with the Clean Water Act, which NACWA 

claims defines publicly-owned treatment works to include 

sewage sludge incinerators, EPA must establish emission 

standards for the entirety of a publicly-owned treatment work 

pursuant to § 112(d). Because EPA may only establish 

emission standards for a source exclusively under either § 

112(d) or § 129(a), see 42 U.S.C. § 7429(h)(2), NACWA 

maintains that § 112(e)(5) supports its interpretation that 

Congress did not intend for EPA to regulate sewage sludge 

incinerators under §129(g)(1). 

 We agree with EPA, however, that § 112(e)(5) is simply 

a timing provision, and does not prevent EPA from regulating 

aspects of a publicly-owned treatment work to which more 

specific provisions apply. See FTC. v. Manager, Retail Credit 

Co., Miami Branch Office, 515 F.2d 988, 993 (D.C. Cir. 

1975) (“The principle that a specific statutory provision 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 21 of 88
22 

prevails over a more general provision is established beyond 

question.”). If we accept EPA’s interpretation of “from . . . 

the general public,” § 129 would govern sewage sludge 

incinerators, and the exclusivity provision of § 129(h)(2) 

would render § 112 not “applicable to” sewage sludge 

incinerators, leaving no conflict between the texts. Thus, the 

overall structure of the Clean Air Act does not unambiguously 

require NACWA’s interpretation of the word “from.” 

In fact, when EPA issued its rule proposing emission 

standards for publicly-owned treatment works as required by 

§ 112(e)(5), it established standards for certain processes at 

publicly-owned treatment works while deciding to regulate 

sewage sludge incinerators under § 129, a decision that went 

unchallenged at the time. See National Emission Standards 

for Hazardous Air Pollutants: Publicly Owned Treatment 

Works, 63 Fed. Reg. 66,084, 66087 (Dec. 1, 1998) (Proposed 

Rule); 64 Fed. Reg. 57,572 (Oct. 26, 1999) (Final Rule). 

Though EPA’s decision in 1998 to regulate sewage sludge 

incinerators under § 129 does not prove that its interpretation 

is correct in the present, the fact that it established standards 

for other processes within publicly-owned treatment works 

under its § 112 authority demonstrates that sewage sludge 

incinerators are not the only aspect of a publicly-owned 

treatment work to which § 112 may be “applicable.” See 40 

C.F.R. Part 63, Subpart VVV. 

 We therefore conclude that the traditional tools of 

statutory construction do not demonstrate that § 129(g)(1) 

unambiguously excludes sewage sludge incinerators. But we 

also disagree with EPA that our opinion in NRDC v. EPA, 489 

F.3d 1250 (D.C. Cir. 2007), unambiguously resolves § 

129(g)(1) in EPA’s favor. 

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In NRDC, we heard challenges to an EPA rule that 

defined “commercial or industrial waste” to include solid 

waste combusted at incinerators that did not provide for 

energy recovery or operated without energy recovery. Id. at 

1258 (citing 70 Fed. Reg. at 55,572). Defining “commercial 

or industrial waste” in this way effectively created exceptions 

to the definition of “solid waste incineration unit” beyond 

those written in the statute. Id. We vacated and remanded 

EPA’s rule, rejecting its argument that it was resolving an 

ambiguity created by Congress’s failure to define 

“commercial or industrial waste.” Id. As we explained, 

Congress’s use of the word “any” in the definitional phrase 

“any facility which combusts any solid waste from 

commercial or industrial establishments” rendered the phrase 

clear and unambiguous, and EPA had no authority to create 

exceptions not explicitly listed in the statute through its 

definition of “commercial or industrial waste.” See id. at 

1259–60. 

Because the resolution of the present issue depends on 

the role of the word “from” in this statute, however, our 

discussion about the broad scope of § 129(g)(1)’s definition 

of “solid waste incineration unit” based on the word “any” is 

largely irrelevant. As we noted in NRDC, “The word ‘any’ is 

usually understood to be all inclusive,” 489 F.3d at 1257 

(internal citation omitted), and EPA presented no compelling 

reason “why ‘any’ should not mean ‘any.’” Id. at 1260 

(internal citation omitted). In contrast, “from” is susceptible 

to different meanings and renders § 129(g)(1) ambiguous—

even when viewed in light of the traditional tools of statutory 

construction—such that either NACWA’s or EPA’s 

interpretation of § 129(g)(1) is plausible. 

 Having determined that the phrase “from . . . the general 

public” is ambiguous under Chevron step one, we now apply 

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Chevron step two to determine whether EPA’s interpretation 

“is based on a permissible construction of the statute.” 

Chevron, 467 U.S. at 843. If EPA’s “choice represents a 

reasonable accommodation of conflicting policies that were 

committed to [EPA]’s care by the statute, we should not 

disturb it unless it appears from the statute or its legislative 

history that the accommodation is not one Congress would 

have sanctioned.” Id. at 845 (internal quotation marks 

omitted). 

 NACWA first asserts that EPA’s interpretation of § 

129(g)(1) is unreasonable under Chevron step two because 

EPA advanced a new rationale for its interpretation of § 

129(g)(1) for the first time in its denial of reconsideration to 

NACWA. Specifically, NACWA cites EPA’s reasoning that 

its conclusion on the coverage of § 129(g)(1) “is based on a 

reasonable interpretation of two provisions of the [Clean Air 

Act], so as to give both meaning,” and that “it is reasonable 

for the EPA to consider both provisions and to conclude that 

. . . section 129(g)’s all-encompassing definition of solid 

waste incineration unit requires regulation” under § 129. 

Joint Appendix 1092 (EPA’s letter denying NACWA’s 

petition for reconsideration). NACWA argues that EPA’s 

explanation is irrational not only because EPA allegedly 

raised it for the first time in the denial of reconsideration, but 

also because it amounts to a conclusory statement and 

because it fails to consider the importance of other 

environmental statutes. We find these arguments 

unconvincing. EPA explained in its final rule that it viewed § 

112(e)(5) as merely a timing provision, and further stated that 

to interpret § 112(e)(5) more broadly “would conflict with 

section 129(g) and with the DC Circuit’s [sic] interpretation 

of section 129(g).” 76 Fed. Reg. at 15,383. EPA’s reasoning 

in denying NACWA’s petition for reconsideration is not only 

consistent with its reasoning in the final rule, but also a 

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reasonable interpretation of the statute for the reasons we 

have just explained. 

 Second, NACWA argues EPA’s construction of § 

129(g)(1) is unreasonable because it ignores legislative 

history and the policies underlying the Clean Water Act’s 

provisions on sewage sludge incineration. NACWA contends 

that the discussion of wastewater treatment facilities in the 

legislative history of § 112, and the absence of any reference 

to sewage sludge or sewage sludge incinerators in § 129, 

demonstrate that Congress intended EPA to regulate all 

aspects of publicly-owned treatment works only under § 112. 

But though the legislative history on § 112 mentions 

wastewater treatment plants—an unsurprising fact in the 

context of a section stating the date by when EPA must issue 

§ 112(d) emission standards applicable to publicly-owned 

treatment works—NACWA has cited no language in the 

legislative history pertaining to sewage sludge incinerators. 

We need not determine whether legislative history can 

generally suffice to render an agency’s interpretation invalid 

at Chevron step two. Nothing in the legislative history cited 

by NACWA suggests that Congress would not have 

sanctioned EPA’s interpretation of § 129(g)(1) as including 

sewage sludge incinerators or EPA’s interpretation of § 

112(e)(5) as being a timing provision. 

 NACWA also contends that one of the congressional 

objectives of the Clean Water Act is to “maintain[] local 

flexibility and control over the means for managing sewage 

sludge,” and that adopting EPA’s interpretation of § 129 

would usurp local control. NACWA Br. at 27–28; see 33 

U.S.C. § 1345(e) (“The determination of the manner of 

disposal or use of sludge is a local determination . . . .”). We 

agree with EPA, however, that this argument is largely 

irrelevant to whether it reasonably interpreted § 129. 

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Establishing MACT standards for sewage sludge incinerators 

does not, as a purely legal matter, remove local control over 

which method of sewage sludge disposal to use. Even if the 

presumably increased costs associated with emission 

standards would affect a municipality’s decision on how to 

dispose of sewage sludge, 33 U.S.C. § 1345(e) is not so 

strongly worded as to completely insulate a municipality’s 

decision-making process from EPA rulemaking. 

 To sum, we conclude that the phrase “from . . . the 

general public” is ambiguous. Because EPA’s original source 

interpretation of that phrase is permissible, we give deference 

to its interpretation of the definition of “solid waste 

incineration unit,” and uphold its authority to establish 

emission standards for sewage sludge incinerators under § 

129. 

B. CHALLENGES TO THE MACT FLOOR METHODOLOGY

Petitioners NACWA and Sierra Club both challenge the 

adequacy of EPA’s methodology in determining the MACT 

floors for existing units. Both challenge EPA’s decision to set 

MACT floors on emissions data from less than 12 percent of 

sewage sludge incinerators, albeit on different legal theories. 

See NACWA Br. at 32–37 (asserting that EPA’s failure to 

base MACT floors on less than 12 percent of incinerators 

violates § 129); Sierra Club Br. at 28–30 (asserting that 

EPA’s failure to base MACT floors on less than 12 percent of 

incinerators is arbitrary and capricious). 

 

Both petitioners also criticize distinct but related aspects 

of EPA’s rulemaking. Sierra Club contends that EPA’s 

method of selecting the best performers based on control 

technology is unlawful and arbitrary, pointing to other factors 

that may influence emission levels. See Sierra Club Br. at 

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27 

18–23. NACWA argues that EPA failed to demonstrate that 

the data it used to set MACT floors represented the 

performance of the best-performing sewage sludge 

incinerators, contending that EPA failed to consider 

variability in sewage sludge contents and its effect on 

emission levels and that the upper prediction limit does not 

account for that variability. See NACWA Br. at 38–42. 

Sierra Club also challenges EPA’s use of the upper prediction 

limit, arguing that EPA does not demonstrate that the upper 

prediction limit represented the “average emissions limitation 

achieved” and was therefore unlawful and arbitrary. Beyond 

these related arguments, Sierra Club argues that EPA’s 

method for accounting for non-detect data is flawed. 

In promulgating the MACT standards for sewage sludge 

incinerators, EPA took a different approach than it has in 

other MACT standard regulations that have come before us 

on petitions for review. First, EPA collected its MACT floor 

dataset—i.e., the emission levels of “the best performing 12 

percent of units” for the existing incinerator MACT floors—

by targeting the sewage sludge incinerators it believed to 

employ the best air pollution control technology for emissions 

testing. See 75 Fed. Reg. at 63,269–70. Second, after it had 

collected emissions data for the MACT floor dataset, EPA 

applied a statistical analysis, which it termed the “upper 

prediction limit,” to account for variability. See 75 Fed. Reg. 

at 63,269, 63,271 (explaining that EPA “must exercise its 

judgment, based on an evaluation of the relevant factors and 

available data, to determine the level of emissions control that 

has been achieved by the best performing [sewage sludge 

incinerators] under variable conditions.”). 

Both steps in this approach involved several different 

estimations and assumptions. For example, because EPA 

chose to limit its information collection requests to nine 

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28 

municipalities, it had to estimate which sewage sludge 

incinerators would have the lowest emissions, which it chose 

to do based on the air pollution control technology the 

incinerators used. See 75 Fed. Reg. at 63,270. And because 

EPA’s limited emission testing did not yield data for 12 

percent of incinerators for every pollutant, it used a statistical 

technique to estimate whether a dataset of fewer than 12 

percent of incinerators could estimate the best-performing 12 

percent of incinerators. Id. Because every test did not 

produce usable data, EPA used an approximation to account 

for emissions test data too low to be accurately measured by 

monitoring equipment. Id. at 63,272. EPA also estimated the 

variability of the sewage sludge incinerators—what they 

would achieve under a range of operating conditions—by 

applying the upper prediction limit. Id. at 63,271.

We have accorded Chevron deference to EPA’s 

interpretation of § 129 as allowing it to estimate MACT 

floors, noting that the requirement that the existing unit floors 

“not be less stringent than the average emissions limitation 

achieved by the best performing 12 percent of units” does not, 

on its own, dictate “how the performance of the best units is 

to be calculated.” Sierra Club v. EPA, 167 F.3d 658, 661–62 

(D.C. Cir. 1999). Although EPA would ideally set MACT 

floors by surveying all existing incinerators and identifying 

the best-performing 12 percent of units with hard data, we 

have not required EPA to go that far, recognizing that “EPA 

typically has wide latitude in determining the extent of datagathering necessary to solve a problem.” Id. at 662; see also 

id. at 661 (noting that Sierra Club, in arguing that case, had 

“disavowed any interpretation that would require measuring 

the performance of every last unit”); Oral Arg. Tr. at 53:25–

54:9 (statement from EPA’s attorney stating, “EPA in a 

perfect world would have data from all 204 units”). Instead, 

we explained that the plain meaning of § 129(a)(2) does not 

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29 

“exclude estimation, either by sampling or by some other 

reliable means.” Sierra Club, 167 F.3d at 662. But we have 

not given EPA free rein in its estimation techniques. EPA 

“must demonstrate with substantial evidence — not mere 

assertions” that its estimation “allows a reasonable inference 

as to the performance of the top 12 percent of units.” Id. at 

663; Northeast Maryland Waste Disposal Authority, 358 F.3d 

at 954 (internal quotation marks omitted). 

Relying on Sierra Club’s holding that EPA may estimate 

“the average emissions limitation achieved by the best 

performing 12 percent” without violating the Clean Air Act, 

we have often held EPA’s attempts to estimate the 

performance of the top 12 percent units to be lawful in theory. 

But we have often held that, in practice, EPA could not 

support the assumptions underlying its estimations with 

substantial evidence. For example, in Sierra Club, EPA based 

existing medical waste incinerator MACT floors on emission 

limits established by state regulations, assuming that “all 

[medical waste incinerators] are . . . achieving their 

[regulatory] limits.” Id. at 663 (second alteration in original). 

Although we held that EPA could, in theory, use regulatory 

data as a proxy, EPA’s use of the data in that case to estimate 

the performance of the top 12 percent was arbitrary and 

capricious because the state emission limits were substantially 

higher than emissions from an uncontrolled incinerator, 

rendering the regulatory data a meaningless proxy for 

emission levels from medical waste incinerators. See id. at 

663–64 (explaining that while the average emission level 

from uncontrolled incinerators was 2,770 parts per million 

volume, the average of the state emission limits appeared to 

be 5,227 parts per million volume); see also Northeast 

Maryland Waste Disposal Authority, 358 F.3d at 953–54 

(rejecting EPA’s use of state emission levels for the same 

reason as in Sierra Club). 

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In Sierra Club, we also discussed a method EPA used to 

set new incinerator MACT floors, which are required to be 

“no less stringent than the emissions control that is achieved 

in practice by the best controlled similar unit.” See 167 F.3d 

at 664–65; 42 U.S.C. § 7429(a)(2). In setting new incinerator 

MACT floors, EPA had chosen what it believed to be the 

most effective control technology used by an incinerator in 

each category, identified the highest level of emissions (i.e., 

worst) recorded by any incinerator using that technology, and 

then increased that value by 10 percent. Sierra Club, 167 

F.3d at 665. Selecting the control technology used by sources 

with the lowest emission levels and then setting MACT floors 

at the levels achieved by the worst performing source, which 

we termed the “MACT approach” in later cases, was 

supposed to account for the fact that the best-controlled 

similar unit will not consistently achieve the same emission 

level. See Cement Kiln Recycling Coaliation v. EPA, 255 

F.3d 855, 861 (D.C. Cir. 2001). In other words, as we 

explained in Sierra Club, it is reasonable to expect that the 

incinerator on which the MACT floors are based should be 

able to “achieve” the MACT floor “in practice,” which it 

could not do unless “achieved in practice” meant “achieved 

under the worst foreseeable circumstances.” 167 F.3d at 665. 

But though EPA may account for variability and set MACT 

floors at the emission levels achieved by the best-controlled 

source under the worst foreseeable circumstances, we 

concluded in Sierra Club that EPA had not adequately 

explained why adopting the MACT approach would achieve 

that goal, and remanded the medical waste incinerator MACT 

standards to EPA for further clarification. Id. 

In later cases, we addressed EPA’s attempts to expand its 

MACT approach to developing existing source MACT floors. 

See National Lime Ass’n v. EPA, 233 F.3d 625, 632 (D.C. Cir. 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 30 of 88
31 

2000); Cement Kiln, 255 F.3d at 859; Sierra Club v. EPA, 479 

F.3d 875, 879–880, 882–83 (D.C. Cir. 2007) (“Brick 

MACT”). For example, in Cement Kiln, EPA identified the 

best-performing 12 percent of sources by emission levels, 

identified the control technology used by sources with 

emission levels equivalent to or lower than the median of that 

12 percent, and then set the MACT floor at the worst emission 

level achieved by any source using that control technology. 

255 F.3d at 859. As in Sierra Club, EPA’s rationale in setting 

the MACT floors on the worst performer using MACT 

technology was to account for variability in the emission 

levels “achieved” by the best-performing 12 percent. See id.

at 862, 865–66. While we explained this approach could be 

lawful in theory if, for example, control technology was 

completely or significantly determinative of a source’s 

emission levels, we nevertheless concluded that EPA had not 

adequately demonstrated with substantial evidence that its 

estimation was reasonable. Id. at 863–66. Because factors 

apart from air pollution control technology could affect 

emission levels, we concluded that EPA’s assumption that the 

worst-performing unit could represent the best-performing 

units was flawed. Id. at 866; see also Brick MACT, 479 F.3d 

at 882 (“Given Cement Kiln’s holding that EPA may not use 

emission levels of the worst performers . . . without a 

demonstrated relationship between the two, we conclude that 

the emission floors . . . violate the [Clean Air Act].”); id. at 

883 (“EPA’s decision to base floors exclusively on 

technology even though non-technology factors affect 

emission levels violates the [Clean Air Act].”). 

As these cases demonstrate, establishing MACT floors is 

no simple task. Determining the best performing sources is 

not even as straightforward as simply collecting emission test 

data from all incinerators and ranking them, as incinerators 

that have low emission levels one day may have very high 

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32 

emission levels under the worst foreseeable conditions (for 

example, if an incinerator experiences a spike in sludge 

pollutant concentrations during certain times of the year). 

Recognizing that variability in the performance of sources can 

make identifying the best-performing sources based on shortterm emissions data a nearly impossible task, we have upheld 

EPA’s estimation of MACT floors in at least one case. In 

Mossville Environmental Action Now v. EPA, 370 F.3d 1232 

(D.C. Cir. 2004), EPA explained that great variability in 

emissions among sources it sought to regulate made 

comparing sources and selecting the best-performing units 

virtually impossible, and so set the MACT standards for the 

pollutant at issue at the level of preexisting EPA emission 

standards. See id. at 1240 (“With comparisons between plants 

impossible, and emission variations not related to 

technological performance, the EPA claims it was unable to 

select the best [performing] sources.”). Because EPA pointed 

out that the source with the overall lowest long-term emission 

of the pollutant at issue barely satisfied the preexisting 

emission standards, we upheld EPA’s estimation that its 

preexisting emission standards for that pollutant reasonably 

represented the average emission levels of that pollutant for 

the best-performing units. Id. at 1242. 

With this background in mind, we turn to the petitioners’ 

challenges to the MACT floor methodology EPA used in 

setting emission standards for sewage sludge incinerators. As 

we explained, EPA’s approach to setting MACT floors had 

essentially two steps: (a) determining the best-performing 

sewage sludge incinerators and gathering data; and (b) 

applying the upper prediction limit to the collected dataset to 

account for variability. 

To determine the best-performing incinerators, EPA, 

mindful of our holding in past MACT floor cases, has devised 

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33 

a different approach than it has in other rulemaking we have 

reviewed. First, EPA identified the incinerators it believed 

would have the lowest emissions based on the type of unit and 

installed air pollution controls. 75 Fed. Reg. at 63,270. EPA 

then conducted emission tests from these incinerators to 

develop its MACT floor dataset, which it supplemented with 

data from state environmental agency public databases. Id. 

Because some test runs yielded emissions data at a level that 

EPA’s testing equipment could not accurately measure, EPA 

developed a method for incorporating this non-detect data. 

Id. at 63,273. 

This method of using technology to set MACT floors 

differs from the “MACT approach” discussed in Cement Kiln

and Brick MACT. In those cases, EPA had first identified the 

sources with the lowest emissions, then identified the primary 

emission control technology used by those sources, and then 

set the MACT floors based on sources that used that 

technology. See Cement Kiln, 255 F.3d at 859; Brick MACT, 

479 F.3d at 879. In contrast, EPA has, in this rulemaking, 

selected which sewage sludge incinerators to survey based on 

their control technology, without first determining their 

emission levels relative to other sources. See Revised MACT 

Floor Memo at 6 (“To select the surveyed owners, EPA 

reviewed the inventory of [sewage sludge incinerators] for the 

control devices being operated, and identified a subset of units 

expected to have the lowest emissions based on the type of 

unit and the installed air pollution controls.” (emphasis 

added)). 

Even after selectively identifying and collecting data 

from incinerators, EPA did not collect data on every § 129 

pollutant from 12 percent of sources. For example, while EPA 

estimated in the final rule that it would need data on eighteen 

multiple hearth incinerators to meet the 12 percent 

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34 

requirement, the number of multiple hearth incinerators for 

which it had data (including supplemental reports from state 

environmental agency databases) ranged from nineteen to five 

incinerators depending on the pollutant. See Revised MACT 

Floor Memo at 7. Believing that § 129(a)(2) required it to 

have data representative of at least 12 percent of incinerators, 

EPA devised a method of estimating whether a limited dataset 

could be representative of the best-performing 12 percent of 

units. Specifically, EPA applied a statistical analysis on the 

underrepresented pollutant datasets to estimate whether it had 

enough observations from testing incinerators to represent the 

best-performing 12 percent of incinerators. See 75 Fed. Reg. 

63,270; Revised MACT Floor Memo at 7–8. Applying this 

statistical analysis to its MACT floor dataset yielded an 

estimate of an estimate; in other words, the limited dataset to 

which EPA was applying this statistical analysis was itself 

already the result of EPA’s estimating the best performers 

based on control technology. 

After it had collected its dataset, EPA applied the upper 

prediction limit to estimate variability in sewage sludge 

incinerator emissions, stating its belief that the MACT floors 

had to be set at such a level that the best-performing 

incinerators “can expect to meet ‘every day and under all 

operating conditions.’” 75 Fed. Reg. at 63,269 (quoting 

Mossville Environmental Action Now, 370 F.3d at 1241–42). 

We will address challenges to EPA’s estimations in the 

following order: (1) whether EPA may use control technology 

as a proxy for best-performing incinerators; (2) whether EPA 

did not adequately account for variability in the characteristics 

of sewage sludge fed into the sewage sludge incinerators, and 

whether it may account for variability with the upper 

prediction limit; (3) whether EPA may apply a statistical 

equation to determine whether EPA had a sufficient dataset to 

be representative of the best-performing 12 percent; and (4) 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 34 of 88
35 

whether EPA may incorporate non-detect data by comparing 

calculated MACT floors to a value that is three times the 

representative detection level. 

1. Identifying the best-performing incinerators based on 

control technology 

We first address Sierra Club’s challenge to EPA’s 

selection of the best-performing units based on the type of 

unit and installed air pollution control technology. In 

addressing Sierra Club’s argument that EPA did not establish 

that non-technology factors do not affect emissions, we admit 

some confusion over whether NACWA is also arguing that 

EPA acted arbitrarily in its selection of best performers by 

failing to account for variability, or whether its argument is 

that EPA failed to account for the variability experienced by 

the best-performing units it selected. See NACWA Br. at 39 

(“Commenters argued that EPA’s targeted selection of nine 

[publicly-owned treatment works] based solely on type of 

pollution control makes it impossible for EPA to assume that 

the data are representative of the best-performing [sewage 

sludge incinerators] across the entire category.”) (citing 

NACWA Comments, Joint Appendix 24–25). But see 

NACWA Br. at 41 (“Because these data show the great 

variability of these pollutants, commenters urged EPA to 

determine the emission rates achieved by the best-performing 

sources under the full range of operating conditions.”). The 

closeness of these two arguments is hardly surprising given 

that variability in incinerator operating conditions may make 

the “best performing 12 percent of units” a moving target, 

particularly when EPA uses emission levels as the metric for 

“best performing.” But while both NACWA’s and Sierra 

Club’s arguments on this point share a similar element—

EPA’s alleged failure to account for sewage sludge variability 

makes its MACT floor methodology arbitrary and 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 35 of 88
36 

capricious—Sierra Club focuses on EPA’s assumption about 

control technology installed on the incinerator, while 

NACWA focuses on EPA’s assumptions about the effect of 

sewage sludge characteristics on emission levels. Because 

these contentions are different in kind, we will address them 

separately. 

We begin with Sierra Club’s allegation that EPA’s 

estimate of the best-performing 12 percent of units is 

unlawful and arbitrary. In arguing that this estimate is 

unlawful, Sierra Club relies on Cement Kiln, asserting that 

EPA’s estimation technique can be upheld only if air 

pollution control technologies are “the only factor 

determining emission levels.” Id. (quoting 255 F.3d at 863). 

Because EPA conceded that some non-technology factors 

affected emission levels, even accounting for Clean Water 

Act Part 503 regulations, see 75 Fed. Reg. at 63,270, Sierra 

Club argues that EPA’s method of estimating is per se

unlawful. 

Sierra Club reads our holding in Cement Kiln too strictly. 

Later in our opinion in Cement Kiln, we explained that “if 

[EPA] can demonstrate with substantial evidence – not mere 

assertions – that MACT technology significantly controls 

emissions, or that factors other than the control have a 

negligible effect, the MACT approach could be a reasonable 

means of satisfying the statute’s requirements.” 255 F.3d at 

866 (emphases added). Unsurprisingly, EPA cited this 

portion of our opinion when responding to Sierra Club’s 

challenge to using control technology as a proxy for the bestperforming incinerators. EPA Br. at 55. Sierra Club asserts 

that EPA cannot justify its approach under this softer 

standard, arguing that the significant/negligible standard is 

dicta. See Sierra Club Reply Br. at 3–4. 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 36 of 88
37 

While Sierra Club may be correct that this statement is 

dicta, we now elevate it to holding. First, our statement in 

Cement Kiln that the MACT approach would satisfy the 

statute “if pollution control technology were the only factor 

determining emission levels” was a direct quote from our 

opinion in National Lime, where the statement was itself 

dicta. 255 F.3d at 863 (quoting National Lime, 233 F.3d at 

633); see National Lime, 233 F.3d at 633 (summarizing an 

argument made by Sierra Club that we could not consider 

because it was not properly raised). Moreover, in Cement 

Kiln, we did not rely on the presence of any other factor 

influencing emission levels to hold that EPA’s MACT 

approach failed to satisfy the statutory requirements for 

setting MACT floors, instead resting our holding on the bases 

that several non-control factors could influence emission 

levels, and that EPA’s difficulty in quantifying these factors 

was no excuse for failing to demonstrate its estimate was 

reasonable. Cement Kiln, 255 F.3d at 863–65. 

Second, if we are to give any substance to EPA’s ability 

to estimate the best performing units based on control 

technology, we must allow EPA to use air pollution control 

technology as a proxy for emission levels even if the 

correlation between control technology and emission levels is 

imperfect because non-control factors have a negligible effect 

on emissions. This is so because an estimate, by definition, 

will not accurately account for every variable that may affect 

emissions. WEBSTER’S, supra 17, at 778 (defining “estimate” 

as meaning “to judge the value, worth, or significance of: esp: 

to arrive at (a value judgment that is often valid but 

incomplete, approximate, or tentative)”) (emphasis added). 

Were we to adopt the strict standard Sierra Club argues 

applies, we would effectively be prohibiting EPA from using 

this estimation technique, as we find it impossible to imagine 

any situation where there is a perfect correlation between 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 37 of 88
38 

control technology and emissions. See Cement Kiln, 255 F.3d 

at 871 (“[W]e do not expect the impossible of the [EPA]. 

Floors need not be perfect mirrors of the best performers’ 

emissions.”). Thus, the fact that air pollution control 

technology is not the only factor affecting emission levels 

does not render EPA’s use of control technologies to identify 

best performers per se unlawful. 

EPA, however, must still demonstrate that its estimate is 

reasonable. In justifying its approach of “specifically 

[seeking] emissions data from those municipalities that have 

installed and operate more than one of the controls that EPA 

identified as achieving the most reductions possible for the 

Section 129 pollutants,” EPA Br. at 56, EPA points to Clean 

Water Act regulations on sewage sludge disposal as 

accounting for non-control technology factors. See 40 C.F.R. 

Part 503, Subpart E. These regulations include a requirement 

that incinerators comply with Clean Air Act emission 

standards for beryllium and mercury, see 40 C.F.R. § 

503.43(a)–(b), and set limits for the average daily 

concentrations of lead, cadmium, and other metals in the 

sewage sludge that is fed into an incinerator. See 40 C.F.R. § 

503.43(c)–(d). EPA explained in the rulemaking, and now 

before us, that sewage sludge incinerators “receive a more 

homogenous type of waste to burn,” and that because of the 

Part 503 standards sewage sludge incinerators “are already 

incorporating management practices and measures to reduce 

waste and limit the concentration of pollutants in [sewage 

sludge].” See Revised MACT Floor Memo at 6–7; 75 Fed. 

Reg. at 63,270. 

It is true that EPA has pointed to some evidence of 

reduced variability among sewage sludge incinerators, a 

showing EPA failed to make in other MACT floor cases. See, 

e.g., Sierra Club, 167 F.3d at 662–64 (concluding that 

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39 

assumption that States would set emission limits at a level 

near what incinerators achieved in practice to be unsupported 

and contradicted by the record); Cement Kiln, 255 F.3d at 865 

(determining that EPA did not attempt to support its 

assumption that emission levels were solely dependent on 

control technologies, instead explaining that for some 

pollutants, the “factors other than technology that affect 

emissions . . . are difficult to quantify for the definition of 

MACT”) (internal quotation marks omitted). Nevertheless, 

EPA concedes “that there is some variation of Section 129 

pollutants present in the waste that is burned at individual 

sewage sludge incinerators.” EPA Br. at 58. The question 

thus remains: can EPA demonstrate with substantial evidence 

that some variation in pollutants has a negligible effect on 

sewage sludge incinerators, or that non-technology factors 

aside from sewage sludge content have a negligible effect on 

emissions? 

Sierra Club argues that EPA has not made that 

demonstration, pointing out that EPA’s assumption does not 

account for the fact that incinerator emissions are “affected by 

the fuels they use, the age and design of the individual unit, 

the specific quality and age of control devices at individual 

units, the training and skill of the operators, and the care with 

which they run individual units.” Sierra Club Br. at 18–19 

(internal quotation marks omitted). We found this argument 

persuasive in Cement Kiln, see 255 F.3d at 862–65, and again 

agree with Sierra Club here. The fact that publicly-owned 

treatment works are already required to limit pollutant 

concentrations in sewage sludge before incineration does not 

establish that other variations in the operation of sewage 

sludge incinerators and the air pollution control technology 

they use will have only a negligible effect in emissions. 

Without evidence that air pollution control technology will 

achieve substantially the same performance across 

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40 

incinerators without regard to the particular incinerator on 

which it is installed, EPA has made only a “mere assertion” 

that its regulations account for non-technology factors and 

that the type of air pollution control technology used by an 

incinerator is significantly determinative of emissions. See 76 

Fed. Reg. at 15,392; Cement Kiln, 255 F.3d at 866. 

Sierra Club also argues that variations in sewage sludge 

pollutant content are a factor affecting emission levels apart 

from the air control technology in use by a sewage sludge 

incinerator. Responding to EPA’s arguments that the Part 503 

regulations already require publicly-owned treatment works to 

“apply[] non-technology measures to reduce emissions” and 

therefore produce a more homogenous waste, Sierra Club 

argues that “[e]ven if correct, these arguments merely show 

that the units EPA selected as best performers have varying 

sludge inputs and that these inputs affect sewage sludge 

incinerators’ emissions less than they affect emissions from 

other categories of incinerators.” Sierra Club Br. at 19. 

Although this is a fair point, it is more relevant to NACWA’s 

argument that EPA failed to account for variability in sewage 

sludge pollutants when collecting its dataset, a point we 

address more comprehensively in the following section. 

Suffice it to say, unless EPA can demonstrate that the 

relatively reduced variations in sewage sludge characteristics 

have a negligible effect on emissions, Sierra Club’s argument 

that non-technology factors affect emissions seems even more 

meritorious. See Cement Kiln, 255 F.3d at 864 (citing, in 

support of its holding, an EPA technical memorandum in 

which EPA observed that the variability in emissions among 

sources using MACT technology “indicate[d] that the air 

pollution control device system type . . . may not be the only 

important consideration affecting [dioxin/furan] control; other 

factors such as combustion quality and waste composition . . . 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 40 of 88
41 

may also be of importance.”) (emphasis added) (second 

alteration in original). As we will discuss in the next section, 

EPA has alluded to evidence that may demonstrate a low 

correlation between sewage sludge characteristics and 

emissions. See Joint Appendix 1095 (Letter Denying 

NACWA’s Petition for Reconsideration) (citing data gathered 

during EPA’s information collection request that showed that 

“the contents of . . . pollutants in the sludge itself has little 

relationship to the emissions of the pollutants, because these 

pollutants are removed by the control devices.”). But as we 

will also discuss in the following section, citing this evidence 

for the first time in denying a petition for reconsideration may 

be an insufficient basis upon which to defend EPA’s position 

that its Part 503 regulations account for non-technology 

factors. 

To bolster its argument that non-technology factors have 

a non-negligible effect on emission levels, Sierra Club points 

out that some incinerators EPA did not survey for data 

collection reported superior performance to those EPA did 

survey, undercutting EPA’s assumption that control 

technology is the only factor controlling emission levels. For 

example, Sierra Club cites comments submitted by Palo Alto, 

which reported that its program of reducing mercury inputs 

was effective in reducing mercury emissions to a level far 

below the existing unit MACT floor, and which was not 

included in the best-performing 12 percent. See Joint 

Appendix 628–29. Sierra Club also notes that the 

supplemental data EPA took from state environmental agency 

public databases showed emission levels lower than those 

EPA decided to survey—a fact EPA candidly acknowledges. 

See 76 Fed. Reg. 15,387 (“For some pollutants, the emissions 

from these supplemental test reports were lower than those 

from the nine [surveyed] sources.”). This is evidence, Sierra 

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42 

Club argues, that EPA’s estimate of the best performers based 

on control technology is arbitrary and capricious. 

EPA responds that it did not have to consider the Palo 

Alto incinerator’s reported emission level, because Palo Alto 

failed to comply with EPA’s instruction in the proposed rule 

to provide “supporting documentation” when submitting 

additional emissions stack test data in its comments. See 75 

Fed. Reg. at 63,270. Because EPA could not verify the 

accuracy of Palo Alto’s asserted emission levels, EPA 

explains that it was unable to draw any correlation between 

Palo Alto’s sewage sludge management practices and a 

reduction in mercury emissions. In the past, we have upheld 

EPA’s rejection of data it determined deficient, explaining 

that we give substantial deference to an agency’s expert 

scientific judgment. Similarly, when EPA requests that 

commenters substantiate their reported emission test data, and 

they do not comply, EPA “[is] not obligated under its policy” 

to compare its collected results with the unsubstantiated data 

that commenters submit. See Edison Electric Institute v. EPA, 

2 F.3d 438, 448 (D.C. Cir. 1993) Id. at 449. Thus, we agree 

with EPA that it deserves deference for its decision not to 

draw any correlations between Palo Alto’s change in 

management practice and a reduction in mercury emissions 

based on the data submitted. 

EPA, however, does not respond to Sierra Club’s 

argument that the fact that randomly selected incinerators 

from state environmental agency databases had emission 

levels lower than those from the incinerators EPA chose to 

survey based on technology demonstrates that EPA’s use of 

control technology is unreasonable. Instead, it explains that 

the supplemental information from state environmental 

agency databases “included emissions test data from 

facilities/units that met the same criteria EPA used in issuing 

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43 

information collection requests, i.e., units with more than one 

of the controls that EPA identified as achieving the most 

reductions possible for the Section 129 pollutants.” EPA Br. 

at 56–57; compare Joint Appendix 979 (listing incinerators 

from which EPA collected emissions test data and the control 

technologies they used), with Joint Appendix 1012–1040 

(listing incinerator emission test data collected from state 

environmental agency databases along with control 

technologies used). But EPA did not state this rationale in the 

rulemaking, and we cannot “accept appellate counsel’s post 

hoc rationalizations for agency action.” Motor Vehicles 

Manufacturer’s Ass’n v. State Farm Mutual Auto Insurance 

Co., 463 U.S. 29, 50 (1983). And before this court, EPA does 

not claim that it specifically searched state environmental 

agency databases for data from sewage sludge incinerators 

that use what it considered the best-performing technology, 

explaining only that the supplemental data “included” 

emissions data from facilities that had one or more of the 

controls identified. Even taking as true that the incinerators 

for which EPA had data in supplemental testing used similar 

air pollution controls as the incinerators it selected, the fact 

that similarly-controlled incinerators achieve lower emission 

levels suggests that non-technology factors have a nonnegligible effect on emission levels. 

Therefore, we agree with Sierra Club that EPA has not 

demonstrated with substantial evidence that non-control 

technology factors apart from sewage sludge content, like 

variations in age, design, or operation of the incinerators 

themselves, would have a negligible effect on incinerator 

emissions. That EPA’s supplemental test reports show 

superior performance to the incinerators EPA chose for 

information collection requests is strong evidence that the 

type of air pollution control technology used itself is not 

significantly determinative of emissions. Nevertheless, 

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44 

because EPA may be able to explain why non-control 

technology factors have a negligible effect on emissions and 

why the data it used from supplemental test reports 

outperform the units it identified as best, we remand this 

portion of the rulemaking to EPA for further explanation 

without vacating the MACT floor regulations. 

2. Accounting for variability 

We now address NACWA’s and Sierra Club’s challenges 

to EPA’s method of accounting for variability. In the 

proposed rule, EPA explained that it was accounting for intraunit variability using a statistical tool it termed the upper 

prediction limit, and was relying on the Part 503 regulations 

to account for variability in sewage sludge pollutant 

concentration between incinerators. See 75 Fed. Reg. at 

63,270–71. Because the upper prediction limit is not a 

straightforward method of accounting for variability, we first 

review and elaborate on this concept. The 99 percent upper 

prediction limit “represents the value which one can expect 

the mean of future 3-run performance tests from the bestperforming 12 percent of sources to fall below, with 99 

percent confidence, based upon the results of the independent 

sample of observations from the best-performing sources.” 

75 Fed. Reg. at 63,271. EPA calculated the upper prediction 

limit using the following formula: 

ݐ݅݉݅ܮ	݊݋݅ݐ݁݀݅ܿݎܲ	ݎ݁݌݌ܷ

ൌ	ݔ̅ ൅ݐሺ0.99, ݊ െ 1ሻ ൈ ඨݏଶ ൈ ൬

1

݊

൅

1

݉൰

In this formula, n represents the number of test runs (i.e., the 

sample size), m represents the number of test runs in a 

compliance average, ݔ̅ represents the mean, s represents the 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 44 of 88
45 

standard deviation (i.e., a value representing how much 

variation exists from the mean within a dataset), and t(0.99, 

n–1) represents a value called the t-statistic, which is a 

number based on the number of test runs and EPA’s desired 

99 percent significance. Id. Because of the role of the 

standard deviation in this formula, greater variation within a 

dataset will produce a higher upper prediction limit. And 

because EPA incorporated the upper prediction limit into its 

analysis by setting the MACT floor at the level of the upper 

prediction limit (unless its methodology for addressing nondetect data, which we will discuss below, yielded a higher 

result), a higher upper prediction limit means a higher MACT 

floor. 

For existing incinerators, EPA did not apply the upper 

prediction limit to each 3-run test for each incinerator, but 

instead applied it to the entire dataset it collected for a 

pollutant. See id.; see, e.g., Revised MACT Floor Memo 

Attachment B-8. For example, when setting the MACT floor 

for sulfur dioxide, for which EPA had 63 test runs, EPA 

calculated the upper prediction limit using a sample size of 

63, a mean and standard deviation based on all 63 test runs, a 

desired 3-run compliance average, and a desired confidence 

level of 99 percent. See 75 Fed. Reg. at 63,271; Revised 

MACT Floor Memo Attachment B-8. The resulting value 

calculated by the upper prediction limit appears to represent, 

with 99 percent confidence, the value EPA predicts a 3-run 

average from an imaginary incinerator—representative of the 

mean and variation among the best-performing 12 percent 

incinerators—could achieve. Predicting the value that a “3-

run average” will fall below appears confusing at first 

glance—but we note that the focus of the upper prediction 

limit is on the average, and not the values of the three runs 

used to derive that future average. Thus if the upper 

prediction limit (i.e., MACT floor) were 5, it would not matter 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 45 of 88
46 

whether the 3-run test was 5-5-5, or 1-5-9, as both 3-run tests 

average to 5. Designing the upper prediction limit this way 

appears to give incinerators testing for compliance with the 

MACT standards some leeway in variations among emissions 

between test runs. See 75 Fed. Reg. at 63,269. 

During the comment period Sierra Club, but not 

NACWA, challenged EPA’s use of the upper prediction limit. 

See Joint Appendix 608. Although NACWA did not criticize 

the upper prediction limit as a method for addressing 

variability in its comments, it did assert that EPA failed to 

account for variability in sewage sludge characteristics 

resulting from regional and seasonal variability. See id. 670–

72. NACWA also challenged EPA’s use of the Clean Water 

Act Part 503 regulatory data in its rulemaking, asserting that 

EPA’s assumption that sewage sludge was homogenous was 

demonstrably false based on that data. For example, 

NACWA pointed out that the monthly average lead 

concentration in sewage sludge in January 2009 was 62.23 

mg/dry kg for southerly incinerators and 97.00 mg/dry kg for 

westerly incinerators, while the monthly average lead 

concentration in July 2009 was 123.14 mg/dry kg for 

southerly incinerators and 218.55 mg/dry kg for westerly 

incinerators. Id. 671. NACWA argued that because EPA 

regulations required publicly-owned treatment works to report 

this data to EPA, see 40 C.F.R. § 503.48, EPA had access to 

the data and should have used it during rulemaking to account 

for variability. Id. 671–72. Moreover, NACWA noted that 

the Part 503 regulations did not even address all § 129 

pollutants. See id. 672. 

In the final rule, EPA defended its use of the upper 

prediction limit against Sierra Club’s criticisms. See 76 Fed. 

Reg. at 15,389. In response to NACWA’s comments, EPA 

explained that it collected emissions data from nine different 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 46 of 88
47 

facilities in nine different states, claiming that these facilities 

were “located in a mix of northern, southern, eastern, and 

western states,” each with its “own unique sludge 

characteristics from different residential and commercial 

populations.” Id. at 15,391. EPA stated that it felt the dataset 

had “sufficient variation in regions, climates and populations” 

to “adequately incorporate[] variability in wastewater 

treatment systems across the U.S.,” and that it had “also 

incorporated variability using the [upper prediction limit].” 

Id. 

Both petitioners now challenge EPA’s use of the upper 

prediction limit to account for variability among sewage 

sludge incinerators. Sierra Club contends that the upper 

prediction limit is unlawful as applied to existing incinerator 

datasets because it does not represent the “average” emissions 

limitation achieved by the best-performing 12 percent of 

incinerators, a fact inconsistent with EPA’s statements that 

the upper prediction limit is “based on” an average. Sierra 

Club asserts that the upper prediction limit is unlawful as 

applied to new sources as well, stating that “the upper 

prediction limit is not an estimate of what the best unit 

actually ‘achieved in practice.’” Sierra Club Br. at 25. 

Sierra Club also argues that EPA’s use of the upper 

prediction limit is arbitrary and capricious because EPA does 

not provide an explanation of how the upper prediction limit 

represents the emissions level achieved by the best 

performing units under the worst reasonably foreseeable 

conditions. To support its arbitrary and capricious argument, 

Sierra Club points to the fact that, by applying the upper 

prediction limit, EPA calculated a MACT floor for the bestcontrolled unit that was higher than the floor based on the 

average emissions limitations achieved by the top 12 percent 

of units. See 76 Fed. Reg. at 15,388–89. Sierra Club also 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 47 of 88
48 

alleges that EPA has been inconsistent with its use of the 

upper prediction limit, using the upper prediction limit to set 

the MACT floors but not using it to identify incinerators in 

the first place. 

NACWA does not challenge EPA’s use of the upper 

prediction limit as broadly as Sierra Club, explaining that 

“using the 99 [percent] [upper prediction limit] method to 

account for variability in emission performance is not 

prohibited by statute, nor is it unreasonable, provided EPA 

uses representative data from the congressionally required 12 

[percent] of units.” NACWA Intervenor Br. at 7. Instead, 

NACWA challenges EPA’s justification that the upper 

prediction limit adequately accounts for variability in a 

dataset that itself is not reflective of the variety of conditions 

in which sewage sludge incinerators operate, asserting that 

“the [upper prediction limit] cannot account for variability 

among [sewage sludge incinerators] unless the underlying 

data are representative of the category as a whole.” In other 

words, NACWA argues that because EPA failed to take into 

account regional and seasonal variability in sewage sludge 

pollutant concentrations and failed to use the Part 503 data 

showing variability in sewage sludge characteristics in its 

analysis, EPA produced a limited dataset that was not 

representative of the “emission rates achieved by the bestperforming sources under the full range of operating 

conditions.” NACWA Br. at 41. 

EPA’s responses to both Sierra Club’s and NACWA’s 

arguments are somewhat conclusory, relying primarily on its 

explanation in the Revised MACT Floor Memo rather than 

addressing the petitioners’ legal arguments. Responding to 

Sierra Club, EPA asserts that it did not “simply ‘pick a 

number’” in setting the upper prediction limit, and explains 

that the reason why some new incinerator MACT floors were 

USCA Case #12-1237 Document #1452443 Filed: 08/20/2013 Page 48 of 88
49 

higher than existing incinerator MACT floors was because of 

the smaller datasets with greater variation. EPA Br. at 52. 

EPA argues that NACWA’s criticism of the upper prediction 

limit is “overly simplistic,” explaining that “EPA’s use of the 

[upper prediction limit] to account for variability also 

addressed any emissions variability due to differences in 

sludge content,” and that if NACWA’s approach were 

accepted, “it would account for variability in sludge content 

on top of the variability in emission levels that are already 

accounted for through the [upper prediction limit].” EPA Br. 

at 50–51. 

Before stepping into the morass of arguments on the 

upper prediction limit, we take a moment to revisit the 

statutory source of EPA’s obligation to set MACT floors. 

Section 129(a)(2) requires existing MACT floors to be no less 

stringent than “the average emissions limitation achieved by 

the best performing 12 percent of units.” As we noted in 

Sierra Club, “this phrase on its own says nothing about how 

the performance of the best units is to be calculated.” 167 

F.3d at 661. In the past, we have primarily relied on Sierra 

Club when reviewing MACT standards to state that EPA can 

reasonably estimate the performance of the best units. But 

underlying Sierra Club’s holding is also the proposition that, 

because EPA can interpret ambiguous statutes under Chevron, 

EPA can decide what value the MACT floors are supposed to 

represent, as long as that decision is a reasonable 

interpretation of the statute. See id. at 661–62. 

In this case, EPA has explained that its “long-standing 

interpretation [of section 129] is that the combination of 

section 129(a)(4), requiring numerical standards for each 

enumerated pollutant, and section 129(a)(2), requiring that 

each such standard be at least as stringent as the MACT floor, 

supports that floors be derived for each pollutant based on the 

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50 

emissions levels achieved for each pollutant.” 75 Fed. Reg. at 

63,269. And in the final rule, EPA clarified that it was “using 

lowest emissions limitation as the measure of best 

performance.” 76 Fed. Reg. at 15,389. 

But even with these explicit interpretations of § 129(a)(2) 

as guidelines, the phrase “average emissions limitation 

achieved by the best performing 12 percent of units” could be 

interpreted several different ways, with several different 

variations of what the MACT floor is supposed to represent. 

For example, and without prejudging the legality of these 

different interpretations, EPA could interpret the “average 

emissions limitation achieved by the best performing 12 

percent of units” to mean the average of the emission levels 

achieved by the best-performing units based on EPA’s shortterm emission test data, without regard to the range of 

conditions under which the incinerators operate. In that case, 

the MACT floors would simply be an average of the 

emissions data EPA collected from the best-performing units. 

The phrase could also mean the average of the emission 

levels that each best-performing unit achieved under the worst 

foreseeable circumstances. If EPA were to take this 

interpretation, it would seem sensible to determine the 

population of the best-performing units based on which units 

achieve the lowest emission levels under the worst 

foreseeable conditions, and then average those emission 

levels. 

Based on EPA’s method of determining MACT floors in 

this case and its response to Sierra Club’s comments, 

however, it seems EPA has adopted yet another interpretation 

of the phrase “average emissions limitation achieved by the 

best performing 12 percent of units.” In the final rule, EPA 

cited Sierra Club’s comments that § 129(a)(2) 

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51 

“unambiguously requires EPA to set floors reflecting the 

‘average’ emission level achieved by the best sources” and 

that “although EPA may consider variability in estimating an 

individual source’s actual performance over time, nothing in 

the [Clean Air Act] or the case law even suggests that EPA 

may account for differences in performance between sources 

except as § 129 provides, by averaging the emission levels 

achieved by the sources in the top 12 percent.” 76 Fed. Reg. 

at 15,389. EPA responded that “[b]ecause the [upper 

prediction limit] represents the value which we can expect the 

mean (i.e., average) of three future observations (3-run 

average) to fall below, based upon the results of the 

independent sample size from the same population, the [upper 

prediction limit] reflects average emissions.” Id. 

It is not clear to us, however, that the “average emissions 

limitation achieved by the best performing 12 percent” would 

refer to the future average of a 3-run test that EPA predicts a 

source in the best-performing 12 percent will fall below with 

99 percent confidence. Instead, the word “average” as 

referred to in the standard for existing unit MACT floors 

seems to mean the average emissions limitation that the 

existing population of the best-performing 12 percent of 

incinerators has achieved, not the average of a future 3-run 

test conducted for compliance purposes. 

This is not to say that the upper prediction limit, which 

EPA applied to the average of the emission levels recorded 

while testing the best-performing 12 percent, would violate 

the statutory standard established in § 129. Under its method, 

EPA seems to have effectively modeled an imaginary 

incinerator based on the short-term emissions test data from 

incinerators in what EPA considers the best-performing 12 

percent of units. Using the average, the standard deviation of 

the dataset, and the number of data points, EPA claims its 

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52 

statistical formula models, with 99 percent confidence, the 

upper limit of what that imaginary incinerator would achieve 

based on the distribution of the dataset. Given that EPA 

believes that it must set MACT floors “that the best 

performing sources can meet ‘every day and under all 

operating conditions,’” it seems plausible to state that this 

predicted emission level represents the “average emissions 

limitation achieved by the best performing 12 percent of 

units.” See 75 Fed. Reg. at 63,269 (quoting Mossville 

Environmental Action Now, 370 F.3d at 1241–42).

 EPA has not interpreted “average emissions limitation 

achieved” this way, however, and because we “may not 

supply a reasoned basis for the agency’s action that the 

agency itself has not given,” we can only adjudge EPA’s 

interpretation based on essentially one sentence from the 

Federal Register. Bowman Transportation, Inc. v. ArkansasBest Freight System, Inc., 419 U.S. 281, 285–86 (1974); see 

76 Fed. Reg. at 15,389. The need for further explanation is 

especially acute when EPA’s approach of using the upper 

prediction limit and its interpretation of “average emissions 

limitation achieved” are both departures from the approaches 

EPA has taken in setting MACT floors in earlier cases. As to 

the interpretation of “average” specifically, EPA has not 

previously interpreted the phrase “average emissions 

limitation achieved” to refer to the average of a future 3-run 

test, but instead the average emissions levels of the bestperforming 12 percent of sources for which EPA had data (or 

the average of the proxies EPA used to estimate those 

emission levels). See Sierra Club, 167 F.3d at 661 (“[EPA] 

selected the 12 percent of the incinerator population subject to 

the strictest controls and set the floor level for the subcategory 

by averaging the emissions limitations governing those 

incinerators.”); National Lime, 233 F.3d at 630 (“To set 

existing source emission floors, EPA . . . . identified the 

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53 

technology used by the median plant out of the best twelve 

percent of plants for which it had information and set the 

existing source emission floor at the emission level of the 

worst performing plant in its database using that 

technology.”); Cement Kiln, 255 F.3d at 859 (explaining that 

for existing sources, EPA identified the best-performing 12 

percent of sources, then identified the emission control 

technology used by sources with emission levels equivalent to 

or lower than the median of the best-performing 12 percent, 

and then set the MACT floor at the worst emission level 

achieved by any source using that technology); Northeast 

Maryland Waste Disposal Authority, 358 F.3d at 953 (“For 

each pollutant, EPA calculated the MACT floor by averaging 

the most stringent 12% of state permit limits in each class.”). 

 Although EPA may be able to justify its novel 

interpretation that “average” means the average of a future 3-

run compliance test, one sentence in the Federal Register is 

not enough of a basis to uphold EPA’s new approach to 

incorporating variability against arbitrary and capricious 

review. Accordingly, on remand, we expect EPA to clarify 

how the upper prediction limit represents the “average 

emissions limitation achieved by the best performing 12 

percent.” See Sierra Club, 167 F.3d at 664 (remanding EPA’s 

MACT floor determination, because “[i]t is possible that EPA 

may be able to explain it”). 

We now turn to Sierra Club’s related challenge to the 

upper prediction limit as arbitrary because “EPA provides no 

support for the notion that the upper prediction limit for the 

single best-performing unit reflects that unit’s actual 

performance, even under the ‘worst reasonably foreseeable’ 

circumstances.’” Sierra Club Br. at 26. While it is true that 

EPA did not even use the phrase “worse foreseeable 

circumstances” in its rulemaking, it did explain its belief that 

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it must set MACT floors that the “best performing sources can 

expect to meet ‘every day and under all operating 

conditions.’” 75 Fed. Reg. at 63,269 (quoting Mossville 

Environmental Action Now, 370 F.3d at 1241–42). Not only 

are these standards approximately equivalent, EPA is not 

wedded to our “worse foreseeable circumstances” 

interpretation of “achieved in practice.” See Sierra Club, 167 

F.3d at 665 (explaining that “EPA would be justified in 

setting the floors at a level that is a reasonable estimate of the 

performance of the ‘best controlled similar unit’ under the 

worst reasonably foreseeable circumstances,” adding “we use 

the subjunctive because it is not clear from the record that the 

agency was doing this”). More substantively, EPA’s citation 

to Mossville Environmental Action Now in the same section as 

EPA’s description of the upper prediction limit may be 

enough to reasonably discern EPA’s justification for the upper 

prediction limit, even if EPA has not directly stated how it 

justifies the upper prediction limit as a method for accounting 

for variability in light of the Clean Air Act and our case law. 

See Bowman Transportation, 419 U.S. at 286. 

Although it may be sufficiently clear that EPA’s 

prediction of the best-performing incinerators’ upper limit 

represents standards these incinerators can “meet every day 

and under all operating conditions,” EPA has not clearly 

explained how the upper prediction limit itself operates to 

predict this value with sufficient accuracy. In the Brick 

MACT case, we held that EPA’s use of the MACT approach 

violated the Clean Air Act because “it . . . failed to show that 

the emission levels achieved by the worst performers using a 

given pollution control device actually predict the range of 

emission levels achieved by the best performers using that 

device.” 479 F.3d at 882. Similarly, EPA provides little 

explanation on how the upper prediction limit can actually 

predict the upper limit EPA expects the best-performing unit 

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or units to achieve. As Sierra Club pointed out, the upper 

prediction limit’s predictive ability does appear somewhat 

doubtful when it produces a higher MACT floor for an 

incinerator with raw test data ranging from 0.31 to 2.26 than 

for a group of incinerators with raw test data ranging from 

0.31 to 40.32 and a mean of 9.38. See Revised MACT Floor 

Memo Attachment B-8 (Sulfur dioxide emissions test data for 

existing multiple hearth incinerator floor); id. Attachment D-8 

(Sulfur dioxide emissions test data for new multiple hearth 

incinerator floor). As EPA stated in explaining this 

apparently illogical result, a smaller dataset may have greater 

variability, and thus a higher upper prediction limit. But if the 

upper prediction limit can vary so much depending on the size 

of the dataset, EPA should explain on remand why the upper 

prediction limit is a reasonable estimate of what an incinerator 

would achieve under the worst foreseeable conditions for 

incinerators with smaller datasets. Put differently, if 

collecting more data has such a significant effect on the upper 

prediction limit, presumably producing a more accurate 

estimate of what that incinerator would “achieve in practice,” 

EPA should explain why the upper prediction limit could still 

be considered accurate given a small dataset. 

While it is true that we “owe particular deference to EPA 

when its rulemakings rest upon matters of scientific and 

statistical judgment within the agency’s sphere of special 

competence and statutory jurisdiction,” American Coke & 

Chemicals Institute v. EPA, 452 F.3d 930, 941 (D.C. Cir. 

2006), EPA must still articulate a “rational connection 

between the facts found and the choice made.” Burlington 

Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962). 

Because we are already remanding the upper prediction limit, 

we encourage EPA to elaborate how the statistical formula it 

uses can predict the upper limit of incinerator emissions. We 

are hesitant to rubber-stamp EPA’s invocation of statistics 

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without some explanation of the underlying principles or 

reasons why its formulas would produce an accurate result, 

particularly when the “facts found”—the MACT floor 

datasets—demonstrate flaws in the formula. 

We now turn to NACWA’s arguments that EPA failed to 

account for variability in sewage sludge characteristics, 

beginning with NACWA’s argument that the upper prediction 

limit cannot account for this sort of variability. See NACWA 

Br. at 39; EPA Br. at 51 (“EPA’s use of the [upper prediction 

limit] to account for variability also addressed any emissions 

variability due to differences in sludge content.”). Before 

discussing NACWA’s challenges to EPA’s method of 

accounting for variability, however, we take a moment to note 

a distinction NACWA appears to draw in its brief, in which it 

argues that its analyses on the Part 503 data “demonstrate that 

there is significant variability in metals concentrations among

[publicly-owned treatment works] and within a [publicly 

owned treatment work].” NACWA Br. at 42. As we will 

explain below, we agree with NACWA that under the 

rationale EPA expressed during rulemaking regarding 

variability, EPA should have accounted for variability in 

sewage sludge characteristics within a publicly-owned 

treatment work or better explained why that variability was 

irrelevant. It is unclear, however, whether EPA needed to 

account for variability among publicly-owned treatment 

works. 

First, we agree with NACWA that EPA has not 

adequately explained how the upper prediction limit can 

address variability in sewage sludge characteristics, 

particularly given the context in which it described the upper 

prediction limit in the proposed rule and the Revised MACT 

Floor Memo. EPA explained in the proposed rule and in its 

Revised MACT Floor Memo that “[t]he types of variability 

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that EPA attempts to account for include operational 

distinctions between and within tests at the same unit.” 75 

Fed. Reg. at 63,269; Revised MACT Floor Memo at 4–5. As 

to existing incinerator MACT floors, EPA stated that “[b]y 

including multiple emissions tests from units with a test 

average in the top 12 percent, EPA can evaluate intra-unit 

variability of emissions tests over time, considering variability 

in control device performance, unit operations, and fuels fired 

during the test. . . . [T]he [upper prediction limit] was used for 

the [sewage sludge incinerator] MACT floor variability 

analysis.” 75 Fed. Reg. at 63,271; Revised MACT Floor 

Memo at 11–12. These statements appear to contradict EPA’s 

implied position in the final rule (and express position on 

petition for review) that the upper prediction limit can account 

for more than intra-unit variability. See 76 Fed. Reg. at 

15,391 (explaining, in response to NACWA’s comments that 

EPA failed to account for variability in sewage sludge 

characteristics, that in addition to collecting emissions 

information from facilities in nine different states, “[w]e have 

also incorporated variability using the [upper prediction 

limit].”); EPA Br. at 51. 

Not only is EPA contradictory on whether the upper 

prediction limit accounts for more than intra-unit variability, 

NACWA’s argument that the underlying dataset must already 

be representative of variability in sewage sludge 

characteristics before applying the upper prediction limit is 

persuasive, at least as applied to variability within a publiclyowned treatment work. Assuming that NACWA’s summary 

of monthly average sewage sludge pollutant concentrations in 

its comments is accurate, short-term emissions testing done in 

January when the monthly average lead concentration is 

lowest may not be representative of incinerators’ performance 

in July, when the monthly average lead concentration is 

almost double. See Joint Appendix 671 (NACWA 

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Comments). If sewage sludge incinerator emissions increase 

based on sewage sludge pollutant concentrations, then it 

would seem to follow that the average emission levels of 

sewage sludge incinerators in July would be higher than the 

average in January. Cf. Sierra Club, 167 F.3d at 666 (“The 

EPA does not deny that the waste stream reductions the Sierra 

Club calls for would reduce pollution. The less mercury in, 

the less mercury out, and the less chlorinated plastic in, the 

less HCl out.”). And assuming that the standard deviation 

does not change from month-to-month, it would also follow 

that the upper prediction limit, and thus the MACT floor, 

would be higher for a dataset based on July emission testing. 

As with the other aspects of the upper prediction limit, 

however, EPA may be able to explain and clarify on remand 

its position on whether the upper prediction limit can account 

for variability in sewage sludge content. EPA may also be 

able to explain why NACWA is incorrect in asserting that 

EPA needs to base its upper prediction limit on a 

representative dataset. Alternatively, EPA could adopt an 

interpretation of “average emissions limitation achieved by 

the best performing 12 percent of units” that does not require 

EPA to determine what the best-performing units achieve 

under the worst foreseeable conditions. 

Having determined that EPA did not make clear whether 

the upper prediction limit accounts only for intra-unit 

variability, we now turn to NACWA’s remaining and related 

arguments on EPA’s variability analysis. We start first with 

NACWA’s argument that EPA failed to demonstrate that its 

MACT floor dataset represented the best-performing 12 

percent of incinerators because it failed to adequately account 

for variability in sewage sludge characteristics. NACWA 

maintains that sewage sludge characteristics can vary not only 

by geographic region, but also by seasons, differences in 

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wastewater treatment technologies, and the sanitary wastes 

received from the communities served by publicly-owned 

treatment works. See Joint Appendix 671 (summarizing 

month-to-month variability in sewage sludge pollutant 

concentrations based on Part 503 data); id. at 1075 

(summarizing the minimum, maximum, median, and 25th and 

75th percentile sewage sludge pollutant concentration for 

several different publicly-owned treatment works operating 

sewage sludge incinerators). Moreover, NACWA criticizes 

EPA for not factoring sewage sludge variability into its 

MACT floor methodology, noting that EPA has had twenty 

years of data on sewage sludge from the Part 503 regulations, 

which require regulated entities to report information about 

pollutant concentrations to EPA. See 40 C.F.R. § 503.48. 

NACWA argues that this limited testing is problematic, 

implying that if EPA used a limited dataset that is not 

representative of the full range of conditions experienced by 

sewage sludge incinerators, and set MACT floors on that 

dataset without accounting for the significant variation in 

sewage sludge, it could underestimate the emissions limitation 

achieved by the best-performing incinerators. For example, if 

the concentration of a pollutant in sewage sludge is lower in 

the winter but higher in the summer, basing MACT floors 

only on a dataset of emission tests taken during the winter 

would underestimate the emissions limitation achieved under 

the worst foreseeable conditions. Relatedly, if sewage sludge 

pollutant concentrations are naturally higher at a sewage 

sludge incinerator in one region versus another incinerator in 

a different region, NACWA appears to assert that EPA must 

account for these variations in its dataset. 

EPA, in addition to responding that the upper prediction 

limit accounts for variability, asserts that NACWA “fails to 

explain how the alleged variations in the metals content in 

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sludge affects the emissions performance of the best 

performing units.” Instead, EPA contends, “NACWA simply 

points to data submitted under the [Clean Water Act] Part 503 

regulations without demonstrating whether and how the 

pollutant content of sludge affects emissions.” EPA Br. at 51. 

EPA further explains that “air pollution control devices 

generally used by the best performing sewage sludge 

incinerators result in significant pollutant reductions between 

the incoming sludge feed and outgoing emissions,” and thus 

that “any differences in pollutant concentrations in the sludge 

feed should have minimal impact on emissions because the 

pollutants contained in the sludge feed itself are removed by 

air pollution control devices.” Id. 

EPA did not cite to the record in its brief for these factual 

assertions. Nor are these assertions in the final rule’s section 

responding to NACWA’s comments on this point, in which 

EPA responded not that there was a low correlation between 

emissions and sewage sludge pollutant concentrations, but 

instead that “[w]e requested additional information in the 

[notice of proposed rulemaking], but did not receive adequate 

sampling data from the best-performing sources.” 76 Fed. 

Reg. at 15,391. Upon review of the record, the only place we 

could find support for EPA’s factual assertion was in its letter 

denying NACWA’s petition for reconsideration. There, EPA 

explained that it had collected sludge content data at the same 

time as the emissions tests, and that because it found a “high 

reduction in pollutant levels between incoming sludge and 

emissions due to add-on controls, the variation in the lead 

content in the sludge . . . did not affect the emissions 

performance of those sources.” Joint Appendix 1095 (Letter 

Denying NACWA’s Petition for Reconsideration). 

But even assuming that EPA intended to rely on this 

assertion in defending its rulemaking on the current petition 

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61 

for review, it is not clear to us that a rationale offered for the 

first time in a petition for reconsideration is sufficient to be a 

ground upon which we can judge the propriety of EPA’s 

action. We could find no case discussing the propriety of 

judging an agency’s action based on a statement made for the 

first time in a denial of a petition for reconsideration, but it 

seems to be a weak basis for upholding agency action. This is 

particularly true when a petitioner has raised an objection 

during the comment period that gave an agency the 

opportunity to respond to the objection before the denial of 

reconsideration. See 76 Fed. Reg. at 15,391 (summarizing 

several statements from commenters, including that 

“emissions from [sewage sludge incinerators] are affected not 

just by control technology but also by other factors including 

the contents of the sludge that a unit is burning,” and that “the 

proposed standards does [sic] not take into account that 

[mercury, cadmium, lead, hydrogen chloride and sulfur 

dioxide] emissions are a function of the sludge content of 

[mercury, cadmium, lead], chlorine, and sulfur”). A purpose 

of notice-and-comment provisions under the APA (and 

presumably of the more elaborate procedural safeguards in § 

307 of the Clean Air Act) is “to ensure that affected parties 

have an opportunity to participate in and influence agency 

decision making at an early stage, when the agency is likely to 

give real consideration to alternative ideas.” New Jersey, 

Department of Environmental Protection v. EPA, 626 F.2d 

1038, 1049 (D.C. Cir. 1980). By waiting until the petition for 

reconsideration to respond to a comment that had been raised 

during the comment period, EPA deprives the affected party 

of the opportunity to respond to EPA’s rationale and influence 

agency action at an earlier stage. Thus, just as we will not 

entertain an argument raised for the first time in a reply brief 

to prevent sandbagging of appellees and respondents, we are 

reluctant to affirm based on a factual assertion raised for the 

first time in an agency’s denial of a petition for 

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reconsideration when the agency had an opportunity to raise 

that point at an earlier point in the rulemaking process. See 

Mohamad v. Rajoub, 634 F.3d 604, 608 (D.C. Cir. 2011). On 

remand, however, EPA may elaborate upon and explain the 

data that led it to conclude a low correlation between sewage 

sludge concentrations and emissions, using that conclusion to 

support the reasonableness of its estimate if it finds that 

approach appropriate. 

Because EPA did not provide evidence during 

rulemaking that there was a low correlation between sewage 

sludge pollutants and actual emissions, we address EPA’s 

argument that NACWA did not establish a correlation 

between sewage sludge pollutant contents and emissions. 

EPA is mistaken in putting the burden of establishing this 

correlation on NACWA. While EPA could arguably have 

interpreted § 129(a)(2) in a way that does not require it to 

account for variability, in which case NACWA would need to 

argue why EPA’s interpretation is not “based on a permissible 

construction of the statute,” Chevron, 467 U.S. at 843, 

having decided to account for variability, and having decided 

to estimate that variability, EPA bears the burden of 

demonstrating with substantial evidence that its estimate is 

reasonable. See Northeast Maryland Waste Disposal 

Authority, 358 F.3d at 954. If EPA is arguing its estimated 

MACT floors are reasonable based on the assumption that its 

limited dataset allows it to account for the worst foreseeable 

conditions because sewage sludge variability will have a 

negligible effect on emissions, EPA, and not NACWA, bears 

the burden of demonstrating that this assumption is correct. 

EPA’s related argument that NACWA “failed to 

demonstrate why data from more units across more states 

during different times of the year would have led to a better 

determination of the best performers, why the representative 

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data that EPA did collect prevented EPA from reasonably 

determining the best performers, or how consideration of 

[Clean Water Act] Part 503 data or stack test data would have 

changed the results” suffers from similar flaws. EPA Br. at 

52. Although EPA did not have to consider emissions stack 

test data that commenters submitted without appropriate 

documentation, see supra at 42, we disagree with EPA that 

NACWA has the burden of showing why more data would 

better determine best performers. It seems self-evident that 

more data from a broader span of time would have helped 

support (or defeat) EPA’s assumptions about the extent to 

which sewage sludge variability affects emission levels, and if 

EPA wanted to justify a limited dataset from a smaller 

timespan as being representative, it, and not NACWA, bears 

the burden of making that demonstration. Moreover, EPA’s 

argument that NACWA did not demonstrate how more data 

would have prevented EPA from reasonably determining the 

best performers is unavailing. The representative data EPA 

collected did not prevent or assist it from determining the best 

performers, as EPA had already determined the bestperforming incinerators based on control technology with no 

additional input from NACWA required. In fact, calling the 

data “representative” implies that EPA believes it targeted the 

best performers even regardless of what the data actually 

showed. 

While we agree with NACWA that EPA may have been 

unduly dismissive of the fact that there is significant sewage 

sludge variability within a publicly-owned treatment work, 

NACWA’s claim that EPA must account for variability 

among publicly-owned treatment works raises statutory issues 

beyond the scope of the issues NACWA raised in its petition 

for review. Specifically, by asserting that EPA must account 

for variability among publicly-owned treatment works 

because the publicly-owned treatment works have limited 

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control over the pollutant concentration in their sewage 

sludge, NACWA appears to be urging a different 

interpretation of the “average emissions limitation achieved 

by the best performing 12 percent of units” than the one EPA 

has adopted. 

In this rulemaking EPA explained that it “is using lowest 

emissions limitation as the measure of best performance.” 76 

Fed. Reg. at 15,389. Thus, by arguing that EPA must account 

for variability in sewage sludge content over which a 

publicly-owned treatment work has no control, NACWA is 

essentially requesting that EPA adopt a different 

interpretation of the phrase “average emissions limitation 

achieved by the best performing 12 percent of units.” For 

example, if an incinerator, through bad luck, receives 100 

units of pollutants in its sewage sludge, and manages to emit 

only 50 units of pollutants, it could be said to be a better 

performer than an incinerator that receives, through good 

luck, only 30 units but emits 25 units of pollutants. But under 

EPA’s interpretation of “best performing,” the reduction in 

emissions from uncontrolled conditions to controlled 

conditions is irrelevant—the best-performing incinerators are 

those that emit the lowest levels of pollutants, and so the 

incinerator with an emission level of 25 would be the better 

performer. Where EPA explains that a best performer is 

determined by its emission level, apparently in absolute terms, 

the logical consequence of NACWA’s argument is that the 

“best performing” incinerators must be those that are the most 

effective at removing pollutants from incinerated waste before 

emitting pollutants from the stack. In fact, NACWA 

expressly states its desire for a different interpretation in its 

comments on the proposed rule, explaining that “[w]ithout the 

use of long-term data to support the level of emission 

standards, this variability makes numeric technology-based 

limits impractical and infeasible and should provide EPA 

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strong motivation to look to other regulatory options.” Joint 

Appendix 671. Relatedly, NACWA’s comments also urged 

EPA to apply a “variability factor,” based on the variability in 

sewage sludge characteristics, to the stack test data. 

While it may be true that a publicly-owned treatment 

work’s obligation to manage all sewage that enters into the 

sanitary sewer system distinguishes it from commercial or 

industrial incinerators that have more control over what waste 

they combust, this fact does not present a unique scenario in 

setting MACT floors. As a concurring opinion noted in the 

Brick MACT case, there seems to be a paradox in § 112’s 

directions on setting MACT standards (which is almost 

identically worded to § 129). See 479 F.3d at 884–85 

(Williams, J., concurring). Specifically, the statute “calls for 

emissions standards that are the most stringent that EPA finds 

to be ‘achievable,’ taking into account a variety of factors 

including cost,” while also requiring that “the standards ‘shall 

not be less stringent’ than the emission control that have been 

‘achieved in practice.’” Id. at 884 (internal citations omitted). 

Thus, implicit in the statute’s requirements is that the standard 

for what is achievable will be more stringent than the floors 

that are based on past achievement. Id. But if meeting the 

floors is prohibitively costly for an incinerator “because of 

conditions specific to those plants,” for example, because “the 

required technology cannot, given local inputs whose use is 

essential, achieve the floor,” then it would seem that what 

some plants have achieved is not achievable for other plants. 

As applied here, where incinerators have limited control over 

sewage sludge that can vary significantly in its pollutant 

concentrations, this criticism of the MACT standards seems 

especially pointed. 

Even if this were true, however, NACWA has not argued 

that § 129 requires EPA to account for variability in sewage 

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sludge inputs among publicly-owned treatment works, or that 

EPA’s interpretation of the statute as basing “best performers” 

on the “lowest emission levels” is impermissible. Nor has 

NACWA argued that EPA acted arbitrarily or capriciously by 

not basing MACT floors on a more “sewage sludge-diverse” 

dataset or by not applying a variability factor to account for 

variations in sewage sludge characteristics. Moreover, 

NACWA’s urging that EPA adopt a variability factor may put 

EPA in conflict with its own interpretation of what “best 

performing” means. If EPA applies a variability factor, based 

on the heaviest sewage sludge pollutant concentrations 

experienced by publicly-owned treatment works, to an 

incinerator for which it has already estimated emission levels 

under the worst foreseeable circumstances, the MACT floor 

could no longer be said to reflect what that incinerator 

“achieved.” Instead, applying a variability factor would be 

akin to EPA’s approach in other cases to set MACT floors 

based on the emissions of the worst performer using MACT 

technology, which EPA attempted to justify “by claiming that 

floors must be achievable by all sources using MACT 

technology.” Cement Kiln, 255 F.3d at 861. While we have 

recognized the paradox in requiring all incinerators to comply 

with a floor based on what some incinerators achieved in the 

past but which may be unachievable to other incinerators, we 

have roundly rejected an interpretation of § 129 that would 

require EPA to set the MACT floors at levels achievable by 

all sources. See Brick MACT, 479 F.3d at 880 (“‘EPA may 

not deviate from section 7412(d)(3)’s requirement that floors 

reflect what the best performers actually achieve by claiming 

that floors must be achievable by all sources using MACT 

technology.’”) (quoting Cement Kiln, 255 F.3d at 861). 

But while we conclude that NACWA has not argued a 

legal basis for why EPA should account for variability in 

sewage sludge characteristics among publicly-owned 

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treatment works, we are somewhat confused by EPA’s 

defense of its variability analysis in the final rule, particularly 

given its statement that it is using the “lowest emissions 

limitation as the measure of best performance.” 76 Fed. Reg. 

at 15,389. In the proposed rule, EPA made no mention of 

deriving a dataset representative of variability among

publicly-owned treatment works. See 75 Fed. Reg. at 63,269–

72. But in the final rule, EPA responded to comments that 

EPA did not adequately account for variability by explaining 

that it had “gathered [emissions information] from nine 

different facilities located in nine different states” and that the 

facilities surveyed, when “combined together,” “represent 

sufficient variations in regions, climates and populations that 

adequately incorporates variability in wastewater treatment 

systems across the U.S.” 76 Fed. Reg. at 15,389. 

“[V]ariations in regions, climates and populations,” however, 

seem irrelevant in the hunt for the lowest emitting 

incinerators. See id. If EPA did consider sewage sludge 

incinerators to be a unique type of incinerator and did seek to 

develop a dataset that was geographically and 

demographically diverse, then it should reconcile that goal 

with its statement that the best-performing units are the lowest 

emitting. And if EPA does seek to develop a dataset 

representative of variability among sewage sludge 

incinerators, it needs to address NACWA’s contentions that 

some of its MACT floors are not actually geographically 

representative. See NACWA Br. at 33–34 (demonstrating 

that fluidized bed incinerator MACT floors were based only 

on publicly-owned treatment works in Michigan, Minnesota, 

Pennsylvania, and North Carolina). 

To sum, while we determine that EPA’s use of the upper 

prediction limit may be lawful, we are remanding this portion 

of its rulemaking for further explanation on the issues of how 

the upper prediction limit represents the “average emissions 

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limitation achieved,” how the upper prediction limit is a 

reasonable method of predicting the upper limit of the bestperforming incinerators, and how the upper prediction limit 

accounts for variability in incinerator performance when it is 

not based on a dataset representative of the best-performing 

incinerators under the worst-performing conditions. We 

further conclude that NACWA’s arguments that EPA must 

consider variability in sewage sludge characteristics among 

publicly-owned treatment works are meritless because 

NACWA has not argued any legal basis invoking either the 

statutory language or arbitrary-and-capricious review why 

EPA is compelled to account for that sort of variability. But 

because EPA’s discussion of its efforts to create a 

representative dataset seems in conflict with its assertion that 

the best-performing incinerators are those with the lowest 

emission levels, we also remand for EPA to reconcile this 

point. 

3. Adequacy of the MACT floor dataset 

We now address Sierra Club’s and NACWA’s argument 

that EPA unlawfully and arbitrarily set certain MACT floors 

on datasets comprising less than 12 percent of the population 

of sewage sludge incinerators. In its rulemaking, EPA 

candidly admitted its data collection efforts yielded a dataset 

that comprised less than 12 percent of existing incinerators for 

certain pollutants. See 75 Fed. Reg. at 63,270 (“EPA does not 

have actual emissions test data for the population of units that 

represent the best-performing 12 percent . . . .”). EPA 

nevertheless concluded that the lack of data for at least 12 

percent of incinerators did not prevent it from setting MACT 

floors, as it had “conducted a statistical analysis to verify the 

minimum number of observations needed to accurately 

characterize the distribution of the 12 percent of units in each 

category,” and had determined that the data it used “m[et] or 

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exceed[ed] the number of observations necessary to provide 

an accurate representation of that data.” 76 Fed. Reg. at 

15,387. EPA’s only explanation for why its use of this 

technique was appropriate was that “emission data are 

normally distributed [i.e., on a bell curve], or can be 

transformed to be normally distributed.” Revised MACT 

Floor Memo at 8. 

On petition for review, NACWA argues that EPA’s 

failure to collect sufficient data violates § 129, which, unlike 

§ 112, requires EPA to set the MACT floor on the top 12 

percent of performing units without the qualifier “for which 

the Administrator has emissions information.” Compare 42 

U.S.C. § 7429(a)(2), with id. § 7412(d). Thus, NACWA 

asserts, EPA may not extrapolate information about the “best 

performing units” from less than 12 percent of such units in 

light of Congress’s unqualified directive on setting solid 

waste incinerator MACT floors. 

NACWA is incorrect that EPA’s decision to set MACT 

floors on less than 12 percent of data is per se unlawful. In 

concluding that the law allows EPA to estimate the “average 

emissions limitation achieved by the best performing 12 

percent of units,” we have not determined any requirement 

that EPA have at least a representative sample of 12 percent 

of the population of incinerators. Instead, we have explained 

that the existing incinerator MACT floor standard “does not 

by its plain meaning exclude estimation either by sampling or 

by some other reliable means.” Sierra Club, 167 F.3d at 662 

(emphasis added). Thus, the fact that EPA does not possess 

data directly collected from 12 percent of incinerators does 

not make its estimate inherently unlawful. Cf. Mossville 

Environmental Action Now, 370 F.3d at 1241 (allowing EPA 

to use one data point—EPA’s preexisting emission 

standard—to establish an existing source MACT floor, 

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because the preexisting standard was “just barely satisfied by 

the plant with the lowest overall long term [emission of the 

pollutant at issue]”). 

While NACWA simply asserts EPA cannot lawfully set 

existing incinerator MACT floors on fewer than 12 percent of 

incinerators, Sierra Club goes further and argues that EPA 

acted arbitrarily and capriciously in setting MACT floors 

representative of the best performing 12 percent on less than 

12 percent of data. Sierra Club contends that EPA fails to 

demonstrate or even claim that “emissions from the units for 

which it has data are representative of emissions from the 

ones for which it lacks data,” repeating its argument that 

incinerators for which EPA lacks data may be achieving 

lower emission levels than those for which it has data. Sierra 

Club. Br. at 29. This appears to be the equivalent of arguing 

that EPA cannot compound its error in estimating the best 

performing 12 percent by assuming that an imperfect dataset 

can represent other potentially superior incinerators that 

should be included in the top 12 percent. 

The point that errors in one estimate will be further 

compounded by another estimate is a fair one. If the MACT 

technology approach to selecting best performing incinerators 

was 75 percent accurate, and EPA’s statistical equation 

represented a larger sample size with 80 percent accuracy, 

each estimate, alone, may be sufficiently reasonable. But if 

EPA combined the two and applied an 80 percent accurate 

formula to a 75 percent accurate estimate of best performers 

based on technology, the underlying result may be too 

imprecise to be considered reasonable. And this does not even 

account for the fact that EPA’s MACT floor methodology 

layers another estimate—the upper prediction limit—to 

account for variability. 

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Sierra Club is also correct that EPA has “base[d] 

estimates of the performance of one group of units on the 

performance of a different group without demonstrating that 

this approach yields accurate estimates.” Sierra Club Br. at 

29. EPA did so in this case by using a statistical formula for 

determining the minimum number of observations necessary 

to adequately characterize the population of the best 

performing 12 percent of units, which is as follows: 

݊ ൌ

ݍ݌ଶܼܰ

ܧଶሺܰെ1ሻ ൅ ܼଶݍ݌

Revised MACT Floor Memo at 8. In this formula, n

represents the minimum number of observations required, N

represents the population size, Z represents a value associated 

with a specific confidence level, E represents the level of 

precision or error tolerance, p represents the degree of 

variability in observations, and q represents one minus p. We 

note that none of the variables in this formula are fixed or 

based on the dataset, aside from N, the population size, 

leaving EPA to select the value for most variables; in this 

case, a 90% confidence level, a precision level of 20%, and a 

degree of variability of 0.5. Revised Mact Floor Memo at 8–

9. 

The flexibility in defining variables in this formula is of 

some concern, as the reasonableness of EPA’s statistical 

extrapolation depends on variables for which EPA sets values. 

Our confidence in this statistical methodology is hardly 

heartened by the fact that the minimum number of 

observations EPA calculated (11 for fluidized bed incinerators 

and 14 for multiple hearth incinerators), were both just one 

shy of the number of observations EPA actually collected for 

the pollutant with the least amount of test data (12 for 

fluidized bed incinerators and 15 for multiple hearth 

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incinerators). Revised MACT Floor Memo at 9. To illustrate 

how much the result can vary, had EPA chosen a precision 

level of 15% instead of 20%, the minimum number of 

observations required for fluidized bed incinerators would 

have increased from 11 to 14. Changing the specific 

confidence level from 90% to 95%3

 increases the minimum 

number of observations from 11 to 13.4

 To EPA’s credit, it 

chose a value for variability that would maximize the number 

of observations required, and explained it chose that value to 

overestimate the number of minimum observations needed. 

Revised MACT Floor Memo at 8–9. But for the rest of the 

variables, EPA selected values which could have been 

determinative of the validity of its dataset without explaining 

why it selected those numbers. That EPA could have 

determined the statutory sufficiency of its dataset by choosing 

values does not mean that EPA did so, but at a minimum EPA 

must explain why it chose the values it did. “[A]n agency 

may not pluck a number out of thin air when it promulgates 

rules in which percentage terms play a critical role.” WJG 

Telephone Co. v. FCC, 675 F.2d 386, 388–89 (D.C. Cir. 

1982). 

 

3

 In entering values into EPA’s statistical equation, we assumed a 

Z-score for a 95% confidence level as 1.960. See 

http://people.richland.edu/james/lecture/m170/ch08-int.html 

(noting the 90% confidence level Z-score is 1.645, the same used 

by EPA to calculate the minimum number of observations required 

in its MACT floor analysis); see Revised MACT Floor Memo at 8. 

4

 As in Sierra Club, we note that “[o]ur observations are based on 

our own analysis of EPA’s data, and we may have omitted some 

crucial step in the process.” 167 F.3d at 664. But as we also noted 

in Sierra Club, and will explain in more detail, this “exercise 

highlights the need for additional explanation even if our 

calculation is wrong.” Id.

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 In addition to not explaining why it chose the values it 

did for its statistical equation, EPA has not clarified how this 

statistical method can allow a limited dataset to approximate a 

larger portion of the population. In laying out the equation, 

EPA cited a study titled “Sample Size Requirements for 

Studying Small Populations in Gerontology Research” from 

the journal “Health Services Outcomes Research 

Methodologies.” See Revised MACT Floor Memo at 8, 18. 

But EPA provided no justification for how this equation could 

allow it to extrapolate the best performing 12 percent from an 

insufficient dataset, other than to state, “Because the emission 

data are normally distributed, or can be transformed to 

normally distributed . . . a statistical technique can be 

employed to determine the minimum number of observations 

needed to accurately characterize the distribution of the best 

performing 12 percent of units.” Revised MACT Floor Memo 

at 8. As we explained with the upper prediction limit, while it 

is true that we “owe particular deference to EPA when its 

rulemakings rest upon matters of scientific and statistical 

judgment within the agency’s sphere of special competence 

and statutory jurisdiction,” EPA must still articulate a 

“rational connection between the facts found and the choice 

made.” Burlington Truck Lines, 371 U.S. at 168; American 

Coke & Chemicals Institute, 452 F.3d at 941. If EPA chooses 

to use statistics as a shortcut for meeting the Congressional 

mandate to set MACT floors, it must justify its statistical 

analysis with greater detail than “a statistical technique can be 

employed” when “data [are] normally distributed.” Although 

EPA does not need to fill the Federal Register with treatises 

on statistics, it must specify in greater detail why the equation 

it is using can accomplish the purpose for which EPA is using 

the equation. This is not only required as part of EPA’s 

obligation to demonstrate the reasonableness of its estimates 

with substantial evidence, but also to prevent an agency from 

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74 

using opaque statistical justification to cover a deficiency in 

its dataset. 

 As with the upper prediction limit, EPA’s use of this 

statistical technique is not unlawful as long as EPA can 

demonstrate with substantial evidence why it reasonably 

estimates the performance of incinerators for which it has no 

data. Because this demonstration requires more detail than 

EPA gave here, we remand this portion of the rulemaking for 

further explanation on why EPA can use this formula to 

estimate gaps in its data and an explanation of why EPA 

chose the variables it did. 

4. Incorporating non-detect data 

Sierra Club challenges EPA’s method of accounting for 

certain emissions data that was not quality-assured. When 

collecting data on certain pollutants from sewage sludge 

incinerators, EPA encountered “non-detect data”—i.e., 

emission levels too low to register in an emissions test. See 

Revised MACT Floor Memo at 14–15. In the rulemaking, 

EPA explained that it would use a two-part test based on the 

method detection level, which is the “minimum concentration 

of a pollutant that can be measured with confidence that the 

level is greater than zero.” EPA Br. at 61 n.20; Revised 

MACT Floor Memo at 14–15. 

Because the method detection level varies depending on 

several factors, EPA first established a value it termed the 

“representative method detection level,” which it defined as 

“the highest test-specific method detection level reported in a 

data set that is also equal to or less than the average emission 

calculated for the data set.” Revised MACT Floor Memo at 

14–15. In other words, if a specific emissions test registered a 

non-detect at a value higher than the average emission level, 

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EPA excluded it as a candidate for the representative method 

detection level to “minimiz[e] the effect of a test[] with an 

inordinately high method detection level.” Id. 

The second step in incorporating non-detect data was to 

multiply the representative method detection level by three 

and compare it to the calculated floor emission limit for that 

pollutant. Id. EPA’s rationale for choosing to multiply the 

representative method detection level by three, rather than 

using the method detection level itself, was to reduce the 

effect of measurement imprecision. EPA explained that at 

values around the method detection level, measurement 

imprecision is around 40 to 50 percent. Id. at 14. As values 

increase above the method detection level, the testing 

becomes more accurate, with around 10 to 15 percent 

measurement imprecision at three times the method detection 

level. Id. 

If the calculated emission limit was greater than the 

representative method detection level times three, EPA 

concluded that its calculation adequately addressed 

measurement variability, and thus would set the calculated 

emission limit as the MACT floor. Id. If the calculated 

emission level was less than the representative method 

detection level, EPA concluded that its calculation did not 

adequately account for measurement variability, and the 

representative method detection level would become the 

MACT floor. Id. EPA used this method to set the four out of 

the forty MACT floors it established for sewage sludge 

incinerators. See Revised MACT Floor Memo at 19. 

Sierra Club argues that EPA’s method of incorporating 

non-detect data is unlawful because it does not reflect what 

the best performers actually achieve, as required by § 

129(a)(2). See Brick MACT, 479 F.3d at 880 (interpreting § 

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112). Sierra Club also contends that the three times 

representative method detection level value is not a 

reasonable estimate of the emission levels achieved by an 

incinerator when a test produces non-detect data. 

We agree with EPA that its method of incorporating nondetect data is reasonable, and not arbitrary or capricious. We 

do not expect EPA to perform the impossible, see Cement 

Kiln, 255 F.3d at 871, and that includes recording emission 

levels that are not accurately detectable with its current 

emissions testing technology. As EPA explains the issue, 

emission levels from zero up to some value above the method 

detection level cannot be stated with accuracy. Because any 

emission level EPA selects at that point will necessarily be an 

estimate, EPA adopted a method to account for measurement 

imprecision that has a rational basis in the correlation between 

increased emission values and increased testing precision. 

Although Sierra Club argued in its comments that EPA 

should have at the very least assumed that non-detect data was 

at the detection limit, it did not offer any evidence that EPA 

was incorrect in explaining why, given the measurement 

imprecision at the method detection level, a non-detect test 

run would always yield emissions data below the method 

detection level. Because we owe significant deference to 

EPA in areas of its technical expertise, we reject Sierra Club’s 

challenge to EPA’s method of addressing non-detect data. 

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C. SETTING CERTAIN NEW MULTIPLE HEARTH 

INCINERATOR MACT FLOORS AT EXISTING MULTIPLE 

HEARTH INCINERATOR MACT FLOOR EMISSION 

LEVELS

Although EPA had explained in its proposed rule that it 

was proposing new incinerator MACT floors for all sewage 

sludge incinerators based only on fluidized bed incinerator 

emission data, in the final rule it set separate new incinerator 

MACT floors for both subcategories in response to industry 

commenters. See 76 Fed. Reg. at 15,384. When EPA applied 

the upper prediction limit to the best performing multiple 

hearth incinerator for each pollutant, however, it yielded new 

multiple hearth incinerator MACT floors for hydrogen 

chloride and sulfur dioxide that were higher than than the 

existing multiple hearth incinerator MACT floors. See 76 

Fed. Reg. at 15,388–89. Reasoning that new incinerator 

MACT floors could not be less stringent than existing 

incinerator MACT floors, EPA set the new multiple hearth 

incinerator MACT floors for hydrogen chloride and sulfur 

dioxide at the existing multiple hearth incinerator MACT 

floors. See id. 

Sierra Club challenges this decision, arguing, among 

other things, that this decision does not at all attempt to satisfy 

§ 129(a)(2)’s requirement that the new incinerator MACT 

floor be set at the level the best-controlled units actually 

achieved. But because we are remanding the portions of 

EPA’s rulemaking establishing the upper prediction limit, in 

part to further explain why the upper prediction limit is a 

reasonable estimate given that it can fluctuate so much 

depending on variability, we decline to consider Sierra Club’s 

challenge at this time. 

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D. BEYOND-THE-FLOOR STANDARDS

In the final rule, EPA explained that it chose not to adopt 

beyond-the-floor standards for existing incinerators, primarily 

based on its determination that additional control technologies 

would not be cost-effective, and mentioned nothing about 

setting beyond-the-floor standards for new incinerators. 76 

Fed. Reg. at 15,394. Sierra Club challenges EPA’s 

determination not to set beyond-the-floor standards for 

existing units based on cost-effectiveness considerations. 

Sierra Club also challenges EPA’s decision not to set beyondthe-floor standards for new multiple hearth incinerators even 

though it provided no comment on this issue, explaining that 

because EPA did not adopt new multiple hearth incinerators 

MACT floors until the final rule it was impracticable to do so. 

See 75 Fed. Reg. at 63,272 (deciding to set all new sewage 

sludge incinerator MACT floors at the level of the bestperforming fluidized bed incinerators); 42 U.S.C. § 

7607(d)(7)(B). 

1. Deciding not to set beyond-the-floor standards for 

existing units 

In challenging EPA’s decision not to set beyond-the-floor 

standards for existing units, Sierra Club argues that § 

129(a)(2) “unambiguously requires the ‘maximum’ degree of 

reduction that can be achieved considering cost and other 

statutory factors.” Sierra Club Br. at 36. Allowing EPA to 

determine whether a cost-per-ton reduction is appropriate, 

Sierra Club asserts, would give EPA greater discretion than § 

129 allows, as Congress requires more from EPA in § 129 

than to undertake a cost-benefit analysis. But in arguing that 

EPA abused its discretion in determining the maximum 

degree of reduction in emissions that is achievable for sewage 

sludge incinerators, “taking into consideration the cost of 

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achieving such emission reduction,” Sierra Club must clear a 

high bar, as we are at our most deferential when an agency is 

“making predictions, within its area of special expertise, at the 

frontiers of science.” See Husqvarna AB v. EPA, 254 F.3d 

195, 199 (D.C. Cir. 2001) (quoting Baltimore Gas & Electric 

Co. v. NRDC, 462 U.S. 87, 103 (1983)). 

EPA argues that § 129(a)(2) does not require it to 

establish a beyond-the-floor standard regardless of costs, 

explaining that we have upheld a similar cost-effectiveness 

analysis in the past based on a similarly-worded statute. See 

Husqvarna, 254 F.3d at 200 (requiring EPA to promulgate 

standards that “shall achieve the greatest degree of emission 

reduction achievable through the application of technology 

which [EPA] 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”) (quoting 42 U.S.C. § 7547(a)(3)). We 

agree. In Husqvarna, we explained that because the similarly 

worded statute did not “mandate a specific method of cost 

analysis, we find reasonable the EPA’s choice to consider 

costs on the per ton of emissions removed basis.” Id. (citing 

65 Fed. Reg. 24,300). This applies equally here to EPA’s 

decision to consider costs on the per pound of mercury 

emissions removed basis. 

Sierra Club also asserts that EPA’s cost-effectiveness 

analysis is arbitrary and capricious because EPA only 

considered the cost of proposed beyond-the-floor technology 

options in reductions of mercury, without also considering the 

benefit that these proposed technology options would have in 

reducing other pollutants. But in the proposed rule, EPA 

estimated the emission reductions to both dioxins and 

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mercury from different control technology options, attributing 

the cost solely to mercury because “99.9 percent of the 

emissions reduction [from applying beyond-the-floor 

technologies] is associated with [mercury].” 75 Fed. Reg. at 

63,277. In the final rule, EPA evaluated adding a fabric filter 

in combination with the beyond-the-floor technologies it 

discussed in its proposed rule, and again attributed reductions 

solely to mercury. 76 Fed. Reg. at 15,393–94. Although EPA 

did not explain in the final rule why it did not consider the 

cost in terms of pounds removed of other pollutants, its failure 

to do so was not arbitrary and capricious, particularly given 

that Congress gave EPA broad discretion in considering 

whether to go beyond-the-floor. See 42 U.S.C. § 7429(a)(2). 

Finally, Sierra Club argues that EPA violated § 129 

because it did not consider “methods and technologies for 

removal or destruction of pollutants before . . . combustion” 

as required by § 129(a)(3). As evidence that pre-combustion 

methods can significantly reduce emission levels, Sierra Club 

again cites Palo Alto’s comments in which the city described 

its source control program. This program involved 

“assist[ing] in authoring California legislation that eliminated 

mercury in thermometers, certain switches, and novelty 

items”; “requir[ing] amalgam separators at dental facilities”; 

and operating “an ongoing drop-off program for all types of 

mercury-containing equipment.” Joint Appendix 628–29 

(Palo Alto Comments). 

EPA responds that § 129 “does not authorize EPA to 

regulate the sources of sewage sludge under the [Clean Air 

Act], and no commenter cited any authority to the contrary,” 

which was the same position it explained to commenters. 

EPA Br. at 73; see Joint Appendix 1011. Because § 129(a)(3) 

is ambiguous as to the extent of pre-combustion emission 

reduction methods EPA should consider, and because Palo 

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Alto’s program goes far beyond the scope of activities that 

occur at publicly-owned treatment works and their sewage 

sludge incinerators, we uphold EPA’s decision not to consider 

source control in its beyond-the-floor analysis as a reasonable 

interpretation of § 129. 

2. Deciding not to set beyond-the-floor standards for new 

multiple hearth incinerators 

EPA asserts that Sierra Club has waived the issue of 

beyond-the-floor standards for new multiple hearth 

incinerators by failing to comment on this issue. We agree. 

The Clean Air Act’s judicial review provision limits judicial 

review to objections “raised with reasonable specificity 

during the period for public comment.” 42 U.S.C. § 

7607(d)(7)(B). If it was “impracticable to raise such 

objection within such time” and the “objection is of central 

relevance to the outcome of the rule,” an objecting party may 

petition for reconsideration and we may review a denial of 

that petition. 42 U.S.C. § 7607(d)(7)(B). If a petitioner has 

not satisfied 42 U.S.C. § 7607(d)(7)(B)’s exhaustion 

requirements in raising its objections before EPA, we do not 

have jurisdiction to hear that objection on a petition for 

review. Portland Cement Ass’n v. EPA, 665 F.3d 177, 185 

(D.C. Cir. 2011). 

In promulgating the sewage sludge incinerator rule, EPA 

explained in the proposed rulemaking that while it was 

proposing that all new incinerator MACT floors be based on 

data from the best-performing fluidized bed incinerator, it was 

“aware that owners and operators with modified [multiple 

hearth] units may have concerns regarding meeting the new 

source limits.” 75 Fed. Reg. at 63,272. In light of that, EPA 

“request[ed] comment on th[e] proposed approach,” even 

providing a proposal of potential MACT floor emission limits 

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“[t]o assist commenters with their evaluation of the proposal.” 

Id. 

EPA’s request for comment and proposed new multiple 

hearth incinerator MACT floors put Sierra Club on notice that 

EPA was seriously considering deviating from its proposed 

new incinerator MACT floors for new multiple hearth 

incinerators. Although the potential MACT standards for new 

multiple hearth incinerators were more stringent than the 

MACT standards EPA ultimately adopted, Sierra Club had 

EPA’s MACT floor dataset, which included raw data from 

emissions test and a list of the control devices used by the 

units EPA considered the best performing. Compare 75 Fed. 

Reg. at 63,272 (tabulating proposed new multiple hearth 

incinerator MACT standards), with 76 Fed. Reg. at 15,388–89 

(tabulating final new multiple hearth incinerator MACT 

standards); see Joint Appendix 607 (Sierra Club comments 

citing EPA’s MACT floor analysis and commenting on EPA’s 

dataset). 

While it is true that “we do not require telepathy,” and 

are reluctant to require advocates for affected groups to 

anticipate every contingency lest we encourage strategic 

vagueness by agencies, we nevertheless “require some degree 

of foresight on the part of commenters.” Portland Cement 

Ass’n, 665 F.3d at 186. Because Sierra Club was on notice 

that EPA was considering setting new multiple hearth 

incinerator MACT floors and because it had access to the 

dataset EPA would use in setting new multiple hearth 

incinerator floors, we conclude that it was practicable for 

Sierra Club to comment on beyond-the-floor standards for 

new multiple hearth incinerator MACT floors. Accordingly, 

we will not consider Sierra Club’s argument regarding new 

multiple hearth incinerator beyond-the-floor standards. See 

42 U.S.C. § 7607(d)(7)(B). 

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E. SUBCATEGORIZING SEWAGE SLUDGE INCINERATORS

NACWA challenges EPA’s decision to create only two 

subcategories for sewage sludge incinerators. In its 

rulemaking, EPA proposed subcategorizing sewage sludge 

incinerators into multiple hearth and fluidized bed 

incinerators, and proposed no other categories or 

subdivisions. See 75 Fed. Reg. at 63,268. EPA invited 

comment on whether other combustor designs were used at 

sewage sludge incinerators, requesting emissions information 

from stack tests conducted on those designs. Id. 

Commenters responded and requested that EPA further 

subcategorize “based on size of the [sewage sludge 

incinerator], type of sewage sludge incinerated, limited use 

units, and distance over which the [incinerator] would need to 

transport its sludge for disposal.” 76 Fed. Reg. at 15,384. But 

EPA adopted only the two subcategories it proposed, 

explaining that it did “not have data to support distinguishing 

units based on class, type, or size,” and that “[w]ithout such 

information,” it did “not have a basis for concluding that these 

types of units should be based in a different subcategory.” Id. 

NACWA challenges EPA’s decision not to subcategorize 

further, asserting that it had identified “back-up and 

emergency” sewage sludge incinerators, and other unique 

categories, that would have a difficult time meeting the 

sewage sludge incinerator rule’s testing obligations. As its 

legal basis, NACWA asserts that EPA failed to respond 

adequately to its substantive comment, as required under 42 

U.S.C. § 7607(d)(6)(B), and that EPA’s claim that it did not 

have data is arbitrary because commenters had submitted 

information about these special-use sewage sludge 

incinerators. 

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 We agree with EPA that its decision to create 

subcategories only for multiple hearth and fluidized bed 

incinerators was not arbitrary or capricious. We have held 

that EPA has authority to subcategorize within 

Congressionally mandated categories under § 129(a)(2). See 

Northeast Maryland Waste Disposal Authority, 358 F.3d at 

946–47. We have also held that EPA’s subcategorization 

authority under § 112 involves an expert determination, 

placing a heavy burden on a challenger to overcome 

deference to EPA’s “articulated rational connection between 

the facts found and the choice made.” NRDC v. EPA, 489 

F.3d 1364, 1375 (D.C. Cir. 2007). 

 EPA’s decision here appears well within its expert 

determination. Perhaps recognizing the deference we owe 

EPA in its decision to subcategorize, NACWA does not 

challenge EPA’s authority to do so, but instead asserts 

procedural challenges. We do not find these challenges 

meritorious. EPA rationally stated its policy to require 

emission information from stack tests on the combustion 

designs that commenters wanted EPA to accommodate into a 

separate subcategory. Although NACWA identified different 

classes of incinerators and discussed differences in sewage 

sludge variability that it felt justified further 

subcategorization, it does not cite any emissions information 

from stack tests it submitted for the special-circumstance 

sewage sludge incinerators for which it desired 

subcategorization. EPA “was not obligated under its policy” 

to create new subcategories or to offer a further response on 

NACWA’s request for further subcategorization, and we will 

uphold its decision not to create additional subcategories 

beyond the multiple hearth and fluidized bed incinerators. 

See Edison Electric Institute, 2 F.3d at 449. 

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F. MONITORING 

Section 129(c) requires incinerator operators “to monitor 

emissions from the unit at the point at which such emissions 

are emitted into the ambient air . . . and at such other points as 

necessary to protect public health and the environment,” and 

“to monitor such other parameters relating to the operation of 

the unit and its pollution control technology” as EPA deems 

appropriate. In the final rule, EPA required all new and 

existing sewage sludge incinerators to “demonstrate initial 

and annual compliance with the emission limits using EPAapproved emission test methods.” 76 Fed. Reg. at 15,377. 

EPA gave existing incinerators the option of continuous 

emissions monitoring in lieu of initial and annual tests, and 

required continuous parameter monitoring. Id. For new 

incinerators, EPA made continuous emissions monitoring 

mandatory for carbon monoxide, and optional for other 

pollutants in lieu of initial and annual emissions testing, and 

required continuous parameter monitoring. Id. 

Sierra Club argues that EPA violates the statute by only 

requiring parameter monitoring and not mandating continuous 

emissions monitoring for all pollutants on all incinerators. 

EPA responds that Congress gave it the discretion to require 

parameter monitoring as appropriate, and that its combination 

of initial and annual emissions testing combined with 

parameter monitoring serves to meet § 129’s monitoring 

requirement. We agree with EPA that § 129(c)(1) does not 

require continuous emissions monitoring and that its 

monitoring requirements in the sewage sludge incinerator rule 

satisfy § 129’s statutory requirement. 

Under 42 U.S.C. § 7661c, EPA “may by rule prescribe 

procedures and methods for determining compliance and for 

monitoring and analysis of pollutants regulated under this 

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Act, but continuous emissions monitoring need not be 

required if alternative methods are available that provide 

sufficiently reliable and timely information for determining 

compliance.” 42 U.S.C. § 7661c(b). Although this section 

appears to clarify the Clean Air Act’s mandate that EPA’s 

permit programs include monitoring and reporting 

requirements, it is evidence supporting EPA’s interpretation 

of § 129’s monitoring requirement as requiring assurance of 

compliance with emission standards, but not continuous 

emissions monitoring. Sierra Club provides no legal authority 

to the contrary. Determining whether specified testing and 

monitoring requirements assure compliance with EPA’s 

emission standards “requires a high level of technical 

expertise,” and because Sierra Club has not given us any 

reason to doubt that EPA’s requirements will effectively 

assure compliance, “we must defer to the informed 

discretion” of EPA. National Lime, 233 F.3d at 635 (quoting 

Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 

377 (1989)). 

III. MAXWEST’S INTERVENTION 

MaxWest Environmental Systems, the developer of a 

“proprietary biosolids management process that converts 

biosolids into syngas,” used in units MaxWest terms as 

“gasifiers,” challenges EPA’s treatment (or lack thereof) of 

gasifiers in the final rule. See Intervenor MaxWest Br. at 1–2, 

9–21. EPA asserts several grounds why we need not reach 

MaxWest’s arguments, including that MaxWest lacks 

standing and that the issues it raises are outside the scope of 

those raised by the petitioners. 

“[B]ecause Article III standing is a prerequisite to a 

federal court’s exercise of jurisdiction,” we “cannot proceed 

at all in any cause” unless we first determine that a party 

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seeking to be heard has satisfied the three-part test of Lujan. 

Sinochem International Co. v. Malay International Shipping 

Corp., 549 U.S. 422, 430 (2007); New England Power 

Generators Ass’n v. FERC, 707 F.3d 364, 368 (D.C. Cir. 

2013). But while we cannot assume hypothetical jurisdiction 

to decide the merits of a case, we have leeway “to choose 

among threshold grounds for denying audience to a case on 

the merits” because “jurisdiction is vital only if the court 

proposes to issue a judgment on the merits.” Sinochem, 549 

U.S. at 431 (internal alteration omitted) (quoting Intec USA, 

L.L.C. v. Engle, 467 F.3d 1038, 1041 (7th Cir. 2006)). Thus, 

we need not resolve MaxWest’s standing to intervene if we 

can dispose of its intervention on another threshold ground 

that does not require us to reach the merits of MaxWest’s 

arguments. See id. (explaining that a federal court need not 

determine whether it has jurisdiction when deciding, for 

example, not to exercise supplemental jurisdiction over state 

law claims on discretionary grounds or to abstain under 

Younger v. Harris). 

The alternative threshold ground for rejecting MaxWest’s 

intervention is that MaxWest’s issues are outside the scope of 

those raised by NACWA. None of the six petitioners’ briefs 

filed in this case mention MaxWest’s gasification process. 

When we allowed MaxWest to intervene out of time, we 

warned it that “an intervening party may join issue only on a 

matter that has been brought before the court by another 

party.” NACWA v. EPA, No. 11-1131, Doc. 1344244 at 2 

(D.C. Cir. filed Nov. 28, 2011) (citing Beethoven.com LLC v. 

Librarian of Congress, 394 F.3d 939, 946 (D.C. Cir. 2005)). 

MaxWest has not heeded our warning. Its bare assertion that 

it modeled its statement of issues after NACWA’s does not 

change the fact that its substantive arguments are unrelated to 

the issues raised by NACWA and Sierra Club. See MaxWest 

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Reply Br. at 8–10. Therefore, we will not consider 

MaxWest’s arguments. 

IV. CONCLUSION 

For the foregoing reasons, we remand to EPA portions of 

its rule for further explanation without vacating the current 

MACT standards. Specifically, we direct EPA to clarify why 

its Clean Water Act Part 503 regulations control for other 

non-technology factors. We also direct EPA to clarify issues 

related to its upper prediction limit and variability analysis. 

In particular, EPA should explain why the upper prediction 

limit represents the “average emissions limitation achieved by 

the best performing 12 percent of” incinerators; why the 

upper prediction limit reasonably estimates the worst 

foreseeable operating conditions; and why the upper 

prediction limit can account for more than intra-unit 

variability, as EPA claimed it could on petition for review. 

Finally, we direct EPA to elaborate on how it can use a 

statistical method to determine whether a limited dataset is 

representative of incinerators for which it has no data, and to 

explain why it chose the variables it did for that statistical 

analysis.5

 In all other respects, we uphold EPA’s rule against the 

petitioners’ challenges. Because the issues MaxWest raised in 

its intervenor brief are outside the scope raised by the 

petitioners, we do not consider its arguments. 

So ordered. 

 

5

 We do not, of course, mean to suggest that EPA is bound to reach 

the same conclusion upon reexamination of the record for purposes 

of explanation. Should EPA find itself unable to support its 

conclusions, it is, of course, free to reach different ones. 

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