ORAL ARGUMENT NOT YET SCHEDULED No. 11-1101 (Consolidated with 11-1285, 11-1328, and 11-1336)
IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

CENTER FOR BIOLOGICAL DIVERSITY, et al., Petitioners, v. UNITED STATES ENVIRONMENTAL PR OTECTION AGENCY, et al., Respondents. Petition for Review of Final Action of the U.S. Environmental Protection Agency REPLY BRIEF OF PETITIONERS Ann Brewster Weeks Clean Air Task Force 18 Tremont Street, Suite 530 Boston, MA 02108 Phone: (617) 624-0234 ext. 156 Counsel for Conservation Law Foundation and Natural Resources Council of Maine Frank Rambo Morgan Butler Southern Environmental Law Center 201 West Main Street, Suite 14 Charlottesville, VA 22902 Phone: (434) 977-4090 Counsel for Coastal Conservation League, Dogwood Alliance, Georgia ForestWatch, and Wild Virginia Meleah Geertsma Natural Resources Defense Council 2 N. Riverside Plaza, Suite 2250 Chicago, IL 60606 Phone: (312) 651-7904 Counsel for Natural Resources Defense Council Kevin P. Bundy Vera P. Pardee Brendan Cummings Center for Biological Diversity 351 California Street, Suite 600 San Francisco, CA 94104 Phone: (415) 436-9682 ext. 313 Counsel for Center for Biological Diversity David Doniger Natural Resources Defense Council 1152 15th Street NW, Suite 300 Washington, D.C. 20005 Phone: (202) 289-2403 Nathaniel S.W. Lawrence Natural Resources Defense Council 3723 Holiday Drive, SE Olympia, WA 98501 Phone: (360) 534-9900 Counsel for Natural Resources Defense Council

DATED: July 10, 2012 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 1 of 40i TABLE OF CONTENTS

TABLE OF AUT HORITIES ................................................................................... iii GLOSSARY OF RULEMAKINGS, ACRO NYMS, AND ABBREVIATIONS .. vii
STATUTES AND RE GULATIONS ..................................................................... viii
INTRODUC TION .....................................................................................................1
SUMMARY OF ARGUME NT .................................................................................2
ARGUMENT .............................................................................................................4
I. THIS COURT HAS JURISD ICTION TO REVIEW THE EXEMPTION. ...4
II. THE CLEAN AIR ACT PRECLUDE S CONSIDERATION OF EXTRARECORD EVID ENCE. ...................................................................................6
III. EPA HAS FAILED TO JUSTIF Y ITS EXEMPTION UNDER THE CLEAN AIR ACT OR ANY DOCT RINE ALLOWING DEVIATIONS FROM THE ST ATUTE. .................................................................................7
A. The Clean Air Act Does Not Leav e the Timing of PSD Applicability to EPA’s Di screti on...............................................................................7
B. EPA Has Failed to Demonstrate the Administrative Impossibility of Requiring Large Biogenic CO 2 Sources to Obta in Permits. .................9
1. EPA’s Assertions of Administrativ e Need for the Exemption Lack Record S upport. .............................................................................9
2. EPA’s Post Hoc Search for Statutory Au thority Is Unavailing...14
C. EPA Has Failed to Justify the Exemption Under the De Minimis or Absurd Results Doctrines....................................................................16 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 2 of 40ii 1. EPA Disclaims Reliance on the De Minimis Doctrine and Concedes it Lacks a Supporting Record for the Exemption. ......16
2. EPA’s Post Hoc Reliance on Absurd Results Fails. ....................18
D. EPA Has Failed to Justify the Exem ption Under the “One Step at a Time” Doctrine....................................................................................21
1. EPA Misconstrues the Reach of the “One-Step-at-a-Time” Doctrine. ......................................................................................21
2. EPA Cannot Justify the Biomass Exemption Under the Catch-All General Rulemaking Authority Found in S ection 301................23
3. No “New Situation” or Unfore seen Condition Supports EPA’s Biomass Exem ption. ....................................................................24
IV. THE ARGUMENTS OF AMICUS CURIAE NACWA CANNOT SALVAGE EPA’S UNLAWF UL EXEMPT ION.........................................25
V. THE COURT SHOULD VACATE THE BIOMASS EXEMPTION. .........27
CONCLUSIO N........................................................................................................28 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 3 of 40iii TABLE OF AUTHORITIES

CASES
*Alabama Power Co. v. Costle , 636 F.2d 323 (D.C. Ci r. 1979) .............................................................. 1, 3, 14 Alaska DEC v. EPA, 540 U.S. 461 (20 04)................................................................................ 23, 24
Am. Elec. Power Co. v. Conn. , 131 S. Ct. 2527 (2011).....................................................................................5
Am. Petroleum Inst. v. Costle , 609 F.2d 20 (D.C . Cir. 1979).......................................................................... 6 American Trucking Ass’ns v. United States, 344 U.S. 298 (1 953).......................................................................................25 Appalachian Power Co. v. EPA , 135 F.3d 791 (D.C . Cir. 1998)....................................................................... 26 Bennett v. Spear , 520 U.S. 154 (1 997).........................................................................................4
Bluewater Network v. EPA, 372 F.3d 404 (D.C. Cir. 2004) .................................................................. 1, 14 Cablevision Sys. Dev. Co. v. Motion Picture Ass’n of America , 836 F.2d 599 (D.C . Cir. 1988)....................................................................... 25 Citizens to Save Spencer County v. EPA , 600 F.2d 844 (D.C. Cir. 1979) ................................................................ 23, 24 City of Las Vegas v. Lujan , 891 F.2d 927 (D.C . Cir. 1989)....................................................................... 22 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 4 of 40iv *Coal. for Responsible Re gulation, Inc. v. EPA , No. 09-1322 et al. (D.C. Cir. June 26, 2012) ..................... 1, 4, 7, 8, 9, 14, 22 Envtl. Def. Fund v. EPA , 898 F.2d 183, 190 (D.C . Cir. 1990) ...............................................................28 Envtl. Def. Fund v. EPA , 636 F.2d 1267 (D.C. Cir. 1980) .............................................................. 10, 13
FTC v. Standard Oil Co ., 449 U.S. 232 (1 980).........................................................................................5 Grand Canyon Air Tour Coal. v. FAA, 154 F.3d 455, 476-478 (D.C. Cir. 1998) .......................................................22 Hazardous Waste Treatment Council v. EPA , 861 F.2d 277 (D.C . Cir. 1988)....................................................................... 21 Honeywell Int’l Inc. v. EPA , 374 F.3d 1363 (D.C . Cir. 2004)..................................................................... 28 Indep. Bankers Ass’n. v. Marine Midland Bank , 757 F.2d 453 (2d Cir. 1985) .......................................................................... 25 Manin v. Nat’l Transp. Safety Bd. , 627 F.3d 1239 (D.C . Cir. 2011)..................................................................... 25 Motor Vehicle Mfrs. Ass’n v. St ate Farm Mut. Auto. Ins. Co. , 463 U.S. 29 ( 1983).........................................................................................19 *Mova Pharm. Corp. v. Shalala , 140 F.3d 1060 (D.C. Ci r. 1998) .......................................................... 3, 12, 20 Nat’l Ass’n of Broadcasters v. FCC , 740 F.2d 1190 (D.C . Cir. 1984)..................................................................... 22
Nat’l Lime Ass’n v. EPA , 233 F.3d 625 (D.C . Cir. 2000)....................................................................... 28 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 5 of 40v Nat’l Park Hospitality Ass’n v. Dept. of Interior , 538 U.S. 803 (2 003).........................................................................................5 New Jersey v. EPA , 517 F.3d 574 (D.C . Cir. 2008)....................................................................... 27
New York v. EPA , 443 F.3d 880 (D.C . Cir. 2006)....................................................................... 18
New York v. EPA , 413 F.3d 3 (D.C. Cir. 2005)........................................................................... 15
North Carolina v. EPA , 550 F.3d 1176 (D.C . Cir. 2008)..................................................................... 28 Northeast Md. Waste Disposal Auth. v. EPA , 358 F.3d 936 (D.C. Cir. 2004) ................................................................ 18, 19
NRDC v. EPA , 571 F.3d 1245 (D.C . Cir. 2008)..................................................................... 27
Portland Cement Ass’n v. EPA , 665 F.3d 177 (D.C . Cir. 2011)......................................................................... 5
Sierra Club v. EPA , 551 F.3d 1019 (D.C . Cir. 2008)..................................................................... 27
Sierra Club v. EPA , 719 F.2d 436 (D.C. Cir. 1983) .................................................................. 9, 12
Sierra Club v. Thomas , 828 F.2d 783 (D.C . Cir. 1987)......................................................................... 8 Tex. Indep. Producers and Ro yalty Owners Ass’n v. EPA , 413 F.3d 479 (5th Cir. 2005) ........................................................................... 5 United States v. Haggar Apparel Co. , 526 U.S. 380, 392 -93 (199 9) ........................................................................24 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 6 of 40vi STATUTES 42 U.S.C. § 7411 (a)(4).............................................................................................15 42 U.S.C. § 7475(a) ...................................................................................................4 42 U.S.C. § 7479(1) .................................................................................................15 42 U.S.C. § 7479 (2)(C)..............................................................................................4 42 U.S.C. § 7601 (a)(1).............................................................................................23 42 U.S.C. § 7607 (d)(3)(C) .......................................................................................18 42 U.S.C. § 7607(d)(6)(A )(i) ........................................................................ 6, 18, 25 42 U.S.C. § 7607(d )(6)(C) .................................................................................. 6, 25 42 U.S.C. § 7607(d )(7)(A).................................................................................. 6, 25

FEDERAL REGISTER 74 Fed. Reg. 66,496 ...................................................................................................9 75 Fed. Reg. 31, 514 .................................................................................... 10, 12, 19 76 Fed. Reg. 15,249 ............................................................................................ 9, 18 76 Fed. Reg. 43,490 .................................................................................. 4, 7, 18, 19 USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 7 of 40vii GLOSSARY OF RULEMAKINGS, ACR ONYMS, AND ABBREVIATIONS Rulemakings: “Biomass Exemption” or “Exemption” : Deferral for CO 2 Emissions from Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs; Final Rule, 76 Fed. Reg. 43,490 (July 20, 2011). “Proposed Biomass Exemption” or “Proposed Exemption” : Deferral for CO 2 Emissions from Bioenergy and Other Biog enic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs; Proposed Rule, 76 Fed. Reg. 15,249 (March 21, 2011). “Tailoring Rule” : Prevention of Significant Dete rioration and Title V Greenhouse Gas Tailoring Rule; Final Rule, 75 Fed. Reg. 31,514 (June 3, 2010). “Endangerment Finding” : Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Secti on 202(a) of the Clean Air Act; Final Rule, 74 Fed. Reg. 66,496 (Dec. 15, 2009). Acronyms and Abbreviations: BACT Best Available Control Technology CAA Clean Air Act
CO 2 Carbon Dioxide CRR Coalition for Responsible Regulation EPA Environmental Protection Agency NACWA National Association of Clean Water Agencies NAFO National Alliance of Forest Owners PSD Prevention of Significant Deterioration RTC Response to Comments USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 8 of 40viii STATUTES AND REGULATIONS All applicable statutes and regulations are contained in the Opening Brief of Petitioners (Corrected), the Brief of Resp ondents, and the Brief of Intervenors in Support of Respondents. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 9 of 401 INTRODUCTION EPA has failed to meet the heavy bur den required to justify the Biomass Exemption’s deviation from the Clean Ai r Act (“CAA” or “Act”). EPA here affirmatively exempted sources from a self

- executing statutory requirement. See Coal. for Responsible Re gulation, Inc. v. EPA , No. 09-1322 et al., slip op. at 53-54, 77 (D.C. Cir. June 26, 2012) (“ CRR ”) (holding that CO 2 became “subject to regulation” for prevention of significan t deterioration permitting purposes “by automatic operation of the statut e” when EPA’s regulation of CO 2 emissions from passenger cars and trucks took effect in January 2011). This deviation from statutory command requires a co mpelling justification. See Alabama Power Co. v. Costle , 636 F.2d 323, 359 (D.C. Cir. 1979). EPA failed to provide one here. Contrary to EPA’s and Intervenors’ a ssertion, this is not a case where regulations are needed to define and impl ement a general statutory instruction and where this Court has sometimes allowed a measure of discretion in the staging of agency actions. Cf., e.g. , Bluewater Network v. EPA, 372 F.3d 404, 412 (D.C. Cir. 2004). EPA’s latitude to exempt s ources from a self-executing statutory requirement is far more limited (e.g., to conditions of administrative impossibility), and requires a rigorous demonstration that is absent from the Exemption rulemaking and its record. Nor can EP A rescue its Exemption by resort to post hoc rationales advanced for the first time in its brief. The Exemption must be vacated. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 10 of 402 SUMMARY OF ARGUMENT EPA and Intervenors do not contest this Court’s jurisdiction to review the Exemption, which is inarguably a fina l rulemaking with permanent, adverse consequences. The Exemption permanen tly insulates new and modified major sources of biogenic CO 2 that commence constructio n during the three-year exemption period from otherwise applic able permitting and pollution control requirements. These sources may operate for decades without installing best available control technology (“BACT”) and meeting other requirements of the prevention of significant deterioration (“ PSD”) and Title V pe rmitting processes. These sources can escape permitting perm anently even if EPA allows the Exemption to expire at the end of three y ears. The Exemption is final and ripe for review. EPA and Intervenors improperly rely on extra-record evidence and post hoc rationalizations. Their arguments also fail on the merits. PSD and Title V applicability was triggered “by automatic operation of the statute” when motor vehicle emission standards for greenhouses gases took effect. CRR , slip op. at 54, 77. The self-executing character of th ese requirements fatally undercuts EPA’s post hoc plea for broad discretion not to “regul ate first” while it examines certain technical issues. Because the commencem ent of PSD permitting requirements is automatic, the statute simply does not give EPA the discretion it claims. Rather, USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 11 of 403 EPA must shoulder the much heavie r burden of producing a compelling justification for the Exemption—a burde n the agency failed to meet here. CRR also contradicts Intervenors’ argumen t that the Exemption was merely a reconsideration of EPA’s supposed “decision” to regulate biogenic CO 2 in the Tailoring Rule. The decision to regulate was made by Congress in the Clean Air Act, not by EPA. The Exemption therefore falls unless EPA meets the hea vy burden necessary to justify deviating from the statute— a burden requiring EPA to depart from the statute no further than necessary to effect uate congressional inte nt and to move as quickly as possible toward full compliance. See generally Alabama Power , 636 F.2d at 359-61; Mova Pharm. Corp. v. Shalala , 140 F.3d 1060, 1068 (D.C. Cir. 1998). Agreeing at least tacitly, EPA i nvokes doctrines allowi ng limited deviation from the statute, but it cannot prevail under any of the theories advanced. Nothing in the record shows that permitting biogenic CO 2 sources that emit more than the Tailoring Rule thresholds is administ ratively impossible. Moreover, EPA disavows reliance on a de minimis rationale and concedes it has no record to support such a theory. The agency’s post hoc invocation of “absurd results,” actually nothing more than the de minimis rationale going by another name, similarly lacks support. Finally, the “one-step-at-a-time” doctrine does not independently give EPA discretion to de viate from the statute’s self-executing USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 12 of 404 permitting requirements. The Exemption unjustifiedly contravenes the Clean Air Act and must be vacated. ARGUMENT
I. THIS COURT HAS JURISDIC TION TO REVIEW THE EXEMPTION. The Court has jurisdiction to review the Exemption. Neither EPA nor Intervenors dispute this; rather, they argue only that the Court should not reach the merits of any future “permanent exemption.” Brie f of Respondents (“EPA Br.”) at 35-36; Brief of Intervenors in Support of Respondents (“Int. Br.”) at 16-21. Petitioners here chal lenge only EPA’s three-year Exemption, not any hypothetical future exemption. The Exemption is final and reviewable. It permanently excludes the covered biogenic CO 2 sources (those with emissions exceeding Tailoring Rule thresholds) that are constructed or modified durin g the three-year ex emption period from otherwise applicable PSD and Title V permitting requirements, including BACT. 76 Fed. Reg. 43,490, 43,492/3 (Jul. 20, 2011) (JA __); see Bennett v. Spear , 520 U.S. 154, 177-78 (1997). As CRR confirms, those permitting requirements otherwise would apply to these sources by operation of the statute. CRR , slip op. at 53-54, 77. Because PSD requirements apply only to new and modified sources,

see sections 165(a), 169(2)(C); 42 U.S.C . §§ 7475(a), 7479(2)(C), facilities built during the exemption period may operate for decades without obtaining permits USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 13 of 405 and meeting pollution control obligations. 1 Exempted facilities—which will emit higher amounts of pollution as a result—ar e being permitted and constructed now. Opening Brief of Petitioners (“Pet. Br.”) at 25-29. The cases cited by Interve nors on finality (Int. Br. at 18-19) are therefore inapposite. See, e.g. , Am. Elec. Power Co. v. Conn. , 131 S. Ct. 2527, 2539-40 (2011) (discussing Congress’ choice to “en trust[ ] complex balancing to EPA in the first instance” in setting standa rds of performance under section 111); Portland
Cement Ass’n v. EPA , 665 F.3d 177 (D.C. Cir. 2011) (finding no final action where EPA was in the process of developing such standards of perfo rmance). Nor does this case raise prudential ripeness questions, as Intervenors suggest. Once again, the cases they cite are inapplicable. See, e.g. , Nat’l Park Hospitality Ass’n v. Dept. of Interior , 538 U.S. 803, 812 (2003) (declining to review rule before it had been applied to a concrete situa tion, so as to avoid the court becoming entangled in abstract disagreements over policy); FTC v. Standard Oil Co ., 449 U.S. 232, 241 (1980) (declining to review the agency’s i ssuance of a complaint at an interim step in administrative adjudication); Tex. Indep. Producers and Royalty Owners Ass’n
v. EPA , 413 F.3d 479, 483 (5th Cir. 2005) (declin ing to review, at the behest of

1 Such a source could become subject to pe rmitting and BACT at some later time if it undergoes a major modification, i.e., an emissions-increasing physical or operational change. But the possibility of a future modification is speculative and even then BACT may only r each the modification and any other affected part of the facility. Thus review at that point is no substitute for the front-end permitting of the entire facility that CRR recognizes is required by the Act. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 14 of 406 industry petitioners, a rule that by its terms excused them from complying until later). The Exemption is final, ha ving effect, and ripe for review.
II. THE CLEAN AIR AC T PRECLUDES CONSIDERATION OF EXTRA-RECORD EVIDENCE. EPA and Intervenors rely extensivel y on documents that are not in the administrative record and that were created well after promulgation of the Exemption. See EPA Br. at 21-22, 28-32, 51; Int. Br. at 3, 10-14 (citing inter alia

a post hoc “Synthesis,” an EPA report proposing a framewo rk for biogenic carbon accounting, a Science Advisory Board repor t, and EPA’s Tailoring Rule “Step 3” proposed rulemaking). Amicus curiae National Association of Clean Water Agencies (“NACWA”) also cites extra-re cord materials. But under the CAA, EPA’s action must stand or fall on the docket before the agency at the time of the rule’s promulgation. See § 307(d)(6)(C), (7)(A); 42 U.S.C. § 7607(d)(6)(C); (7)(A); Am. Petroleum Inst. v. Costle , 609 F.2d 20, 23-24 ( D.C. Cir. 1979). These extra-record materials and the arguments relying on them cannot furnish grounds for upholding the Exemption. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 15 of 407 III. EPA HAS FAILED TO JUSTIF Y ITS EXEMPTION UNDER THE CLEAN AIR ACT OR ANY DOCTRINE ALLOWING DEVIATIONS FROM THE STATUTE.
A. The Clean Air Act Does Not Leave the Timing of PSD Applicability to EPA’s Discretion. EPA contends it had authority to deci de not to “regulate first” pending scientific review of biogenic carbon accounting principles. See EPA Br. at 5-6. The statute, however, does not leave the ti ming of regulation to EPA. This Court
in CRR confirmed that PSD permitting requirements for CO 2 took effect automatically when CO 2 became “subject to regulation.” CRR , slip op. at 16, 54 (finding EPA’s construction “statutor ily compelled” and “unambiguously correct”). EPA cannot preva il by claiming it has discretion that this Court has held the statute does not provide.
CRR also fatally undercuts Intervenors’ ar guments. Intervenors urge that the Exemption reverses a supposed EPA “decision” to regulate biogenic CO 2 in the Tailoring Rule, thereby “restor[ing] th e pre-Tailoring Rule status quo” and allowing a “reasonable” delay in regula tion so EPA can examine the science. 2 Int.

2 Intervenors spend the bulk of their brie f attacking EPA’s supposed “reversal of course” in regulating biogenic CO 2 under the Tailoring Rule, insisting that reconsideration of that aspect of the Tailoring Rule (which EPA granted) was compelled, and essentially rearguing their re quest for an administrative stay of the Tailoring Rule (which EPA denied). See Int. Br. at 22-39. These arguments rest largely on a misinterpretation of EPA’s references to the U.S. Greenhouse Gas Inventory; as EPA has explained, such re ferences were never intended to “exempt” biogenic CO 2 from regulation. See, e.g. , 76 Fed. Reg. at 43,494/3-95/1 (JA __-__). USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 16 of 408 Br. at 26-27. But EPA did not decide to regulate CO 2 , biogenic or otherwise, in the Tailoring Rule. Congress made that decisi on in a self-executing statute. Nor did the “pre-Tailoring Rule status quo” exempt biogenic CO 2 . Rather, the statute itself automatically required PSD permits for all CO 2 emissions above the statutory thresholds. CRR , slip op. at 77. EPA accurate ly explained this in denying NAFO’s request for an administrative stay of the Tailoring Rule. EPA-HQ-OAR2011-0083-0008 at 2 (JA __) (“As no exemption for emissions of CO 2 from biomass existed prior to the final [Tailo ring Rule], an administrative stay would not result in an exemption from the re quirements of PSD and Title V.”). Contrary to Intervenors’ suggestion (I nt. Br. at 28), Petitioners do not allege that EPA has unreasonably delayed the start of regulation in the absence of a clear statutory duty to act by a certain date. Cf., e.g., Sierra Club v. Thomas , 828 F.2d 783, 798 (D.C. Cir. 1987) (dec lining to hold delay in regulation unreasonable where statute did not instruct EPA to regul ate or “require EPA even to consider [the] question”). As CRR confirms, the permitting requirements took hold automatically. Accordingly, unlike the situation in Sierra Club v. Thomas , EPA has a clear statutory duty here, and l acks discretion to delay compliance.

In the unlikely event that any of these arguments survives CRR , it does not belong here, but rather in the Tailoring Ru le challenge by In tervenors NAFO and American Forest & Paper Association (No. 10-1209; currently held in abeyance). USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 17 of 409 In a similar vein, Intervenors incorrec tly assert that EPA “excluded biomass emissions” from its greenhouse ga s Endangerment Finding. In t. Br. at 4. EPA did no such thing; the Endangerment Finding treated all six well-mixed greenhouse gases, including CO 2 , as a single pollutant notwithstanding their origins in “different processes” that may “require different contro l strategies.” 74 Fed. Reg. 66,496, 66,541/3 (JA __). It did not even mention “biomass emissions.” Moreover, as EPA acknowledged in the Proposed Biomass Exemption, biogenic and fossil CO 2 have exactly the same heat-trappi ng effect in the atmosphere, 76 Fed. Reg. 15,249, 15 ,254/1 (JA __), and thus share the characteristic s that cause endangerment. This C ourt has confirmed Congress’s intent to cover any air pollutant contributing to global warming under the PSD program. See CRR , slip op. at 57-59. Intervenors’ misreading of the Endangerment Finding, like their misunderstanding of the statute, does nothing to save the Exemption.
B. EPA Has Failed to Demonstrate the Administrative Impossibility of Requiring Large Biogenic CO 2 Sources to Obtain Permits.
1. EPA’s Assertions of Administ rative Need for the Exemption Lack Record Support. EPA fails to defend the Biomass Ex emption on administrative necessity grounds. EPA Br. at 40-56. An administrative necessity exemption must be backed by a compelling demonstration that statutory compliance is “impossible,” not merely difficult. Sierra Club v. EPA , 719 F.2d 436, 462-63 (D.C. Cir. 1983); USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 18 of 4010 Envtl. Def. Fund v. EPA , 636 F.2d 1267, 1283 (D.C. Cir. 1980). Here, EPA utterly fails to show that issuing permits to the modest number of large biogenic CO 2 sources would be impossible. EPA attempts to portray the Exempti on as part-and-parcel of the Tailoring Rule, but the Exemption is a separate fina l action, taken in a separate rulemaking, and is based on a different rationale. The Exemption is premised on the asserted difficulty of permitting sources of a par ticular kind, in a specific industrial category, while the Tailoring Rule wa s based solely on the administrative impossibility, at least for an initial period, of permitting the vast number of facilities emitting more than the statutory th resholds irrespective of source type. EPA expressly decided in the Tailoring Ru le “to address the need for tailoring through a uniform threshold-based approach , rather than through a collection of various specific exclusions.” 75 Fe d. Reg. 31,514, 31,526/3-27/1 (JA __-__); see also id. at 31,591/1 (JA __) (noting that EP A had no basis for a threshold-based exemption for biogenic CO 2 sources and that EPA did not examine “burdens with respect to specific categories” or “analy ze[]the administrative burden of permitting projects that specifically involve biogenic CO 2 emissions”). While EPA is not barred from changing its approach, any new exemption for an industrial category must be made on a record that robustly supports that exemption—not on a prior record that by the agency’s own assessment did not USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 19 of 4011 support it. At a minimum, a record to support this exemption would have to specify how many above-the-thresholds biogenic CO 2 sources would require permits, and compellingly show why permitti ng that number would be impossible.
See Pet. Br. at 34-35. The record he re contains nothing of the sort. What is in the Exemption record undercuts EPA. A number of state permitting agencies commented that they expected only a small number of biogenic CO 2 permit applicants (e.g. , “no significant increases or decreases,” “one or two” per year, “3 to 5” in power sect or over the three-year period), while others declined to speculate. 3 No state demonstrated that it could not handle these modest numbers. See Pet. Br. at 15-16. EPA brushes off the states’ comments by claiming, without any evidence, that the states would have said the same thing about any industrial category of sources. EPA Br. at 44. This is pure speculation. EPA never asked the states about any other category, and EPA’s brief cites no record evidence to demonstrate that permitting agencies would be sa ddled with overwhelmingly burdensome numbers of biogenic CO 2 sources.

3 While the number of sources is modest , the burden on persons living near the unpermitted biomass plants built during the exemption period will be significant. Construction of even one or two plants per year will have harmful effects on persons living nearby, in terms of criteri a air pollutant emissions that otherwise would have been more strictly limited. And these impacts will persist well after the three-year exemption period, because the sources that escape permitting will be allowed to operate for decades without best available pollution controls. See Pet. Br. at 25-29. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 20 of 4012 Even if the record had shown an impossible burden, EPA would still have had to adopt the narrowest effective solution. Mova Pharm. Corp. v. Shalala , 140 F.3d 1060, 1068 (D.C. Cir. 1998) (EPA “may deviate no further from the statute than is needed to protect congressional in tent.”). There was no need for a broad exemption. As EPA found in the Tailoring Rule, “there is flexibility to apply the existing regulations and policies regarding BACT in ways that take into account their lifecycle effects on GHG c oncentrations.” 75 Fed. Reg. at 31,591/2 (JA __). EPA notes correctly that the statute re quires “case-by-case” BACT reviews in which the use of “clean fuels” is a spec ified control measure, and costs and other environmental impacts (positive or negati ve) must be evaluated. EPA Br. at 56 (quoting § 169(3), 42 U.S.C. § 7479(3)). EPA acknowledges that BACT provi des an appropria te context for considering whether “use of some bi ofuels may have significant positive environmental and energy benefits while others may have significant negative impacts.” EPA Br. at 56; see also id. at 4 (distinguishing, e.g., effects of burning whole trees that take decades to re-grow and re-absorb CO 2 from effects of burning farm wastes that displace fossil fuels a nd would otherwise quickly decay). The agency claims this exercise would “fur ther encumber” the permitting process. EPA Br. at 56. But showing an “e ncumbrance” does not demonstrate an impossibility. See Sierra Club v. EPA , 719 F.2d at 462-63; Envtl. Def. Fund v. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 21 of 4013 EPA , 636 F.2d at 1283. EPA fails to cite a ny record evidence, let alone make a compelling demonstration, that permitting agencies could not feasibly evaluate the relative benefits and impacts of different biomass types in BACT determinations. What the record does show is that none of the states expecting permit applications claimed that processing them would be impossible. EPA repeatedly invokes the risk that requiring biogenic CO 2 sources to undergo permitting now may counter-productively deter the use of as-yetunspecified beneficial types of biomass. But EPA’s analysis ignores the countervailing environmental costs of al lowing sources burning forms of biomass known to be detrimental to bypass the permitting process altogether. The harms produced by an overbroad exemption undersco re the need to cr aft exemptions from statutory requirements as narrowly as possible. Finally, EPA and Intervenors seek to avoid EPA’s burden of justifying an exemption by mischaracterizing the question as when to start regulating biomass

sources. See, e.g., EPA Br. at 27 (“the prudent course is to . . . not leap to regulation and worry about scientific support later” ); Int. Br. at 27-29. 4 As discussed supra at 7-8, however, these sources were already regulated by the

4 EPA has the matter backwards. Its duty under the Clean Air Act is to act in a precautionary manner, not to defer action until it has elusive “certainty.” “As we have stated before, ‘Awaiting certainty will often allow for only reactive, not preventive, regulation.’” CRR , slip op. at 31 (quoting Ethyl Corp. v. EPA , 541 F.2d 1, 25 (D.C. Cir. 1976)). USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 22 of 4014 statute itself. See CRR , slip op. at 53-54, 77. The question posed by the Exemption was whether to stop regulating them. While th is Court has sometimes given agencies leeway on the staging of regulations necessary to initiate sources’ emission control obligations under a non-self-executing statutory provision, it is another thing entirely to exempt sources from direct, self-executing statutory prohibitions that have already been tr iggered. The latter requires a rigorous showing of impossibility that EPA has failed to offer. Compare, e.g., Bluewater Network v. EPA, 372 F.3d 404, 412 (D.C. Cir. 2004) (approving two-tiered implementation of statute that require s agency implementing regulations), with Alabama Power , 636 F.2d at 359 (finding agency’s “burden of justification” is “especially heavy” when seeking “approval of a prospective exemption of certain categories” from the same PSD provision at issue here “based upon the agency’s prediction of the difficulties of undertaking regulation”).
2. EPA’s Post Hoc Search for Statutory Authority Is Unavailing. Petitioners demonstrated that EPA ha s no statutory authority to look far beyond a facility’s borders and decades into the future for offsetting CO 2 absorption when deciding whether a source n eeds a PSD permit. Pet. Br. at 40-45. In response, EPA purports to find authority in the word “incr ease.” EPA Br. at 47- 50. Even if this were not a post hoc rationale, as EPA conc edes (EPA Br. at 48 n.9), it would fail for two reasons. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 23 of 4015 First, EPA fails to identify the statut ory context. The word “increase” appears in the Clean Air Act’s definition of “modification.” § 111(a)(4), 42 U.S.C. § 7411(a)(4). That definition unambiguously refers to “increases [in] the amount of any air pollutant emitted by such source .” Id. (emphasis added). Those terms cannot be stretched to include CO 2 absorption occurring outside the boundaries of a “source.” Second, the term “increas es” appears only in the definition of “modification” and not in section 169(1)’s definition of a “major emitting facility,” the term controlling whether a new biogenic CO 2 source needs a permit to

construct. See 42 U.S.C. § 7479(1). Congress ther efore left no gap in the Clean Air Act from which the agency can leverage authority to consider distant or delayed CO 2 absorption when determining whet her a biomass source has sufficient
CO 2 emissions to be a “major emitting facility ” or a “major stationary source,” and thus needs a PSD or Title V permit. EPA relies on this Court’s holding in New York v. EPA that Congress left EPA some discretion concerning the timeframe over which to calculate contemporaneous emissions for netting pu rposes. EPA Br. at 47-48 (citing 413 F.3d 3, 27 (D.C. Cir. 2005) (“ Congress did not specify how to calculate ‘increases’ in emissions”)). But Congress did not leave the same discretion over the spatial dimension; the Clean Air Act directs EP A to calculate the increases “emitted by such source.” § 111(a)(4), 42 U.S.C. § 7411(a)(4). Even in the temporal USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 24 of 4016 dimension, EPA stretches New York v. EPA beyond the breaking point by asserting that the decision provides EPA discretion to counterbalance CO 2 emissions with
CO 2 absorption occurring decades later—and with no record support for that timeframe, let alone assurance that the re growth and associated absorption will actually occur as assumed.
C. EPA Has Failed to Justify the Exemption Under the De Minimis or Absurd Results Doctrines.
1. EPA Disclaims Reliance on the De Minimis Doctrine and Concedes it Lacks a Supporting Record for the Exemption. Notwithstanding its re petitive reference to de minimis principles throughout the proposed and final Exemption preamb les, EPA disavows any reliance on the doctrine. EPA Br. at 34-36. Acknowledging “the burden of establishing that a [ de
minimis ] exemption is warranted,” EPA conced es it has not met this burden here:

“ If and when EPA comes to such a conclusion, it will provide the record to support it.” EPA Br. 35 (emphasis in original). In light of EP A’s disavowal of the doctrine and its admission that it lacks a supporting record, the Exemption cannot be upheld

on de minimis grounds. 5

5 Only if the Court finds, notwithstanding EPA’s disavowal, that the agency relied on the de minimis doctrine to justify its current action would the Court have occasion to decide whether EPA has met its burden to justify the Exemption on those grounds. Pet. Br. at 38-39. That question would, of course, have to be answered in light of EPA’s concession that it lacks a supporting record for a de minimis exemption. EPA Br. at 35-36. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 25 of 4017 EPA nonetheless contends, without any legal support, that de minimis principles should be a “factor” in the Court’s consideration of EPA’s use of other doctrines, such as administrative necessity . EPA Br. at 35. EPA cannot have it both ways; after discla iming reliance on the de minimis doctrine and conceding it lacks a supporting record, EPA cannot invoke the same doctrine in watered down form to bolster its otherwise inadequate justifications. No cases allow EPA to transform a weak showing of administrative burden into the required demonstration of impossibility by claiming that some of the exempted sources may later be found to have only de minimis impacts. See Pet. Br. at 36.

The administrative record here would not support a de minimis exemption in any event. In both its pr oposed and final Biomass Ex emptions, EPA effectively admitted the possibility that certain exempted feedstocks do have effects that are

not de minimis : “the use of whole, standing tress [ sic ], removes a carbon sink that, although replaced with carbon absorbing trees through recognized and even regulated forest management, may take ma ny years or decades to complete such replacement, depending on the type of tree, location and other factors.” EPA Br. at 31 (citing RTC at 9, JA __); see also 76 Fed. Reg. at 43, 498/1, 43,499/1-2 (JA__, __); 76 Fed. Reg. 15,261/3 (JA __) (adm itting possibility that some biomass feedstocks “have a significant impact on the net carbon cycle”). USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 26 of 4018 Yet EPA indiscriminately extended the Exemption to all biomass feedstocks, including whole, standing trees. See 76. Fed. Reg. at 43,493/1 (JA __) (excluding emissions from a ll “biologically-based materials other than fossil fuels and mineral sources of carbon”). The Biomass Exemption thus is grossly overbroad and could not be justified on de minimis grounds. See New York v. EPA , 443 F.3d 880, 888 (D.C. Cir. 2006) (“Reliance on the de minimis doctrine invokes congressional intent that agencies diverg e from the plain meaning of a statue only so far as is necessary to avoid its futile application.”).
2. EPA’s Post Hoc Reliance on Absurd Results Fails. Having acknowledged not making or supporting a de minimis exemption, EPA repackages the same basic position as an attempt to avoid “absurd results.” This new rationale is not only post hoc but also lacks substantive merit. This Court has described an agency’s responsibility to “set forth the reasons for its actions” as “the fundamental re quirement of nonarbitrary administrative decisionmaking.” Northeast Md. Waste Disposal Auth. v. EPA , 358 F.3d 936, 949 (D.C. Cir. 2004). The Clean Air Act requires proposed and promulgated rules to set forth a “statement of basis and pur pose” that summarizes “the major legal interpretations and policy considerati ons underlying the proposed rule.” §§ 307(d)(3)(C), (d)(6)(A)(i); 42 U.S.C . §§ 7607(d)(3)(C), (d)(6)(A)(i). Axiomatically, “the courts may not accept appellate counsel’s post hoc USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 27 of 4019 rationalizations for agency action. It is well established that an agency’s action must be upheld, if at all, on the basi s articulated by the agency itself.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 50 (1983) (citations omitted). EPA’s “absurd results” rationale is entirely post hoc . EPA claims it “explained”—albeit in a single phrase—th at the Exemption was supported by “the same rationale” as the Tailoring Rule, and thereby incorporated reliance on the absurd results doctrin e. EPA Br. at 58

. Yet nothing in the proposed or final Exemption actually identified “absurd results ” as a rationale EPA intended to rely on. All EPA said was that its “decision to defer the applicability of PSD and Title V to biogenic CO 2 emissions is . . . supported, in part, on the same rationale as EPA used to justify the Tailoring Rule’s phase-in approach.” 76 Fed. Reg. at 43,496/3 (JA __). This one vague refe rence cannot satisfy EPA’s burden to explain what it did and why. See, e.g., Northeast Md . Waste Disposal Auth. , 358 F.3d at 949 (holding that a single referenc e to “supporting information” in prior rulemaking docket insufficient to explain agency rationale). The “absurd result” EPA invokes here is not even the same “absurd result” discussed in the Tailoring Rule. There, EPA identified administrative burdens leading to permitting paralysis as the relevant “absurd result.” See, e.g. , 75 Fed. Reg. at 31,547/3 (JA __). Here, EPA claims the Exemption is needed to avoid the USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 28 of 4020 “absurd result” of permitting biogenic CO 2 sources that it speculates may later be found to have de minimis effects. EPA Br. at 59. Th is is not at all “the same rationale . . . used to ju stify the Tailoring Rule,” id. at 58, but rather a whole-cloth post hoc invention. Even if this Court could reach EPA’s post hoc argument, it would fail on the merits. The Tailoring Rule itself stated th at a categorical exemption for sources of biogenic CO 2 emissions was not warranted on that record. 75 Fed. Reg. at 31,591/1 (JA __). Moreover, EPA’s asserti on that it would be “absurd” to require permits for sources that might someday pr ove to have negligible or negative net lifecycle emissions (EPA Br. at 58- 59), is simply the disclaimed de minimis rationale marching under another banner. In any even t, to avoid absurd results, EPA “may deviate no further from the statute than is needed to protect Congressional intent.” Mova Pharm. Corp. , 140 F.3d at 1068. Here, EPA tacitly concedes the Exemption sweeps in sources like “whole, standing trees,” EPA Br. at 31, that should be regulated, and is thus overbroad. Finally, EPA simply assumes Congress w ould prefer to let even the largest sources burning clearly detrimental types of biomass escape permitting and pollution controls ( see EPA Br. at 57-59), ra ther than risk even the possibility of requiring permits for some sources that might later be shown to have negligible or beneficial lifecycle profiles. EPA points to nothing in the statute or the legislative USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 29 of 4021 history showing that Congress intended this result. If anything, the PSD program’s pollution-reduction and harm-prevention purposes undercut EPA’s assumption.
See CRR , slip op. at 58.
D. EPA Has Failed to Justify the Exempti on Under the “One Step at a Time” Doctrine.
1. EPA Misconstrues the Reach of the “One-Step-at-a-Time” Doctrine. The “one-step-at-a-time” doctrine pr ovides no independent authority to depart from the Clean Air Act’s clear and self-executing commands where, as here, the agency has failed to support such de parture on administrative necessity, absurd results, or de minimis impact grounds. It is true that where Congress directs an agency to issue regulations needed to effe ctuate a statutory di rective, the agency has latitude in some circumstances to proceed stepwise towards full implementation, rather than tackling the whole problem at once. See Hazardous Waste Treatment Council v. EPA , 861 F.2d 277, 288 (D.C. Cir. 1988) (noting that the agency may proceed stepwise to implement a statute whose “structure...confirms the EPA’s broad disc retion.”). The “one-step-at-a-time” doctrine, however, applies onl y where agencies already ha ve statutory discretion. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 30 of 4022 Pet. Br. at 54-57. It does not provide EP A with independent authority to exempt regulated entities from clear statutory commands. 6 As EPA recognizes ( see EPA Br. at 59), PSD permitting requirements for
CO 2 took effect “by automatic operation of the statute” wh en EPA regulated vehicular greenhouse gas emissions under Title II of the Act. CRR, slip op. at 53- 54, 77. Congress thus did not leave EPA br oad leeway to create its own stepwise regulatory program for a pollutant newl y subject to regulation. Because applicability of PSD permitting requirements does not hinge on EPA’s implementation, the Exemption requires a compelling justification under some established doctrine of statutory constr uction. In the Tailoring Rule, EPA grounded its departure from the statute in a robust demonstration of administrative necessity. In such a cont ext, the one-step doctrine ma y provide support for the agency to phase out an exemption and return towards full compliance with the statutory language in several steps, wh ere each of those steps is based on a

6 The cases cited by EPA (Br. at 35-36)—all decided under statutes that leave the agency involved some discretion in im plementing a statutory goal—make this clear. See City of Las Vegas v. Lujan , 891 F.2d 927, 935 (D.C. Cir. 1989) (Endangered Species Act doe s not require that, for emergency listing of one population as endangered to be valid, other arguably similar populations be concurrently listed); Grand Canyon Air Tour Coal. v. FAA, 154 F.3d 455, 476-478 (D.C. Cir. 1998) (upholding stepwise approach to implement Congressional directive to develop a regulatory plan for achieving “substantial restoration of the natural quiet and experience of the park”); Nat’l Ass’n of Broadcasters v. FCC , 740 F.2d 1190, 1207 (D.C. Ci r. 1984) (condoning agency’s step-at-a-time response to a situation not involving a specific “s tatutory requirement” but rather the agency’s informed judgment a bout the public interest). USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 31 of 4023 demonstration of ongoing administrative necessity and minimal departure from the statute. Here, although EPA salts its one-s tep-at-a-time argument with references to administrative necessity (EPA Br. at 36-37), nowhere does it show on the record the existence of such necessity. See supra at 9-15.
2. EPA Cannot Justify the Biomass Exemption Under the CatchAll General Rulemaking Auth ority Found in Section 301. Offering yet another post-hoc rationale, EPA asserts that Clean Air Act section 301 gives it sweeping authority to act incrementally, even in the face of clear statutory requirements. 7 EPA Br. at 38. But EPA misreads the statute, which authorizes regulation only “as necessary to carry out [the Administrator’s] functions under this chapter ”—that is, under the Clean Air Act— not in whatever way she “deem[s] necessa ry or expedient.” See § 301(a)(1); 42 U.S.C. § 7601(a)(1) (emphasis added) (applying the la tter phrase only to the Administrator’s discretion to delegate non- rulemaking authority). Section 301 thus provides authority to regulate only in a manner consiste nt with the statute, not in ways that contravene it. This is all the more so where Congress created self-executing provisions, as in the PSD program . EPA’s position is unsupportable. Neither Citizens to Save Spencer County v. EPA , 600 F.2d 844 (D.C. Cir. 1979), nor Alaska DEC v. EPA, 540 U.S. 461 (2004), supports the proposition that

7 Nowhere in the proposed or final Biomass Exemption does EPA make the argument that section 301 gives it broad, unf ettered authority to carve exemptions from the statute’s PSD applicability provisions. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 32 of 4024 the catch-all provisions of section 301(a )(1) authorize EPA to override express requirements in other sections of the Act. Spencer County recognized EPA’s need

to reconcile two competing express require ments of the then-new 1977 CAA Amendments, rather than leavi ng the choice to the states. Spencer County , 600 F.2d at 868. The case in no way sugge sts that EPA has unbounded authority to create broad, unjustified exemptions fro m specific statutory requirements.
In Alaska DEC , it was not the “general author ity” of section 301(a)(1), but rather the oversight role expressly defi ned by Congress in CAA sections 113(a)(5) and 167, that gave EPA authority to ensu re that Alaska’s BACT determinations met the statute’s requirements. Alaska DEC, 540 U.S. at 484. This case, too, does not support broad agency discretion to create exemptions from the statute’s express, detailed requirements.
3. No “New Situation” or Unfore seen Condition Supports EPA’s Biomass Exemption. EPA’s claim of “heightened” discretion to act in “new circumstances,” EPA Br. at 39, has little meaning in the context of self-executing provisions like those at issue here. The cases offered by the ag ency—all involving agency actions taken under ambiguous statutes, not deviations from clear and self-executing statutory requirements—are inapposite. See United States v. Haggar Apparel Co. , 526 U.S. 380, 392-93 (1999) (requiring tariff wher e agency had discretion to evaluate situation because provisions authoriz ing exemptions were ambiguous); American USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 33 of 4025 Trucking Ass’ns v. United States, 344 U.S. 298, 312 (1953) (upholding agency decision to take regulatory action as re asonable where statute did not provide specifics); Cablevision Sys. Dev. Co. v. Motion Picture Ass’n of America , 836 F.2d 599, 608 (D.C. Cir. 1988) (noting specifica lly that the relevant statute was not selfexecuting, and in that circumstance finding authority for agency action in furtherance of the general statutory policy); Indep. Bankers Ass’n. v. Marine Midland Bank , 757 F.2d 453, 460 (2d Cir. 1985) (finding agency authority to act in furtherance of the statute’s goals where statute’s language was “not determinative”). Because the relevant stat utory language here is self-executing, EPA has no discretion over applicability in the first instance.
IV. THE ARGUMENTS OF AMICUS CURIAE NACWA CANNOT SALVAGE EPA’S UNLAWFUL EXEMPTION. In its amicus curiae brief in support of the Biomass Exemption, NACWA raises legal and factual issues concerning publicly owned water tr eatment facilities. NACWA has proffered arguments regarding EPA’s legal authority that the agency did not rely on. See, e.g. , Brief Amicus Curiae of the National Association of Clean Water Agencies in Support of Res pondents at 14-17. Because they did not form EPA’s basis for the Exemption, the Court should not consider them. See § 307(d)(6)(C), (7)(A); 42 U.S .C. §7607(d)(6)(C); (7)(A); see also Manin v. Nat’l Transp. Safety Bd. , 627 F.3d 1239, 1243 (D.C. Cir. 2011) (“[T]he law does not USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 34 of 4026 allow us to affirm an agency decisi on on a ground other than that relied upon by the agency.”). NACWA’s factual assertions also are grounded in evidence outside the record. None of the documents cited in NACWA’s brief were submitted to EPA for inclusion in the docket, and very few were even mentioned in NACWA’s comment letters. See NACWA Comments Re: EPA Proposed National Greenhouse Gas Reporting Reg ime, EPA-HQ-OAR-2008-0 508-0566 (JA __-__); NACWA Comments Re: Proposed GHG Tailoring Rule, EPA-HQ-OAR-2009- 0517-5336 (JA __-__); NACWA Comments Re: Call for Information, EPA-HQOAR-2010-0560-0156 (JA __-__); NACWA Comments Re: Biogenic Emissions Deferral, EPA-HQ-OAR-2011-0083-01 17 (JA __-__). As discussed supra at 6, this evidence lies outside the administrativ e record and is not properly before this Court. Parties bear the burden of ensu ring that the documents on which they intend to rely appear in the administrative record. See Appalachian Power Co. v.
EPA , 135 F.3d 791, 799 n.14 (D.C. Ci r. 1998). Finally, even if NACWA’s arguments and evidence could be considered, they would not save the Exemption. At best, NACWA’s brief provides evidence and arguments that EPA might have consid ered in crafting a far more narrowly tailored exemption. But EPA did not cons ider any such narrow exemption here. NACWA’s brief offers no basis for upholding the Exemption. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 35 of 4027 V. THE COURT SHOULD VACATE THE BIOMASS EXEMPTION. Vacatur is the proper remedy where, as here, an exemption violates unambiguous statutory language. Sierra Club v. EPA , 551 F.3d 1019, 1028 (D.C. Cir. 2008) (vacating unauthorized exemption); see also New Jersey v. EPA , 517 F.3d 574, 578, 583-84 (D.C. Ci r. 2008) (vacating delisting of air toxics-emitting power plants from § 112 source category list where statutory prerequisites were not satisfied). As this Court held in CRR , the statute unambiguously prohibits the sources at issue in this case from cons tructing or operating without required permits. Lacking a record-supported, doctrinally sound basis, the Biomass Exemption plainly and substantively violat es the Clean Air Act, and must not be allowed to stand. Vacatur is also appropriate because th ere is “little or no prospect of the rule’s being readopted upon the basis of a more adequate explanation of the agency’s reasoning.” NRDC v. EPA , 571 F.3d 1245, 1276 (D.C. Cir. 2008) (quoting Ill. Pub. Telecomm s. Ass’n v. FCC , 123 F.3d 693, 693 (D.C. Cir. 1997)). Given EPA’s concession that burning at leas t some forms of biomass (e.g., burning whole trees) “might be categorized as a net contributor of CO 2 ,” EPA Br. at 4, there is little or no prospect that EPA will be able to readopt the blanket exemption of all biogenic CO 2 sources. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 36 of 4028 Finally, this Court has in excepti onal cases granted petitioners’ (or plaintiffs’) requests to leave a remanded rule in effect where vacatur “would at least temporarily defeat [petitione r’s] purpose” in bringing the case. See , e.g., Nat’l Lime Ass’n v. EPA , 233 F.3d 625, 635 (D.C. Cir. 2000); see also Envtl. Def. Fund v. EPA , 898 F.2d 183, 190 (D.C. Cir. 1990) (same). Here, by contrast, Petitioners actively seek vacatur to avoi d adverse environmental effects from the Exemption. Moreover, a remand without vacatur would effectively amount to an indefinite stay of the effectiv eness of the court’s decision. See Honeywell Int’l Inc.
v. EPA , 374 F.3d 1363, 1375 (D.C. Cir. 2004) (Randolph, J., concurring). Given the likelihood that the full three-year exemption period would run before EPA acted, a simple remand in this instance w ould be equivalent to denying Petitioners any relief at all. For all these reasons, vacatur is required. CONCLUSION For the foregoing reasons, and for the reasons set forth in Petitioners’ Opening Brief, the Biomass Ex emption must be vacated.

Respectfully submitted this 10th day of July, 2012. USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 37 of 4029 /s/ Kevin P. Bundy Kevin P. Bundy Vera P. Pardee Brendan Cummings Center for Biological Diversity 351 California Street, Suite 600 San Francisco, CA 94104 Phone: (415) 436-9682 ext. 313 kbundy@biologicaldiversity.org Counsel for Center for Biological Diversity /s/ Ann Brewster Weeks (KB) Ann Brewster Weeks Clean Air Task Force 18 Tremont Street, Suite 530 Boston, MA 02108 Phone: (617) 624-0234 ext. 156 aweeks@catf.us Counsel for Conservation Law Foundation and Natural Resources Council of Maine
/s/ Frank Rambo (KB) Frank Rambo Morgan Butler Southern Environmental Law Center 201 West Main Street, Suite 14 Charlottesville, VA 22902 Phone: (434) 977-4090 frambo@selcva.org Counsel for Coastal Conservation League, Dogwood Alliance, Georgia ForestWatch, and Wild Virginia /s/ David Doniger (KB) David Doniger Natural Resources Defense Council 1152 15th Street NW, Suite 300 Washington, D.C. 20005 Phone: (202) 289-2403 ddoniger@nrdc.org /s/ Nathaniel S.W. Lawrence (KB) Nathaniel S.W. Lawrence Natural Resources Defense Council 3723 Holiday Drive, SE Olympia, WA 98501 Phone: (360) 534-9900 nlawrence@nrdc.org /s/ Meleah Geertsma (KB) Meleah Geertsma Natural Resources Defense Council 2 N. Riverside Plaza, Suite 2250 Chicago, IL 60606 Phone: (312) 651-7904 mgeertsma@nrdc.org Counsel for Natural Resources Defense Council USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 38 of 4030 CERTIFICATE REGARDIN G WORD LIMITATION Counsel hereby certifies that, in acco rdance with Federal Rule of Appellate Procedure 32(a)(7)(C), the foregoing Open ing Brief of Petitioners contains 6,560 words, as counted by counsel’s word processing system.

DATED: July 10, 2012 SI GNED: /s/ Kevin P. Bundy USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 39 of 40CERTIFICATE OF SERVICE I hereby certify that the foregoing Reply Brief of Petitioners was electronically filed with the Clerk of th e Court using the CM/ECF system, which will send notification of said filing to the attorneys of record who have registered with the Court’s CM/ECF system.
DATED: July 10, 2012 SI GNED: /s/ Kevin P. Bundy

__ USCA Case #11-1101 Document #1382982 Filed: 07/10/2012 Page 40 of 40