(Slip Opinion) 

NOTICE: This opinion is subject to formal revision before 

publication in the Environmental Administrative Decisions (E.A.D.). 

Readers are requested to notifY the Environmental Appeals Board, 

U.S. Environmental Protection Agency, Washington, D.C. 20460, of 

any typographical or other formal errors, in order that corrections 

may be made before publication. 

BEFORE THE ENVIRONMENTAL APPEALS BOARD 

UNITED STATES ENVIRONMENTAL PROTECTION AGEN 

WASHINGTON, D.C. 

In re: 

Shell Offshore, Inc. 

OCS Permit No. RIO OCS030000 

-----------------------------

) 

) 

) 

) 

) OCS Appeal Nos. 11-05, 

) 11-06 & 11-07 

) 

) 

) 

[Decided March 30, 2012] 

ORDER DENYING PETITIONS FOR REVIEW 

MAR 3 0 2012 

ClERK ENVIR~ENTAL APPEALS BOARD 

INITIALS kED 

Before Environmental Appeals Judges Charles J. Sheehan, 

Kathie A. Stein, and Anna L. Wolgast. 
IN RE SHELL OFFSHORE, INC.

OCS Appeal Nos. 11-05, 11-06 & 11-07

ORDER DENYING PETITIONS FOR REVIEW

Decided March 30, 2012

This decision addresses petitions for review that challenge an Outer Continental

Shelf (“OCS”) Permit to Construct and Title V Air Quality Operating Permit (“Permit”)

Region 10 (“Region”) of the U.S. Environmental Protection Agency (“EPA” or

“Agency”) issued to Shell Offshore, Inc. (“Shell”). The Region issued the Permit on

October 21, 2011, pursuant to Clean Air Act (“CAA or “Act”) section 328, 42 U.S.C.

§ 7627, and applicable regulations governing air emissions from OCS sources at

40 C.F.R. part 55, and pursuant to Title V of the CAA, 42 U.S.C. § 7661, and

implementing regulations at 40 C.F.R. part 71, as well as applicable Alaska code and

regulatory provisions. The Permit authorizes Shell to “construct and operate the Conical

Drilling Unit Kulluk and associated air emission units and to conduct other air pollutant

emitting activities” within Shell’s lease blocks in the Beaufort Sea off the North Slope

of Alaska. The Permit also provides for the use of an associated fleet of support ships,

including icebreakers, supply ships, and oil spill response vessels in addition to the

Kulluk.

The Board received three petitions for review of the Permit. One petition was

filed by Resisting Environmental Destruction of Indigenous Lands (“REDOIL”), Alaska

Wilderness League, Center for Biological Diversity, Natural Resources Defense Council,

Northern Alaska Environmental Center, Oceana, Pacific Environment, Sierra Club, and

the Wilderness Society (collectively, “REDOIL Petitioners”). A second petition was filed

by the Iñupiat Community of the Arctic Slope (“ICAS”). The third petition was filed by

Mr. Daniel Lum. 

The three petitions collectively raise seven issues for review: (1) Have

Petitioners demonstrated that the Region clearly erred in establishing limitations to

restrict the Kulluk drilling unit’s potential to emit? (2) Have REDOIL Petitioners

demonstrated that the Region clearly erred in declining to require prevention of

significant deterioration (“PSD”) increment consumption analyses for the Kulluk’s

proposed emissions as part of the Title V permitting process? (3) Did REDOIL

Petitioners raise below their contention that Shell’s ambient air quality analysis was

flawed in that it failed to conform to applicable Agency guidance? (4) Have REDOIL

Petitioners demonstrated that the Region clearly erred in its ambient air exemption

determination? (5) Have Petitioners demonstrated that the Region failed to satisfy its

obligation to consider environmental justice under Executive Order 12898 and comply

with applicable Board precedent? (6) Has ICAS demonstrated that the Region clearly

erred or abused its discretion in providing forty-six days to comment on the draft permit
2 SHELL OFFSHORE, INC.

and in denying ICAS’s request for non-overlapping comment periods? (7) Has ICAS

demonstrated that the Region clearly erred in its public hearing procedures or that any

alleged procedural deficiencies otherwise warrant review?

Held: The Board denies review of the Permit. Petitioners have not met their

burden of demonstrating that review is warranted on any of the grounds presented.

(1) Limitations on Potential to Emit. The Board concludes that Petitioners have failed

to demonstrate that the Region erred in establishing limitationsto restrict the potential to

em 2 2 it nitrogen dioxide (“NO ”), carbon monoxide (“CO”), sulfur dioxide (“SO ”), and

greenhouse gases (“GHGs”) for emission units located on the Kulluk and on the

Associated Fleet when operating within twenty-five miles of the Kulluk while it is an

OCS source. The Region exercised its discretion and applied its technical expertise to

establish practically enforceable source-wide emission limits that accommodate the

substantial and unpredictable variations in emissions based on the atypical nature of

Shell’s operations. The Region explained in the record its rationale, based on the

Region’s technical expertise and applied in certain limited circumstances, for

supplementing source-specific emission factors derived for most of the emission units or

groups of emission units with either AP-42 emission factors, or emission factors derived

from source test data Shell submitted to the Region in support of two separate, previously

issued OCS PSD permits authorizing Shell to conduct exploratory activities in the

Chukchi and Beaufort Seas using the Discoverer drillship.

(2) PSD Increment Consumption Analyses. The Board concludes that REDOIL

Petitioners failed to demonstrate clear error in the Region’s decision not to require PSD

increment consumption analyses for the Kulluk’s proposed emissions as part of the

Title V permitting process. The Board holds that the Region provided a reasonable

interpretation of CAA section 504(e), which imposes permitting requirements on

“temporary” stationary sources, in its Response to Comments document. The Region

determined that “PSD major sources are subject to NAAQS and increment in the

permitting process, whereas non-PSD sources are subject only to the NAAQS unless the

applicable minor source program also includes the [PSD] increment[s].” The Region

concluded that the State of Alaska’s minor source preconstruction program does not

require permanent minor sources to demonstrate compliance with PSD increments as a

condition of construction, so neither would it require such compliance of temporary

minor sources. The Board finds REDOIL Petitioners’ series of challenges to this basic

analysis to be deficient in a variety of ways and therefore upholds the Region’s decision.

(3) Ambient Air Quality Analysis. REDOIL Petitioners contend that Shell’s ambient air

quality analysis was flawed in that it failed to conform to applicable Agency guidance.

Upon examination of the administrative record, the Board concludes that REDOIL

Petitioners failed to raise this issue during the comment period. This issue, therefore, was

not preserved for review.

(4) Ambient Air Exemption Determination. The Board concludes that REDOIL

Petitioners have not shown that the Region clearly erred in its decision to exempt the area
SHELL OFFSHORE, INC. 3

within a 500 meter radius from the Kulluk – the area within the U.S. Coast Guard safety

zone – from the definition of “ambient air.” The Region, in its Response to Comments,

provided a reasonable interpretation of the ambient air regulation and the Agency’s

longstanding interpretation of that regulation as applied in the OCS context.

(5) Environmental Justice Analysis. The Board concludes that ICAS and Mr. Lum have

not demonstrated that the Region failed to satisfy its obligations to comply with

Executive Order 12898 and applicable Board precedent. The Region conducted an

environmental justice analysis that demonstrated compliance with the NAAQS and

endeavored to include and analyze data that is germane to the environmental justice

issues raised during the comment period. The Region appropriately determined that it

was not required to analyze the mobile source emissions fromvesselsthat operate outside

of twenty-five miles from the Kulluk while it is an OCS source where, as here, the Title V

permit did not address these mobile source emissions, and the record lacked sufficient

data for such an analysis. In addition, in the remaining arguments they put forth in their

petitions, ICAS and Mr. Lum do not demonstrate how the Region's responses to

comments are inadequate, overcome the particularly heavy burden a petitioner must meet

to demonstrate that review of the Region's technical decisions is warranted, or raise issues

within the Board's jurisdiction. 

(6) Public Comment Period. The Board concludes that ICAS has failed to show that the

Region clearly erred or abused its discretion in either selecting a 46-day comment period

or in denying ICAS’s request for non-concurrent comment periods. The length of time

the Region provided for comment on this permit was 16 days more than the 30-day

regulatory minimum and 1 day more than the amount of time ICAS had specifically

requested. ICAS’s attempt to recalculate the length of the comment period based on an

unexplained mathematical formula involving the number and lengths of other comment

periods is unconvincing. Furthermore, ICAS has not pointed to any regulations that

prohibit the Agency from issuing concurrent permits or that require – or even specify –

a different comment period length when the Agency does issue concurrent permits.

Finally, it is clear from the administrative record that the Region appropriately balanced

conflicting considerations in deciding on the length of the comment period for this permit

and in denying the request for non-overlapping periods, and ICAS has failed to

demonstrate otherwise.

(7) Public Hearing. The Board concludes that ICAS has failed to demonstrate that the

Region clearly erred in its public hearing procedures or that any alleged procedural

deficiencies otherwise warrant review. ICAS has not shown that the Region violated any

part 71 or 124 procedural regulation. Moreover, the alleged problems ICAS has

identified do not, even if the Board were to find them to constitute a deficiency in some

way, warrant Board review.

Before Environmental Appeals Judges Charles J. Sheehan,

Kathie A. Stein, and Anna L. Wolgast.
4 SHELL OFFSHORE, INC.

 REDOIL Petitioners include Resisting Environmental Destruction of 1

Indigenous Lands (“REDOIL”), Alaska Wilderness League, Center for Biological

Diversity, Natural Resources Defense Council, Northern Alaska Environmental Center,

Oceana, Pacific Environment, Sierra Club, and The Wilderness Society.

 Mr. Lum’s petition was designated as OCS Appeal No. 11-05, REDOIL 2

Petitioners’ petition was designated as OCS Appeal No. 11-06, and ICAS’s petition was

designated as OCS Appeal No. 11-07.

 The Permit was issued under multiple CAA and Alaska air pollution 3

provisions because it is a consolidation of three air permits. According to the Region, it

consolidated “an OCS/Title V permit under 40 CFR Parts 55 and 71 for operations

beyond 25 miles of Alaska’s seaward boundary; an OCS/minor permit for air quality

protection under 40 CFR Part 55 and 18 Alaska Administrative Code (AAC) 50.502 and

for owner requested limitations under 40 CFRPart 55 and 18 AAC 50.508 for operations

within 25 miles of Alaska’s seaward boundary; and an OCS/Title V permit under 40 CFR

Part 55 and 18 AAC 50.326 for operations within 25 miles of Alaska’s seaward

boundary.” Response to Comments for OCS Permit to Construct and Title V Air Quality

Operating Permit Conical Drilling Unit Kulluk at 1 (A.R. J-3).

Opinion of the Board by Judge Stein:

I. STATEMENT OF THE CASE

A group of conservation petitioners (“REDOIL Petitioners”),

1

the Iñupiat Community of the Arctic Slope (“ICAS”), and Mr. Daniel

Lum each petitioned the Environmental Appeals Board (“Board”) to 2

review an Outer Continental Shelf (“OCS”) Permit to Construct and

Title V Air Quality Operating Permit (“Permit”) that U.S. Environmental

Protection Agency (“EPA” or “Agency”) Region 10 (“Region”) had

issued to Shell Offshore, Inc. (“Shell”). See generally OCS Permit to

Construct and Title V Air Quality Operating Permit, Permit No. R10

OCS030000 (Oct. 21, 2011) (Administrative Record (“A.R.”) J-2). The

Region issued the Permit pursuant to Clean Air Act (“CAA or “Act”)

section 328, 42 U.S.C. § 7627, and applicable regulations governing air

emissions from OCS sources at 40 C.F.R. part 55, and pursuant to

Title V of the CAA, 42 U.S.C. § 7661, and implementing regulations at

40 C.F.R. part 71, as well as applicable Alaska code and regulatory

provisions. See Permit at 6 (citing all relevant provisions). 3
SHELL OFFSHORE, INC. 5

The Permit authorizes Shell to construct and operate the Kulluk

drilling unit and associated air emission drilling units in certain lease

blocks within the Beaufort Sea. Id. at 1. The Region and Shell each

filed a response to the petitions. Thereafter, both REDOIL Petitioners

and ICAS filed motions requesting leave to file reply briefs. These

motions are currently pending before the Board and are addressed below

in Part V. The Board did not hold oral argument in this case. For the

reasons discussed below, the Board denies review of the Permit.

II. ISSUES

The Board has determined that the three petitions filed in this

case, collectively, present the following seven issues for review:

A. Have Petitioners demonstrated that the Region clearly

erred in establishing limitations to restrict the Kulluk

drilling unit’s potential to emit? 

B. Have REDOIL Petitioners demonstrated that the Region

clearly erred in declining to require PSD increment

consumption analyses for the Kulluk’s proposed

emissions as part of the Title V permitting process?

C. Did REDOIL Petitioners raise below their contention

that Shell’s ambient air quality analysis was flawed in

that it failed to conform to applicable Agency guidance?

D. Have REDOIL Petitioners demonstrated that the Region

clearly erred in its ambient air exemption

determination?

E. Have Petitioners demonstrated that the Region failed to

satisfy its obligation to consider environmental justice

under Executive Order 12898 and comply with

applicable Board precedent?
6 SHELL OFFSHORE, INC.

 The OCS regulations direct the Agency to follow the applicable part 124 4

permit regulations in processing OCS permits. 40 C.F.R. § 55.6(a)(3). Accordingly, the

part 124 permit appeal provision, 40 C.F.R. § 124.19, applies here. See In re Shell Gulf

of Mex., Inc., OCS Appeal Nos. 11-02 through 11-04 and 11-08, slip op. at 7

(EAB Jan. 12, 2012), 15 E.A.D. ___ [hereinafter Shell Discoverer 2012].

 The part 71 regulatory language governing Title V permit appeals is nearly 5

identical to the part 124 regulatory language governing review of other types of permits.

Compare 40 C.F.R. § 71.11(l)(1) with 40 C.F.R. § 124.19; see also Peabody, 12 E.A.D.

at 33 n.26.

F. Has ICAS demonstrated that the Region clearly erred or

abused its discretion in providing 46 days to comment

on the draft permit and in denying ICAS’s request for

non-overlapping comment periods?

G. Has ICAS demonstrated that the Region clearly erred in

its public hearing procedures or that any alleged

procedural deficiencies otherwise warrant review?

III. STANDARD OF REVIEW

Under the part 124 procedural regulations, which apply to OCS

permits, the Board will not ordinarily review a permit unless it is based 4

on a clearly erroneous finding of fact or conclusion of law, or involves

a matter of policy or exercise of discretion that warrants review.

40 C.F.R. § 124.19(a); Consolidated Permit Regulations, 45 Fed. Reg.

33,290, 33,412 (May 19, 1980). The Board also applies this standard in

reviewing Title V permits issued under part 71. See 40 C.F.R. 5

§ 71.11(l)(1); In re Peabody W. Coal Co., 12 E.A.D. 22, 32-33

(EAB 2005). When analyzing permits, the Board is cognizant of the

preamble to section 124.19, in which the Agency states that the Board’s

power of review “should be only sparingly exercised” and that “most

permit conditions should be finally determined at the [permit issuer’s]

level.” Consolidated Permit Regulations, 45 Fed. Reg. at 33,412; accord

In re Cardinal FG Co., 12 E.A.D. 153, 160 (EAB 2005); see also

Peabody, 12 E.A.D. at 33 (applying these same principles in the context

of a part 71 permit appeal). 
SHELL OFFSHORE, INC. 7

The petitioner bears the burden of demonstrating that review is

warranted. See 40 C.F.R. § 124.19; id. § 71.11(l)(1). To meet this

burden, the petitioner must satisfy threshold pleading requirements

including timeliness, standing, and issue preservation. See 40 C.F.R.

§ 124.19; id. § 71.11(l)(1); In re Russell City Energy Ctr., LLC (“Russell

City II”), PSD Appeal Nos. 10-01 through 10-05, slip op. at 12

(EAB Nov. 18, 2010), 15 E.A.D. ___, appeal docketed sub nom.

Chabot-Las Positas Cmty. Coll. Dist. v. EPA, No. 10-73870 (9th Cir.

Dec. 20, 2010); In re BP Cherry Point, 12 E.A.D. 209, 216 (EAB 2005).

For example, a petitioner seeking review must file an appeal of the

permit decision within 30 days of service of the decision, and must have

filed comments on the draft permit or participated in the public hearing.

40 C.F.R. § 124.19(a); accord Russell City II, slip op. at 12, 15 E.A.D.

at __. In addition, a petitioner must not only specify objections to the

permit, but also explain why the permit issuer’s previous response to

those objections is clearly erroneous or otherwise warrants review. See

40 C.F.R. § 124.13 (requiring that all persons who believe a condition of

a draft permit is inappropriate “must raise all reasonably ascertainable

issues and submit all reasonably available arguments supporting their

position by the close of the public comment period”); id. § 124.19(a)

(stating that a petition for review to the Board “shall include * * * a

demonstration that any issues being raised were raised during the public

comment period”); see also In re Avenal Power Ctr., LLC, PSD Appeal

Nos. 11-02 through 11-05, slip op. at 4-5 (EAB Aug. 18, 2011),

15 E.A.D. ___, appeals docketed sub nom. Sierra Club v. EPA, No. 11-

73342 (9th Cir. Nov. 3, 2011), El Pueblo Para el Aire y Agua Limpio v.

EPA, No. 11-73356 (9th Cir. Nov. 4, 2011); BP Cherry Point, 12 E.A.D.

at 216-17. The petitioner’s burden is particularly heavy in cases where

a petitioner seeks review of an issue that is fundamentally technical or

scientific in nature, as the Board will typically defer to a permit issuer’s

technical expertise and experience on such matters if the permit issuer

adequately explains its rationale and supports its reasoning in the

administrative record. See, e.g., In re Dominion Energy Brayton Point,

LLC, 12 E.A.D. 490, 510 (EAB 2006); Peabody, 12 E.A.D. at 33-34;

In re NE Hub Partners, L.P., 7 E.A.D. 561, 567-68 (EAB 1998), review

denied sub nom. Penn Fuel Gas, Inc. v. EPA, 185 F.3d 862 (3rd Cir.
8 SHELL OFFSHORE, INC.

1999); see also In re Ash Grove Cement Co., 7 E.A.D. 387, 404 (EAB 1997).

When evaluating a permit appeal, the Board examines the

administrative record prepared in support of the permit to determine

whether the permit issuer exercised his or her “considered judgment.”

Ash Grove Cement, 7 E.A.D. at 417-18; accord In re Cape Wind

Assocs., LLC, OCS Appeal No. 11-01,slip op. at 5 (EAB May 20, 2011),

15 E.A.D. at ___; In re GSX Servs. of S.C., Inc., 4 E.A.D. 451, 454

(EAB 1992). The permit issuer must articulate with reasonable clarity

the reasons supporting its conclusion and the significance of the crucial

facts it relied upon when reaching its conclusion. E.g., In re Shell

Offshore, Inc. (“Shell 2007”), 13 E.A.D. 357, 386 (EAB 2007) (citing

In re Carolina Light & Power Co., 1 E.A.D. 448, 451 (Act’g

Adm’r 1978)); Ash Grove Cement, 7 E.A.D. at 417 (same). As a whole,

the record must demonstrate that the permit issuer “duly considered the

issues raised in the comments and [that] the approach ultimately adopted

by the [permit issuer] is rational in light of all information in the record.”

In re Gov’t of D.C. Mun. Separate Storm Sewer Sys., 10 E.A.D. 323, 342

(EAB 2005); accord In re City of Moscow, 10 E.A.D. 135, 142

(EAB 2001); NE Hub, 7 E.A.D. at 568.

Finally, the Board endeavors to construe liberally objections

raised by parties unrepresented by counsel (i.e., those proceeding pro se),

so as to fairly identify the substance of the arguments being raised. In re

Sutter Power Plant, 8 E.A.D. 680, 687 & n.9 (EAB 1999); accord In re

Shell Gulf of Mex., Inc. (“Shell Discoverer 2012”), OCS Appeal Nos.

11-02 through 11-04, & 11-08, slip op. at 10-11 (EAB Jan. 12, 2012),

15 E.A.D. at ___; Russell City II, slip op. at 15, 15 E.A.D. at ___. While

the Board does not expect such petitions to contain sophisticated legal

arguments or to utilize precise technical or legal terms, the Board

nonetheless expects such petitions “to articulate some supportable reason

or reasons as to why the permitting authority erred or why review is

otherwise warranted.” Sutter, 8 E.A.D. at 687-88 (citing In re Beckman

Prod. Servs., 5 E.A.D. 10, 19 (EAB 1994)).
SHELL OFFSHORE, INC. 9

 For a description of the three permits, see supra note 3. 6

IV. SUMMARY OF DECISION

For all of the reasons stated below, the Board concludes that:

(a) Petitioners failed to demonstrate that the Region clearly erred in

establishing limits to restrict the Kulluk’s potential to emit; (b) REDOIL

Petitioners failed to demonstrate that the Region clearly erred in

declining to require PSD increment consumption analyses for the

Kulluk’s proposed emissions as part of the Title V permitting process;

(c) REDOIL Petitioners failed to raise below their contention that Shell’s

ambient air quality analysis was flawed in that it failed to conform to

applicable Agency guidance; (d) REDOIL Petitioners failed to

demonstrate that the Region clearly erred in its ambient air exemption

determination; (e) Petitioners have not demonstrated that the Region’s

environmental justice analysis and related conclusions failed to satisfy

its obligation to comply with Executive Order 12898 and applicable

Board precedent; (f) ICAS failed to demonstrate that the Region clearly

erred or abused its discretion in providing 46 days to comment on the

draft permit and in denying ICAS’s request for non-overlapping

comment periods; and (g) ICAS failed to demonstrate that the Region

clearly erred in its public hearing procedures or that any alleged

procedural deficiencies otherwise warrant review. Accordingly, the

Board denies review of the Permit.

V. RELEVANT PROCEDURAL AND FACTUAL HISTORY

On July 22, 2011, the Region issued a draft permit consolidating

three permits that regulated air pollution from Shell’s proposed

exploratory drilling operations on OCS lease blocks in the Beaufort Sea

off the North Slope of Alaska, as authorized by the United States Bureau

of Ocean Energy Management, Regulation and Enforcement

(“BOEMRE”). The Region solicited public comment on the draft

6

permit from July 22, 2011, through September 6, 2011. See Statement

of Basis for Draft OCS Permit to Construct and Title V Air Quality

Operating Permit (“Statement of Basis”) at 10 (A.R. H-4). In addition,

the Region held an informational meeting and public hearing on the draft
10 SHELL OFFSHORE, INC.

permit on August 23, 2011, in Barrow, Alaska, and a separate public

hearing on August 26, 2011, in Anchorage, Alaska. Id. at 11. All of the

petitioners submitted comments on the draft permit. See E-mail from

Daniel Lum to EPA Region 10 (Aug. 10, 2011) (A.R. I-31) [hereinafter

Lum Comments]; E-mail from Alaska Wilderness League, Audubon

Alaska, Center for Biological Diversity, Defenders of Wildlife,

Earthjustice, Eyak Preservation Council, Greenpeace, National Wildlife

Federation, Natural Resources Defense Council, Northern Alaska

Environmental Center, Ocean Conservancy, Oceana, Pacific

Environment, REDOIL, Sierra Club, The Wilderness Society, and World

Wildlife Fund to EPA Region 10 (Sept. 6, 2011) (A.R. I-53) [hereinafter

REDOIL Comments]; Letter from North Slope Borough, AEWC, and

ICAS to Doug Hardesty, Air Permits Project Manager, EPA Region 10

(Sept. 6, 2011) (A.R. I-54) [hereinafter ICAS Comments]; see also Lum

Petition at 1 (noting that he also provided comments at the public

hearing).

On October 21, 2011, the Region issued the Permit. See Permit

at 1. At the same time, the Region issued a response to both the written

comments it had received on the draft permit and the oral comments that

had been presented at the public hearings. See generally Response to

Comments for OCS Permit to Construct and Title V Air Quality

Operating Permit Conical Drilling Unit Kulluk (“RTC”) (A.R. J-3); see

id. at 2 (describing comments to which the document responded). The

Permit authorizes Shell to conduct air pollutant emitting activities for the

purpose of oil exploration with the conical drilling unit Kulluk on lease

blocks in the Beaufort Sea. The Permit provides for the use of an

associated fleet of support vessels (“Associated Fleet”), such as

icebreakers, oil spill response vessels (“OSRVs”), and a supply ship, in

addition to the Kulluk.

The Board received three timely petitions for review of the

Permit: one from Mr. Lum, one from REDOIL Petitioners, one from

ICAS. The Region and Shell each filed a single response to those

petitions. ICAS and REDOIL Petitioners each filed motions requesting

leave to file reply briefs and attached their proposed reply briefs. Shell

filed an opposition to the motions for leave to file replies. Before
SHELL OFFSHORE, INC. 11

 In April 2011, the Board issued a standing order in which it adopted certain 7

procedures intended to facilitate expeditious resolution of petitions requesting review of

permits issued under the CAA NSR program, including OCS permits. See Standing

Order at 1 n.2; see also 40 C.F.R. § 124.19. Among other things, the Board will apply

a presumption against the filing of reply briefs and sur-replies in NSR appeals. See

Standing Order at 3. However, the Board maintains discretion to modify these

procedures as appropriate on a case-specific basis. Id. at 6.

addressing the issues raised by the petitions, the Board first considers

whether it is appropriate to grant Petitioners’ motions.

A petitioner seeking leave to file a reply brief in an appeal of a

new source review (“NSR”) permit issued pursuant to the CAA, such as

the OCS Permit at issue here, must state “with particularity the

arguments to which the Petitioner seeks to respond and the reasons the

Petitioner believes it is both necessary to file a reply to those arguments

* * * and how those reasons overcome the presumption in the Standing

Order.” Shell 2012, slip op. at 15, 15 E.A.D. at ___ (citing Order 7

Governing Petitions for Review of Clean Air Act New Source Review

Permits 3 (Apr. 19, 2011) (“Standing Order”), available at

http://www.epa.gov/eab (click on Standing Orders)). 

Upon consideration of Petitioners’ motions to file reply briefs

and proposed reply briefs, the Board finds that only two select issues

within REDOIL Petitioners’ and ICAS’s reply briefs meet the high

threshold required to overcome the presumption against reply briefs that

the Board applies in NSR appeals. See Standing Order at 3. In

particular, in its reply brief, ICAS responds to arguments concerning

ICAS’s challenge to the public hearing procedures that the Region

advances for the first time in the response brief. ICAS could not have

responded to these particular arguments prior to the Region’s response

because a portion of the Region’s rationale in its response brief does not

appear in the administrative record. In addition, both ICAS and REDOIL

Petitioners assert that the Region referenced for the first time in its

response a decision by the Administrator as support for the Region’s

rationale that the Agency has previously concluded that rolling emission

limits accompanied by prescribed emission factors and appropriate

monitoring and recordkeeping sufficiently restrict a source’s potential to
12 SHELL OFFSHORE, INC.

 The Board notes that Mr. Lum attempted to file by email a request to file a 8

reply brief and a request for oral argument. See E-mail from Daniel Lum to Eurika Durr,

Clerk of the Board, Environmental Appeals Board, U.S. EPA (Nov. 4, 2011 6:18 pm

EDT). The Board denies Mr. Lum’s requests. 

emit. See Region Response at 17 (citing In re Pope & Talbot, Inc.,

Petition No. VIII-2006-04 (Adm’r 2007) (A.R. B-24)). ICAS and

REDOIL Petitioners did not have an opportunity to review the

Administrator’s decision in the context of this appeal or to analyze its

relevance to the Region’s stated rationale until the Region cited it for

support in its response brief. Accordingly, the Board grants, in part,

ICAS’s and REDOIL Petitioners’ motions for leave to file a reply brief.

Thus the Board, in reaching its conclusions set forth in this order, has

considered the portions of ICAS’s reply brief and REDOIL Petitioners’

reply brief that address the public process for the permit and the

Region’s inclusion of the Pope & Talbot decision as support for the

Region’s PTE decisions. See ICAS Reply at 3, 6-7; REDOIL Petition

at 9-10. The Board denies REDOIL Petitioners’ and ICAS’s motions for

leave to file a reply brief with respect to all other issues.8

The Board analyzes the parties’ arguments and sets forth its

determinations below. 

VI. ANALYSIS

A. ICAS and REDOIL Petitioners Have Not Demonstrated That the

Region Clearly Erred in Establishing Limitations to Restrict the

Kulluk Drilling Unit’s PTE

ICAS and REDOIL Petitioners both challenge the Region’s

determination of the Kulluk’s potential to emit (“PTE”) and argue that

the Region should require Shell to obtain a preconstruction prevention

of significant deterioration (“PSD”) permit. They complain that the PTE

restrictions Shell requested and the Region included in the permit to

ensure that the Kulluk remains a synthetic minor source for nitrogen

ox xides (“NO ”), carbon monoxide (“CO”), greenhouse gases (“GHGs”),
SHELL OFFSHORE, INC. 13

 While ICAS challenges the Region’s PTE limitations for all of these

9

pollutants, REDOIL Petitioners only challenge the Region’s PTE limitations with respect

x

to NO and CO. See ICAS Petition at 10-28; REDOIL Petition at 9-14.

 Section 328 defines an OCS source as follows: 10

The terms “Outer Continental Shelf source” and “OCS source”

include any equipment, activity, or facility which --

(i) emits or has the potential to emit any air pollutant,

(ii) is regulated or authorized under the Outer Continental Shelf

(continued...)

and 2sulfur dioxide (“SO ”) are practically unenforceable. The Region 9

counters that the restrictions it imposed in the permit that reduce Shell’s

emissions below the PSD threshold levels for all criteria pollutants are

practically enforceable and constitute fundamentally technical decisions

that are consistent with CAA statutory and regulatory authority as well

as Agency guidance and past practice. This PTE question is central to

the Board’s analysis because the Region uses the potential to emit to

determine which provisions of the CAA, including both the Title V

permit requirements and the PSD preconstruction permit requirements,

apply to the Kulluk. The question the Board must resolve, then, is

whether the restrictions the Region included in the permit to limit the

Kulluk’s PTE are both practically enforceable and reasonable in light of

the applicable statutory and regulatory authorities as well as Agency

guidance and practice, and whether the Region provided adequate

support for its decisions in the administrative record.

Before addressing the parties’ arguments, a brief review of the

relevant statutory and regulatory authorities is warranted.

1. Statutory and Regulatory Context 

a. CAA Section 328 & OCS Air Regulations

Section 328 of the CAA, 42 U.S.C. § 7627, establishes air pollution

controls for OCS sources and requires OCS sources to “attain and 10
14 SHELL OFFSHORE, INC.

(...continued) 10

Lands Act [43 U.S.C. § 1331 et seq.], and

(iii) is located on the Outer Continental Shelf or in or on waters

above the Outer Continental Shelf.

Such activitiesinclude, but are not limited to, platform and drill ship

exploration, construction, development, production, processing, and

transportation. For purposes of this subsection, emissions from any

vessel servicing or associated with an OCS source, including

emissions while at the OCS source or en route to or from the OCS

source within 25 miles of the OCS source, shall be considered direct

emissions from the OCS source.

CAA § 328(a)(4)(C), 42 U.S.C. § 7627(a)(4)(c). 

 Section 55.13 states, among other things, that the PSD program applies to 11

OCS sources located within 25 miles of a state’s seaward boundary whenever the OCS

source requires construction of a new major stationary source or a modification at an

(continued...)

maintain Federal and State ambient air quality standards” and to comply

with the PSD provisions contained in CAA Title I, part C. EPA

promulgated the Outer Continental Shelf Air Regulations, 40 C.F.R.

part 55, to implement CAA section 328 and established within part 55

“the air pollution control requirements for OCS sources and the

procedures for implementation and enforcement of the requirements.”

40 C.F.R. § 55.1. 

Section 328(a)(1), 42 U.S.C. § 7627(a)(1), also requires that, for

OCS sources located within 25 miles of a state’s seaward boundary, the

requirements shall be the same as would apply if the source were located

in the corresponding onshore area (“COA”), including, but not limited

to, state and local requirements for emission controls, emission

limitations, offsets, permitting, monitoring, testing, and reporting. As the

Board has explained before, “OCS sources must obtain a preconstruction

permit from either EPA or an EPA-delegated agency if the OCS source

is located within twenty-five miles of a state’s seaward boundary and is

subject to either federal or state requirements listed in 40 C.F.R.

§§ 55.13 or 55.14.” Shell 2007, 13 E.A.D. at 365 (citing 40 C.F.R. 11
SHELL OFFSHORE, INC. 15

(...continued) 11

existing major source and the COA is classified under the PSD program as in attainment

or unclassifiable. 40 C.F.R. § 55.13(d)(1) (“40 C.F.R. [§] 52.21 shall apply to OCS

sources [l]ocated within 25 miles of a state’s seaward boundary if the requirements of

40 C.F.R. [§] 52.21 are in effect in the COA.”); see also Shell 2007, 13 E.A.D. at 364.

Section 55.14 incorporates by reference regulatory requirements that states

which border the OCS in the Pacific, Atlantic, and Arctic Oceans and the Gulf of Mexico

have promulgated to meet the national ambient air quality standards (“NAAQS”).

40 C.F.R. § 55.14(d); CAA § 328(a)(1), 42 U.S.C. § 7627(a)(1) (defining the geographic

scope of EPA authority to regulate air pollution from OCS sources). These state

regulations are known as state implementation plans (“SIPs”) and are created pursuant

to CAA § 110, 42 U.S.C. § 7410.

§§ 55.6(b)(1), 55.11 and CAA § 328(a)(3), 42 U.S.C. § 7627(a)(3)). The

Agency hasretained the authority to implement and enforce section 328

in the OCS off the coast of Alaska as opposed to delegating that

authority to the state. Accordingly, as mentioned above, Shell submitted

its permit applications to the Region, and the procedural rules contained

at 40 C.F.R. part 124 apply. 40 C.F.R. § 55.6(a)(3). 

Because requirements for these OCS sources are based on onshore

requirements, which may change, section 328(a)(1) and the

corresponding regulations in part 55 require EPA to update the OCS

requirements as necessary to maintain consistency with onshore

requirements. See CAA § 328(a)(1), 42 U.S.C. § 7627(a)(1); 40 C.F.R.

§§ 55.6(b)(2), 55.12; see also Shell 2007, 13 E.A.D. at 364 & n.6. In

response to Shell’s December 10, 2010, notice of intent submitted to the

Agency pursuant to 40 C.F.R. § 55.4, the Agency first proposed in the

Federal Register a consistency update on February 10, 2011, and later

published the final consistency update on June 27, 2011, subsequent to

a public notice and comment period. See Outer Continental Shelf Air

Regulations Consistency Update for Alaska, 76 Fed. Reg. 37,274

(June 27, 2011) (codified at 40 C.F.R. § 55.14(e) & appx. A); Statement

of Basis at 17. This most recent consistency update incorporated, except

where specifically noted, Alaska Administrative Code title 18, articles

1 through 5 and article 9, into part 55. 76 Fed. Reg. at 37,279-80;

Statement of Basis at 17. In particular, articles 3 and 5 establish the
16 SHELL OFFSHORE, INC.

 The NAAQS are maximum ambient air concentrations for specific pollutants 12

that EPA has determined are necessary to protect public health and welfare. See CAA

§§ 108(a)(1)(A), 109, 42 U.S.C. §§ 7408(a)(1)(A), 7409; 40 C.F.R. § 50.4-.12.

EPA regulations define a major stationary source as any of certain 13

specifically listed stationary sources that emit or have a potential to emit 100 tons per year

(“tpy”) or more of any regulated NSR pollutant, see 40 C.F.R. § 52.21(b)(50), or any

other stationary source that emits, or has the potential to emit, 250 tpy or more of a

regulated NSR pollutant. 40 C.F.R. § 52.21(b)(1)(i)(a)-(b); accord CAA § 169(1),

42 U.S.C. § 7479(1) (defining a “major emitting facility” in the same way). 

Alaska regulations, which incorporate large parts of the federal PSD regulations

into title 18 of the Alaska Administrative Code, provide that a new PSD permit is

required prior to actual construction of a new major stationary source. Alaska Admin.

Code tit. 18, § 50.040 (adopting federal standards by reference); id. §§ 50.302(a)(1),

50.306. The Alaska regulations also define a major stationary source as any of certain

specifically listed stationary sources that emit or have a potential to emit 100 tpy or more

(continued...)

minor source and major source permitting requirements with which the

Kulluk must comply. See Shell 2007, 13 E.A.D. at 364 & n.6.

In addition, because the permit authorizes the Kulluk to operate on

a group of lease blocks located both within 25 miles and beyond 25 miles

of the state’s seaward boundary, the permit conditions that refer to lease

blocks wholly or partially located beyond 25 miles of the seaward

boundary are designated as “outer OCS,” and conditions that refer to

lease blocks wholly or partially located within 25 miles of the seaward

boundary are designated as “COA.” Permit at 9 (noting that conditions

identified with “COA” are those that apply on the “inner OCS,” within

25 miles of the state’s seaward boundary, and that all other conditions

not identified as “COA” or “outer OCS” apply to lease blocks on both

the inner and outer OCS); see also Statement of Basis at 7.

b. The PSD Program & PTE

The PSD program is a preconstruction NSR program that applies to

areas designated as either in attainment with the national ambient air

quality standards (“NAAQS”) or unclassifiable and requires new major 12

stationary sources to limit their impact on ambient air quality by 13
SHELL OFFSHORE, INC. 17

(...continued) 13

of any regulated NSR pollutant, or any other stationary source that emits, or has the

potential to emit, 250 tpy or more of a regulated NSR pollutant. Id. § 50.990(52)

(incorporating by reference definition of major stationary source from 40 C.F.R.

§ 51.166(b)(1)); accord Alaska Stat. § 46.14.990 (same).

 The OCS regulations define the term “potential emissions” almost identically 14

to the PTE definition in part 52, with the exception of first sentence, which instead states

that “[p]otential emissions means the maximum emissions of a pollutant from an OCS

source.” 40 C.F.R. § 55.2.

obtaining a PSD permit before construction begins. CAA §§ 160-169,

42 U.S.C. §§ 7470-7479; 40 C.F.R. § 52.21(a)(2). 

A source’s PTE relates to its inherent ability to emit air pollutants.

Shell 2007, 13 E.A.D. at 365; Peabody, 12 E.A.D. at 30. Under the PSD

program, a permitting authority must determine a source’s PTE to

identify which sources are “major sources” subject to regulation under

the applicable PSD requirements, making PTE a technical determination

that “is jurisdictional in nature.” Ala. Power Co. v. Costle, 636 F.3d 323,

352 (D.C. Cir. 1979), quoted in Peabody, 12 E.A.D. at 30;see also CAA

§ 165(a), 42 U.S.C. § 7475(a) (requiring a PSD permit for any “major

emitting facility”); Shell 2012, slip op. at 62 n.58, 15 E.A.D. at ___. The

regulations that implement the PSD program define PTE as:

[T]he maximum capacity of a stationary source to emit a

pollutant under its physical and operational design. Any

physical or operational limitation on the capacity of the source

to emit a pollutant, including air pollution control equipment

and restrictions on hours of operation or on the type or amount

of material combusted, stored, or processed, shall be treated as

part of its design if the limitation or the effect it would have on

emissions is federally enforceable.

40 C.F.R. § 52.21(b)(4). In sum, PTE reflects a source’s maximum 14

emissions capacity considering the application of any emission control

equipment, or other capacity-limiting restrictions, that effectively and

enforceably limit emissions capacity. Shell 2007, 13 E.A.D. at 366;
18 SHELL OFFSHORE, INC.

EPA guidance defines the term “synthetic minor” as “air pollution sources 15

whose maximum capacity to emit air pollution under their physical and operational

design is large enough to exceed the major source threshold but [is] limited by an

enforceable emissions restriction that prevents this physical potential from being

realized.” Memorandum from John Seitz, Dir., Office of Air Quality Planning &

Standards, U.S. EPA, & Eric Schaeffer, Dir., Office of Regulatory Enforcement, U.S.

EPA, Potential to Emit Transition Policy for Part 71 Implementation in Indian Country

2 n.2 (Mar. 7, 1999), quoted in Shell Discoverer 2012, slip op. at 63 n.59, 15 E.A.D.

at ___, and Peabody, 12 E.A.D. at 31 n.21. 

(continued...)

Peabody, 12 E.A.D. at 31 (citing Part 71 Rulemaking, 61 Fed.Reg.

34,202, 34,212 (July 1, 1996)). 

Alaska regulations require that, under certain circumstances, a

stationary source with a PTE of less than 250 tons per year (“tpy”) obtain

a minor source permit. Alaska Admin. Code tit. 18, § 50.502.

Specifically in terms of the Kulluk’s operations, Alaska regulations

require a minor source permit prior to the construction of a new

x

stationary source with the potential to emit more than forty tpy of NO .

Id. § 50.502(c)(1)(B). Thus, as the Board noted in Shell 2007, under the

Alaska PSD program, a new stationary source that has a PTE between 40

and 250 xtpy of NO must obtain a minor source permit before

commencing construction, and a stationary source with a PTE greater

x

than 250 tpy of NO must obtain a major source permit. 13 E.A.D.

at 366. 

A source that would otherwise exceed the applicable PSD major

source threshold of 250 tpy of any regulated NSR pollutant may, as in

this instance, seek to avoid regulation as a major source under the PSD

program by requesting that the permitting authority impose enforceable

permit restrictions on the source’s PTE. Shell 2007, 13 E.A.D. at 366,

cited in RTC at 20; see also Peabody, 12 E.A.D. at 26 & n.11, 31. A

Title V permit may function as a vehicle for a permitting authority to

establish enforceable permit limits that restrict the source’s potential to

emit air pollutants to a level below the PSD major source threshold, in

this instance 250 tpy, allowing the source to qualify instead as a

“synthetic minor” source. Peabody, 12 E.A.D. at 31 & n.21. 15
SHELL OFFSHORE, INC. 19

(...continued) 15

Alaska regulations refer to such a limitation as an owner requested limit

(“ORL”), which can be used to “avoid one or more permit classifications * * * at a

stationary source that will still be subject to at least one permit classification; a limitation

approved under an ORL is an enforceable limitation for the purpose of

determining * * * a stationary source’s potential to emit.” Alaska Admin. Code tit. 18,

§ 50.508(5). 

 The permit states that the Kulluk will be an OCS source at any time it is 16

attached to the seabed at a drill site by at least one anchor. Permit at 8; Statement of

Basis at 17, 19-20 (A.R. H-4). 

If a source accepts limitations that restrict its potential to emit air

pollutants to a level below the PSD threshold, that source will be a

synthetic minor source for purposes of the PSD program and will

therefore not be subject to PSD permitting requirements “unless future

facility modifications increase emission capacity enough to exceed the

PSD major source threshold.” Id. at 31-32. As the Board noted in

Peabody, in order for a capacity restriction to be cognizable as a PTE

limit, it must be practically enforceable, which Agency guidance has

interpreted to mean that: 

[T]he permit’s provisions must specify: (1) a technically

accurate limitation and the portions of the source subject to the

limitation; (2) the time period for the limitation (hourly, daily,

monthly, and annual limits such as rolling annual limits); and

(3) the method to determine compliance including appropriate

monitoring, recordkeeping, and reporting.

12 E.A.D. at 32 (quoting Memorandum from John Seitz, Dir., Office of

Air Quality Planning & Standards, U.S. EPA, to EPA Reg’l Air Div.

Dirs., Options for Limiting the Potential to Emit (PTE) of a Stationary

Source Under Section 112 and Title V of the Clean Air Act 5-6 (Jan. 25,

1995) [hereinafter Options for Limiting PTE] (A.R. B-9)). 

In this instance, the pre-permit PTE for units located on the Kulluk,

and on the Associated Fleet when operating within 25 miles of the

Kulluk while it is an OCS source, exceeded applicable PSD thresholds 16
20 SHELL OFFSHORE, INC.

 The primary emission sources on the Kulluk and the Associated Fleet are 17

internal combustion engines that consume diesel fuel. Statement of Basis at 9, 12-14.

Incinerators, heaters, boilers, and seldom used sources on the Kulluk and the Associated

Fleet also emit pollution but to a far lesser extent. Id.

 ICAS asserts that the Region should include a 5-10% buffer zone between 18

the PSD threshold emissions level of 250 tpy and the Kulluk’s restricted PTE, and that

x

the NO emission limit of 240 tpy does not provide this. ICAS Petition at 15 (citing a

comment letter from Region 9 to the Nevada Division of Environmental Protection in

which Region 9 “encourage[d] a 5-10% buffer between the permitted emission limits and

the federal threshold” for a permit that established a CO synthetic minor limit of 249 tpy).

However x, the 240 tpy emission limit for NO contained in the current Permit represents

a 4% buffer between the synthetic minor limit and the PSD threshold emission level of

250 tpy, which is ten times larger than the 0.4% buffer between a 249 tpy emission limit

and the PSD threshold of 250 tpy contained in the Nevada permit. The Board agrees with

(continued...)

x 2 for NO , CO, SO , and GHGs. Statement of Basis at 24-25 & tbl. 2-1.17

To avoid exceeding the PSD major source thresholds, Shell requested

that the Region include in the permit practically enforceable restrictions

that will reduce the Kulluk’s PTE below PSD threshold levels for each

of the four pollutants. See Letter from Susan Childs, Alaska Venture

Support Integrator Manager, Shell Offshore Inc., to Doug Hardesty, EPA

Region 10, attach. 2 (Apr. 29, 2011) (describing Shell’s proposed

restrictions and how they would affect emissions) (A.R. E-17). The final

permit authorizing the Kulluk to operate within the Beaufort Sea contains

source-wide emission limits, operational restrictions, and monitoring,

recordkeeping and reporting requirements intended to ensure that the

Kulluk can operate as a synthetic minor source. Permit Conditions D.1-

D.4. 

With this framework in mind, the Board now turns its attention to

Petitioners’ arguments presented in these appeals.

2. The Region Did Not Clearly Err in Establishing Source-Wide

Emis xsion Limits to Restrict PTE for NO and CO

The Permit restricts emissions from the Kulluk and the Associated

Fleet x to no more than 240 tpy of NO and no more than 200 tpy of CO.18
SHELL OFFSHORE, INC. 21

(...continued) 18

the Region that Congress established specific thresholds to determine when a source

would be considered major for purposes of PSD review. See RTC at 30. The buffer that

ICAS requests is neither a legal requirement nor an established Agency policy, and thus

the Region appropriately declined ICAS’s request. 

See infra Part VI.A.2.b. 19

Permit Conditions D.4.1, D.4.2. For both pollutants, the PTE limits are

determined on a rolling 365-day basis by calculating emissions for each

day and adding the emissions calculated for the previous 364 days. Id.

For both NOx and CO, daily emissions from each emission unit or group

of emission units “shall be determined by multiplying the appropriate

emission factor (lb/unit) specified in Tables D.2.1 – D.2.2 (until a testderived emission factor has been determined according to Permit

Condition E.2) by the recorded daily operation rate (units/day) and

dividing by 2000 lb/ton.” Id. The Region further explained that

“[c]ompliance with xthe emissions limits for NO and CO is determined

by applying the relevant emission factor to the amount of fuel combusted

by each emission unit (or hours of operation for incinerators).” RTC

at 29. The Permit also includes conditions that require source-wide

recordkeeping and monitoring to ensure that Shell complies with the

source-wide limits. Permit at 56-61 (including operations and fuel

monitoring in Permit Condition F.2 as well as selective catalytic

reduction (“SCR”) and oxidation catalyst (“OxyCat”) control device

monitoring in Permit Conditions F.3 - F.4). 

REDOIL Petitioners and ICAS make several challenges to the

Reg xion’s decision to restrict the Kulluk’s PTE for NO and CO using

source-wide emission limits. Both petitioners assert that the Region’s

deci x sion to limit CO and NO emissions using source-wide limits in

effect applies blanket emission limits, which Agency guidance expressly

prohibits because they are practically unenforceable, and that the limited

exception in the Agency guidance that allows for source-wide limits is

inapplicable to the Kulluk’s operations. REDOIL Petition at 10-11;

ICAS Petition at 11. Both petitioners also object to the Region’s use of

generic emission factors to calculate source-wide emission limits. In

19

particular, both petitioners assert that (1) the Region should have
22 SHELL OFFSHORE, INC.

 The Region issued Shell two OCS PSD permits to conduct exploratory 20

drilling activitiesin the Chukchi and Beaufort Seas utilizing the drillship Discoverer that

were twice appealed to the Board, first in 2010, and then again in 2011 subsequent to a

Board remand of the permits to the Region. See Shell Discoverer 2012, slip op. at 5-6,

11-14, 15 E.A.D. at ___ (describing history of Discoverer permit proceedings). In

preparing the permit applications for the Discoverer’s operations, Shell conducted

source-specific emission tests for various emission units on the Discoverer and an

associated fleet of support ships, including icebreakers, supply ships, and oil spill

response vessels. See id., slip op. at 5, 15 E.A.D. at ___ (describing associated fleet). 

developed source-specific emission factors for all units of the OCS

source; (2) the AP-42 emission factors applied to the emergency

generator, the OSRVs, and heaters and boilers lead to inaccurate and

underestimated emissions for those sources, and; (3) the Region did not

require Shell to conduct enough stack-tests to accurately calculate

source-specific emission factors. ICAS Petition at 15-20; REDOIL

Petition at 11-14. 

The Region responds that Agency guidance documents generally

“illustrate that the Clean Air Act and the implementing regulations allow

for a flexible, case-by-case evaluation of appropriate methods for

ensuring practical enforceability of PTE limits.” Region Response at 14-

15 (quoting In re Orange Recycling and Ethanol Prod. Facility, Pet.

No. II-2001-05, at 5 (Adm’r Apr. 8, 2002) (A.R. B-17)). Specifically,

x

the Region asserts that source-wide emission limits for NO and CO are

indeed practically enforceable and are most appropriate given the

uncertainty of a number of factors that otherwise preclude the Region

from establishing PTE restrictions based on operational limits. Id. at 18;

RTC at 26-27, 29-30. In addition, the Region asserts that the emission

x

factors used to calculate NO and CO emissions provide reliable

emission calculations. Region Response at 19-23. In particular, the

Region asserts that it made an appropriate technical determination to

apply AP-42 emission factors or emission factors derived from

Discoverer data rather than source-specific emission factors for certain

20

emission units. Id. The Region adds that the permit conditions that

apply to source-specific emission factors require source-tests that are

inadequate in frequency and unrepresentative of the variation in Shell’s
SHELL OFFSHORE, INC. 23

 Appendix C of the NSR Manual is based largely on the 1989 Guidance on 21

Limiting PTE. NSR Manual at C.1 n.1. 

proposed operations to allow the Region to derive accurate emission

factors. Id.

a. Blanket Emission Limits & Practical Enforceability

ICAS and REDOIL Petitioners correctly assert that the use of

blanket emission limits alone, essentially statements that actual

emissions of a pollutant will not exceed a particular quantity, is generally

prohibited to restrict PTE because such limits are not enforceable as a

practical matter. See United States v. La.-Pac. Corp., 682 F. Supp. 1122,

1133 (D. Colo. 1987) (“[C]ompliance with blanket restrictions on actual

emissions would be virtually impossible to verify or enforce.”), quoted

in REDOIL Petition at 11; see also Office of Air Quality Planning &

Standards, U.S. EPA, New Source Review Workshop Manual at C.4

(draft Oct. 1990) [hereinafter NSR Manual] (“Blanket emissions limits

alone (e.g., tons/[year], lb/[hour]) are virtually impossible to verify or

enforce, and are therefore not enforceable as a practical matter.”), quoted

in ICAS Petition at 13; Memorandum from Terrell Hunt, Assoc.

Enforcement Counsel, U.S. EPA, & John Seitz, Dir., Stationary Source

Compliance Div., U.S. EPA, Guidance on Limiting Potential to Emit in

New Source Permitting 7 (June 13, 1989) (A.R. B-4) [hereinafter 1989

Guidance on Limiting PTE]. However, the petitioners’ characterization 21

of the x source-wide emission limits for NO and CO contained in the

Permit as blanket emission limits must fail. ICAS and REDOIL

Petitioners do not acknowledge the Region’s explanation in the Response

to Comments for why it chose to apply source-wide emission limits in

the Permit, nor do they establish that the Region’s fundamentally

technical determinations contravene Agency guidance. 

The Region made clear in the Response to Comments that its

decision to employ source-wide emission limits calculated as rolling

365-day x limits to restrict NO and CO was based in large part on the

substantial and unpredictable variations in emissions based on the

atypical nature of Shell’s operations. RTC at 26-27; Region Response
24 SHELL OFFSHORE, INC.

 The 1989 Guidance on Limiting PTE recommends that the time limit over 22

which production or operational limits extend should be “as short term as possible” in

order for such limitations to be enforceable as a practical matter, and generally not

exceeding one month, but the Guidance also recognizes that in rare circumstances a limit

spanning a longer time may be appropriate. 1989 Guidance on Limiting PTE at 9. The

Guidance specifies that a limit spanning a longer time is appropriate if it is rolling, and

that it should not exceed an annual limit rolled on a monthly basis. Id. The Guidance

also notes that:

[P]ermits where longer rolling limits are used to restrict production

should be issued only to sources with substantial and unpredictable

annual variation in production[] * * * Rolling limits could be used

as well for sources which shut down or curtail operation during part

of a year on a regular seasonal cycle, but the permitting authority

should first explore the possibility of imposing a month-by-month

limit.

Id. at 9-10. In this instance, although the Guidance was written prior to Congress

authorizing EPA to regulate air emissions from sources located on certain areas of the

OCS, see Region Response at 17, including the Arctic, the circumstances the Guidance

anticipates that would make a longer time limit appropriate apply in this instance to the

Kulluk permit, where the operations are seasonal and thus variation in production would

(continued...)

at 18. Variability in Shell’s exploratory operations, multiple engines and

generators located on both the Kulluk and numerous vessels in the

Associated Fleet, the state of the weather and the sea, ice thickness, and

the changing nature of the activities that Shell may need to conduct all

influenced the Region’s conclusion that the need for operational

flexibility made it impractical to establish unit-specific limits or

operating x parameters for some pollutants, such as NO and CO, that

might typically be applied to limit a stationary source’s PTE. RTC at 27;

see Statement of Basis at 38. The Region continued that, in its judgment,

x

the choice to restrict the Kulluk’s PTE for NO and CO using sourcewide emissions limits “accounts for variability in operations and

emissions, yet still provides assurance that limits on potential to emit can

be enforced as a practical matter.” RTC at 28. 

Although the restrictions to limit the PTE of emission units located

on the Kulluk and the Associated Fleet utilize a rolling 365-day limit, a

longer time period than generally recommended in Agency guidance,22
SHELL OFFSHORE, INC. 25

(...continued) 22

be substantial. See 1989 Guidance on Limiting PTE at 9-10.

 Although the Board agrees with Petitioners that the Region did not cite this

23

decision until it submitted its response to the petitions for review, and thus accepts their

reply briefs with respect to this point, see supra Part V, the Board nonetheless disagrees

that this publicly available decision of the Administrator is inapposite to the current

appeal. The Pope & Talbot decision underscores the Agency’s ability to exercise its

discretion and its technical expertise in order to craft practically enforceable synthetic

minor limits. 

as the Region points out, the continuous monitoring and recording of fuel

usage and the application of source-test derived or specified emission

factors have the practical effect of constraining Shell’s fuel use, thus

ensuring compliance with the PTE limits. Region Response at 15, 17

(citing In re Pope & Talbot, Inc., Petition No. VIII-2006-04

(Adm’r 2007) (A.R. B-24), in which rolling emission limits in addition

to prescribed emission factors and appropriate monitoring and

recordkeeping were sufficient to restrict PTE). In essence, although the 23

Region could not incorporate more traditional operational limits into the

Permit based on the atypical nature of the permitted activities, the daily

calculation of NOx and CO emissions in conjunction with continuous

mon xitoring and recording of fuel usage ensure that the NO and CO PTE

restrictions can be practically enforced. 

Despite the Region’s explanation in the Response to Comments

regarding the need to consider the facts unique to this Permit, neither

ICAS nor REDOIL Petitioners explain why, especially in light of the

Kulluk’s atypical operations as compared to other stationary sources, the

Permit’s PTE limits are not practically enforceable. See Region

Response at 17. Rather, the petitioners hew closely to the language in

the 1989 Guidance on Limiting PTE prohibiting blanket emissions,

asserting instead that because the Permit does not contain production or

operat xional limits to restrict PTE, the NO and CO emission limits

constitute blanket emission limits that contravene Agency guidance.

ICAS Petition at 11-14; REDOIL Petition at 9-11. The 1989 Guidance

on Limiting PTE sets forth the types of limitations that will restrict a

source’s PTE and states in relevant part:
26 SHELL OFFSHORE, INC.

 The Guidance also acknowledges that the “particular circumstances of some 24

individual sources make it difficult to state operating parameters for control equipment

limits in a manner that is easily enforceable as a practical matter,” and lists two

exceptions. 1989 Guidance on Limiting PTE at 7. Although the Guidance preceded

EPA’s authority to regulate air emissions on parts of the OCS, see Region Response

at 17, and thus could not have anticipated the circumstances of the permit at issue in these

appeals, the Region nonetheless asserts that the circumstances surrounding the current

permit are sufficiently analogous to the second exception for volatile organic compound

(“VOC”) surface coating operations, which contemplates no add-on controls but allows

for the restriction of PTE by limiting the VOC contents and quantities of coatings used.

Id. at 17-19 (referring to 1989 Guidance on Limiting PTE at 8). 

The VOC exception focuses on circumstances where operating and production

parameters could not be readily set due to the wide variety of coatings and products and

due to the unpredictable nature of the operations. 1989 Guidance on Limiting PTE at 8.

The Region asserted that the rationale informing the VOC surface coating operation

exception is sufficiently similar to the present circumstances, and analogized that an

ef xfective way to restrict NO and CO was through source-wide emissions limits supported

by test-derived or specified emission factors, similar to the VOC content of coatings,

continuous monitoring and recording of operational parameters, and tracking the quantity

of VOC coating used. RTC at 30; Region Response at 18. REDOIL Petitioners and

ICAS assert that the VOC exception should be construed quite narrowly, and that the

VOC surface coating operation exception within the 1989 Guidance on Limiting PTE

could not apply to the Kulluk and the Associated Fleet. See ICAS Petition at 20;

REDOIL Petition at 13-14. Petitioners do not state more than a difference of opinion or

alternative view on a technical issue. See NE Hub, 7 E.A.D. at 567. Without more,

petitioners cannot sustain the burden of demonstrating that review of the Region’s

exercise of its technical judgment is warranted. See Peabody, 12 E.A.D. at 33; In re Teck

Cominco Alaska Inc., 11 E.A.D. 457, 473 (EAB 2004). 

To appropriately limit potential to emit * * * permits * * * must

contain a production or operational limitation in addition to the

emission limitation in cases where the emission limitation does not

reflect the maximum emissions of the source operating at full design

capacity without pollution control equipment. Restrictions on

production or operation that will limit potential to emit include

limitations on quantities of raw materials consumed, fuel combusted,

hours of operation, or conditions which specify that the source must

install and maintain controls that reduce emissions to a specified

emission rate or to a specified efficiency level.

1989 Guidance on Limiting PTE at 5-6. In addition, neither ICAS nor 24

REDOIL Petitioners address the operational limits included in the Permit
SHELL OFFSHORE, INC. 27

and discussed in the Response to Comments. See RTC at 29 (discussing

hourly operational limits on mudline cellar drilling and overall drilling

act xivity and the installation of SCR and OcyCat controls to limit NO

emissions).

Finally, ICAS challenges the Region’s inclusion of requirements in

x

the Permit to calculate daily emissions for NO and CO on a weekly

basis, arguing that it is a “critical flaw to enforceability of the permit

because it means that Shell will only know where it stands vis-a-vie [sic]

x

its NO and CO permit limits once a week.” ICAS Petition at 14 (citing

Permit Conditions D.1.1, D.1.2). The Board finds ICAS’s argument here

unavailing in light of the Region’s thorough explanation in the Response

to Comments. See RTC at 44; Region Response at 19, 23. The Region

explained that although the calculations of emission limits will be

conducted weekly, data is continuously collected and recorded and will

eventually be generated in the same terms as the emission limits. See

RTC at 44; Region Response at 23. Moreover, the Region points out that

Shell is required to process data from numerous emission units across

multiple vessels for 168 individual hours (24 hours x 7 days). RTC

at 44. The permit requirements to continuously monitor and record data

necessary to conduct daily emissions calculations ensures, as ICAS

raises, the ability to assess and verify compliance immediately should an

inspector, the Region, or Shell require it. RTC at 44; Region Response

at 23. In this instance, ICAS does not acknowledge the Region’s

response or address why that response is inadequate and thus warrants

review. As this Board has previously stated, “[p]etitions for review may

not simply repeat objections made during the comment period; instead

they must demonstrate why the permitting authority’s response to those

objections warrants review.” Peabody, 12 E.A.D. at 46 n.58; accord In

re Knauf Fiber Glass GmbH, (“Knauf II”), 9 E.A.D. 1, 5 (EAB 2000);

see also standard of review discussion supra Part III. 

In addition, as the Board noted above in Part VI.A.1.b, the

determination of a source’s PTE is inherently an exercise that requires

technical expertise. Neither REDOIL Petitioners nor ICAS have met the

particularly heavy burden of demonstrating that review of the Region’s

decisions to employ source-wide emission limits to restrict the Kulluk’s
28 SHELL OFFSHORE, INC.

PTE is warranted. See, e.g., Peabody, 12 E.A.D. at 33; NE Hub,

7 E.A.D. at 567 (“When issues raised on appeal challenge a Region’s

technical judgments, clear error or a reviewable exercise of discretion is

not established simply because petitioners document a difference in

opinion or an alternative theory regarding a technical matter.”). 

b. Emission Factors

An emission factor is a representative value used to relate the

quantity of a pollutant released to the atmosphere with an activity

associated with the release of that pollutant. U.S. EPA, AP-42,

Compilation of Air Pollutant Emission Factors, Volume 1: Stationary

Point and Area Sources 1 (Jan. 1995) (5th ed.) (“AP-42 Guidance”).

Emission factors essentially represent an average of a range of emission

rates of the subject sources. Id. at 2. As stated above in Part VI.A.2, in

x

this instance compliance with the PTE restrictions for NO and CO are

determined by calculating daily emissions of each pollutant, which

requires multiplying the appropriate emission factor by the recorded

daily operation rate and dividing by 2000 lb/ton. Permit Conditions

D.4.1, D.4.2. 

REDOIL Petitioners and ICAS challenge several aspects of the

Region’s use of emission factors to assist in calculating compliance with

x

the restricted PTE for both NO and CO. Both petitioners challenge the

Region’s decision to forgo source-specific emission testing to establish

emission factors for all emission units on the Kulluk and the Associated

Fleet and further assert that this will cause the Region and Shell to

unde xrestimate the quantities of NO and CO emitted by the OCS source.

ICAS Petition at 15-19; REDOIL Petition at 11-13. REDOIL Petitioners

and ICAS assert that the use of AP-42 emission factors and emission

factors derived from Discoverertest results for those emission units that

will not undergo source-specific testing constitutes clear error because

these more generic emission factors will likely lead to an

underestimation of emissions from the units to which they are applied.

ICAS Petition at 16-18; REDOIL Petition at 11-12 (referring to AP-42

emission factors as “notoriously inaccurate default factors”). Finally,

ICAS challenges the frequency and number of stack tests used to develop
SHELL OFFSHORE, INC. 29

 ICAS’s attempt to analogize the situation the Board confronted in Peabody 25

to the current permit appeal falls short. Although Peabody discusses the use of AP-42

emission factors in a PTE calculation where the source was seeking synthetic minor

status, ICAS failsto acknowledge critical factual elements that distinguish Peabody from

the current appeal. 

In Peabody, the permittee was a large coal-processing plant built prior to the

effective date of the PSD program that requested a PTE limit for particulate matter with

a diameter of 10 10 microns or less (“PM ”) in the permittee’s Title V permit so that the

10 facility could remain a synthetic minor source for PM emissions should it conduct any

major modifications in the future. See Peabody, 12 E.A.D. at 24-34. Of critical

importance, the facility’s emissions were primarily fugitive, and thus, emission testing to

(continued...)

source-specific emission factors for emission units and further asserts

that by Shell’s own admission there is a 15% variability in stack test data

that results in a less conservative emission factor than the Region claims.

ICAS Petition at 16-17. 

The Board notes at the outset that the development of emission

factors for use in calculating daily emissions to determine compliance

with PTE restrictions requires the sort of quintessential technical

expertise the permit issuer possesses, here the Region, to which the

Board will defer if “the record demonstrates that the Region duly

considered the issues raised in the comments and if the approach

ultimately selected by the Region is rational in light all of the

information in the record.” NE Hub, 7 E.A.D. at 567-68, quoted in

Peabody, 12 E.A.D. at 34; see also Avenal Energy Ctr., slip op. at 5,

15 E.A.D. at ___. As explained more fully below, for each challenge

regarding the derivation and use of emission factors set forth in the

Permit, REDOIL Petitioners and ICAS have failed to sustain the

particularly heavy burden petitioners must overcome to demonstrate that

review of a fundamentally technical decision is warranted. See, e.g.,

Peabody, 12 E.A.D. at 33; NE Hub, 7 E.A.D. at 567-68. 

The Region fully explained in the Response to Comments its

rationale for supplementing source-specific emission factors derived for

most of the emission units or groups of emission units located on the

Kulluk or the Associated Fleet with either AP-42 emission factors or 25
30 SHELL OFFSHORE, INC.

(...continued) 25

direct 10 ly measure PM emissions was not feasible. Id. at 34. The permittee consequently

submitted a request for a PTE limit based on a quantitative estimate of the facility’s

capac 10 ity to emit PM , which in turn relied on estimates of uncontrolled emissions from

each unit based on the application of AP-42 emission factors that were then used to

estimate net emissions by applying assumed emission control efficiencies for the emission

control equipment in use. Id. at 34-35 & n.31. Peabody’s proposed compliance regimen

did 10 not include direct measurement of PM emissions. As the Board stated, “[b]ecause

Peabody’s approach would rely entirely on the application of emission factors and

assumed control efficiencies, for purposes of both estimating maximum emissions

capacity and monitoring ongoing compliance, the accuracy and appropriateness of the

emission factors and the control efficiency assumptions were the focal point of Region

IX’s analysis of Peabody’s proposal.” Id. at 35-36. 

Contrary to the facility in Peabody, in this instance the use of AP-42 factors to

ca xlculate compliance with restricted PTE for NO and CO was essentially a last resort

method for calculating compliance, whereas the emission units that accounted for at least

90% x of the NO and CO emissions were subject to source-specific emission testing. See

id. at 32-33. The Region made clear that in the relatively small number of instances

where an AP-42 emission factor was employed to calculate compliance with PTE, the

Region chose conservatively higher emission factors. In Peabody, the Region made a

technical determination and “concluded that Peabody had not sufficiently demonstrated

that it met the central criteria for establishing [PTE] – technical accuracy and a reliable

method of determining compliance.” Id. at 39. In this instance, the Region made a

technical determination that Shell has sufficiently demonstrated that the Kulluk could

demonstrate compliance x with the NO and CO PTE limits included in the permit in a

manner that is technically accurate, and that the compliance of the emission units can be

verified based on source-specific testing. The Region’s exercise of its technical expertise

to conclude that in limited circumstances AP-42 emission factors were appropriate to

demonstrate compliance with the restricted PTE is rational in light of all of the

information in the record. Thus, ICAS’s contention that Peabody governs the appeal

currently before the Board is unpersuasive. 

emission factors derived from Discoverersource test data for a minority

of units. RTC at 32-33; see also Region Response at 20-21. In support

of its decision to utilize a mix of source-specific testing for emission

factors in addition to using AP-42 and Discoverer test data emission

factors, the Region stated that it “believes the permit strikes an

appropriate balance between the need for accurate emission factors to

reliably calculate emissions for comparison to permit limits and the

complexity of testing numerous emission units in a short period of time.”

RTC at 33. The Region also noted that, in response to comments
SHELL OFFSHORE, INC. 31

 The Region explained in the Statement of Basis that an important element of 26

Permit Condition E.2, which catalogues the procedures for conducting tests to determine

equipment-specific emission factors, “is the selection of worst[-]case emission factors for

each emission unit or group of emission units tested.” Statement of Basis at 43; see also

Permit at 52-56. The record demonstrates that the Region thoughtfully and judiciously

employed emission factors derived from Discoverertest data and AP-42 emission factors,

and consistently chose higher, more conservative emission factors when there was any

ques xtion or discrepancy. For example, for those NO emission units for which the Permit

does not require source testing and that rely on emission factors based on Discoverer test

data, the Region adjusted the emission factor to reflect the conservative 90 percentile (or th

higher) values from the test data. RTC at 32. The Region further explained that for

hea xters and boilers – the only remaining group of NO emission unitsthat rely on AP-42

for emission factors – the Region expects the AP-42 emission factor to be a conservative

x

representation of actual emissions. Id. (noting that while AP-42 predicted an NO

emission factor for heaters and boilers of 0.02 lb/gal, Shell testing of Discoverer boilers

shows a range of values between 0.011 lb/gal and 0.015 lb/gal); see also RTC at 46

x

(noting that the boiler and heater NO emission factor used in the Kulluk permit is “lower

than the Discoverer BACT limit for similar equipment, but is higher than available test

data xfor a similar source”). ICAS challenged the Region’s use of an NO emission factor

in the Permit that is lower than the one in the Discoverer permits, see ICAS Petition

at 18-19, but ICAS failed in its petition to even acknowledge the Region’s response to

x

its comment regarding the NO emission factor for heaters and boilers, let alone

“substantively confront the permit issuer’s subsequent explanation.” Peabody, 12 E.A.D.

at 33 (citing In re Zion Energy, LLC, 9 E.A.D. 701, 705 (EAB 2011)). 

With respect to emission units that will not undergo source testing to verify CO

emission factors, the Region similarly explained that it believed emission factors are

reasonable for use in the permit given that AP-42 emission factors will represent only 3%

of the total CO emissions. RTC at 32. In addition, the Region notes that the CO

emissions from tests conducted for two boilers on the Discoverer were nearly identical

to the AP-42 emission factor. Id. at 33 (explaining that the Region chose the highest,

most conservative emission factor of the three). Finally, the Region notes that one of the

(continued...)

received, it decided to require source-specific emission testing for

incinerators and that, after that change, the permit will require source

x

testing of emission units that constitute 91% of NO and 97% of CO

emissions. Id. at 32. Of the remaining units that were not required to

undergo source testing to develop an emission factor, the Region set

forth in detail why it had chosen emission factors derived from

Discoverer source test data or the AP-42 emission factors, in many

instances raising the value of an emission factor to provide a more

conservative estimate of emissions. Id. at 32-33; see also Region 26
32 SHELL OFFSHORE, INC.

(...continued) 26

potential oil spill and response boats has an actual CO emission factor for its propulsion

engine that is based on the manufacturer’s data and is one tenth of what the AP-42 factor

predicts. Id.; see also Permit Table D.2.2 (demonstrating that the Region chose to

include the much higher AP-42 emission factor for the OSRV propulsion engine). 

 REDOIL Petitioners contend that the Region’s recognition that Shell’s

27

approach involves “inherent uncertainty” regarding what equipment will be aboard the

Kulluk and the Associated Fleet, which in turn requires “thorough source testing,”

coupled with the Region’s refusal to require source testing for all equipment, is

“internally inconsistent and thus arbitrary and unlawful.” REDOIL Petition at 12.

However, the Region responded that it used its technical expertise to determine that in

thisinstance, a mix of both source-specific testing to derive emission factors, in addition

to using AP-42 factors and emission factors derived from Discoverer test data where

appropriate, was reasonable and not inconsistent. Region Response at 20-21. The Board

agrees with the Region that the decision to use source-specific testing to derive emission

factors, in conjunction with the emission factors developed from Discoverer data and

from AP-42, is inherently technical. In order to effectively exercise its expertise, the

Region should not, as REDOIL Petitioners suggest, be cabined by a rigid interpretation

of how emission factors should be determined. REDOIL Petitioners have failed to meet

the particularly high threshold for demonstrating that Board review of the Region’s

fundamentally technical decision is warranted. Peabody, 12 E.A.D. at 33-34.

Response at 20; Statement of Basis at 38 (noting that testing for sourcespecific emission factors (Permit Condition E.2) uses a protocol that

results in conservatively high unit-specific emission factors that in turn

help to ensure compliance with PTE). While REDOIL Petitioners and 27

ICAS may disagree with the Region’s approach, Petitioners do not

demonstrate that the Region’s choices in deriving emission factors for

emission units will result in an underestimation of pollutants emitted by

the Kulluk and the Associated Fleet. The Region has demonstrated that

x

it balanced its primary task of accurately calculating NO and CO

emission factors to ensure that the Kulluk and the Associated Fleet will

not exceed the restricted PTE with the practical need to calculate

emission factors for numerous and varied emission units aboard both the

Kulluk and the Associated Fleet. The Board has frequently stated that it

will not grant review where, as here, the record demonstrates a bona fide

difference of opinion or alternative theory regarding a technical matter

but the approach the Region ultimately selected is rational in light of all
SHELL OFFSHORE, INC. 33

 ICAS also asserts that stack tests are “conducted once a year for one or two 28

years depending on the source,” at three different loads, and even when the worst-case

emissions are used, the stack tests fail to account for Shell’s varying emissions. ICAS

Petition at 16. The Region explained in response that Permit Condition E.2.1 requires

each source-tested unit to be tested prior to each of the first two drilling seasons and

subsequently every two or five years depending on any variability observed in the results

of the two initial tests. Region Response at 22; see also Statement of Basis at 44

(frequency of source-specific emission factor testing after first two years based on

variability of results). Further, each test requires three 1-hour runs at each of the three

tested operating loads, which results in nine results total for each aggregate source test.

Region Response at 22. Without more than its bare assertion that the current source tests

do not adequately address Shell’s varying emissions when the data is used to derive

emission factors, ICAS cannot demonstrate that the permit conditions that dictate the

frequency and parameters of source tests warrant Board review. 

the information in the record. Peabody, 12 E.A.D. at 34 (quoting NE

Hub, 7 E.A.D. at 567).

Finally, ICAS asserts that the Discoverer source test data is not

sufficient to accurately generate worst-case scenario emission factors for

Kulluk emission units because similar sources tested on the Discoverer

were subject to BACT, and further, that in using stack test results from

the Discoverer to develop emission factors for the Kulluk permit, the

Region never accounted for “15% variability in Shell’s stack tests,”

resulting in inadequate emission factors. ICAS Petition at 17-19. The

Region points out, however, that the Discoverer stack tests on which the

Region relied to calculate the 90 percentile value and assess the th

appropriateness of AP-42 factors were not subject to post-combustion

cont xrols limiting NO or CO and thus provided an appropriate

comparison for purposes of deriving emission factors for the Kulluk.

Region Response at 21 (citing Discoverer stack test results and

communications discussing them in the administrative record,

specifically A.R. B-55, B-63, C-406, C-489). With respect to the 15%

variability in stack test results that ICAS alleges, the Region points to 28

the technical literature Shell referenced in Shell’s comments, which

addresses “uncertainty in determining front-half PM [particulate matter]

emission rates” and does not directly address procedures for deriving

NOX and CO emission factors. Id. at 22-23; see also Permit Conditions

E.1.2, E.1.7, E.1.14 (requiring Shell to submit a testing plan and follow
34 SHELL OFFSHORE, INC.

GHGs are defined as “the aggregate group of six greenhouse gases: carbon 29

dioxide, nitrous oxide, methane, hydroflourocarbons, perflourocarbons, and sulfur

hexaflou 2ride.” 40 C.F.R. § 52.21(b)(49)(i). CO e represents the amount of GHGs

emitted and is computed by “[m]ultiplying the mass amount of emissions (tpy), for each

of the six greenhouse gases in the pollutant GHGs, by the gas’s associated global

warming potential published at Table A-1 subpart A of [40 C.F.R.] part 98 of this chapter

– Global Warming Potentials.” Id. § 52.21(b)(49)(ii)(a). 

 The regulations provide that any source that is considered a new major source 30

for a regulated NSR pollutant other than GHGs will also be subject to regulation for

GHG 2s if it emits or has the potential to emit 75,000 tpy or more of CO e. 40 C.F.R.

§ 52.21(b)(49)(iv). New stationary sources that emit or have the potential to emit more

2

than 100,000 tpy or more of CO e are also subject to regulation for GHGs. Id.

§ 52.21(b)(49)(v). 

EPA-approved test methods, and establishing Region’s authority to

require additional stack tests if necessary). As the Region correctly

points out, ICAS has not demonstrated that the worst-case stack test

results, which embody the Region’s fundamentally technical

determinations, will be biased low and underreport emissions. Region

Response at 22-23; see, e.g., Teck Cominco, 11 E.A.D. at 473 (discussing

heavy burden assigned to petitioners seeking review of issues that are

essentially technical in nature).

3. ICAS Has Failed to Demonstrate That the Region Clearly Erred

in Restricting the Kulluk and the Associated Fleet’s Potential

to Emit GHGs

ICAS also challenges the Permit’s GHG emission limit, which

restricts Shell’s annual GHG emissions to 80,000 tpy of carbon dioxide

equivalen 2t (“CO e”). See ICAS Petition at 21-26; see also Permit 29

Condition D.4.4; RTC at 28. EPA promulgated regulations, commonly

referred to as the “Tailoring Rule,” that set forth applicability criteria to

determine which GHG emission sources become subject to the PSD and

Title V programs under the Act. Prevention of Significant 30

Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg.

31,514, 31,516 (June 3, 2010). In this instance, despite the fact that the

OCS source’s pre-permitted potential to emit exceeded 100,000 tpy of

CO2e, see Statement of Basis at 24, the Permit restricts the potential to
SHELL OFFSHORE, INC. 35

 The Permit imposes annual limits of 120 days of operation as an OCS source 31

during a drilling season, which spans from July 1 through November 30, and 1,632 hours

of total drilling activity in a drilling season, of which only 480 hours may be used to

conduct mudline cellar drilling activity, which is expected to generate the most air

pollution. See Permit Conditions D.3.1-D.3.5. The Permit also limits the total aggregate

combustion of fuel over a 12-month rolling period, the type of fuel combusted, and the

total aggregate daily waste-combusting capacity of incinerators. See Permit Conditions

D.4.6-.7, .9;see also RTC at 34-35. In addition, the Permit includes various monitoring

and recordkeeping requirements to document when emissions should be counted toward

emission limits, testing requirements for the derivation of source-specific emission

factors, tracking and documentation requirements for the fuel and waste combusted, and

maintenance requirements to ensure that emission units are properly operated and

maintained. See Permit Conditions D.1-.4, D.8, F.2.1-.7; see also RTC at 36-37, 43. 

 The Region explained methane emissions from the DMS as follows: 32

When wells are drilled through porous, hydrocarbon[-]bearing rock,

drilling fluids(mud) circulated through the drill bit can carry gaseous

hydrocarbons from the well back to [the] Kulluk. These gases are

(continued...)

em 2it GHGs to 80,000 tpy of CO e and thus prevents Shell from being

subject to regulation for GHGs under the PSD program. See RTC at 24.

As noted previously, the vast majority of emissions, including GHG

emissions, from both the Kulluk and the Associated Fleet result from

internal combustion sources such as engines and boilers, along with

incinerators. Statement of Basis at 12, 14, 39; RTC at 35. The Permit

contains operational restrictions on the amount of time a source can

operate, the amount of fuel and waste combusted, and the type of fuel

combusted to ensure compliance with the Permit’s GHG emission limit.

31

See Statement of Basis at 37-39; RTC at 33-36; id. at 34-35 (noting that

in response to comments the Region adjusted the methane emission

factor upward by a factor of four to represent a reasonable upper-bound

estimate of the number of wells that could be drilled in a single season,

which in turn required a small reduction to the total amount of fuel that

may be combusted in engines and boilers during any rolling 12-month

period). In addition to the combustion sources and the incinerators, a

relatively small amount of GHG emissions in the form of methane results

from the drilling mud system (“DMS”). See RTC at 35. GHG 32
36 SHELL OFFSHORE, INC.

(...continued) 32

typically released as fugitive emissions when the mud is processed

for reuse on the Kulluk or stored and shipped away; however, some

of the emissions pass through a vent. 

Statement of Basis at 38.

 In calculating the unrestricted PTE for DMS methane emissions, the Region 33

included several conservative assumptions to ensure a wide margin of safety for total

methane emissions over Shell’s five-month period of operation. See RTC at 34; Options

for Limiting PTE at 8 (noting that for sources with inherent physical limitations that

restrict the potential emissions of an emissions unit, if such limitations can be

documented and confirmed, the permitting authority may factor them into estimates of

a stationary source’s PTE). For example, the Region assumed that the total unrestricted

PTE for DMS methane emissions for the entire five months of drilling operations would

be emitted during each of the five months. RTC at 35. 

In addition, despite much of the methane emissions being fugitive emissions

that are not counted towards PSD applicability for exploratory drill rigs, see 40 C.F.R.

§ 52.21(b)(1)(iii), Shell agreed to consider all of the methane emissions from the DMS

as pointsource emissions that would count towards Shell’s potential to emit GHGs. See

RTC at 35; see also Statement of Basis at 38-39. In its petition, ICAS disputes the

Region’s claim that counting such fugitive emissions towards PTE represents a

conservative approach that lends a “measure of safety” and asserts that the part 71

regulations governing Title V permits require such fugitive emissions to be included.

ICAS Petition at 24 (citing 40 C.F.R. § 71.3(d), which statesthat fugitive emissions from

a part 71 source “shall be included in the permit application and the part 71 permit in the

same manner as stack emissions”). However, as the Region correctly points out in its

response, the definitions of major source in both 40 C.F.R. § 52.21(b)(1)(iii) and

40 C.F.R. § 71.2 make clear that fugitive emissions are not considered when determining

whether a source is a major source. Region’s Response at 26 n.21 (citing the Tailoring

Rule and noting that it retained this approach of determining whether a source becomes

subject to regulation for GHGs). 

em 2issions from the DMS, calculated at 85 tpy of CO e, represent only

0.11% of the total GHG emissions allowed under the permit, 80,000 tpy

of CO2e. Id. The Region calculated an unrestricted PTE for methane

emissions of 1,596 lbs/month, the equivalent of 17 tons per month

2

(“tpm”) of CO e. Id. The Permit accounts in Condition 4.4.2 for 33

methane emissions encompassing the source’s full unrestricted PTE of

17 2tpm of CO e, which are added to GHG emissions from combustion
SHELL OFFSHORE, INC. 37

 Similarly, ICAS’s contention that the Region clearly erred by not requiring 34

more frequent calculations of GHG emissions than the monthly calculations the Permit

requires, see Conditions D.1.3-.4, falls short. The Region explained that its decision to

calculate emissions on a monthly basis stemmed from “good confidence in the overall

[GHG emission] compliance technique and therefore ‘yearly’ emissions are required to

be summed only monthly.” Statement of Basis at 38. Although GHG emission

(continued...)

sources when calculating total GHG emissions. See Statement of Basis

at 39; Shell Discoverer 2012, slip op. at 64-65, 15 E.A.D. at ___.

ICAS raises several challenges to the Permit’s GHG emission limit.

Simila xr to its challenges of the Permit’s synthetic minor limits for NO ,

CO 2, and SO , ICAS contends that the Permit contains a blanket emission

limit for GHGs that is practically unenforceable, and further asserts that

the requirement that GHG emissions only be calculated monthly to

determine compliance with the established rolling 12-month limit is

inadequate to verify compliance “in a given moment.” ICAS Petition

at 21-22 (citing NSR Manual at C.3, C.5, H.5); see Permit Conditions

D.1.3-.4. In addition, ICAS asserts that the Region clearly erred by

accepting an owner-requested limit for methane attributable to mud offgassing from the DMS that is not only unenforceable, but also less than

the “maximum expected capacity” or “upper-bound projection”

ConocoPhillips submitted in another Arctic OCS permit proceeding. Id.

at 22-26.

Based on the foregoing information, ICAS’s general assertion that

the GHG emission limit is practically unenforceable must fail. The

Region has demonstrated in both the Permit and the documentation in the

record supporting the Permit that it crafted a synthetic minor limit that

would not only prevent Shell from being subject to regulation under the

PSD program for GHG emissions, but also would be practically

enforceable as a result of the numerous operational restrictions in

combination with monitoring, recordkeeping, and reporting requirements

contained in the Permit. While ICAS acknowledges the operational

limits contained in the Permit, ICAS simultaneously disputes their

efficacy without explaining why such operational limits will not have

their intended effect of restricting Shell’s potential to emit GHGs. See 34
38 SHELL OFFSHORE, INC.

(...continued) 34

calculations will be calculated once a month based on the Region’s stated confidence in

its compliance method, the data required to make such calculations is collected

continuously through fuel usage monitoring. RTC at 43-44 (“Shell is generally required

to continuously measure and record, on an hourly basis, the fuel consumed by each

emission unit or group of emission units.”); see also Region Response at 24 (citing 1989

Guidance on Limiting PTE and noting that “in light of annual variations in operations and

the fact that the source operates during only part of the year” the Region determined that

a 12-month rolling 2 limit for CO e was appropriate as stated). Again, ICAS has failed to

meet its burden of demonstrating that review is warranted, where, as here, it has not

addressed the Region’s stated rationale for requiring only monthly calculation of GHG

emissions and has not demonstrated that monthly calculation of GHG emission would

inhibit verification of compliance with the GHG emission limit. See supra Part III.

ICAS Petition at 21-22. Without stating more than mere disagreement,

ICAS cannot meet the especially high threshold of demonstrating that the

Region’s inherently technical decisions regarding the GHG emission

limit warrant Board review. See, e.g., NE Hub Partners, 7 E.A.D.

at 567; Shell Discoverer 2012, slip op. at 42-43, 15 E.A.D. at ___.

ICAS’s more specific contention that the Region clearly erred by

accepting an owner requested restriction for methane from mud offgassing that is practically unenforceable is unavailing. See ICAS

Petition at 22-26. ICAS raised this same argument in previous appeals

of two OCS PSD permits the Region issued to Shell for operations in the

Chukchi Sea of the Arctic OCS. See Shell Discoverer 2012, slip op.

at 62-68, 15 E.A.D. at ___; see also supra note 20. In brief, the monthly

calculation of methane to be released in mud off-gassing in both Shell

Discoverer 2012 and the current appeal are not only the same amount,

17 tpm, they also both reflect the unrestricted PTE for methane

emissions from DMS operations. See RTC at 34-35; Shell Discoverer

2012, slip op. at 66, 15 E.A.D. at __. The Board rejects ICAS’s assertion

in this instance, relying on the same reasons it gave in Shell Discoverer

2012:

[T]he Permit[] in this case do[es] not include owner requested

limits on PTE for methane emissions. Rather, * * * methane

emissions were assumed to occur at the source[’s] full PTE for
SHELL OFFSHORE, INC. 39

 This is the same unrestricted PTE for methane emissions as in the Kulluk 35

permit (1596 lb / 2000 lb = 0.798 tons).

the five-month drilling season (0.798 tons per month), and the 35

Permit[] count[s] these emissions towards the total GHG

limitation * * * . The Region determined that because these

unrestricted emissions of methane (when combined with GHG

emissions from combustion sources) would not result in an

exceedance of the Permit[’s] total GHG emissions limit,

additional permitting restriction limits were not required.

Under these circumstances, ICAS’s reliance on the requirement

that permits include conditions ensuring the enforceability of

limitations on a source’s PTE is misplaced, as the Permits do

not contain owner requested limits on methane emissions or

otherwise limit the source[’s] PTE from DMS operations.

Shell Discoverer 2012, slip op. at 66-67, 15 E.A.D. at ___ (citations

omitted). 

In addition, ICAS has not demonstrated that the Region’s

calculation of methane emissions from the DMS underestimated the

“upper-limit” projection that is in turn used to identify the “maximum

capacity” of a source based on an “inherent physical limitation.” RTC

at 34 (citing Options for Limiting PTE at 8 and Memorandum from John

Seitz, Dir., Office of Air Quality Planning & Standards, to Reg’l Air

Dirs., U.S. EPA, Calculating Potential to Emit (PTE) and Other

Guidance for Grain Handling Facilities at 4-5 (Nov. 14, 1995) (A.R. B10) [hereinafter Grain Handling Guidance]). ICAS’s assertion is

premised on ConocoPhillips’ higher estimate of DMS methane emissions

submitted to the Region in another permit proceeding concerning

exploratory drilling in the Arctic OCS. ICAS Petition at 23-26.

However, ICAS simply states that the discrepancy between Shell’s and

ConocoPhillips’ calculations of DMS methane emissions means that the

Region clearly erred in accepting Shell’s methane calculations, but it

does not acknowledge or evaluate the record information Shell submitted
40 SHELL OFFSHORE, INC.

 In Shell Discoverer 2012, ICAS asserted that it was unable to evaluate the 36

basis for Shell’s estimates of DMS methane emissions that the Region had relied on to

calculate PTE because Shell did not release its estimates until after the close of the

comment period. Slip op. at 65 n.63, 15 E.A.D. at ___. In that instance, the Board

concluded that the Region was authorized to supplement the record with previously

unavailable information confirming that Shell’s estimate of methane PTE was a

reasonable upper-bound estimation, and “[t]hus, ICAS had the opportunity to evaluate

the basis for Shell’s PTE estimates and the Region’s assessment of those estimates in

preparing its appeal to this Board.” Id. (citing In re Cape Wind Assoc., LLC, OCS

Appeal No. 11-01, slip op. at 8, 10 (EAB May 20, 2011), 15 E.A.D. at ___, and

40 C.F.R. §§ 124.17(a)-(b), .18(b)). 

The material in question is not only in the record submitted with the Discoverer

appeals, it also appears in the record for the instant appeal. See E-mail from Susan

Childs, Shell, to Doug Hardesty, EPA Region 10 (Sept. 16, 2011 14:31 pm PDT) (A.R.

CCC-438 in Shell Discoverer 2012 and A.R. C-575 in the current appeal). Thus in the

current appeal there is no question that the information from Shell clarifying and

explaining its estimate of DMS methane emissions, including the highly conservative

assumptions Shell included in its estimate, was at ICAS’s disposal. In addition, Shell

submitted further clarification of its DMS methane estimates as compared to

ConocoPhillips’ in order to “explain how different assumptions led to different results,

and why Shell believes that ConocoPhillips’ estimate is unrealistically high.” E-mail

from Susan Childs, Shell, to EPA Region 10 (Sept. 20, 2011 17:57 pm PDT) (A.R. C577). ICAS’s petition does not address either of these record submissions or the Region’s

reliance on this information to determine that the Region’s calculation of methane

emissions from the DMS represents “a reasonable upper-bound projection for Shell’s

operations [that] is not expected to be exceeded under any reasonably anticipated

operating scenario.” RTC at 35. 

that explains in depth the causes for the divergent methane calculations.36

Upon considering this information, the Region exercised its technical

expertise in concluding that Shell’s estimates of methane emissions from

the DMS were permissible, especially given the conservative

assumptions the Region incorporated when calculating PTE. ICAS does

not address either the record information that supports the Region’s

decision to accept Shell’s methane estimate or the Region’s stated

rationale for concluding that methane monitoring is not required. See

RTC at 35-36 (explaining that, based on the inherent limitations that

exist and the relatively small contribution of the DMS to overall GHG

emissions, the Region does not believe monitoring of DMS emissions or

operations is necessary in addition to the monitoring already required in

the permit). As this Board has often stated, a petitioner cannot
SHELL OFFSHORE, INC. 41

demonstrate that review is warranted if the petitioner fails to

substantively confront a permit issuer’s response. Peabody, 12 E.A.D.

at 33 (noting that to obtain review a petitioner must “explain why, in

light of the permit issuer’s rationale, the permit is clearly erroneous or

otherwise deserving of review”); see also In re BP Cherry Point,

12 E.A.D. 209, 217 (EAB 2005). Moreover, as stated above, the

Region’s decision regarding the GHG emission limit is inherently

technical in nature, and ICAS has fallen short of the particularly high

threshold it must meet to demonstrate that review of the Region’s

technical determination is warranted. See Peabody, 12 E.A.D. at 33-34;

see also NE Hub, 7 E.A.D. at 567-68. 

4. The Region Did Not Clearly Err in Restricting OCS Source’s

Poten 2tial to Emit SO

The Perm 2it restricts SO emissions from the Kulluk and the

Associated Fleet to no more than 10 tpy, well below the 250 tpy PSD

threshold level. See Permit Condition D.4.3. Compliance with this limit

is determined on a rolling 12-month basis and is achieved by requiring

that Shell not combust any liquid fuel with sulfur content greater than

0.01 percent by weight in any emission unit on the Kulluk or the

Associated Fleet and that all fuel purchased for use in emission units on

the Kulluk and Associated Fleet have a maximum sulfur content of

0.0015 percent by weight. Permit Conditions D.4.5, D.4.9. Shell is

required to keep diesel fuel purchase records documenting sulfur content

for each batch of fuel purchased. Permit Condition D.4.9.2. In addition,

the total amount of fuel combusted in engines and boilers must not

exceed 7,004,428 gallons during any rolling 12-month period. Permit

Condition D.4.6; see also Permit Condition F.2.4 (requiring Shell to

(1) obtain representative fuel samples and determine fuel sulfur content

in parts per million from fuel storage tanks on the Kulluk and the

Associated Fleet prior to their mobilization, (2) determine the sulfur

content of each delivery of fuel to the Kulluk and the Associated Fleet

once the vessels are mobilized, and (3) maintain records of all sampling

and analysis).
42 SHELL OFFSHORE, INC.

2

ICAS asserts that the Region justifies its blanket SO emissions

limits by including “purported ‘operational limits’” that restrict fuel

content and usage and concludes that compliance with the restricted PTE

2

for SO is practically unenforceable because these operational limits are

not unit-specific and because the overall limit is based on a 12-month

rolling limit. ICAS Petition at 26-27. ICAS offers no explanation as to

why the operational limits and averaging time the Region chose to

include in the Permit, both of which are clearly considered legitimate in

Agency guidance, nonetheless constitute clear error. See Region

Response at 28; Options on Limiting PTE attach. 1 at 5 (“[L]imitations

on sulfur dioxide emissions could be based on specified sulfur content

of fuel and the source’s obligation to limit usage to certain maximum

amounts.”); 1989 Guidance on Limiting PTE at 9-10 (noting that in

certain situations a rolling limit of up to a year may be appropriate for

sources with “substantial and unpredictable annual variation in

production,” including “source which shut down or curtail operation

during part of the year on a regular seasonal cycle”). 

ICAS also challenges the monitoring provisions for small and/or

infrequently used emission units that are not required to have fuel flow

monitors. ICAS Petition at 27. As the Region correctly points out,

however, ICAS makes no attempt to explain why the specified fuel

measurement alternatives, together with the requirement to measure and

record fuel usage before and after operation, do not allow for a reliable

and accurate assessment of fuel usage. Region Response at 28 (citing

Permit Condition F.2.2.2). Here again, ICAS offers nothing more than

a bald assertion of clear error without any analysis of why the Region

erred. Where, as here, the Region’s decision was technical in nature,

ICAS has failed to meet the particularly high threshold for establishing

that review of the Region’s technical determination is warranted.

5. Shell’s Minor Source Permit Is Not a “Sham” Permit

ICAS asserts that in order to ensure the Kulluk’s status as a minor

source, Shell has agreed to operational limitations in its OCS/Title V

permit that are not represented in other authorizations and permit

applications for Shell’s exploratory activities in the Beaufort Sea. ICAS
SHELL OFFSHORE, INC. 43

 The NSR Manual defines a sham permit as follows: 37

A sham permit is a federally enforceable permit with operating

restrictions limiting a source’s potential to emit such that potential

emissions do not exceed the major or de minimis levels for the

purpose of allowing construction to commence prior to applying for

a major source permit. Permits with conditions that do not reflect a

source’s planned mode of operation may be considered void and

cannot shield the source from the requirement to undergo major

source preconstruction review. In other words, if a source accepts

operational limits to obtain a minor source construction permit but

intends to operate the source in excess of those limitations once the

unit is built, the permit is considered a sham.

NSR Manual at C.6. 

 ICAS asserts that its concern with the potential for Shell to obtain a minor 38

source sham permit arose because “Region 10 has provided no assurance that reporting

mechanisms in the permit will provide sufficient time for Shell to halt drilling with

enough of an emissions buffer remaining to secure a partially drilled well for the entire

winter season * * * .” ICAS Petition at 29. ICAS also acknowledges that any exceedance

of an emission limit would allow the Agency to exercise its enforcement powers. Id.

Without more, ICAS cannot demonstrate that the Region clearly erred in determining that

Shell’s minor source permit is not a sham.

Petition at 28. ICAS alleges that Shell’s incidental hazard assessment,

required under the Marine Mammal Protection Act, 16 U.S.C.

§ 1371(a)(5)(A), (D), authorizes 78 days of drilling whereas the

OCS/Title V permit only authorizes 68 days of drilling. Id. Based on

this single discrepancy, ICAS categorically concludes that “Shell is

submitting permit applications and seeking authorization from other

agencies with different plans than are provided for in its air permit.”

ICAS Petition at 28-29. ICAS also asserts that the Region did not

adequately respond to its concern that Shell’s application for a minor

source permit is a sham. Id. 37

At the outset, the Board notes that ICAS’s assertion that Shell has

secured a sham minor source permit with the intention to avoid

preconstruction review as a major source under the PSD program is

wholly unsupported in the record. As the Region noted in the Response 38

to Comments, there is nothing to indicate that Shell intends to later apply
44 SHELL OFFSHORE, INC.

Specifically, the guidelines for determining when minor source construction 39

permits are shams state in relevant part:

1. Filing a PSD or nonattainment NSR permit application

If a major source or major modification permit application is filed

simultaneously with or at the same time as the minor source

construction permit, this is strong evidence of an intent to

circumvent the requirements of preconstruction review.

* * * * 

(continued...)

to the Region to remove the synthetic limits contained in the Permit.

RTC at 22. The Region continued that, regardless of what the incidental

hazard assessment says regarding the number of days Shell may drill,

Shell nonetheless “must comply with all requirements of the Kulluk

Permit and failure to do so is a violation of the CAA.” Id. (citing Permit

Condition A.3). Finally, the Region made clear that whether an original

request for a minor source permit is a “sham” may be evaluated when the

Region receives a request to remove the synthetic limits. Id.

ICAS rejects the Region’s statement that there is nothing to suggest

that Shell intends to obtain a minor source permit now and then apply for

a major source permit down the road, and baldly asserts that “this is not

the proper test.” ICAS Petition at 28. ICAS ignores the element of

intent to obtain a minor source sham permit that both the Region in the

Response to Comments and the 1989 Guidance on Limiting PTE discuss

and instead quotes the NSR Manual language for the proposition that the

“proper test” is a permit that does not reflect a source’s “planned mode

of operation.” ICAS Petition at 28 (citing NSR Manual at C.6)

(emphasis in original); see also 1989 Guidance on Limiting PTE at 12.

However, the 1989 Guidance on Limiting PTE contains guidelines for

determining, based on an evaluation of specific facts and evidence in

each individual case, when minor source construction permits are shams

and includes two of four criteria that discuss the intent of the source to

circumvent the PSD preconstruction review process. 1989 Guidance on

Limiting PTE at 14-15. 

39
SHELL OFFSHORE, INC. 45

(...continued) 39

4. Statement of authorized representatives of the source regarding

plans for operation

Statements by representatives of the source to EPA or to state or

local permitting agencies about the source’s plans for operation can

be evidence to show intent to circumvent preconstruction review

requirements.

1989 Guidance on Limiting PTE at 14-15 (emphasis added). 

ICAS has not identified any information in the record that supports

its assertion that Shell is seeking to avoid preconstruction review.

Moreover, minor source sham permits are generally discovered when a

source seeks another air emissions permit that requests the permit issuer

to relax the synthetic limits in the minor permit, see 1989 Guidance on

Limiting PTE at 12-14, rather than when the source seeks another

authorization under a different statute such as the Marine Mammals

Protection Act. Finally, ICAS has not demonstrated any deficiency in

the Region’s response to its comment regarding sham permits. See, e.g.,

Russell City II, slip op. at 30-31, 15 E.A.D. at ___ (noting that the part

124 regulations require a response to comments document to

“demonstrate that all significant comments were considered but does not

require a permit issuer to respond to each comment in an individualized

manner or require the permit issuer’s response to be of the same length

or level of detail as comment”) (citation omitted). 

For all of the reasons stated above, the Board denies review of this

issue. 
46 SHELL OFFSHORE, INC.

2 2 To date, EPA has established PSD increments for four pollutants – SO , NO ,

40

PM10 2.5 , and PM . The increments consist of numeric concentrations, measured in

micrograms of pollutant per cubic meter of air, that vary according to averaging period

(3-hour, 24-hour, or annual averages) and geographic location (areas designated as

“Class I,” “Class II,” or “Class III”). See 40 C.F.R. § 52.21(c) (table of increment levels).

B. REDOIL Petitioners Have Not Demonstrated That the Region

Clearly Erred in Declining to Require PSD Increment Consumption

An alyses for the Kulluk’s Proposed Emissions as Part of the Title V

Permitting Process

1. Section 504(e) of CAA Title V Imposes Permitting

Requirements on “Temporary” Stationary Sources

The CAA’s PSD program requires permit applicants to demonstrate

compliance with ambient air quality “increments” (also called “PSD

increments”) for specific air pollutants. See CAA §§ 161,

163, 165(a)(3)(A), 42 U.S.C. §§ 7471, 7473, 7475(a)(3)(A); 40 C.F.R.

§ 52.21(c), (k). Such increments are maximum allowable increases in

pollutant concentrations that may occur in particular areas. They are 40

designed to “prevent significant deterioration” of air quality in locations

that already have relatively clean air by ensuring that contaminants

contributed by proposed new sources, combined with levels of

contamination already present in the ambient air as of a specific baseline

date, fall within bounds established by the Agency. See generally NSR

Manual ch. C.

As noted in Part VI.A.1.b above, Congress designed the PSD

program to regulate “major” sources of air pollution, which have

potential to emit certain specific pollutants in amounts exceeding major

source threshold levels. “Minor” sources, which have projected

emissions that fall below the PSD majorsource thresholds, generally are

not regulated under the PSD program. The Board determined above that

the Kulluk qualifies as a minor source for PSD purposes, and so it is not

required to obtain a PSD permit. The Kulluk nonetheless is still subject

to permitting under the CAA’s Title V program. The question presented
SHELL OFFSHORE, INC. 47

is whether section 504(e) of Title V imposes PSD increment

requirements in this circumstance.

In section 504(e) of Title V, Congress set out permitting

requirements for “temporary” stationary sources of air pollution, as

follows:

The permitting authority may issue a single [Title V] permit

authorizing emissions from similar operations at multiple

temporary locations. No such permit shall be issued unless it

includes conditions that will assure compliance with all the

requirements of this chapter [i.e., the CAA] at all authorized

locations, including, but not limited to, ambient standards and

compliance with any applicable increment or visibility

requirements under part C of subchapter I of this chapter [i.e.,

the PSD program].

CAA § 504(e), 42 U.S.C. § 7661c(e). In allowing for a streamlined

permitting process in which a single permit could authorize emissions at

multiple temporary locations, Congress explained:

Some sources requiring [Title V] permits do not operate at

fixed locations. These might include asbestos demolition

contractors and certain asphalt plants. Subsection (e) allows

the permittee to receive a permit allowing operations, after

notification to the permitting authority, at numerous fixed

locations without requiring a new permit at each site. Any

such permit must assure compliance at all locations of

operation with all applicable requirements of the Act, including

visibility protection and PSD requirements and ambient

standards.

H.R. Rep. No. 101-490, pt. 1, at 350 (1990).

The parties’ dispute centers on competing interpretations of

section 504(e) and whether, in providing for a streamlined permitting

process for temporary sources, Congress intended temporary minor
48 SHELL OFFSHORE, INC.

sources to have increment provisions in their Title V permits where the

state implementation plans do not otherwise impose increment

provisions on such sources.

Section 504(e) is an unusual provision, not only because it addresses

temporary rather than permanent stationary sources of air pollution

(which comprise the majority of Title V sources), but also because it

imposes substantive air requirements on temporary sources. As a general

matter, Title V is a procedural rather than a substantive statute. It serves

as a vehicle for collecting diverse CAA requirements otherwise

applicable to a source into one all-encompassing air permit for that

source. See, e.g., Ohio Pub. Interest Research Grp., Inc. v. Whitman,

386 F.3d 792, 794 (6th Cir. 2004) (“Title V does not impose new

obligations; rather, it consolidates pre-existing requirements into a

single, comprehensive document for each source”); Operating Permit

Program, 57 Fed. Reg. 32,250, 32,251 (July 21, 1992) (explaining that

Title V “generally does not impose substantive new requirements” on

sources but instead attempts to “clarify, in a single document, which

requirements apply to a source,” thereby enabling all parties to better

understand and track that source’s CAA compliance). For the most part,

requirements that are “applicable” to a source’s emissions units under a

Title V permit are directly imposed not by Title V itself but, rather, by

state or federal implementation plans, preconstruction permits, the air

toxics or acid rain programs, and other substantive CAA provisions. See

40 C.F.R. §§ 70.2, 71.2 (definitions of “applicable requirements” under

state and federal operating permit program regulations, respectively).

To ensure adequate regulation of temporary sources, Congress

directed that Title V permits for such sources must include, as noted

above, “conditions that will assure compliance with all the requirements

of [the CAA] at all authorized locations, including, but not limited to,

ambient standards and compliance with any applicable increment or

visibility requirements under [the PSD program].” CAA § 504(e),

42 U.S.C. § 7661c(e). The parties do not dispute that this language

serves to impose, through Title V itself, substantive CAA requirements

on temporary sources. See REDOIL Petition at 19-25; Region Response

at 5-6. Indeed, they agree that, because of section 504(e), the Kulluk’s
SHELL OFFSHORE, INC. 49

Title V permit “must contain terms and conditions that ensure

compliance with the NAAQS at all relevant locations.” Statement of

Basis at 26, quoted in Region Response at 5; see REDOIL Petition at 21.

The parties strongly dispute, however, whether PSD increments should

also be included in the complement of substantive requirements for the

Kulluk.

2. Under the Region’s Interpretation, PSD Increment

Compliance Demonstrations Are Not Mandatory for

Temporary Minor Sources but May Be Required by States

The Region’s basic position is that section 504(e) uniformly

imposes ambient standards (i.e., NAAQS) compliance requirements on

all temporary sources, but that it does not uniformly so impose PSD

increment requirements. The Region initially based this distinction on

the language of section 504(e) and the implementing regulations, as well

as on a prior Agency interpretation of these authorities. See Statement

of Basis at 25-27. The distinction hinged primarily on Congress’

insertion of the adjective “applicable” in section 504(e) to modify not

“ambient standards” but only “increment or visibility requirements under

[the PSD program].” Id. at 26; see CAA § 504(e), 42 U.S.C. § 7661c(e).

PSD increments are only “applicable” to a temporary source, the Region

reasoned, if the source also qualifies as a PSD major source, obligated

to obtain a PSD permit. Statement of Basis at 26 (“applicable”

increment requirements are those applicable “under [the PSD program]”

(i.e., part C of subchapter I of the CAA), which covers only PSD major

sources). By this logic, the Kulluk, a PSD minor source, would not have

to demonstrate compliance with PSD increments at any of its authorized

locations. Id.

Commentors on the Kulluk’s draft permit pressed the Region on this

point, which prompted it to take a closer look at the entire issue. The

Region prepared a lengthy, detailed Response to Comments document,

in which it repeated the above points, but also added a far more robust

discussion of the preconstruction permitting programs for major and

minor sources. The Region explained that, under the statute and

implementing regulations, states have discretion to impose PSD
50 SHELL OFFSHORE, INC.

increment requirements on PSD minor sources as part of their minor

source construction permitting programs, if the states deem such

requirements necessary to preventsignificant deterioration of air quality.

See RTC at 102-09 (citing and discussing, e.g., CAA §§ 110(a)(2)(C),

161, 163, 165(a)(3)(A), 504(e), 42 U.S.C. §§ 7410(a)(2)(C), 7471, 7473,

7475(a)(3)(A), 7661c(e); 40 C.F.R. §§ 51.160(a)(2), (b)(2), .166(a)(1),

(3), 70.2, 71.2, 71.6(e)). The Region emphasized that states are not

obliged to do this but have discretionary authority to pursue this course

if they deem it necessary to fulfill their obligations under CAA

sections 161 and 163(a). See id. at 103-06.

These clarifications led the Region to encapsulate its understanding

of section 504(e) and the preconstruction programs in the following way:

“PSD major sources are subject to NAAQS and increment in the

permitting process, whereas non-PSD sources are subject only to the

NAAQS unless the applicable minor source program also includes the

[PSD] increment[s].” Id. at 107. The Region concluded that the State

of Alaska’s minor source preconstruction program does not require

permanent minor sources to demonstrate compliance with PSD

increments as a condition of construction, so neither would it require

such compliance of temporary minor sources. See id. at 103-04, 107-08;

see also Region Response at 12, 11 n.7. For this reason, the Region

declined to require that Shell conduct PSD increment compliance

analyses for Kulluk emissions at any of its authorized locations in the

Beaufort Sea.

The Region’s statutory and regulatory interpretation of the Title V

temporary source program finds support in Board case law that

recognizes the states’ primary role in using PSD increments to manage

economic growth. In In re W. Suburban Recycling &Energy Center, LP,

8 E.A.D. 192 (EAB 1999), the Board observed the following:

From the beginning of the PSD program, EPA has

acknowledged that decisions about how increment should be

used or allocated are primarily within the province of the

states. For example, in the preamble to the original PSD

regulations, EPA noted that allocation of PSD increment could
SHELL OFFSHORE, INC. 51

affect economic development and that EPA should endeavor to

preserve the states’ authority on issues of economic

development and growth:

“EPA should not make decisions [that] would have a

significant impact upon future growth options of the

[s]tates.”

8 E.A.D. at 196 (quoting Approval and Promulgation of State

Implementation Plans, 43 Fed. Reg. 26,388, 26,401 (June 19, 1978));

accord In re Commonwealth Chesapeake Corp., 6 E.A.D. 764, 768

(EAB 1997) (“‘The PSD requirements provide for a system of area

classifications [that] affords [s]tates an opportunity to identify local land

use goals. * * * Each classification differs in terms of the amount of

[industrial or other] growth it will permit before significant air quality

deterioration would be deemed to occur.’” (quoting NSR Manual at C.4-

.5)).

3. REDOIL Petitioners Have Not Demonstrated That the

Region’s Interpretation Is Clearly Erroneous

On appeal, REDOIL Petitioners claim on a number of grounds that

the Region’s interpretation is clearly erroneous and thus a basis for

remand of this permit. REDOIL Petition at 19-37. REDOIL Petitioners’

central contention is that the plain language, structure, and purpose of

section 504(e) reveal Congress’ “unambiguously expressed intent” to tie

increment requirement applicability to the increment status of the

geographic area or areas in which a temporary source will emit

pollutants. See id. at 20-32. REDOIL Petitioners also contend that the

Agency’s implementing regulations confirm the plain meaning of the

statutory language and, additionally, contain provisions that “at least

imply” independent obligations to ensure PSD increment compliance.

Id. at 33-35.

REDOIL Petitioners observe that section 504(e) distinguishes

between ambient standards (i.e., NAAQS), which apply to all temporary

sources “at all times and in all locations,” id. at 21, and PSD increment
52 SHELL OFFSHORE, INC.

standards, which do not apply at all times and in all locations because

they “are not universally applicable to all areas.” Id. Rather, as designed

by Congress, PSD increments “apply” only in areas where they

specifically have been triggered, by means of the submission of an

initial, complete PSD permit application to emit in a particular area. Id.;

see CAA §§ 163, 169(4), 42 U.S.C. §§ 7473, 7479(4); 40 C.F.R.

§ 52.21(b)(14)(ii), (15)(i). The concentration of pollutants in such an

area’s ambient air is measured at the time the initial application is

submitted (the “baseline date”) and then fixed as the “baseline

concentration” for that area. See NSR Manual at C.6-.8, .12-.15. From

that point forward, PSD increments serve as the maximum allowable

increases that pollutant concentrations may rise above the established

baseline levels. CAA § 163, 42 U.S.C. § 7473; 40 C.F.R. § 52.21(c).

REDOIL Petitioners reason from this basic design that Congress

intended “applicable increment * * * requirements” in section 504(e) to

be area-dependent rather than source-dependent. See REDOIL Petition

at 21-22, 25-27, 29. By this logic, any new source, including any new

temporary minor source, that proposes to emit in geographic areas where

increments previously have been triggered would be obligated to

demonstrate compliance with such increments, as “applicable”

requirements undersection 504(e). Only in areas where increments have

not yet been triggered would PSD increments be inapplicable to

temporary minor sources. See id. REDOIL Petitioners claim the

Agency’s implementing regulations are fully in accord with this

interpretation and thus do not bar increment compliance demonstrations

prior to issuance of Title V permits. Id. at 33-35.

As described below, the Region did not clearly err in its own

interpretation of these authorities. The Board agrees with the Region

that its interpretation more fully comports with the structure and

language of the CAA and the implementing regulations, and rejects

REDOIL Petitioners’ assertion that the statutory language is so plain that

there is no ambiguity about whether Congress intended to impose

increment provisions on temporary minor sources where the state

implementation plan does not otherwise impose increment requirements

on such sources. REDOIL Petitioners misapprehend or fail to grapple
SHELL OFFSHORE, INC. 53

 The Region acknowledges that statements in the Statement of Basis could be 41

read to suggest such an approach. Region Response at 8.

with several key points that formed the basis for the Region’s

interpretation in its final permitting decision and Response to Comments.

a. REDOIL Petitioners Misunderstand Portions of the

Region’s Response to Comments

In several of its points of advocacy before this Board, REDOIL

Petitioners reveal a misunderstanding of the explanations the Region set

forth in the Response to Comments. In the most significant example,

REDOIL Petitioners argue that the Region erroneously construes “any

applicable increment * * * requirements under Part C” in section 504(e)

to mean that only those temporary sources that are also PSD major

sources must demonstrate PSD increment compliance. REDOIL Petition

at 29, 33-34. While this description reflects the position the Region

advanced in the Statement of Basis, it fails to acknowledge the very

41

substantial further interpretive exegesis the Region developed and

presented in its Response to Comments on the draft permitting record

(which included the Statement of Basis). In that later and more

comprehensive analysis, the Region made clear that, in its view, states

have discretionary authority in their minor source preconstruction

programs to impose PSD increment requirements on temporary minor

sources, either as implementation plan requirements or on a case-by-case

basis, as they deem necessary to protect the NAAQS. See RTC at 103-

06. REDOIL Petitioners fail to address or demonstrate why the Region’s

position, as more fully articulated in the Response to Comments, is

clearly erroneous. Because REDOIL Petitioners have failed to

substantively confront the Region’s Response to Comments, they cannot

prevail on this ground. See, e.g., In re Guam Waterworks Auth., NPDES

Appeal Nos. 09-15 & 09-16, slip op. at 17-18 (Nov. 16, 2011), 15 E.A.D.

at ___ (petitioners “must substantively confront the permit issuer’s

explanations in its response to comments document”); In re Peabody W.

Coal Co., 12 E.A.D. 22, 33 (EAB 2005) (same).
54 SHELL OFFSHORE, INC.

REDOIL Petitioners also misunderstand the interplay of

sections 161, 165, and 504(e) of the Act, as those provisions are

discussed by the Region in the Response to Comments. See RTC at 103-

06. REDOIL Petitioners point out that section 163, not section 165, is

the source of increment requirements within the PSD program and

contends that the Region “ignore[d]” this provision in interpreting

section 504(e). REDOIL Petition at 30. In so arguing, REDOIL

Petitioners take the position that section 504(e) makes the section 163

increments directly applicable to temporary sources. See id. at 30-31.

The plain language of section 163, however, is to the contrary. It

provides that “each applicable implementation plan shall contain

measures assuring that maximum allowable increases over baseline

concentrations [i.e., increments] * * * shall not be exceeded.” CAA

§ 163(a), 42 U.S.C. § 7473(a). Moreover, the text of section 161, which

establishes implementation plan requirements, provides that such plans

“shall contain emission limitations and such other measures as may be

necessary * * * to prevent significant deterioration of air quality.” CAA

§ 161, 42 U.S.C. § 7471.

Increments, in other words, are not directly imposed by

section 504(e). Instead, they must be implemented (i.e., applied to a

source) through either of two means: (1) a state implementation plan, per

section 161 and 40 C.F.R. § 51.166(a)(1); or (2) the PSD major source

permitting program, per section 165(a)(3)(A) and 40 C.F.R. § 52.21. See

RTC at 103-04. Thus, while section 504(e) can serve as the direct source

of NAAQS compliance requirements and other CAA requirements for

temporary sources (see infra note 44 and accompanying text), it only

imposes PSD increment requirements to the extent such requirements are

“applicable” to the source.

Finally, REDOIL Petitioners also suggest that the State of Alaska’s

operating permit regulations are “more lenient” than the federal

regulations because they do not require PSD minor sources to

demonstrate compliance with PSD increments as a preconstruction

condition. REDOIL Petition at 27-28. Noting that the Alaska rules

apply to sources on the inner OCS only, and not on the outer OCS,

REDOIL Petitioners suggest that the purportedly more stringent federal
SHELL OFFSHORE, INC. 55

 This OCS-specific regulation provides: 42

If the Administrator determines that additional requirements are

necessary to protect [f]ederal and [s]tate ambient air quality

standards or to comply with part C of title I, such requirements will

(continued...)

operating permit rules in effect on the outer OCS require temporary

sources situated on the outer OCS to demonstrate compliance with PSD

increments. Id. at 28 (citing 40 C.F.R. §§ 71.2, 71.6(e)). REDOIL

Petitioners claim, therefore, that Shell must conduct, at the very least, a

PSD increment analysis for the Kulluk’s authorized locations on the

outer OCS. Id.

This argument reveals a misunderstanding of the Region’s

discussion of relevant legal requirements on the inner versus outer OCS.

In the Response to Comments, the Region explained:

In this case, the requirements for Title V temporary sources in

the inner OCS and outer OCS off of Alaska are the same

because Alaska has adopted EPA’s Part 71 rules with respect

to Title V temporary sources by reference for application

onshore and Region 10 has in turn adopted these requirements

into the [Corresponding Onshore Area] regulations for

application in the inner OCS.

RTC at 109. As the Region explained, PSD increments are not

applicable to any temporary minor sources, wherever they might be

located on the OCS, unless a state exercises its discretion to require

minor source compliance with such increments. A state, of course, has

limited jurisdiction, and its authority does not extend beyond its borders.

E.g., CAA § 107(a), 42 U.S.C. § 7407(a) (“[e]ach [s]tate shall have the

primary responsibility for assuring air quality within the entire

geographic area comprising such [s]tate”). That would mean, therefore,

that in the outer OCS or other places where only federal operating permit

rules apply, PSD increments would not be applicable to temporary minor

sources, unless federal OCS regulations required it or EPA chose to add

increment compliance obligations under 40 C.F.R. § 55.13(h) once the 42
56 SHELL OFFSHORE, INC.

(...continued) 42

be incorporated in this part.

40 C.F.R. § 55.13(h).

source becomes operational. See RTC at 109. REDOIL Petitioners fail

to squarely confront this legal landscape, which results in a failure to

demonstrate how the Region’s interpretation is clearly erroneous. See,

e.g., In re Teck Cominco Alaska, Inc., 11 E.A.D. 457, 494-95

(EAB 2004) (burden of demonstrating review is warranted rests with the

petitioner, who must raise objections to the permit and explain why the

permit issuer’s previous response to those objections is clearly erroneous

or otherwise warrants review); In re Westborough, 10 E.A.D. 297, 305,

311-12 (EAB 2002) (same).

b. REDOIL Petitioners Mischaracterize the Title V

Regulatory Scheme

REDOIL Petitioners’ notion that “applicable increment

requirements” in section 504(e) mean “applicable to the area” rather

than “applicable to the source” is not supported by the Title V regulatory

model as a whole. A Title V permit for a temporary source to operate at

multiple locations must include, among other things, “[c]onditions that

will assure compliance with all applicable requirements at all authorized

locations.” 40 C.F.R. §§ 70.6(e)(1), 71.6(e)(1). Broadly speaking, the

Board has recognized that “‘[a]pplicable requirement’ is a term of art in

the Title V program that, in general, refers to any substantive

requirement that applies to an emissions source under any CAA

regulatory provisions.” Peabody, 12 E.A.D. at 28 n.14 (emphasis added)

(citing 40 C.F.R. § 71.2). Further, the regulations implementing the

federal Title V program provide that “[a]pplicable requirement means all

of the following as they apply to emissions units in a part 71 source.”

40 C.F.R. § 71.2 (emphasis added). In turn, the term “emissions unit”

means “any part or activity of a stationary source that emits or has the

potential to emit any regulated air pollutant.” Id. (emphasis added).
SHELL OFFSHORE, INC. 57

Accordingly, the Region’s interpretation of the term “applicable” in

section 504(e) as meaning “applicable to the source” is consistent with

the Agency’s Title V regulations, in which applicability is determined by

reference to the source, not the area. REDOIL Petitioners fail to present

legal authorities supporting their own novel view of applicability in a

way sufficient to demonstrate that the Region’s different approach is

clearly erroneous.

c. REDOIL Petitioners Confuse Air Quality Management

Obligations with Permitting Obligations

REDOIL Petitioners argue that the Region’s interpretation of

section 504(e) should be rejected because it is inherently inconsistent.

REDOIL Petition at 31-32. On the one hand, REDOIL Petitioners note,

the Region explicitly recognized that the Kulluk will consume a portion

of the available PSD increments in its authorized drilling areas, but the

Region nonetheless refused to impose preconstruction increment

compliance requirements in the Title V permit, finding them

“inapplicable.” RTC at 102, 105-06. On the other hand, the Region

acknowledged that after the Kulluk becomes operational, it might be

necessary to impose increment-related restrictions; i.e., increments

would be “applicable.” In the Response to Comments, the Region stated:

If, at any time after the Kulluk begins operation under its

Title V/OCS permit, Region 10 determines that the actual

emissions increases from the permitted OCS source cause or

contribute to an increment violation, Region 10 has authority

to adopt additional requirements to ensure that increments are

not violated.

Id. at 106 (footnote omitted). REDOIL Petitioners argue that the Region

cannot have it both ways, contending on this basis that the Region’s

interpretation should not be sustained. REDOIL Petition at 32.

The Board perceives no conflict between the Region’s purportedly

“inconsistent” positions on increment applicability. As the Region noted

in its Response to Comments, EPA has authority, separate and apart from
58 SHELL OFFSHORE, INC.

 This state implementation plan regulation provides, in relevant part: 43

If the [s]tate or the Administrator determines that a[n]

implementation] plan is substantially inadequate to prevent

significant deterioration or that an applicable increment is being

violated, the plan shall be revised to correct the inadequacy or the

violation.

40 C.F.R. § 51.166(a)(3). The regulations also provide, in the next subsection, that the

state “shall review the adequacy of a[n implementation] plan on a periodic basis and

within 60 days of such time as information becomes available that an applicable

increment is being violated.” Id. § 51.166(a)(4).

section 504(e) and the preconstruction programs, to address violations

of increment standards that might arise once sources become operational.

See RTC at 106 (citing CAA §§ 301, 328, 42 U.S.C. §§ 7601, 7627;

40 C.F.R. § 55.13(h)). Moreover, states have authority to revise their

implementation plans to adopt emission limits and other remedial control

measures in cases where existing controls are not adequately protecting

air quality increments. 40 C.F.R. § 51.166(a)(3), cited in RTC at 106.43

REDOIL Petitioners confuse permitting obligations with ongoing air

quality management obligations, but the two are distinct. See RTC

at 105-06. Simply positing that the Region’s view of “applicable”

increments is inconsistent is not sufficient to overcome the specific

statutory and regulatory authority the Region references in support of its

position. The Board therefore finds no showing of clear error justifying

a remand on this ground.

d. REDOIL Petitioners Misconstrue the Regulations

The Agency’s Title V implementing regulations for state and federal

operating permit programs closely parallel the language of

section 504(e). Compare CAA § 504(e), 42 U.S.C. § 7661c(e), with

40 C.F.R. §§ 70.6(e), 71.6(e). The regulations define “applicable

requirement” for Title V purposes as (among other things): “(2) [a]ny

term or condition of any preconstruction permits” issued under parts C

or D of title I ; and “(13) [a]ny [NAAQS] or increment or visibility

requirement under part C of title I of the Act, but only as it would apply

to temporary sources permitted pursuant to section 504(e) of the Act.”
SHELL OFFSHORE, INC. 59

 As such, the NAAQS and PSD increment requirements for future locations 44

would be “additional” requirements imposed on the temporary source by section 504(e).

RTC at 107-08.

40 C.F.R. §§ 70.2, 71.2. REDOIL Petitioners argue on appeal, as

commentors did on the draft permit, that the Region’s interpretation of

“applicable requirement” improperly reads the thirteenth requirement out

of the regulations by subsuming it within the second requirement.

REDOIL Petition at 33-34.

The Region explained in the Response to Comments why this was

not so. See RTC at 107-08. The Region stated that “the intent of the

Title V temporary source provisions is to relieve sources of the burden

of applying for Title V permits for each new location, while at the same

time[] assuring compliance with all requirements to which the source

would be subject if it were a new [permanent] source at each such new

location.” Id. at 108. For a temporary source that is also a PSD major

source, this would include ensuring that the NAAQS and increment

standards are met at each future location – a requirement that, the Region

pointed out, would exceed the requirements otherwise applicable to the

source under the PSD program alone. Id. at 107. For a temporary 44

source that is also a PSD minor source, this would include ensuring that

the NAAQS and, if required under the implementation plan for minor

permanent sources, PSD increment standards are met at each future

location, even if the implementation plan did not require such a

demonstration for temporary minor sources. See id. at 107-08; Region

Response at 12.

REDOIL Petitioners fail to meaningfully confront the Region’s

reasoning on this issue or demonstrate why it is clearly erroneous.

Instead, REDOIL Petitioners reference an irrelevant minor permit

modification provision (40 C.F.R. § 71.7(e)(1)(i)(A)(3)), rather than a

minor source provision, as support for their position. REDOIL Petition

at 34. REDOIL Petitioners also suggest that the Title V permitting

regulations in sections 70.6(e) and 71.6(e) establish a more expansive

regulatory program than the one the Region finds present in

section 504(e); indeed, one that would even be broad enough to require
60 SHELL OFFSHORE, INC.

 In light of the Board’s decision to uphold the Region’s interpretation of 45

section 504(e) and the implementing regulations, the Board need not reach REDOIL

Petitioners’ final argument, which challenges the Region’s finding that air quality

modeling establishes the Kulluk’s emissions will not violate the PSD increments.

the Kulluk to demonstrate PSD increment compliance. Id. at 33. The

Board finds otherwise, in light of the fact that sections 70.6(e) and

71.6(e) are expressly limited by a reference to section 504(e) itself and

therefore cannot expand the meaning of the statute. See RTC at 107-08.

4. Increment Section Conclusion

The Board has carefully examined each of REDOIL Petitioners’

increment-related arguments and determined that none have merit.

Petitioners’ burden is to show clear error, but REDOIL Petitioners have

failed in all instances to achieve this standard. The Board therefore

denies review of the Permit on this ground.

45

C. REDOIL Petitioners Failed to Raise Below Their Contention That

Shell’s Ambient Air Quality Analysis Was Flawed in That It Failed

to Conform to Applicable Agency Guidance

On February 9, 2010, EPA published in the Federal Register a final

2

rule (effective April 12, 2010) revising the primary NO NAAQS “in

order to provide requisite protection of public health as appropriate

unde 2r section 109 of the Clean Air Act.” Primary NAAQS for NO ,

75 Fed. Reg. 6474, 6475 (Feb. 9, 2010); see also Shell 2010, slip op.

at 2 64-65 & n.74, 15 E.A.D. at ___. This rule set the new 1-hour NO

NAAQS 2 standard (hereinafter “the 1-hour NO NAAQS”) at 100 parts

per billion (“ppb”) to supplement the existing annual standard, set at

53 ppb. 75 Fed.Reg at 6475. EPA regulations specify how attainment

of the standard is to be calculated, providing that the 100 ppb standard

is met “when the annual 98th percentile of the daily maximum 1-hour

average concentration is less than or equal to 100 ppb, as determined in

accordance with Appendix S of this part for the 1-hour standard.”

40 C.F.R. § 50.11(f). This calculation is sometimes referred to as “the
SHELL OFFSHORE, INC. 61

 The 98th percentile form corresponds approximately to the 7th or 8th highest 46

daily maximum concentration in a year. 75 Fed. Reg. at 6492.

 According to the Page Memo, the guidance was issued in response to reports 47

2

that sources were modeling potential violations of the 1-hour NO NAAQS. Page Memo

at 1. The Memo states that “[t]o respond to these reports and facilitate the PSD

permitting of new and modified major stationary sources, we are issuing the attached

guidance in the form of two memoranda.” Id. The attached memoranda are titled

“Gene 2ral Guidance for Implementing the 1-hour NO National Ambient Quality Standard

2

in Prevention of Significant Deterioration Permits, Including an interim 1-hour NO

SignificantImpact Level” and “Applicability of Appendix W Modeling Guidance for the

1-hou 2r NO National Ambient Air Quality Standard.” Id. at 1-2. Although the Page

Memo attaches these two memoranda, the Memo is consecutively numbered as a single

document.

 In order to establish compliance with the NAAQS and PSD increments, 48

permit applicants must conduct an “ambient air quality analysis,” which applicants must

prepare under the permitting rules for each regulated pollutant their proposed facilities

will emit in “significant” amounts. 40 C.F.R. § 52.21(b)(23)(i), (m)(1)(i). This analysis

predicts a pollutant’s future concentration in the ambient air by modeling a proposed

facility’s expected emissions of the pollutant against the backdrop of existing ambient

(continued...)

form.” See 75 Fed. Reg. at 6477 n.5, 6492-93. The 100 ppb standard 46

2

reflects the maximum allowable NO concentrations anywhere in an

area. Id. at 6493, 6502. EPA has issued guidance clarifying procedures

2

for demonstrating compliance with the new 1-hour NO NAAQS. See

REDOIL Petition Ex. 16 (Memorandum from Stephen D. Page, Dir.,

Office of Air Quality Planning & Standards, U.S. EPA, to Reg’l Air

Dirs., U.S. EPA, Guidance Concerning the Implementation of the 1-

Hou 2r NO NAAQS for the Prevention of Significant Deterioration

(June 29, 2010) (“Page Memo”)); Memorandum from Tyler Fox, 47

Leader, Air Quality Monitoring Grp., Office of Air Quality Planning &

Standards, U.S. EPA, to Reg’l Air Dirs., U.S. EPA, Additional

Clarification Regarding Application of Appendix W Modeling Guidance

2

for the 1-Hour NO National Ambient Air Quality Standard (Mar. 1,

2011) (“Fox Memo”) (A.R. BB-83).

REDOIL Petitioners assert that Shell’s ambient air quality analysis

was flawed. In particular, REDOIL Petitioners state that in

48
62 SHELL OFFSHORE, INC.

(...continued) 48

conditions. To conduct an air quality analysis, a permit applicant compiles data on the

proposed facility’s physical specifications and anticipated emission rates, local

topography, existing ambient air quality, meteorology, and related factors. See, e.g., id.

§ 52.21(l), (m); id. pt. 51 app. W (Guideline on Air Quality Models); In re Knauf Fiber

Glass, GmbH, 8 E.A.D. 121, 145-48 (EAB 1999); NSR Manual at C.16-.23, .31-.50.

These data are then processed using mathematical models that calculate the rates at which

pollutants are likely to disperse into the atmosphere under various climatological

conditions, with the goals of determining whether emissions from the proposed source

will cause or contribute to a violation of either the NAAQS or the PSD increments. See

40 C.F.R. § 52.21(f); id. pt. 51 app. W; NSR Manual at C.24-.27, .51-.70.

“identifying the Kulluk’s 98th percentile cumulative impact - i.e., the

Kulluk’s impact added to background levels of pollutants - for

comparison 2 to the 1-hour NO standard, Shell used an approach that the

Region admits is ‘less conservative.’ More specifically, Shell used

background values that were already adjusted to the 98th percentile,

instead of basing its calculations on the full distribution of background

values.” REDOIL Petition at 38 (footnote omitted). According to

REDOIL Petitioners, this method for demonstrating compliance with the

1-hour NAAQS was rejected in the Page Memo as “not being protective

of the [NAAQS].” Id. at 38-39 (quoting Page Memo at 18). REDOIL

Petitioners then cite to a portion of the more recent Fox Memo which,

according to them, allows for the method Shell used to calculate

background values. Id. at 39. That is, the Fox Memo states that the

approach used in the Page Memo was overly conservative and should not

be used in certain cases. Id. (citing Fox Memo at 17-20). REDOIL

Petitioners assert that the Region allowed Shell to demonstrate

compliance with the form of the 1-hour NAAQS using the approach

permitted in the Fox Memo without providing an explanation as to why

the determination in the Page Memo was incorrect. Id. at 40. REDOIL

Petitioners argue that “[b]ecause neither EPA nor the Region provided

any explanation about whether and, if so, how, its earlier conclusion [in

the Page Memo] that the use of the 98th percentile background values is

‘not protective’ of the national ambient air quality standard was

incorrect, EPA’s new guidance and the approach taken by the Region

here in reliance on it are arbitrary.” Id. (quoting Page Memo at 17-20).
SHELL OFFSHORE, INC. 63

REDOIL Petitioners contend that the Region had an obligation to explain

this “departure from its prior analysis.” Id. at 40-41.

Upon examination of the record, the Board concludes that this issue

was not adequately raised during the comment period and was therefore

not preserved for review. As stated above, the regulations require any

person who believes that a permit condition is inappropriate to raise “all

reasonably ascertainable issues and * * * all reasonably available

arguments supporting [petitioner's] position” during the comment period

on the draft permit. 40 C.F.R. § 124.13. That requirement is made a

prerequisite to appeal by 40 C.F.R. § 124.19(a), which requires any

petitioner to “demonstrat[e] that any issue[] being raised [was] raised

during the public comment period * * * to the extent required[.]”). In re

ConocoPhillips Co., 13 E.A.D. 768, 800-01 (EAB 2008); accord In re

Christian Cnty. Generation, LLC, 13 E.A.D. 449, 457 (EAB 2008);

Shell 2007, 13 E.A.D. at 394 n.55.

The requirement that an issue must have been raised during the

public comment period in order to preserve it for review is not an

arbitrary hurdle placed in the path of potential petitioners. Russell

City II, slip op. at 13, 15 E.A.D. at ___; In re City of Marlborough,

12 E.A.D. 235, 244 n.13 (EAB 2005), appeal dismissed for lack of juris.,

No. 05-2022 (1st Cir. Sept. 30, 2005); In re BP Cherry Point,

12 E.A.D. 209, 219 (EAB 2005). Rather, the requirement serves an

important function related to the efficiency and integrity of the overall

administrative permitting scheme. Marlborough, 12 E.A.D. at 244 n.13.

The intent of the rule is to ensure that the permitting authority first has

the opportunity to address permit objections and to give some finality to

the permitting process. Id.; In re Sutter Power Plant, 8 E.A.D. 680, 687

(EAB 1999). As the Board has explained, “[t]he effective, efficient and

predictable administration of the permitting process demands that the

permit issuer be given the opportunity to address potential problems with

draft permits before they become final.” In re Teck Cominco, 11 E.A.D.

457, 481 (EAB 2004) (quoting In re Encogen Cogeneration Facility,

8 E.A.D. 244, 250 (EAB 1999)). “In this manner, the permit issuer can

make timely and appropriate adjustments to the permit determination, or,

if no adjustments are made, the permit issuer can include an explanation
64 SHELL OFFSHORE, INC.

See Teck Cominco, 11 E.A.D. at 481-82 (denying review where issue was not 49

specifically raised during the comment period). The Board notes that the issue REDOIL

Petitioners did raise during the comment period was fully and adequately addressed in the

Region’s Response to Comments. Specifically, in commenting on the draft permit,

REDOIL Petitioners raised the argument that Shell had failed to demonstrate compliance

w 2ith the 1-hour NO NAAQS because, according to REDOIL Petitioners, Shell used

background ambient air data in a manner that understated the impact of its operations.

REDOIL Comments at 10-11. As stated above, REDOIL Petitioners’ comments

recognized that Shell’s approach to analyzing background data was consistent with the

Fox Memo, but argued that Shell’s approach 2 was inconsistent with the 1-hour NO

NAAQS standard itself. Id. at 11. The Region provided a detailed response to this

assertion in the Response to Comments. RTC at 74-78. Nothing in the REDOIL Petition

indicates why the Region’s response on this issue was erroneous or otherwise warrants

Board review, nor does the Board find anything erroneous in the Region’s response.

Thus, even if Petitioners had preserved this issue, the Board would deny review. See,

e.g., In re Guam Waterworks Auth., NPDES Appeal Nos. 09-15 & 09-16, slip op. at 17-

18 (Nov. 16, 2011), 15 E.A.D. ___ (stating that “a petitioner may not simply reiterate

comments made during the public comment period, but must substantively confront the

permit issuer’s explanations in its response to comments document”); In re Peabody W.

Coal Co., 12 E.A.D. 22, 33 (EAB 2005) (same).

of why none are necessary.” In re Essex County (N.J.) Res. Recovery

Facility, 5 E.A.D. 218, 224 (EAB 1994).

Although REDOIL Petitioners’ comments on the draft permit

asserted that Shell had used background ambient air data in a manner

that understated the impact of its operations, see REDOIL Comments

at 9-11, nowhere in these comments did Petitioners assert that Shell’s

approach conflicted with the Page Memo or that the Region had any

obligation to provide an explanation for its alleged departure from the

Page Memo. Indeed, REDOIL Petitioners’ comments recognized that,

according to the Fox Memo, Shell’s approach is appropriate in some

circumstances. Id. at 11. The comments, however, did not assert any

conflict between the Page Memo and the Fox Memo nor is it clear to this

Board that any such conflict exists. Thus, this “battle of the memos”

issue was not preserved for review. See Shell Discoverer 2012, slip op.

49

at 52, 15 E.A.D. at ___.
SHELL OFFSHORE, INC. 65

 For an area that is not considered within the definition of “ambient air,” Shell 50

would not have to demonstrate compliance with the NAAQS. See CAA §§ 109(b), 160,

163, 42 U.S.C. §§ 7409(b), 7470,7473 (NAAQS apply to areas meeting the definition of

ambient air); 40 C.F.R. § 50.1(e) (definition of “ambient air”); In re Hibbing Taconite

Co., 2 E.A.D. 838, 848 & nn.23-24 (Adm’r 1989); RTC at 53.

 REDOIL Petitioners additionally argue that, should the Region’s response 51

contain a “natural physical feature” argument similar to an argument the Region raised

in its response brief in Shell Discoverer 2012, the Board should consider such an

argument a “post hoc rationalization” and should disallowit. REDOIL Petition at 19; see

also Shell Discoverer 2012, slip op. at 56 n.52 (discussing this issue), 15 E.A.D. at ___.

REDOIL Petitioners also reserve the right to request leave to file a reply brief addressing

this issue. REDOIL Petition at 19. Unlike the situation in Shell Discoverer 2012, the

Board does not find that the Region’s response brief contains an explanation that is

clearly different than the rationale set forth in the Response to Comments. Moreover,

REDOIL Petitioners do not raise this particular issue in their reply brief. Consequently,

the Board does not consider REDOIL Petitioners’ “post hoc rationalization” argument

further.

D. REDOIL Petitioners Have Not Demonstrated That the Region

Clearly Erred in Its Ambient Air Exemption Determination

REDOIL Petitioners allege that the Region clearly erred in

exempting the area within a 500 meter radius from the Kulluk from the

definition of “ambient air.” REDOIL Petition at 15. This area is also 50

referred to throughout the record as the United States Coast Guard

(“USCG”) “safety zone.” See, e.g., RTC at 52-54. REDOIL Petitioners

claim that the Region’s decision “contravenes both EPA’s definition of

‘ambient air’ as well as EPA’s longstanding interpretation of that

regulation.” REDOIL Petition at 16. In particular, they assert that the

Region’s 500 meter ambient air boundary fails to meet either of the two

criteria the Agency has previously used in evaluating the appropriateness

of an exemption. Id. at 16-18. According to REDOIL Petitioners, the

Region’s decision essentially allows Shell to emit more pollution, and

possibly with fewer controls, than would otherwise be lawful. Id.

51

at 15-16.

The CAA regulations define “ambient air” as “that portion of the

atmosphere, external to buildings, to which the general public has

access.” 40 C.F.R. § 50.1(e). Based on this definition, the Agency has,
66 SHELL OFFSHORE, INC.

on occasion, exempted certain areas from the definition of ambient air.

E.g., Letter from Steven C. Riva, Chief, Permitting Sec., U.S. EPA

Region 2, to Leon Sedefian, Air Pollution Meteorologist, N.Y. State

Dep’t of Env’t Conservation, at 1-2 (Oct. 9, 2007) (A.R. BB-19)

[hereinafter Broadwater Letter]; Letter from Douglas M. Costle, Adm’r,

U.S. EPA, to Sen. Jennings Randolf, Chairman, Env’t & Pub. Works

Comm., at 1 (Dec. 19, 1980) (A.R. BB-1) [hereinafter Costle Letter]; see

also Letter from Nancy Helm, Fed. & Delegated Air Programs, U.S.

EPA, to John Kuterbach, Alaska Dep’t of Envtl. Quality, at 2 (Sept. 11,

2007) (area exempt if certain conditions met) [hereinafter Helm Letter].

The parties agree that the Agency’s “longstanding interpretation” of this

exemption is set forth in a letter signed by former EPA Administrator

Douglas Costle, which states that “the exemption from ambient air is

available only for the atmosphere over land owned or controlled by the

source and to which the public access is precluded by a fence or other

physical barriers.” Costle Letter at 1; REDOIL Petition at 16 (quoting

same letter); Region Response at 29-30 (referring to same letter); Shell

Response at 26-27 & n.27 (same); see also RTC at 51 (same). The

Costle Letter also indicates that, in determining whether the exemption

applies, the Agency reviews “individual situations on a case-by-case

basis.” Costle Letter at 1; see also Approval and Promulgation of State

Implementation Plans, 50 Fed. Reg. 7056, 7057 (Feb. 20, 1985) (noting

that, in considering ambient air exemptions, “individual variations in the

type of land and nature of the limitation on access necessitate a case-bycase evaluation of the facts, and application of the principles involved in

this determination”).

Here, in its permitting decisions, the Region determined that, as long

as certain permit conditions were being met, it was appropriate to set the

ambient air boundary at a 500 meter radius from the Kulluk, or, in other

words, the 500 meter radius “safety zone” was exempt from the ambient

air definition. RTC at 51-52; see also Statement of Basis at 40. The

terms and conditions upon which the Region relied to exempt this area

prohibit the operation of vessels and emissions units unless (1) the

USCG establishes a safety zone within at least 500 meters from the

center of the Kulluk, (2) members of the public are precluded from

entering the safety zone, and (3) Shell develops and implements a
SHELL OFFSHORE, INC. 67

 The precise terms and conditions of the Permit is as follows: 

52

The permit does not authorize operation unless:

5.1.1. The Kulluk is subject to a currently effective safety zone

established by the [USCG] which encompasses an area within at

least 500 meters from the hull of the Kulluk and which prohibits

members of the public from entering this area except for attending

vessels or vessels authorized by the USCG (such area shall be

referred to as the “Safety Zone”); and

5.1.2. The permittee has developed in writing and is implementing

a public access control program to:

 

5.1.2.1. Locate, identify, and intercept the general public by radio,

physical contact, or other reasonable measures to inform the public

that they are prohibited by CoastGuard regulations from entering the

Safety Zone; and

5.1.2.2. Communicate to the North Slope communities on the

Beaufort Sea on a periodic basis when exploration activities are

expected to begin and end at a drill site, the location of the drill site,

and any restrictions on activities in the vicinity of the Kulluk’s

exploration operations.

Permit at 42-43.

“public access control program.” Permit at 42-43. The Region 52

determined that, as long as these safety zone and public access restriction

permit conditions are complied with, exempting the area within the

safety zone from the ambient air definition would generally be consistent

with previous Agency interpretations. RTC at 51-52. In so finding, the

Region noted that “[g]iven that the permitted activities occur over open

water in the Arctic, the[] criteria [for exemption included in the Costle

Letter] must be adapted to some extent when applied to this

environment.” Id. In specifically considering the applicability of the

two exemption criteria, the Region stated: 

Region 10 recognizes that Shell does not “own” the areas of the

Beaufort Sea on which the Kulluk will be operating as might be

the case for a stationary source on land. Shell has a lease
68 SHELL OFFSHORE, INC.

 REDOIL Petitioners also seem to suggest that the Region’s approach is 53

flawed because it “is based upon an assumption that Shell will request, and the [USCG]

will establish, a safety zone restricting the passage of other vessels.” REDOIL Petition

at 15 & n.45. This argument is unpersuasive because it fails to recognize that, as the

permit conditions quoted in note 52 state, operation is prohibited unless these two

conditions are met. See Permit at 42-43.

authorizing the company to use these areas for the activities

covered by the permits. A Coast Guard safety zone establishes

legal authority for excluding the general public from the area

inside the zone. EPA has previously recognized a safety zone

established by the Coast Guard as evidence of sufficient

ownership or control by a source over areas over water so as to

qualify as a boundary for defining ambient air where that safety

zone is monitored to pose a barrier to public access. Letter

from Steven C. Riva, EPA Region 2, to Leon Sedefian, New

York State Department of Conservation, re: Ambient Air for

the Offshore LNG Broadwater Project, dated October 9, 2007

(Broadwater Letter).

To meet the second of the criteria applied by EPA and ensure

the source actually takes steps to preclude public access, Shell

proposed and Region 10 required as a condition of operation

under the permits that Shell develop in writing and implement

a public access control program to locate, identify, and

intercept the general public by radio, physical contact, or other

reasonable measures to inform the public that they are

prohibited by Coast Guard regulations from entering the area

within 500 meters of the hull of the Kulluk. Region 10

believes that, for the overwater locations in the arctic

environment at issue in these permitting actions, such a

program of monitoring and notification is sufficiently similar

to a fence or physical barrier on land such that the area within

the Coast Guard safety zone qualifies for exclusion from

ambient air. See Broadwater Letter at 2.

RTC at 52.

53
SHELL OFFSHORE, INC. 69

As the Region rightly noted, see RTC at 51-52, the regulation and the Costle 54

Letter, by their very terms, were clearly written with overland situations in mind. See

40 C.F.R. § 50.1(e) (referring to “buildings”); Costle Letter at 1 (referring to “land” and

“fences”). 

 In support of their contention, REDOIL Petitioners rely on a previous 55

Agency determination that leased property could not be exempted from the definition of

ambient air because the lessee did not have control over access to its leased property

(only the landlord did). REDOIL Petition at 17 & n.52 (citing Helm Letter). Petitioners

assert that this onshore interpretation must apply equally to an OCS lease BOEMRE

issued. Id. As the Petitioners themselves note, federal courts have found agency action

to be arbitrary when the agency’s “explanation ‘runs counter to the evidence,’” id. at 17

(quoting Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto Ins. Co.,

(continued...)

Upon consideration of the administrative record and the parties’

arguments, the Board concludes that Petitioners have not shown that the

Region clearly erred in its decision to exempt the area within the USCG

safety zone from the definition of “ambient air.” The Region, in its

Response to Comments, provided a reasonable interpretation of the

ambient air regulation and the Agency’s “longstanding interpretation” of

that regulation as applied in the OCS context. Furthermore, the 54

Region’s analysis was entirely consistent with a similar analysis

undertaken by Region 2 in which that Region determined that it was

appropriate for a permittee to use the USCG safety zone to define an

ambient air boundary around a proposed offshore liquefied natural gas

facility. See Broadwater Letter at 2. The Broadwater Letter, moreover,

suggests that Region 2’s analysis, as well as Region 10’s, is not unique,

stating that “[i]n previous permitting decisions involving * * * drilling

operations, EPA Regional offices have used the USCG’s safety zone as

the boundary for defining ambient air.” Id. at 2 (emphasis added). The

letter explains that the Agency has found that “[t]he ‘safety zone’

approach represents a reasonable surrogate for a source’s fence or

physical barrier and thus could act as an ambient air boundary.” Id. 

Thus, while it is true, as Petitioners allege, that the Agency has

generally required the source to own or control access over the area in

question for that area to meet the first criterion, REDOIL Petition at 16-

17, this requirement has been limited to sources located on land. See, 55
70 SHELL OFFSHORE, INC.

(...continued) 55

463 U.S. 29, 43 (1983)), and “‘the agency offer[s] insufficient reasons for treating similar

situations differently,’” id. (quoting Transactive Corp. v. United States, 91 F.3d 232, 237

(D.C. Cir. 1996)); see also FCC v. Fox Television Stations, Inc., 556 U.S. 502, __, 129

S.Ct. 1800, 1810-11 (2009)(discussing standard ofreviewof an agency’s policy change).

Here, not only are the situations dissimilar enough to arguably not be governed by these

cases, but the Agency did offer persuasive reasons for treating the two situations

differently.

 REDOIL Petitioners’ arguments that the Region’s determination fails to meet 56

the second criteria because the safety zone “fails to effectuate a barrier that ‘precludes’

public access” are equally unpersuasive. REDOIL Petition at 17. REDOIL Petitioners

focus on the fact that the USCG will limit access to the area based on safety concerns

rather than for air quality considerations. Id. at 17-18. The important fact is that access

within the zone will be strictly limited, not the reason behind it. Moreover, REDOIL

Petitioners do not address the other condition of the permit that the Region relied upon

for its ambient air boundary determination: the public access control program Shell is

required to implement. The Board does not find clear error in the Region’s conclusion

that, based on the USCG limiting access to the safety zone and the permittee

implementing a public access control program, the latter of which will include

notification to the local residents of the location of the drilling and the fact that the public

is restricted from the safety zone, the general public will be denied access to the area

inside the safety zone.

e.g., Helm Letter at 1 (referring to possible exemption near coal-fired

power plant);MemorandumfromStevenD. Page,Director, Office of Air

Quality Planning & Standards, U.S. EPA, to Reg’l Air Div. Dirs., U.S.

EPA, Interpretation of “Ambient Air” in Situations Involving Leased

Land Under the Regulations for the Prevention of Significant

Deterioration (PSD) (June 22, 2007) (A.R. B-26) (discussing the

applicability of the exemption where a source is located on “land”

leased to them by another source). The Region (and the Agency before

it) reasonably determined that application of the regulation and the

interpretive letter to an “overwater” situation requires some leeway.

REDOIL Petitioners’ reliance solely on land-based exemption decisions

is thus unpersuasive. Finally, as mentioned above, the Agency has 56

consistently taken the position that ambient air exemption determinations

are analyzed on a case-by-case basis.

For all the reasons stated above, REDOIL Petitioners have not

shown that the Region clearly erred in its ambient air exemption
SHELL OFFSHORE, INC. 71

 The Board came to the same conclusion in Shell Discoverer 2012. See slip 57

op. at 60-62, 15 E.A.D. at ___. In that case, the Region had adopted and followed the

same or a very similar interpretation as described in the text above. See id. at 57-59,

15 E.A.D. at ___. Nothing REDOIL Petitioners offer in the present case convinces the

Board that anything in the prior analysis – and reiterated here – was in error.

determination. Consequently, review of the Permit based on this issue

57

is denied.

E. ICAS and Mr. Lum Have Not Demonstrated that the Region Failed

to Satisfy Its Obligation to Comply with Executive Order 12898 and

Applicable Board Precedent

ICAS and Mr. Lum argue that the Region’s environmental justice

analysis lacked a valid basis on which to conclude that Shell’s oil

exploration activities in the Beaufort Sea will not have a

disproportionately high and adverse effect on the health of the Alaska

Native population living on the North Slope. ICAS alleges that the

Region’s environmental justice analysis fails to account for the impacts

of short- 2term NO and ozone exposures on the Alaska Native population

residing on the North Slope, and also asserts that the opportunities for

public participation were inadequate. Mr. Lum challenges the lack of

analysis regarding the impacts emissions from Shell’s activities in the

Beaufort Sea could have on traditional subsistence food sources, and also

challenges Shell’s oil spill response capabilities. The Region counters

that its environmental justice analysis and resulting conclusions comply

with Executive Order 12898, “Federal Actions to Address Environmental

Justice in Minority Populations and Low Income Populations”

(“Executive Order”). The issue the Board must resolve is: did the

Region satisfy its obligation to comply with the Executive Order and

applicable Board precedent?

The Executive Order states in relevant part:

Agency Responsibilities. To the greatest extent practicable and

permitted by law, and consistent with principles set forth in the

report on the National Performance Review, each Federal
72 SHELL OFFSHORE, INC.

 Under the Executive Order, the Alaska Native population residing on the 58

North Slope qualifies as a minority population. See Statement of Basis at 55; ICAS

Petition at 30.

 ICAS’s remaining challenges to the amount and quality of public

59

participation opportunities available pertaining to the environmental justice analysis

appear to mirror its more general arguments regarding the public participation process.

See ICAS Petition at 6-10, 38-39. Accordingly, the Board addresses ICAS’s challenges

to the adequacy ofthe public participation process, both generally and with respect to the

environmental justice analysis, in Parts VI.F and VI.G below.

agency shall make achieving environmental justice a part of its

mission by identifying and addressing, as appropriate,

disproportionately high and adverse human health or

environmental effects of its programs, policies, and activities

on minority and low-income populations * * * .

Exec. Order 12898, 59 Fed. Reg. 7629, 7629 (Feb. 11, 1994) (A.R. FF1). Federal agencies are required to implement the Executive Order

“consistent with, and to the extent permitted by, existing law.” Id.

at 7632. The Board has held that a permit issuer should exercise its

discretion to examine any “superficially plausible” claim that a minority

or low-income population may be disproportionately affected by a 58

particular facility seeking a PSD permit. In re EcoEléctrica, L.P.,

7 E.A.D. 56, 69 n.17 (EAB 1997); accord Shell 2010, slip op. at 63-64

& n.71, 15 E.A.D. at ___ (citing PSD cases).

At the outset, the Board notes that both ICAS and Mr. Lum recently

challenged the Region’s environmental justice analysis in Shell

Discoverer 2012. See slip op. at 32-48, 15 E.A.D. at ___. In addition,

the environmental justice analysis the Region prepared in the current

matter is reminiscent of the environmental justice analysis prepared for

the Discoverer permits that were the subject of the Board’s Shell

Discoverer 2012 decision. Moreover, while their petitions for review in

Shell Discoverer 2012 and the current appeal are not identical, both

ICAS and Mr. Lum raise substantially similar arguments in their current

appeals as they did in their appeals of the Discoverer permits.59

Compare Lum Petition with Eskimo Whaler Petition for Review,
SHELL OFFSHORE, INC. 73

 The Region further explained that: 60

[T]he Title V operating permit program is generally a vehicle for

ensuring that existing air quality control requirements are

appropriately applied to facility emission units and that compliance

with these requirements is assured. Accordingly, the primary means

of addressing environmental justice issues in the Title V program is

through increased public participation and review by permitting

agencies, and conditions to assure compliance with applicable

requirements. As discussed above, the Title V permit at issue in this

case is unusual in that it requires the source, as a Title V temporary

source, to meet the NAAQS and also establishes limits on the

potential to emit. Region 10 has considered environmental justice

concerns in this permitting action where possible in the context of

assuring compliance with applicable requirements for the source, in

particular assuring compliance with the NAAQS as a Title V

temporary source and establishing PSD avoidance limits.

EJ Analysis at 2; see also Statement of Basis at 54.

Shell Discoverer 2012 (Doc. No. 24), and ICAS Petition with ICAS and

AEWC Petition for Review, Shell Discoverer 2012 (Doc. No. 7).

1. Region’s Environmental Justice Analysis

The Region included a fifteen-page environmental justice analysis

in the administrative record to accompany the Permit and to allow for

public comment on the analysis. Environmental Justice Analysis for

Proposed OCS Permit No. R10 OCS030000 Kulluk Drilling Unit

(undated) (“EJ Analysis”) (A.R. F-1). TheRegion’s analysis begins with

a discussion of environmental justice in the permitting context, and notes

that “[t]he Title V operating permit program does not generally impose

new substantive air quality control requirements.” EJ Analysis at 2. 60

In addition, the analysis includes a discussion of how the national

ambient air quality standards (“NAAQS”) are crafted by integrating

scientific information and evidence from rigorously reviewed studies,

and a summary of the Board’s case law stating that the Board views

compliance with the NAAQS as “emblematic of achieving a level of

public health protection that, based on the level of protection afforded by

the NAAQS, demonstrates that minority or low-income populations will
74 SHELL OFFSHORE, INC.

 The analysis also includes, for some of the northern Iñupiat communities, the 61

distances residents have reported traveling offshore to hunt for traditional subsistence

food sources. See EJ Analysis at 6 (noting Nuiqsut residents have traveled up to 60 miles

offshore to the north and as far east as Camden Bay to hunt for bowhead whale and that

Kaktovik residents have traveled as far as 35 miles offshore to hunt for bowhead whale

and walrus); Statement of Basis at 55; see also Shell 2010, slip op. at 72 n.80, 15 E.A.D.

at ___ (noting that subsistence activities, which can take Iñupiat residents living on the

North Slope far from their local communities and closer to emissions sources, are a

potential environmental justice consideration that may be unique to the OCS PSD

permitting context); Shell 2012, slip op. at 35 n.32, 15 E.A.D. at ___ (same). 

 The Region used demographic information gathered from the 2000 U.S. 62

Census to compare the population ofthe North Slope Borough to the populations of both

the State of Alaska and the entire United States, which served as reference populations

for the demographic analysis. EJ Analysis at 6-8 & n.6. The North Slope Borough

consists ofthe following eight incorporated villages: Point Hope, Point Lay, Wainwright,

Atqasuk, Barrow, Nuiqsut, Kaktovik, and Anaktuvuk Pass. See Statement of Basis at 55.

not experience disproportionately high and adverse human health or

environmental effects due to exposure to relevant criteria pollutants.” Id.

(quoting Shell 2010,slip op. at 74, 15 E.A.D. at ___) (citations omitted);

see also Statement of Basis at 54-55. 

The analysis goes on to catalogue the distances between Iñupiat

communities on the coast of the North Slope that are closest to Shell’s

lease blocks in the Beaufort Sea, and discusses the importance of

subsistence foods obtained through hunting, fishing, and whaling to the

Iñupiat diet, and more generally the nexus between subsistence activities

and Iñupiat culture. EJ Analysis at 3, 5. The Region also included an

illustration that juxtaposes the location of Shell’s lease blocks, including

proposed exploration sites, with onshore and offshore subsistence use

areas for the northern Iñupiat communities. Id. at 4; see also Statement 61

of Basis at 56.

The Region then proceeded to analyze demographic, health-related,

and air quality data. The demographic analysis indicates that 68% of 62

residents living in the North Slope Borough classify themselves as

Alaska Natives. EJ Analysis at 7. In addition, nearly half of North Slope

residents speak a language other than English at home. Id. at 8. The
SHELL OFFSHORE, INC. 75

 The Region utilized data from the Alaska Native Health Status Report 2009, 63

which the Alaska Native Epidemiology Center and the Alaska Native Tribal Health

Consortium had prepared to analyze health conditions in the North Slope Borough. See

EJ Analysis at 8-10 & n.11.

 The Board notes that the information included in table 5 of the air quality

64

analysis includes modeled impactsin the nearest onshore communities from operation of

the Kulluk alone, without impacts from the Associated Fleet or background

concentrations. EJ Analysis at 12 & tbl.5. The Region explains that the maximum

modeled concentrations in Nuiqsut, Deadhorse, and Kaktovik listed in table 5 are all

below the significant impact levels (“SILs”) established for each criteria pollutant. Id.

at 12. In the PSD program, SILs function as threshold levels for ambient concentrations

of a given pollutant; for a given pollutant and averaging period, any source that has a

measured concentration that is below the SIL is considered too small to cause or

contribute to a violation of the NAAQS. Id. 

The Region made clear earlier in the environmental justice analysis that

emissions from the Associated Fleet while operating within 25 miles of the Kulluk,

together with emissions from the Kulluk, are considered in conducting an ambient air

quality analysis to determine whether emissions from the project will cause or contribute

(continued...)

analysis of health data revealed, among other things, that from 1990 to

2007 there has been a 158% rate of increase in the prevalence of diabetes

for Alaska Natives residing on the Arctic Slope, whereas during the same

time period there has been a 117% rate of increase in the prevalence in

diabetes for Alaska Natives statewide. Id. at 9. In addition, there is a 63

higher incidence of outpatient visits for respiratory problems ranging

from the common cold to pneumonia in the Arctic Slope than in the rest

of Alaska. Id. 

In the air impacts analysis, the Region first noted that the North

Slope Borough is currently designated as attainment/unclassifiable for

all of the NAAQS, meaning that the North Slope has sufficient data to

determine that the area is meeting the NAAQS, or that due to no data or

insufficient data, EPA cannot make a determination. Id. at 11 & n.15

(citing CAA § 107(d), 42 U.S.C. § 7407(d)). The Region then examined

2

the total modeled concentrations of NO , particulate matter with a

diamete 10 r of 10 micrometers or less (“PM ”), particulate matter with a

diameter of 2.5 2.5 2 micrometers or less (“PM ”), SO , and CO, including 64
76 SHELL OFFSHORE, INC.

(...continued) 64

to a violation of the NAAQS. Id. at 4. The Region’s analysis repeatedly emphasized that

compliance with the NAAQS is “emblematic of achieving a level of public health

protection” that demonstrates that minority or low-income populations will not

experience disproportionately high and adverse human health or environmental impacts

due to exposure to relevant criteria pollutants. Id. at 4-5 (quoting Shell 2010, slip op.

at 74, 15 E.A.D. at ___). While the inclusion of information on modeled impacts of

emissions from the Kulluk alone on the nearest onshore communities is illustrative

regarding the Kulluk’s contribution to the overall emissions profile, it is the information

that encompasses both background concentrations and emissions from the Kulluk and the

Associated Fleet when it is within 25 miles of the Kulluk that establishes the Region has

satisfied its obligation to comply with the Executive Order.

Monitoring data from Prudhoe Bay, Deadhorse, and Endicott were used for 65

background values. EJ Analysis at 13. The Region also noted that the modeled impacts

are based on conservative assumptions, including that all four wells are drilled at the

same location to account for overlapping plumes, even though the drilling of four wells

at a fixed location and the overlap of plumes will not occur. Id.

 Specifically, the Region noted that in Kaktovik, located 8 miles from Shell’s

66

closest lease block in the Beaufort Sea, the total maximum modeled concentrations,

assuming Shell’s Discovereris in operation and considering background concentrations,

are measured at the follow 2ing percentages of the NAAQS: 11% for the 1-hour NO

NAAQS 2.5 10 ; 20% for the 24-hour PM NAAQS; 35% for the 24-hour PM NAAQS, and;

20% 2.5 for the annual PM NAAQS. EJ Analysis at 13-14 & tbl.6. Similarly, in Nuiqsut,

located 33 miles from Shell’s closest lease block in the Beaufort Sea, and applying the

same assumptions, the total maximum modeled concentrations are measured at the

2

following percentages of the NAAQS: 50% for the 1-hour NO NAAQS; 48% for the 24-

hou 2.5 10 2.5 r PM NAAQS, 35% for the 24-hour PM NAAQS, and 26% for the annual PM

NAAQS. Id.

background concentrations and maximum concentrations from the Kulluk

and the Associated Fleet. Id. at 13-14 & tbl.6. The Region compared 65

the total modeled concentrations for each of the three nearest

communities while the source is in operation and found that the total

maximum modeled concentrations demonstrate that the NAAQS will be

attained at all locations beyond the 500-meter boundary, and that the

modeled concentrations in the North Slope communities and in areas

where the communities conduct subsistence activities will be below the

relevant standard. Id. at 14. Finally, the Region noted that a majority

66

of the total impacts result from background concentrations. Id. 
SHELL OFFSHORE, INC. 77

 NAAQS are health based-standards, designed to protect public health with 67

an adequate margin of safety, including sensitive populations such as children, the

elderly, and asthmatics. See In re AES Puerto Rico, L.P., 8 E.A.D. 324, 351 (EAB 1999),

aff’d sub nom. Sur Contra La Contaminación v. EPA, 202 F.3d 443 (1st Cir. 2000), cited

in Shell 2010, slip op. at 64 n.72, 15 E.A.D. at ___. The Administrator is required to

carry out periodic reviews of the air quality criteria published under section 108 of the

CAA, 42 U.S.C. § 7408, as well as the NAAQS, and to revise the criteria and standards

as appropriate. CAA § 109(d)(1), 42 U.S.C. § 7409(d)(1). The Board outlined the

his 2tory of the NO NAAQS reviews in its December 2010 remand order. See Shell 2010,

slip op. at 65 nn.73-74, 15 E.A.D at ___. 

Overall, the Region concluded that Shell’s proposed OCS activities

in the Beaufort Sea will not result in disproportionately high and adverse

human health or environmental effects with respect to Alaska Natives

residing on the North Slope, and further, in reaching this conclusion the

Region considered the impact on these communities while engaging in

subsistence activities in the areas where such activities are regularly

conducted. Id. at 15. With this background in mind, the Board now

turns to the specific assertions both ICAS and Mr. Lum make in support

of their arguments that the Region has not complied with its obligation

under the Executive Order.

2. One 2-Hour NO NAAQS Analysis

2

ICAS challenges the Region’s consideration of 1-hour NO

NAAQS compliance in the environmental justice analysis on several 67

grounds, arguing that it is “insufficient and ignores salient record

evidence 2.” ICAS Petition at 34. ICAS asserts that in addition to NO

emissions from the Kulluk when it is an OCS source and from the

Associated Fleet when it is within 25 miles of the Kulluk, the Region

mus 2t also account for mobile source NO emissions that remain

unregulated by the Permit when assessing potentially adverse health

2

impacts of NO emissions on North Slope communities. Id. at 35-38. In

addition, ICAS challenges the Region’s “fatal flaw of the environmental

justice analysis,” namely the failure to analyze the impacts of Shell’s

emissions on residents of the North Slope conducting subsistence

activities offshore. Id. at 36-37 (emphasis in original). Finally, ICAS

cha 2llenges the Region’s analysis of Shell’s 1-hour NO NAAQS
78 SHELL OFFSHORE, INC.

 ICAS asserts that the Board should remand the Kulluk permit so that the 68

Region can assess mobile source emissions included in Shell’s emissions inventory

submitted to BOEMRE as part of Shell’s Exploration Plan, both because it “shows that

the additional emissions estimates are not as hard to obtain as Region 10 implies,” and

because once it assesses the accuracy of the inventory the Region can “use the

information to conduct an EJ analysis that accounts for all of Shell’s emissions.” ICAS

Petition at 35 (emphasis in original). 

Nowhere in its petition does ICAS acknowledge the Region’s statement in the

Response to Comments, that “[t]he Exploration Plan * * * does not include estimates of

air emissions from these other vessels during the time they are more than 25 miles from

the Kulluk or before the Kulluk becomes an OCS source.” RTC at 15. The Board has

consistently stated that in order to sustain its burden of demonstrating that review is

warranted, the petitionermust address the permit issuer’s responses to relevant comments

made during the permit proceeding. See, e.g., Peabody, 12 E.A.D. at 33 (“[T]he

petitioner may not simply reiterate comments made during the public comment period,

but must substantively confront the permit issuer’s subsequent explanations.”). 

Furthermore, ICAS’s suggestion that the Region should “compile rough

estimates” of these mobile source emissions because “[s]ome additional steps are

particularly necessary here” is similarly unavailing. ICAS Petition at 36. ICAS has

acknowledged its ongoing concern regarding emissions that are not included in the PTE

analysis, along with its efforts to compel Region 10 to consider non-PTE emissions as

OCS source emissions in prior appeals to this Board. ICAS Petition at 34. Despite its

concerns, ICAS cannot demonstrate that review is warranted where, as here, ICAS offers

(continued...)

compliance based on several technical decisions the Region made. Id.

at 37-38. 

ICAS asserts that the Region’s environmental justice analysis is

inadequate because it does not account for emissions from mobile

sources that are not included in the air quality impact analysis conducted

to determine whether emissions from the project will cause or contribute

to a violation of the NAAQS. See Id. at 34 & n.30; EJ Analysis at 4.

The Board disagrees. 

The Region appropriately determined that it was not required to

analyze these mobile source emissions where, as here, the Title V permit

did not address mobile source emissions, and the record lacked sufficient

data for such an analysis. RTC at 114; Statement of Basis at 54; see 68
SHELL OFFSHORE, INC. 79

(...continued) 68

a generalized objection to the Region’s consideration of mobile sources in the

environmental justice analysis, and the Region has demonstrated that it lacks sufficient

data to reach a determinative conclusion regarding these mobile source emissions in the

environmental justice context. See Avenal, slip op. at 25-26, 15 E.A.D. at ___; see also

In re Cape Wind Assocs., LLC, OCS Appeal No. 11-01, slip op. at 4 (EAB May 20,

2011), 15 E.A.D. ___ (noting that petitioners “must raise specific objections to the

permit”); In re BP Cherry Point, 12 E.A.D. 209, 217 (EAB 2005) (same). 

 In a memorandum addressing environmental justice in the permitting context, 69

the Agency stated:

Unlike PSD/[New Source Review] permitting, Title V generally does

not impose substantive emission control requirements, but rather

requires all applicable requirements to be included in a Title V

operating permit. * * * Because Title V does not directly impose

substantive emissions control requirements, it is not clear whether or

how EPA could take environmental justice issues into account in

Title V permitting - other than to allow public participation to serve

as a motivating factor for applying closer scrutiny to a Title V

permit’s compliance with applicable CAA requirements.

Memorandum from GaryGuzy, General Counsel, U.S. EPA, to Assistant Administrators,

U.S. EPA, EPA Statutory and Regulatory Authorities Under Which Environmental

Justice Issues May Be Addressed in Permitting 13 (Dec. 1, 2000) (A.R. FF-7).

also EJ Analysis at 2; Region Response at 36 n.34. The Region

acknowledged that the Title V permit at issue in this case is unusual in

that it requires a temporary Title V source to meet the NAAQS, and the

permit also establishes limits on PTE. EJ Analysis at 2; Statement of

Basis at 54; RTC at 114. However, the Title V permit does not regulate

mobile source emissions.69

Despite the fact that mobile source emissions are not regulated

under the Title V permit, the Region did go beyond its required review

to consider mobile source emissions with respect to environmental

justice in the Response to Comments. See RTC at 114-15. The Region

was unable to reach a determinative conclusion with respect to these

emissions due to insufficient information.
80 SHELL OFFSHORE, INC.

 ICAS includes a citation to Avenal for the proposition that “motor vehicle

70

emissions are by far the greatest concern,” in support of its contention that mobile source

em 2issions should be included in the short-term NO NAAQS assessment included in the

environmental justice analysis, but the quote istaken out of context and does not support

ICAS’s position. See ICAS Petition at 35. The circumstances in Avenal are markedly

different than those in the present case. In Avenal, the Agency conducted an

env 2 ironmental justice analysis that focused in particular on short-term NO impacts in

support of a PSD permit to build a 600 megawatt power plant. Slip op. at 21, 15 E.A.D.

at ___. The Agency noted that in the area surrounding the proposed site for the new

2

source, motor vehicles accounted for 91% of NO emissions locally, as compared to 61%

of 2 NO emissions nationwide. Id., 15 E.A.D. at ___. In addition, the environmental

justice analysis in Avenal noted that the area surrounding the proposed facility was

des 2ignated as extreme nonattainment for ozone, and NO is a precursor emission. Id.,

15 E.A 2.D. at ___. Finally, the Agency further explained that NO concentrations on or

(continued...)

ICAS’s attempt to construe the Executive Order and Board

precedent to require in this instance the analysis of emissions from

mobile sources that the Region may not have accurate or sufficient data

to complete in the context of a Title V permit is unpersuasive. Notably,

the Board has held that it will decline to review a permit issuer’s

environmental justice analysis that cannot reach a determinative

conclusion due to the insufficiency of available valid data. See RTC

at 115; Avenal, slip op. at 25-26, 15 E.A.D. at ___ (stating that where a

permit issuer conducts a substantive environmental justice analysis that

endeavors to include and analyze data that is germane to the

environmental justice issue raised during the comment period, and the

permit issuer demonstrated it exercised its considered judgment when

determining that it cannot reach a determinative conclusion due to the

insufficiency of available data, the Board will decline to grant review of

the environmental justice analysis). Moreover, “[t]he plain language of

the Executive Order imparts considerable leeway to federal agencies in

determining how to comply with the spirit and letter of the Executive

Order.” Avenal, slip op. at 24, 15 E.A.D. ___. ICAS overreads Avenal

when it suggests that Avenal compels the analysis of these mobile source

emissions in the context of this permit. See ICAS Petition at 35 (“The

Agency has considered mobile emissions previously in its EJ analyses

and should be required to do so here.”) (citing Avenal, slip op. at 21-22,

15 E.A.D. ___). 

70
SHELL OFFSHORE, INC. 81

(...continued) 70

near major roadways have appreciably higher emissions than those measured at monitors

in the Agency-approved network. Id. at 21-22, 15 E.A.D. at ___. ICAS has not

demonst 2rated that the need to assess NO impacts from mobile sources in Avenal, where

NO2 emissions near roadways were known to be much higher, translates into a

requirement that the Agency account for these mobile emissions on the Arctic OCS to

demonstrate that its environmental justice analysis is sufficient.

ICAS’s challenge also fails because ICAS never responded to the

Region’s stated rationale in the administrative record thatTitle V permits

generally do not impose new substantive air quality control

requirements. A petitioner cannot simply repeat comments made during

the comment period, but must substantively confront the permit issuer’s

substantive explanations in order to demonstrate that review of a

particular issue is warranted. Peabody, 12 E.A.D. at 33. 

Further, ICAS’s assertion that the Region failed “to analyze the

impacts of Shell’s emissions on subsistence hunters and fishers while

offshore,” is unsupported by the record. ICAS Petition at 36-37

(emphasis in original);see also Shell 2012, slip op. at 42, 15 E.A.D. ___.

The environmental justice analysis stated that mobile source emissions

will dissipate while vessels are in transit, RTC at 115, and the

environmental justice analysis analyzed how the subsistence areas

located in close proximity to Shell’s lease blocks might be affected by

Shell’s OCS activities. EJ Analysis at 5; id. at 6 (discussing distances

subsistence hunters, whalers, and fishermen have traveled offshore in

search of subsistence foods); id. at 4 (depicting subsistence use areas

mapped over Shell exploration plan well sites). In addition to

demonstrating compliance with the applicable NAAQS, the Region

conducted an environmental justice analysis that included and analyzed

data that is germane to the environmental justice issues raised during the

comment period. See Shell 2010, slip op. at 79 n.87, 15 E.A.D. at ___.

Although ICAS may disagree with the contents or conclusions of the

Region’s environmental justice analysis, ICAS has not demonstrated that

this difference in opinion equates to an insufficient effort on the

Region’s part regarding environmental justice, or that the Region failed

to analyze impacts. See id., slip op. at 42, 15 E.A.D. ___. 
82 SHELL OFFSHORE, INC.

Finally, ICAS enumerates several problems with the Region’s

environmental justice analysis that amount to challenges to the Region’s

technical expertise. See ICAS Petition at 37; Region Response at 43-44;

see also Shell 2012, slip op. at 42-43, 15 E.A.D. ___. Without

elaborating any further, ICAS expresses “significant concerns” with,

among 2 other things, installed NO controls and their ability to function

prope x 2 rly in cold weather, the use of generic NO /NO ratios in lieu of

actual 2source tests, the use of “diurnal pairing” of NO data, and the need

for additional “tracer experiments” to supply data for the AERMOD

model. ICAS Petition at 37. It is axiomatic that a challenge to the

fundamental technical expertise of a permit issuer requires a petitioner

to overcome a particularly heavy burden, and that a successful challenge

to a permit issuer’s technical expertise must consist of more than just a

difference of opinion. Shell 2012, slip op. at 42-43, 15 E.A.D. at ___;

accord In re NE Hub Partners, L.P., 7 E.A.D. 561, 567 (EAB 1998),

review denied sub nom. Penn Fuel Gas, Inc. v. EPA, 185 F.3d 862 (3rd

Cir. 1999). Here, ICAS has failed to overcome this particularly heavy

burden because it does nothing more than list its broad objections to the

Region’s environmental justice analysis.

3. Ozone NAAQS Analysis

ICAS also challenges the Region’s compliance with its obligation

under the Executive Order based on the Region’s alleged failure to

adequately address both the latest scientific findings regarding ozone and

the potential impacts of ozone on local communities. ICAS Petition

at 31. ICAS’s assertions focus in large part on the Region’s decision to

demonstrate compliance with the current 8-hour ozone NAAQS, which

is set at 0.75 parts per million (“ppm”), as opposed to the range of 0.60

to 0.70 ppm for the 8-hour ozone NAAQS that EPA’s Administrator

proposed in January 2010 but never finalized. See id. at 30-34; Region

Response at 40-42; RTC at 96-98, 119-20. On September 2, 2011, four

days before the close of the public comment period and prior to the

Region issuing the Permit, the President requested that the Administrator

withdraw the proposed 8-hour ozone NAAQS standard, and instead

enforce the current 8-hour ozone standard of 0.75 ppm until the ozone

standard is reconsidered again in 2013. Statement on the Ozone National
SHELL OFFSHORE, INC. 83

Ambient Air Quality Standards, 2011 Daily Comp. Pres. Doc. 607, at 1

(Sept. 2, 2011), available at http://www.gpo.gov/fdsys/ (click on

Compilation of Presidential Documents). ICAS also asserts that the

Region’s conclusion not to model emissions from ozone precursors

based on available background data that does not account for the

cumulative impacts of proposed activities on the Arctic OCS was in

error, and that the Region’s response to its comments regarding ozone

were inadequate. ICAS Petition at 33.

The Region responds that ICAS’s petition raises issues that are

largely technical, and that the Region appropriately relied on the

Agency’s current legal standard of 0.75 ppm when assessing Shell’s

compliance with the 8-hour ozone NAAQS. Region Response at 40.

The Region further asserts that it exercised its technical expertise to

determine that ozone levels in the area were not expected to exceed even

the lowest level of 0.60 ppm that EPA included in its proposed 8-hour

ozone NAAQS. Id. at 42. Finally, the Region asserts that it

appropriately responded to comments received, including comments

specifically raising concerns about the cumulative impacts of proposed

OCS operations with respect to attaining the ozone NAAQS. Id.

Although ICAS argues to the contrary, the current, enforceable 8-

hour ozone NAAQS that Shell must demonstrate compliance with is 0.75

ppm. As this Board has stated previously, “[a] permit issuer must apply

the statutes and implementing regulations in effect at the time the final

permit decision is made.” Russell City II, slip op. at 108 n.98, 15 E.A.D.

at ___ (quoting In re Phelps Dodge Corp., 10 E.A.D. 460, 478 n.10

(EAB 2002)). The Region’s decision to require Shell to comply with the

0.75 ppm 8-hour ozone NAAQS is consistent with applicable law and the

corresponding regulations in effect at the time the Region issued the

Permit.

In addition, ICAS does not demonstrate that the Region’s analysis

of the impacts the 8-hour ozone NAAQS may have on Alaska Natives

residing on the North Slope would result in a disproportionately high or
84 SHELL OFFSHORE, INC.

 ICAS’s assertion that in the context of an environmental justice analysis the 71

Region’s treatment of the 8-hour ozone standard in the current appeal is analogous to the

Reg 2ion’s treatment of the newly promulgated 1-hour NO NAAQS in Shell 2010 must

also fail. See ICAS Petition at 32. As the Board recently explained, the context of the

challenge to the environmental justice analysis in Shell 2010 was unusual in that the OCS

PSD permits at issue were finalized in the interim between the Administrator’s

publication of the f 2inal rule establishing the hourly NO NAAQS in the Federal Register

on Februa 2ry 9, 2010, and the effective date of the new hourly NO standard, April 12,

2010. Avenal, slip op. at 24, 15 E.A.D. at ___. The Board emphasized that the

environmental justice aspect of the Shell 2010 remand order turned on the Region’s scant

environmental justice analysis, which provided no examination or analysis of short-term

NO2 impacts whatsoever. Id., 15 E.A.D. at ___. 

Here, the Region not only analyzed impacts from ozone emissions, see RTC

at 96-98, 119-20, it further explained that current levels of ozone in the area are well

below the low end of the range EPA had requested comment on in the proposed ozone

NAAQS, and that emissions of ozone precursors would also not lead to an exceedance

of the low range of the proposed ozone NAAQS. Id. at 120; see also Region Response

at 41 n.37 (noting that the discussion of ozone in the Region’s environmental justice

analysis was brief, but that both the Response to Comments and the technical support

document contained in the administrative record provide more detailed discussions of the

Region’s determination regarding ozone). Of equal importance, and unlike the events

leading up to the Board’s remand order in Shell 2010, in this instance the Agency has not

made a final determination or issued a final rule stating that the current 8-hour ozone

standard is inadequate. See Region Response at 41. ICAS has not demonstrated that the

Region’s consideration of the ozone NAAQS in the current appeal warrants Board review

based on s 2imilarities to the Region’s treatment of the hourly NO NAAQS in Shell 2010.

 ICAS challenges the Region’s conclusion not to model emissions of ozone 72

and ozone precursors, and allegesthat the “limited background data” that exists does not

(continued...)

adverse impact on the health of Alaska Natives. In the Response to 71

Comments supporting the Permit, the Region stated that it “stands by its

decision” to forego regional photochemical modeling and further

explained that “Region 10 reviewed ozone monitoring data along with

existing precursor emissions that will impact ozone formation. Based on

this review, Region 10 determined further analysis of ozone was not

warranted.” RTC at 97. In addition, the Region explained that the most

recent ozone data indicates that current ozone levels in the Beaufort Sea

are well below 0.60 ppm, which represents the low end of the range of

the proposed 8-hour ozone NAAQS. Id. at 97-98, 120. 72
SHELL OFFSHORE, INC. 85

(...continued) 72

demonstrate that current ozone levels are well below the proposed ozone NAAQS. ICAS

Petition at 33. ICAS does not provide any citation or reference as support for this

statement, which amounts to a challenge to the Region’stechnical expertise. This Board

recently stated that “it is axiomatic that a challenge to the fundamental technical expertise

of a permit issuer requires a petitioner to overcome a particularly heavy burden, and that

a successful challenge to a permit issuer’s technical expertise must consist of more than

just a difference of opinion.” Shell Discoverer 2012, slip op. at 42-43, 15 E.A.D. at ___

(citing Shell 2011, slip op. at 15, 15 E.A.D. at ___, and NE Hub, 7 E.A.D. at 567).

ICAS’s bald assertion that background ozone data was limited and does not support the

Region’s conclusions cannot overcome this particularly heavy burden.

Finally, ICAS’s assertion that the Region failed to consider the

cumulative impacts of emissions from proposed Arctic OCS operations

is unavailing. See ICAS Petition at 33. ICAS’s petition for review not

only lacks any further support for this statement, it also fails to

substantively confront the Region’s explanation in the Response to

Comments. See Peabody, 12 E.A.D. at 33 (petitioner must demonstrate

why a permitting authority’s response to objections made during the

public comment period warrants review). In this instance, the Region

explained:

[T]he Clean Air Act permitting programs are essentially ‘first

come, first served’ programs and each subsequent permitting

action needs to account for all of those that went before but not

any actions that will occur subsequent to that action. The

permits for the Discoverer drill ship in the Chukchi Sea and

Beaufort Sea are the first permits in their respective vicinities

and they only need to assess their impacts on the existing air

quality situation.

The Kulluk drill rig in the Beaufort Sea is the second permit

and EPA has addressed cumulative impacts by including

conditions in the permit that prevent Shell from operating the

Kulluk drill rig and the Discoverer drill ship in the Beaufort

Sea during the same drilling season. Permit Condition D.4.8.

As such, only one of the two drill rigs can operate in the
86 SHELL OFFSHORE, INC.

 As noted above, see Part VI.A.1.a, the OCS air regulations require that OCS 73

permit proceedings follow the procedures used to issue PSD permits contained in

40 C.F.R. part 124. 40 C.F.R. § 55.6(a)(3).

Beaufort in any year so there will be no overlapping impacts

with respect to compliance with short[]term NAAQS. * * * *

As discussed above, ConocoPhillips has withdrawn its permit

application for operation of a jack-up drill rig in the Chukchi

Sea.

RTC at 101; see also EJ Analysis at 14 (reporting total maximum

modeled concentrations for criteria pollutants in Kaktovik and Nuiqsut,

which account for both the Discoverer’s operation and background

concentrations); Region Response at 42 n.39 (noting that “[p]otential

OCS operations in the Chukchi Sea and the Beaufort Sea are over 200

miles apart at the closest point.”). Aside from its plain statement that the

Region did not consider the emissions from all proposed OCS

operations, ICAS does not address the Region’s response to its comment,

and thus cannot demonstrate that this issue warrants Board review.

Peabody, 12 E.A.D. at 33.

4. Oil Spill Response Capabilities

Mr. Lum assertsthat EPA has failed to require Shell to demonstrate

its oil spill response capabilities in “clear, windy, broken ice and sheet

ice conditions.” Lum Petition at 1-2. The Region responds that this

issue is outside the scope of these permit proceedings and thus is not

properly subject to review. Region Response at 47. 

The Board has previously emphasized that “[t]he PSD review

process is not an open forum for consideration of every environmental

aspect of a proposed project, or even every issue that bears on air

quality.” In re Knauf Fiber Glass GmbH, 8 E.A.D. 121, 127 73

(EAB 1999) (“Knauf I”), quoted in In re Sutter Power Plant, 8 E.A.D.

680, 688 (EAB 1999); see also In re Encogen Cogeneration Facility,

8 E.A.D. 244, 259-60 (EAB 1999). The Board has jurisdiction “to
SHELL OFFSHORE, INC. 87

 As the Board has noted in previous Shell decisions, in May 2010 the 74

Secretary of the Department of the Interior (“DOI”) signed a Secretarial Order

reorganizing the former Minerals Management Service (“MMS”) into three independent

entities to better carry out its three missions of: (1) improving the management, oversight,

and accountability of activities on the OCS; (2) ensuring a fair return to the taxpayer from

offshore royalty and revenue collection and disbursement activities; and (3) providing

independent safety and environmental oversight and enforcement of offshore activities.

Shell 2012, slip op. at 30 n.29, 15 E.A.D. at ___; see also Shell 2010, slip op. at 11 n.7,

15 E.A.D. at ___; U.S. DOI, Departmental Manual, pts. 118 & 119, ch. 1 (Sept. 30,

2011), available at http://elips.doi.gov/app_dm/dm.cfm (“Departmental Manual”)

(establishing the creation, authorities, objectives, and reporting relationships for the

Bureau of Ocean Energy Management (“BOEM”) and Bureau of Safety and

Environmental Enforcement (“BSEE”)). BOEMRE assumed all of MMS’s

responsibilities in the interim until the full implementation of the reorganization into the

three separate entities was complete. Shell 2012, slip op. at 30 n.29, 15 E.A.D. at ___;see

Shell 2010, slip op. at 11 n.7, 15 E.A.D. at ___. The transfer of the revenue collection

function to the Office of Natural Resources Revenue was completed on October 1, 2010.

See Secretary of the Interior, U.S. DOI, Order No. 3306, Organizational Changes Under

the Assistant Secretary - Policy, Management and Budget (Sept. 20, 2010), available at

http://elips.doi.gov/app_SO/so.cfm; Departmental Manual, pt. 112, ch. 34 (Apr. 15,

2011). One year later, on October 1, 2011, the reorganization was completed when

BOEMRE was replaced by BOEM and BSEE. See Departmental Manual, pts. 118 &

119. For consistency the Board refers to BOEMRE because the Permit and the

supporting documentation refer exclusively to BOEMRE. 

review issues directly related to permit conditions that implement the

federal PSD program,” Sutter, 8 E.A.D. at 688, but will deny review of

issues not governed by the PSD regulations because it lacks jurisdiction

over them. Id.; see also Encogen, 8 E.A.D. at 259 (noting that

petitioners had not shown how the issues they requested the Board to

review fell within the Board’s PSD jurisdiction). Moreover, there are

often other regulatory programs in place that may address environmental

concerns that fall outside the Board’s scope of review. Knauf I, 8 E.A.D.

at 162; see also Shell 2007, 13 E.A.D. at 405 n.66.

EPA’s jurisdiction over portions of the OCS applies to air emissions

subject to the CAA and its implementing regulations. In this instance,

BOEMRE isresponsible for implementing regulations that address oil 74
88 SHELL OFFSHORE, INC.

 On August 4, 2011, BOEMRE (now BOEM, see note 74 above) 75

conditionally approved Shell’s exploration plan for the Beaufort Sea. Letter from Jeff

Walker, Regional Supervisor, Field Operations, Alaska OCS Region, BOEMRE, U.S.

DOI, to Susan Childs, Shell Offshore, Inc. (Aug. 4, 2011) [hereinafter Beaufort EP

Letter]. The approval of the Beaufort Sea exploration plan was conditioned, among other

things, on Shell submitting to BOEMRE prior to the commencement of exploratory

drilling operations documentation regarding the subsea well capping and containment

system Shell has committed to have at its disposal. Id. at 3. Specifically, Shell must

“submit documentation on the procedures for deployment, installation, and operation of

the system under anticipated environmental conditions, including the potential presence

of sea ice for approval by BOEMRE. Shell will also be required to conduct a field

exercise to demonstrate Shell’s ability to deploy the system.” Id.

spill and response capabilities. The Board does not have jurisdiction 75

to consider Shell’s oil spill and response capabilities in the Arctic OCS,

and thus, the Board denies Mr. Lum’s petition for review on these

grounds.

5. Impacts of Air Emissions on Traditional Subsistence Food

Sources

Mr. Lum asserts that the Kulluk’s operations in the Beaufort Sea

will introduce toxins into the ocean “via the exhaust [from the Kulluk]

that settles down into it,” and contaminate the marine mammals and fish

the coastal Iñupiat consume as part of their indigenous diet. Lum

Petition at 2-3. Mr. Lum continues that this will not only contaminate

the food supply but also alter traditional Iñupiat culture. Id. The Region

responds that this issue is outside the scope of these permit proceedings

and thus is not properly subject to Board review. Region Response at 47.

The Board construes Mr. Lum’s assertions as a challenge to the

adequacy of the Region’s compliance with the Executive Order. 

Mr. Lum also raised this issue in the appeals that led to the Board’s

Shell Discoverer 2012 decision. See slip op. at 45-46, 15 E.A.D. at ___.

In Shell Discoverer 2012, the Board denied review on procedural

grounds because the impacts of air emissions on traditional subsistence
SHELL OFFSHORE, INC. 89

 As mentioned above, the Board remanded to the Region two OCS PSD 76

permits in December 2010. See generally Shell 2010, 15 E.A.D. at ___. In the

subsequent appeals of the permits issued upon completion of remand proceedings, the

Board unequivocally stated that “in the current appeals, ‘no new issues may be raised that

could have been raised, but were not raised,’ in the previous appeals.” Shell Discoverer

2012, slip op. at 8, 15 E.A.D. at ___ (quoting Shell 2010, slip op. at 82, 15 E.A.D.

at ___). 

 The Board also considers ICAS’s claim under an abuse of discretion 77

standard. See infra note 80.

food sources was not raised at the time of the first appeals. Id. In the 76

current appeal, Mr. Lum timely submitted comments on this issue and

thus his petition for review is procedurally sound. See Lum Comments

at 1. The Board, however, has previously held that “[i]mpacts on

subsistence hunting and fishing are outside the scope of the PSD

program and therefore the Board’s jurisdiction.” Shell 2007, 13 E.A.D.

at 405 n.66 (citing Knauf I, 8 E.A.D. at 161-62), quoted in RTC at 125.

The Board does not have jurisdiction to consider the impacts of air

emissions on traditional subsistence food sources and Iñupiat culture,

and thus, the Board denies Mr. Lum’s petition for review on these

grounds.

For all of the foregoing reasons, the Board declines to review the

Region’s compliance with the Executive Order and applicable Board

precedent.

F. ICAS Has Failed to Demonstrate That the Region Clearly Erred or

Abused Its Discretion in Providing 46 Days for Comment on the

Draft Permit and in Denying ICAS’s Request for Non-Overlapping

Comment Periods

ICAS claims that the Region “committed clear legal error by failing

to provide the public an adequate opportunity to comment on” the draft

permit. ICAS Petition at 6. More specifically, ICAS alleges that the 77

Region failed to meet the parts 71 and 124 procedural requirements that

require permit issuers to “allow at least 30 days for public comment” on

draft permits. Id. at 7 (citing 40 C.F.R. §§ 71.11(d)(2)(i), 124.1)
90 SHELL OFFSHORE, INC.

 The Region had issued two draft permits for Shell’s Discoverer drillship 78

earlier in July of 2011. See Shell Discoverer 2012, slip op. at 13, 15 E.A.D. at ___. The

comment period for those two permits ran from July 6 to August 5, 2011. Id.; ICAS

Petition at 7. In addition, on the same date the Region had issued the Kulluk draft permit,

it had also issued a draft permit for ConocoPhillips to operate a jackup drill rig in the

Chukchi Sea. ICAS Petition at 7. The comment period for this permit originally ended

at the same time as the Kulluk draft permit, but was later extended to September 21, 2011.

 ICAS Petition at 8-9; RTC at 7. 

(emphasis added by Petitioners). Although ICAS acknowledges that the

comment periods for the Permit ran from July 22, 2011, to September 6,

2011, an interval of 46 days, ICAS contends that, because the Region

issued the draft Kulluk permit for comment at the same time it issued

another draft minor source air permit for comment and in the middle of

comment periods for two major source air permits for another Shell

drillship, in reality, ICAS only “had 16 days to comment on each of

78

the[] permits,” rather than the required minimum of 30. Id. at 7. This is

because, according to ICAS, it “does not have the resources to comment

on more than one air permit at a time.” Id. ICAS further claims that “the

short and overlapping comment periods * * * deprived [them] of a

meaningful opportunity to comment on Shell’s new air modeling

results.” Id. at 8. 

In a related argument, ICAS asserts that the Region clearly erred in

denying its request that the Region “hold non-overlapping comment

periods on the OCS permits and [] provide 45 days to comment on each

permit.” Id. at 8-9. ICAS claims that it met the regulatory standard for

demonstrating the need for additional time to prepare comments. Id.

(referring to the standard at 40 C.F.R. § 71.11(g)); see also id. attach. 8

(Letter from Harry Brower, Chairman, Alaska Eskimo Whaling

Commission (“AEWC”), et al., to Doug Hardesty, Air Permits Project

Manager, U.S. EPA Region 10 (June 15, 2011) (A.R. C-487)) (AEWC

and ICAS request for non-overlapping comment periods) [hereinafter

ICAS Letter]; id. attach. 9 (Letter from Richard Albright, Director,

Office of Air, Waste, & Toxics, U.S. EPA Region 10, to Harry Brower,

AEWC Chairman, et al. (July 21, 2011) (A.R. C-532)) (EPA response).
SHELL OFFSHORE, INC. 91

 As the Region explained, the Permit is subject to the procedural requirements

79

of both part 55 (and consequently part 124) as well as part 71: 

The portion of this permit that is a Part 71 permit (e.g., the portion

of the permit that applies on the Outer OCS) is issued under 40 CFR

Part 55 and 40 CFR Part 71 and subject to the procedural

requirements of 40 CFR Part 71 as provided in 40 CFR § 71.4(d).

The portion of this permit that is a COA Title V permit and a COA

minor source permit (e.g., the portion of the permit that applies on

the Inner OCS) is issued under 40 CFR Part 55 and, in the absence

of other applicable procedures, subject to the permit issuance

procedures for PSD permits under 40 CFR Part 124, Subpart A and

C. See 40 CFR §§ 55.6(a) (3) and 124.1.

RTC at 6 n.3.

 Because the regulations authorize the permit issuer to grant a longer comment 80

period upon an adequate showing of need, the Board also considers ICAS’s challenge

(continued...)

The part 71 procedural regulation governing public notices and

public comment periods specifically provides that “[p]ublic notice of the

preparation of a draft permit * * * shall allow at least 30 days for public

comment.” 40 C.F.R. § 71.11(d)(2)(i). The part 124 procedural

regulations, which also apply to the Permit, contain the same language. 79

See 40 C.F.R. § 124.10(b). The Board has traditionally read these

regulations to establish a minimum comment period length of 30 days,

recognizing that the regulations clearly allow the permit issuer, in its

discretion, to grant a longer comment period. Shell Discoverer 2012,

slip op. at 70-71, 15 E.A.D. at ___ (discussing the applicable part 124

regulation); see also In re Genesee Power Station, 4 E.A.D. 832, 841

(EAB 1993) (noting that the part 124 regulation governing public

comment periods “only require[s them] to last 30 days”). In addition, as

ICAS points out, part 71 contains a separate provision specifically

authorizing a permit issuer to grant additional time. It states that “[a]

comment period longer than 30 days may be necessary to give

commenters a reasonable opportunity to comply with the requirements

of this section. Additional time shall be granted to the extent that a

commenter who requests additional time demonstrates the need for such

time.” 40 C.F.R. § 71.11(g)).

80
92 SHELL OFFSHORE, INC.

(...continued) 80

under an abuse of discretion even though ICAS did not clearly present its challenge as

such, alleging instead only “clear error.” See Shell Discoverer 2012, slip op. at 71-72

(considering similar argument as raising an abuse of discretion claim), 15 E.A.D. at ___;

In re Guam Waterworks Auth., NPDES Appeal Nos. 09-15 & 09-16, slip op. at 9 n.7

(EAB Nov. 16, 2011), 15 E.A.D. ___ (explaining Board’s standard in reviewing claims

involving a permit issuer’s exercise of discretion); In re Desert Rock Energy Co., PSD

Appeal Nos. 08-03 through 08-06, slip op. at 65 (Sept. 24, 2009), 14 E.A.D. ___ (using

an abuse of discretion standard where the permit issuer had “broad discretion” in making

the challenged determination). The Board similarly reads ICAS’s challenge to the

Region’s denial of non-overlapping comment periods as raising an abuse of discretion

claim. 

In the present case, the Region provided a 46 day public comment

period for the Kulluk draft permit, albeit a comment period that partially

overlapped with several other comment periods. The Region, in its

Response to Comments, provided a lengthy, well-reasoned explanation

for its establishment of a 46 day comment period for the Kulluk permit

and for its denial of ICAS’s request for non-concurrent comment periods.

See RTC at 5-8. In addressing comments on these topics, the Region

pointed out that it had granted a period longer than the regulatory

minimum for this permit and had also extended the comment period for

one of the other permits, the ConocoPhillips permit. Id. at 6; accord id.

at 7. The Region further noted that the ConocoPhillips permit, for which

it had extended the comment period to 60 days, was for a proposed 2013

operation, whereas Shell “intends to begin its exploratory drill operations

with the Kulluk in July 2012.” Id. at 7. The Region also enumerated the

many stepsit had taken before and during the public comment period “to

promote meaningful public involvement.” Id. at 6.

In addition, the Region observed that, while “it agree[d] with the

commenters that some aspects of the Draft Permit are technically and

legally complex,” on the other hand, “[t]he comments submitted * * *

demonstrate[d] that the public was able to review, evaluate, and

comment on many complex issues during the comment period provided.”

RTC at 8. The Region noted that among the more than 14,500 public

comments it had received, a number of them had contained “substantive

comments on, among other issues, the definition of OCS Source, limits

on the source’s potential to emit, choice of model, modeling data,
SHELL OFFSHORE, INC. 93

 As the Board discussed above in Part III, a petitioner must explain why the 81

permit issuer’s previous response to those objections is clearly erroneous or otherwise

warrants review. “[A] petitioner’s failure to address the permit issuer’s response is fatal

to its request for review.” In re Indeck-Elwood LLC, 13 E.A.D. 126, 143, 170

(EAB 2006); accord Russell City II, slip op. at 92, 15 E.A.D. at ___.

ambient air boundary, source testing, emission factors, air quality

analysis, applicability of increments and visibility, and cumulative

impacts.” Id. Accordingly, the Region believed that “[t]he volume of

comments received and the substantive issues addressing technically and

legally complex issues demonstrate[d] that the public was able to

meaningfully review and comment on the Draft Permit.” Id. 

The Region also explained that “40 CFR § 71.7(a)(2) requires

that it take a final action on a Title V permit application within 18

months of receiving a complete application. In conducting the permitting

process, Region 10 must strike a balance between its obligation to

provide for meaningful public participation and its responsibility to make

a final permitting decision in a timely manner.” Id. Based on all these

factors, the Region had determined that “the commenters have not

demonstrated that a period of more than 46 days is necessary to give the

public a reasonable opportunity to comment.” Id. at 7 (citing 40 C.F.R.

§§ 71.11(g) and 124.13).

In its petition, ICAS does not explain why the Region’s response

to these commentsis clearly erroneous or an abuse of discretion. In fact,

ICAS does not even address the Region’s response. ICAS’s failure to

address the Region’s response is, in and of itself, sufficient to deny its

claims of procedural error concerning the comment period. 

81

Nevertheless, even if the Board considered ICAS’s claim of

procedural error, the Board would deny review of this claim for several

reasons. First, the length of time the Region provided for comment on

this permit – 46 days – is 16 days more than the regulatory minimum

required by 40 C.F.R. §§ 71.11(d)(2)(i) and 124.10(b). It is also one day

more than the amount of time ICAS had specifically requested for each
94 SHELL OFFSHORE, INC.

 Notably, therefore, for this permit, by providing a longer comment period, 82

the Region did in essence partially grant ICAS’s request. 

 And, in this case, the Region did, provide additional time for comment on 83

two of the permits whose comment period overlapped. The Region increased the

comment period for the Shell Kulluk permit to 46 days and the comment period for the

ConocoPhillips permit to 60 days. See supra note 78. 

permit in its letter. See ICAS Letter at 2 (requesting non-concurrent 82

comment periods of 45 days). ICAS’s attempt to recalculate the length

of the comment period as “16 days” based on an unexplained

mathematical formula involving the number and lengths of other

comment periods is unconvincing and does not demonstrate clear error.

See Shell Discoverer 2012, slip op. at 71, 15 E.A.D. at ___; see also

Russell City II, slip op. at 127-31, 15 E.A.D. at ___ (denying review of

a procedural error claim where petitioners fail to point to a part 124

procedural regulation that was violated); Knauf II, 9 E.A.D. at 17

(denying review where the permit issuer fulfilled the applicable

regulatory obligations, but did not go beyond those requirements).

Furthermore, while it is true that the Region did not grant

ICAS’s request for non-overlapping comment periods, ICAS has not

pointed to any regulations that prohibit the Agency from issuing

concurrent permits or that require – or even specify – a different

comment period length when the Agency does issue concurrent permits.

To the contrary, the relevant regulations authorize the Agency to issue

a single public notice to “describe more than one permit or permit

actions,” 40 C.F.R. §§ 71.11(d)(1)(iii), 124.10 (a)(3), without mentioning

a different time frame for public comment when concurrent permits are

issued. While section 71.11(g) authorizes the Agency to extend a

particular comment period on a case-by-case basis where a commenter

has demonstrated the need for additional time – which would thereby

provide an avenue for commenters to obtain longer comment periods in

situations where comment periods overlap – the provision does not 83

prohibit, or even mention, overlapping comment periods.

Finally, it is clear from the administrative record that the Region

appropriately balanced conflicting considerations in deciding on the
SHELL OFFSHORE, INC. 95

 The Board is unpersuaded by ICAS’s argument that it had difficulty locating 84

an expert to review the air modeling. See ICAS Petition at 8. As the Region indicated

in its Response to Comments, RTC at 8, other commenters provided substantive,

technical comments on the air modeling, which suggests that the comment period was

sufficient to allow opportunity for meaningful comment. See Fla. Power & Light Co. v.

United States, 846 F.2d 765, 772 (D.C. Cir. 1988) (upholding a short comment period

as sufficient where the agency had received numerous comments, some lengthy, and the

comments had had a “measurable impact” on the final rule); Conference of State Bank

Supervisors v. Office of Thrift Supervision, 792 F. Supp. 837, 844 (D.D.C. 1992)

(holding length of comment period not unreasonable especially in light of the comments

that plaintiffs and other parties submitted ). Furthermore, as the Region points out, it

notified ICAS in May that the comment periods would begin in July. See Letter from

Doug Hardesty, EPA, to North Slope Borough et al. (May 25, 2011) (A.R. HH-1). The

Region also conducted three separate informational meetings in Barrow and Kaktovik,

Alaska more than a month prior to the start of the public comment period for the Permit

“to inform the North Slope community of the draft permit and to describe opportunities

for public participation.” RTC at 6.

length of the comment period for this permit and in denying the request

for non-overlapping periods. ICAS has not demonstrated otherwise and 84

has therefore failed to show that the Region clearly erred or abused its

discretion in either selecting a 46 day comment period or in denying

ICAS’s request for non-concurrent comment periods. See Shell

Discoverer 2012, slip op. at 71, 15 E.A.D. at ___ (denying review of a

similar claim based on similar facts). Review of the Permit is therefore

denied on this issue.

G. ICAS Has Failed to Demonstrate That the Region Clearly Erred in

Its Public Hearing Procedures or That Any of the Alleged

Procedural Deficiencies Otherwise Warrant Review

As noted above in Part V, the Region held two public hearings on

the draft permit, one in Barrow, and a second in Anchorage. The Region

also held an informational meeting prior to the Barrow public hearing.

See Statement of Basis at 11 (scheduling informational hearing from

5:00-6:30 pm, public hearing from 7:00-9:00 pm); RTC at 6-7. 

ICAS claims that the Region “committed clear legal error by failing

to provide the public an adequate opportunity” to participate in the
96 SHELL OFFSHORE, INC.

 According to ICAS, although the Region may have noted that an interpreter 85

was available at the top of the hearing’s sign-in sheet, it did not make a public

announcement of this fact at the outset of the hearing. ICAS Petition at 10; ICAS Reply

at 6; see also infra note 89. 

Barrow public hearing. ICAS Petition at 6; see also id. at 9-10. ICAS

alleges three procedural problems with the Barrow hearing. Id. at 9-10.

ICAS first claims that the Region continued with the hearing despite

difficulties with the teleconference phone systemthat allegedly impaired

the ability of the Region to hear all comments. Id. at 9. ICAS next

alleges that, “for a significant portion of the hearing,” the Region

discussed a PowerPoint presentation that was not made available to the

public attending the hearing. Id. at 9-10. Finally, ICAS contends that

the Region failed to sufficiently inform those attending the public

hearing that it had procured an Iñupiat interpreter for the hearing. Id.

85

at 10. ICAS asserts that making an interpreter “available in this fashion

is akin to not having [one] at all.” Id.

Part 71 and part 124 each contain a provision governing public

hearings. See 40 C.F.R. §§ 71.11(f), 124.12. Both public hearing

regulations require the permitting authority to hold a public hearing

when the permitting authority “finds, on the basis of requests, a

significant degree of public interest in a draft permit.” Id. §§ 71.11(f)(1),

124.12(a)(1). The regulations also authorize the permitting authority to

hold a public hearing “at its discretion, whenever, for instance, such a

hearing might clarify one or more issues involved in the permit

decision.” Id. §§ 71.11(f)(2), 124.12(a)(2); accord In re Russell City

Energy Ctr. (“Russell City I”), PSD Appeal No. 08-01, slip op. at 7 & n.6

(EAB July 29, 2008), 14 E.A.D. __. The public hearing regulations also

prescribe the method of giving public notice of the hearing, 40 C.F.R.

§§ 71.11(f)(3), 124.12 (a)(4), the procedure for designating a presiding

officer to preside at the hearing, id. §§ 71.11(f)(4), 124.12 (b), and the

procedures for the public to comment at the hearing, id. §§ 71.11(f)(5),

124.12 (c). Finally, both regulations require that a tape recording or

written transcript of the hearing be made publically available. Id.

§§ 71.11(f)(6), 124.12 (d). 
SHELL OFFSHORE, INC. 97

Parts 71 and 124 also both require the permit issuer, in making its

final decision, to consider all comments it receives during the public

comment period and at any public hearings and to issue a “response to

comments.” Id. §§ 71.11(j), 124.17(a); see also id. §§ 71.11(e), 124.11.

More particularly, these provisions require the permit issuer to “[b]riefly

describe and respond to all significant comments on the draft permit

* * * raised during the public comment period, or during any hearing” in

the response to comments document issued at the same time the final

permit decision is issued. Id. §§ 77.11(j)(1)(ii), 124.17(a)(1).

Importantly, none of the aforementioned regulations refer to, or in any

way mention, a requirement to provide an interpreter or a requirement to

provide written materials at the hearing. 

Upon review of the administrative record and the parties’

arguments, the Board concludes that ICAS has not shown that the Region

clearly erred in its handling of the Barrow public hearing for any of the

three reasons ICAS advances. Not only does ICAS fail to point to any

specific regulatory provision that the Region violated, but none of the

alleged problems otherwise warrant Board review. The Board addresses

each alleged deficiency in more detail below.

ICAS’s first contention – that the Region committed clear error

because it was allegedly unable to adequately obtain input from the

public due to telecommunication problems during the hearing – is

unpersuasive. The Region addressed this concern in its Response to

Comments. See RTC at 9. There, the Region explained that, because

such telecommunication problems are common on the North Slope, it

had “recorded the public hearing in addition to having the hearing

transcribed by a court reporter. From these two sources, Region 10 was

able to capture the comments provided during the public hearing.” Id.

(emphasis added); see also Public Hearing Transcript (“Pub. Hrg

Tr.”) at 3 (explaining that the hearing was recorded on the teleconference

line as a “safety net”). In response, ICAS merely asserts that “this does

not change the fact that people were not able to be heard via phone.”

ICAS Petition at 9. Significantly, however, ICAS does not identify any

comment that the Region failed to hear or for which the Region failed to
98 SHELL OFFSHORE, INC.

 As discussed above, the regulatory requirement is for a permit issuer to

86

respond to significant comments. See 40 C.F.R. § 77.11(j)(1)(ii), 124.17(a)(1). Thus,

had ICAS identified significant comments raised at the public hearing that the Region

failed to address, ICAS’s arguments would have been more persuasive. See, e.g., In re

Rockgen Energy Ctr., 8 E.A.D. 536, 557 (EAB 1999) (remanding so that permit issuer

could demonstrate it had given thoughtful and full consideration to public comments);

In re W. Suburban Recycling & Energy Ctr., L.P., 6 E.A.D. 692, 710-12 (EAB 1996)

(remanding permit and requiring permit issuer to comply with procedures under part 124

including provision requiring a response to all significant comments received); see also

In re N. Mich. Univ., PSD Appeal No. 08-02, slip op. at 47-48 (EAB Feb. 18, 2009),

14 E.A.D. at ___ (discussing part 124 requirement to adequately respond to comments).

 The Region’s explanation makes sense in light of the purpose of the two 87

meetings. While the permitting authority may present its analyses, findings, and

conclusions about the draft permit at an informational meeting, the purpose of the public

hearing is to obtain comments from the public.

provide a response. See id. at 9; ICAS Reply at 6. Nor has any

86

commenter come forward alleging that the Region failed to respond to

his or her public hearing comments. The fact that the call center

experienced some telecommunications problems during the public

hearing – which the Region appears to have adequately anticipated and

addressed by utilizing two methods of note taking – does not, without

more, constitute clear legal error. Speculative claims that a permitting

authority may have failed to hear a comment are insufficient to warrant

Board review.

ICAS’s contention that the Region committed clear procedural error

by failing to provide pre-meeting copies of a Powerpoint presentation is

inapposite. In its response to the petition, the Region explains that this

presentation was given during the informational meeting, not during the

public hearing. Region Response at 39;see also Statement of Basis at 11

(scheduling informational hearing prior to public hearing); RTC at 6-7

(mentioning informational meeting). ICAS does not dispute this. See 87

ICAS Reply at 5-7. Furthermore, nowhere do the regulations require a

permitting authority to provide informational handouts at an
SHELL OFFSHORE, INC. 99

 The only document the public hearing regulations require a permit issuer 88

make available to the public is the transcript of the hearing. 40 C.F.R. §§ 71.11(f)(6),

124.12 (d). 

 The parties seemingly dispute the method in which the Region notified the 89

public of the availability of the interpreter. The Region stated in its Response to

Comments that, “[p]rior to the Barrow public hearing, Region 10 contacted [ICAS] to

arrange for an Iñupiat speaker to be available to provide Iñupiat interpretation at the

hearing if requested by any participant. At the beginning of the hearing, participants were

provided the opportunity to request Iñupiat interpretation during the hearing. No

participant requested translation and therefore an interpreter was not used.” RTC at 10-

11. In response, ICAS claims that attendees only recall mention of an interpreter on the

sign-up sheet, and only in English. ICAS Petition at 10. ICAS further asserts that the

transcript of the public hearing does not indicate that an announcement was made. ICAS

Reply at 6. In light of the Board’s conclusion on this issue, it is unnecessary to determine

the precise methodology the Region used to notify the public of the interpreter’s

availability.

informational meeting (or at a public hearing). Thus, while it may be 88

useful for a permit issuer to provide copies of a presentation to the

audience attending an informational meeting, failure to do so at the

meeting – or at a subsequent public hearing – does not constitute clear

error or otherwise warrant Board review.

ICAS’s final contention – that the Region committed clear

procedural error by not adequately informing the public that an

interpreter was available at the public hearing – is also unconvincing.

Importantly, as noted above, there is no regulatory requirement for an

interpreter in either part 71 or part 124, nor is there a provision

specifying the method a permit issuer should use to inform the public of

the availability of an interpreter at the public hearing. ICAS has not

89

pointed to any other requirement, regulatory or otherwise, requiring an

interpreter or prescribing the method for announcing one. Accordingly,

while it may be preferable for the permit issuer to formally announce the

availability of an interpreter at the beginning of the public hearing, and

in both languages, failure to do so does not constitute clear error or

otherwise warrant Board review.
100 SHELL OFFSHORE, INC.

In sum, ICAS has failed to demonstrate that the public hearing

procedures utilized by the Region constituted clear error. ICAS has not

shown that the Region violated any part 71 or 124 procedural regulation.

Moreover, the alleged problems ICAS has identified do not, even if the

Board were to find them to constitute a deficiency in some way, warrant

Board review. Consequently, the Board denies review of the Permit on

this ground. 

VII. CONCLUSION AND ORDER

For the foregoing reasons, the Board concludes that none of the

petitioners have demonstrated that review of Permit No. R10

OCS030000 is warranted on any of the grounds presented. The Board

therefore denies review of the Permit.

So ordered. 
CERTIFICATE OF SERVICE 

I hereby certify that copies ofthe forgoing Order Denying Petitions for Review in the 

matter of Shell Offshore, Inc., OCS Appeal Nos. 11-05,11-06 & 11-07 were sent to the 

following persons in the manner indicated: 

By First Class U.S. Mail: 

Duane A. Siler 

Sarah C. Bordelon 

Tony G. Mendoza 

Crowell & Moring LLP 

1001 Pennsylvania Ave. NW 

Washington, DC 20004 

Telephone: 202-624-2500 

Facsimile: 202-628-5116 

dsiler@crowell.com 

sbordelon@crowell.com 

tmendoza@crowell.com 

Colin O'Brien 

Eric Jorgensen 

EARTHJUSTICE 

325 Fourth Street 

Juneau, AK 99801 

Telephone: (907) 500-7134 

Facsimile: (907) 463-5891 

co brien@earthjustice.org 

ejorgensen@earthjustice.org 

Daniel Lum 

P.O. Box 70169 

Fairbanks, AK 99707 

Telephone: (907) 799-1491 

eskimo. whaler@yahoo.com 

Tanya Sanerib 

Christopher Winter 

Crag Law Center 

917 SW Oak Street, Suite 417 

Portland, OR 97205 

Telephone: (503) 525-2722 

Facsimile: (503) 296-5454 

tanya@crag.org 

chris@crag.org 

Erik Grafe 

EARTHJUSTICE 

441 W. 5th Avenue, Suite 301 

Anchorage, AK 99501 

Telephone: (907) 277-2500 

Facsimile: (907) 277-1390 

egrafe@earthjustice.org 
By EPA Pouch Mail: 

Alexander Fidis 

Julie Vergeront 

Office of Regional Counsel 

U.S. EPA, Region 10 

1200 Sixth Avenue, Suite 900 (ORC-158) 

Seattle, W A 98101 

Telephone: (206) 553-4710 (AF) 

Telephone: (206) 553-1497 (JV) 

Facsimile: (206) 553-1762 

vergeront.julie@epa.gov 

fidis.alexander@epa.gov 

By EPA Interoffice Mail: 

David Coursen 

Office of General Counsel 

U.S. Environmental Protection Agency 

1200 Pennsylvania Ave. NW (2322A) 

Washington, DC 20460 

Telephone: (202) 564-0781 

Facsimile: (202) 501-0644 

coursen.david@epa.gov 

Dated: MAR 3 0 2012 

Secretary