ALASKA CALIFORNIA FLORIDA MID-PACIFIC NORTHEAST NORTHERN ROCKIES

NORTHWEST ROCKY MOUNTAIN WASHINGTON, DC INTERNATIONAL

156 WILLIAM STREET SUITE 800 NEW YORK, NY 10038

T: 212.791.1881 F: 212.918.1556 E: neo ffice@earthjustice.org W: www.earthjustice.org June 4, 2012

Administrator Lisa Jackson

Office of the Administrator

United States Environmental Protection Agency

Ariel Rios Building

1200 Pennsylvania Avenue, N.W.

Mail Code: 1101A

Washington, DC 20460

Jackson.lisa@epa.gov

James B. Martin

Regional Administrator

United States Environmental Protection Agency

Region 8

1595 Wynkoop Street

Denver, CO 80202

‐ 1129

Martin.jim@epa.gov

Jonah Staller

United States Environmental Protection Agency

Region 8

1595 Wynkoop St.

Denver, CO 80202

‐ 1129

Staller.jonah@epa.gov

Via Federal Express and Email

Re: Petition for Reconsideration of Partial Approval of North Dakota’s Regional Haze State

Implementation Plan, 77 Fed. Reg. 20894 (Apr. 6, 2012), Docket ID No. EPA

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Dear Administrator Jackson:

Pursuant to Section 307(d)(7)(B) of the Clean Air Act (the “CAA” or the “Act”), 42 U.S.C.

§ 7607(d)(7)(B), the National Parks Conservation Association and the Sierra Club respectfully

petition the Administrator of the Environmental Protection Agency (“EPA” or the “Agency”) to

reconsider certain aspects of the final rule partially approving North Dakota’s Regional Haze

State Implementation Plan, 77 Fed. Reg. 20894 (Apr. 6, 2012).2 In the final rule, EPA arbitrarily and capriciously reversed its position regarding the

technology that constitutes the Best Available Retrofit Technology (“BART”) necessary to

control emissions of nitrogen oxides (“NOx”) at Milton R. Young Station Units 1 and 2 (“Milton

R. Young”) and Leland Olds Station Unit 2 (“Leland Olds”). Initially, EPA proposed to reject

North Dakota’s determination that selective non

‐ catalytic reduction (“SNCR”) plus advanced

separated overfire air (“ASOFA”) was BART for Milton R. Young Units 1 and 2 and Leland

Olds Unit 2. EPA instead proposed to require a more effective control technology, selective

catalytic reduction (“SCR”) plus ASOFA, as BART pursuant to a Federal Implementation Plan

(“FIP”). In the final rule, however, EPA relied on a district court decision regarding the

application of the Clean Air Act’s Prevention of Significant Deterioration (“PSD”) provisions to

Milton R. Young to approve less effective SNCR technology as BART.

EPA based its decision to depart from its proposed BART determination solely on this

district court PSD decision, which was not issued until after the November 21, 2011 comment

deadline. Thus, Petitioners’ objections arose after the period for public comments, but within

the time for judicial review. See CAA § 307(d)(7)(B); 42 U.S.C. § 7607(d)(7)(B).

Petitioners’ objection to EPA’s reliance on the district court decision is central to whether

the final approval of North Dakota’s BART determinations for Milton R. Young and Leland

Olds was unlawful. Id. In keeping with the governing requirements to petition for

reconsideration, Petitioners request that EPA “convene a proceeding for reconsideration of the

rule and provide the same procedural rights as would have been afforded had the information

been available at the time the rule was proposed.” Id.



### BACKGROUND

In approving North Dakota’s Regional Haze State Implementation Plan (“SIP”), EPA

reversed its proposed conclusion that SCR is BART for Milton R. Young and Leland Olds. It

justified this reversal on grounds that North Dakota recently prevailed in parallel litigation

regarding its determination of Best Available Control Technology (“BACT”) under the Clean

Air Act’s PSD provisions. In that case, the court was required to defer to the State, and it

ultimately upheld the State’s conclusion that installation and operation of SCR at Milton R.

Young was infeasible under the BACT (as opposed to BART) standard. As set forth in further

detail below, EPA reasoned that it was constrained by the district court decision

notwithstanding (1) the Agency’s own previous statements that the BACT determination

should have no bearing on its BART determination and (2) the district court decision’s silence

with respect to EPA’s key conclusions regarding the feasibility of SCR for BART purposes.

EPA’s Evaluation of North Dakota’s Regional Haze SIP I.

On March 3, 2010, North Dakota submitted a Regional Haze SIP revision for EPA’s

approval. 1 In creating a SIP to comply with the Clean Air Act’s visibility program and

1 Proposed Rule, 76 Fed. Reg. 58570, 58579 (Sept. 21, 2011).3 implementing regulations, each state must evaluate the controls to be imposed on BART

‐ eligible sources that are reasonably anticipated to cause or contribute to visibility impairment at

certain national parks, wilderness areas, wildlife refuges and other “Class I areas” where air

quality should be pristine. 2 For electricity generating units that are larger than 750 MW in size, 3

the BART Guidelines set forth a five

‐ step process for determining BART. 4 Under Step 1, all

available retrofit control technologies are identified. 5 Under Step 2, technically infeasible

options are eliminated. 6 Under Step 3, the control effectiveness of the remaining control

technologies is evaluated. 7 Under Step 4, the cost, energy impacts, non

‐ air quality

environmental impacts, and remaining useful life of the source are evaluated. 8 Finally, under

Step 5, visibility impacts are evaluated. 9

In its original Regional Haze SIP, North Dakota identified a number of potential control

options as technically feasible for Milton R. Young Units 1 and 2 and Leland Olds Unit 2,

including two forms of SCR: (1) low dust SCR (“LDSCR”), which is located after or

“downstream” of pollution control technology designed to remove particulate matter, such as

an electrostatic precipitator (“ESP”); and (2) tail

‐ end SCR (“TESCR”), which is located

downstream of both particulate control technology and scrubbers designed to remove sulfur

dioxide (“SO 2 ”). 10 Ultimately, however, the State rejected these forms of SCR as not

‐ cost

effective and determined that BART was SNCR plus ASOFA. 11 On July 28, 2011 with its SIP

Amendment No. 1, North Dakota provided EPA with the entire administrative record for its

BACT determination in the parallel PSD proceedings (discussed in further detail below) and

supplemented its SIP appendix to identify documents that purportedly demonstrated the

technical infeasibility of installing and operating LDSCR and TESCR at Milton R. Young. 12

2 A source is BART

‐ eligible if: (1) it is a stationary source within one of 26 enumerated categories; (2) it

was not in operation before August 7, 1962 but was in existence on August 7, 1977; and (3) it has the

potential to emit 250 tons per year or more of any pollutant. CAA 169A(b)(2)(A), (g)(7); 42 U.S.C. §

7491(b)(2)(A), (g)(7).

3 EPA and North Dakota disagreed about whether Milton R. Young met this threshold. However, EPA

proposed to find that Milton R. Young did in fact have a generating capacity greater than 750 MW. In so

concluding, EPA relied on the actual operating levels of both units, which exceeded their nameplate

capacities, and concluded that the total generating capacity of the two units is 794 MW. See 76 Fed. Reg.

at 58,596. For Leland Olds, while EPA recognized that the BART Guidelines were not mandatory given

its generating capacity, EPA chose to follow them “because they provide a reasonable and consistent

approach for determining BART.” Id. at 58604.

4 40 C.F.R. pt. 51, app. Y § IV.D.

5 Id.

6 Id.

7 Id.

8 Id.

9 Id.

10 76 Fed. Reg. at 58596 (Milton R. Young Unit 1), 58597 (Milton R. Young Unit 2), 58597

‐ 98 (Leland Olds

Unit 2).

11 Id. at 58596

‐ 97 (Milton R. Young Units 1), 58597 (Milton R. Young Unit 2), 58598 (Leland Olds Unit 2).

12 See SIP Amendment No. 1, Doc. No. EPA

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‐ 0026.4 EPA’s Proposed Action on the North Dakota Regional Haze SIP A.

Notwithstanding the information presented by the State regarding the alleged

infeasibility of SCR, EPA, on September 21, 2011, proposed to disapprove North Dakota’s SIP to

the extent that it required SNCR plus ASOFA as BART to control NOx emissions for Units 1 and

2 of Milton R. Young and Unit 2 of Leland Olds. EPA based its decision in large part on its

technical conclusion that SCR was feasible. In addition, EPA found that North Dakota failed to

properly evaluate the costs of compliance and to assess the visibility impacts of alternative

BART controls as required under the Act. 13 Given its proposed disapproval of the State’s NOx

BART determinations, EPA proposed a FIP that required SCR plus ASOFA as NOx BART for

Milton R. Young and Leland Olds. 14

Critical to EPA’s conclusion that SCR was BART was EPA’s determination that, contrary

to the State’s assertions, successful operation of SCR is feasible at these lignite boilers. 15 Under

the BART Guidelines, technical infeasibility must be established “based on physical, chemical,

or engineering principles” that demonstrate “why technical difficulties would preclude the

successful use of the control option on the emissions unit under review.” 16 A technology will be

deemed feasible if it is available—in that it can be obtained through commercial channels—and

applicable—meaning that it can reasonably be installed and operated on the source type under

consideration, or has been used on the same or similar source type. 17

EPA based its feasibility determination on a number of factors. First, EPA rejected the

argument that the NOx BART determination for Milton R. Young Units 1 and 2 and Leland

Olds Unit 2 should be influenced by then

‐ ongoing proceedings to determine the “Best Available

Control Technology” to control NOx emissions at Milton R. Young Units 1 and 2. At the time of

the proposal, EPA was actively challenging North Dakota’s BACT determination regarding the

feasibility of SCR in court. However, EPA concluded that the BACT proceeding had no bearing

on EPA’s evaluation of North Dakota’s SIP, including its NOx BART determinations for Milton

R. Young and Leland Olds. As EPA explained, “[o]ur proposed action here pertains to BART,

13 76 Fed Reg. at 58599, 58602, 58604.

14 Id. at 58609

‐ 10 (Milton R. Young Unit 1), 58612

‐ 13 (Milton R. Young Unit 2), 58618

‐ 19 (Leland Olds Unit

2).

15 Id. at 58604

‐ 05 (finding that SCR is feasible at Milton R. Young Unit 1, and refusing to eliminate the

technology under Step 2 of the BART analysis); id. at 58610 (refusing to eliminate SCR as technically

infeasible under Step 2 of the BART analysis at Milton R. Young Unit 2 for the reasons described in the

BART analysis and determination for Milton R. Young Unit 1); id. at 58613 (refusing to eliminate SCR as

technically infeasible under Step 2 of the BART analysis at Leland Olds Unit 2 based both on North

Dakota’s initial determination that TESCR and LDSCR are technically feasible for use on North Dakota

electricity generating units burning lignite coal and for the reasons described in the BART analysis and

determination for Milton R. Young Unit 1).

16 Id. at 58604 (citing 40 C.F.R. pt. 51, app. Y § IV.D, Step 2).

17 Id.5 not BACT, is governed by CAA provisions and regulations specific to regional haze and BART,

and is not governed by [the] consent decree” in the BACT proceeding. 18

Second, EPA rejected North Dakota’s view that SCR is not technically feasible for

cyclone boilers firing North Dakota lignite. According to the State, the fuel used at Milton R.

Young—North Dakota lignite—and the resultant flue gas stream contain high concentrations of

sodium and potassium that will rapidly deactivate the SCR catalyst, requiring frequent

replacement. 19 EPA rejected this argument, explaining that the State’s expressed concerns about

the length of the catalyst life at Milton R. Young were not related to the commercial availability

of SCR or the ability of SCR to reduce NOx emissions in the flue gas stream. 20 Rather, the

concern that the sodium and potassium constituents in the flue gas would require frequent

replacement of the catalyst related to cost of using SCR, not its technical feasibility. 21 Under the

BART Guidelines, if resolution of technical difficulties is a matter of increased cost, the

technology will not be deemed infeasible. 22

Third, EPA rejected the State’s argument that two catalyst vendors’ unwillingness to

provide typical catalyst life guarantees without first performing catalyst deactivation field

testing demonstrated technical infeasibility. 23 As EPA explained, “the vendor guarantee for a

specific catalyst life, or lack thereof, is not relevant to the availability of SCR, or its ability to

remove NOx from the gas stream at Milton R. Young Station, but only to the willingness of two

catalyst companies to provide a specific catalyst life guarantee without more information.” 24

Moreover, EPA noted that neither vendor was unwilling to provide the catalyst absent field

testing, just the guarantee. 25 In addition, one vendor indicated that it was willing to provide

“full performance guarantees on critical operating parameters,” a factor indicating that the

vendor believed NOx could be successfully controlled at Milton R. Young with SCR. 26 EPA also

pointed out that both catalyst vendors indicated that they believed that they would be able to

offer a catalyst life guarantee after testing. 27 Thus, EPA rejected the argument that the lack of

guarantee overcame the presumption that the technology, which is widely used at hundreds of

units burning a variety of coals, is applicable to Milton R. Young. 28

18 Id. at 58604 n.41 (discussion regarding Milton R. Young Unit 1); see also id. at 58610, 58613 (applying the

same reasoning to Milton R. Young Unit 2 and Leland Olds Unit 2).

19 Id. at 58604.

20 Id.

21 Id.

22 Id. (citing 40 C.F.R. pt. 51, app. Y § IV.D, Step 2).

23 Id. at 58604

‐ 05.

24 Id. at 58605.

25 Id.

26 Id.

27 Id.

28 Id. at 58604

‐ 05.6 EPA further reasoned that North Dakota itself, per Appendix B.5 of its original SIP

submission, had initially found that LDSCR and TESCR were technically feasible. 29 As North

Dakota originally acknowledged, the placement of these technologies downstream from other

controls that impact flue gas characteristics is critical. LDSCR is positioned after the ESP, which

removes particulates, and TESCR is positioned after both the ESP and the SO 2 scrubber. 30

Because these technologies eliminate many of the catalyst poisons in North Dakota lignite,

North Dakota had found, and EPA agreed, that the flue gas treated by LDSCR and TESCR

would be comparable to flue gas that is successfully treated by SCR at other plants around the

country. Moreover, as to Milton R. Young Unit 2, the State found that stack tests confirmed that

the ESP and wet scrubber could remove the offending sodium and potassium, resulting in

levels “significantly lower” than those present in gas streams of boilers burning peat and wood

that were the subject of experimental and pilot scale testing of SCR catalyst life. 31 Appendix B.5

also indicated that three vendors reported that SCR would be technically feasible for Milton R.

Young. 32 Lastly, North Dakota had found that existing biomass boilers with flue gas

characteristics similar to North Dakota lignite have used TESCR successfully. 33

Finally, EPA’s feasibility determination relied on PM emission testing at Milton R.

Young Unit 2 by Microbeam Technologies, Inc. This testing also demonstrated the high

removal efficiency of PM and the sodium and potassium catalyst poisons by the ESP and

scrubber. Before the ESP, the sodium oxide and potassium oxides were about 50 to 90 times

greater than after the ESP, indicating that differences in fuel quality could be offset by locating

the SCR after the ESP, as with both LDSCR and TESCR. 34

For all of these reasons, EPA concluded that SCR was feasible at both Milton R. Young

Units 1 and 2 and Leland Olds Unit 2, and ultimately concluded that SCR was BART. 35

EPA’s Final Action on the North Dakota SIP and the Agency’s Response to the B.

BACT Enforcement Action

Although EPA proposed to find that SCR was a feasible control to limit NOx emissions

at Milton R. Young Units 1 and 2 and Leland Olds Unit 2, EPA changed its position in the final

rulemaking based solely on the outcome of the BACT proceedings. As EPA explained, “[a]fter

considering a recent judicial decision, we have decided to approve North Dakota’s NOx BART

determinations for [Milton R. Young Station] 1 and 2 and [Leland Olds Station] 2 and to not

promulgate a FIP for NOx BART for these units.” 36 While Leland Olds Unit 2 was not subject to

29 Id. at 58605 (citing Appendix B.5 to the State’s March 3, 2010 SIP submission, Doc. No. EPA

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30 Id.

31 Id.

32 Id.

33 Id.

34 Id.

35 Id. (Milton R. Young Unit 1); id. at 58610 (Milton R. Young Unit 2); id. at 58613 (Leland Olds Unit 2).

36 77 Fed. Reg. 20894, 20897 (Apr. 6, 2012).7 the BACT decision, EPA reasoned that the technical feasibility analysis applied equally to it

because it was the same type of unit burning the same type of coal as Milton R. Young. 37 Based

on this deference to the judicial decision in the BACT proceedings, EPA approved North

Dakota’s determination that SNCR plus ASOFA was BART for Milton R. Young Units 1 and 2

and Leland Olds Unit 2. 38

EPA did not provide any reasoned explanation for abandoning its view that SCR is

BART and that the BACT proceedings in general, and these proceedings in particular, have no

bearing on the BART determinations for Milton R. Young Units 1 and 2 and Leland Olds Unit 2.

Nowhere in the final rule did EPA explain why, much less provide evidence why, its proposed

conclusions regarding the feasibility of SCR were factually incorrect.

To justify its reversal, EPA asserted that under the BART Guidelines, states can rely on a

BACT determination to determine BART for the same source “unless new technologies have

become available or best control levels for recent retrofits have become more stringent.” 39

Taking the position that North Dakota could rely on the BACT determination as the equivalent

of BART, EPA summarily approved the State’s proposal without any further consideration of

the five BACT factors. 40

EPA further stated that finalizing its proposed BART limits would be “inappropriate” in

light of the district court’s decision on BACT, but EPA offered no explanation why its review

was constrained by a decision that did not address BART and that, in any case, employed a

standard of review that was expressly deferential to the State—a standard of review that would

not apply to EPA’s own BART determination. 41

BACT Enforcement Action Concerning Milton R. Young Station II.

The district court decision that ostensibly persuaded EPA to reverse course on its BART

proposal affirmed, under a very deferential standard of review, North Dakota’s determination

that SCR was technically infeasible. 42

37 Id. at 20898 (“While Leland Olds 2 was not the subject of the BACT determination, the same reasoning

that applies to Milton R. Young 1 and 2 also applies to Leland Olds 2. It is the same type of boiler

burning North Dakota lignite coal, and North Dakota’s views regarding technical infeasibility that the

U.S. District Court upheld in the Milton R. Young BACT case apply to it as well.”).

38 Id.

39 Id. (citing 70 Fed. Reg. 39104, 39164 (July 6, 2005)).

40 Id. (“As a general rule, the selection of a recent BACT level as BART is the equivalent of selecting the

most stringent level of control, and consideration of the five statutory BART factors becomes

unnecessary.“).

41 Id. at 20898.

42 See Order Denying Plaintiff’s Motion to Stay and Motion for Dispute Resolution, United States v.

Minnkota Power Cooperative, Inc., 1:06

‐ cv

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‐ CSM (D.N.D. Dec. 21, 2011) [hereinafter Order].8 Leading up to that decision, EPA and North Dakota had alleged that the owners of

Milton R. Young, Minnkota Power Cooperative and Square Butte Electric Cooperative

(collective referred to herein as “Minnkota”), illegally undertook “major modifications” at

Milton R. Young’s two lignite

‐ fired boilers without installing BACT. 43 The parties ultimately

entered into a Consent Decree under which the State would determine BACT to control NOx

emissions and EPA and Minnkota would retain the option to challenge the State’s decision in

federal district court. 44 In such a challenge, the court would sustain North Dakota’s

determination “unless the Party disputing the BACT determination demonstrates that it is not

supported by the state administrative record and not reasonable in light of applicable statutory

and regulatory provisions.” 45

In November 2010, North Dakota issued its final BACT determination. 46 It found that all

forms of SCR, including LDSCR and TESCR, were technically infeasible and not BACT given,

among other issues, the allegedly unique chemical and physical characteristics of a boiler

combusting North Dakota lignite. 47 As a result, the State concluded that SNCR plus ASOFA

was BACT. 48

EPA challenged North Dakota’s BACT determination in May 2011. 49 On December 21,

2011, the court issued a decision deferring to North Dakota’s conclusion that SCR technology

was technically infeasible at Milton R. Young and affirming the corresponding determination

that BACT was SNCR plus ASOFA. 50 The court was convinced that North Dakota could

conclude that LDSCR and TESCR were not feasible given the different flue gas characteristics of

North Dakota lignite and the absence of vendor performance guarantees. 51 However, the court

did not address the key reasons why EPA had concluded that SCR was feasible in its proposed

BART determination for Milton R. Young and Leland Olds. Specifically, the court did not

43 Id. at 2

‐ 4.

44 Id. at 6; see also Consent Decree ¶¶ 65

‐ 66, 147, United States v. Minnkota Power Cooperative, Inc., 1:06

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00034

‐ DHL

‐ CSM (D.N.D. July 27, 2006) [hereinafter Consent Decree].

45 Consent Decree ¶ 147(c).

46 See Order at 7

‐ 13 ; Admin. Rec. 240, Doc. No. EPA

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determination for control of NOx for Milton R. Young Units 1 and 2 from November 2010).

47 Admin. Rec. 240 § III.A.23

‐ 24 (concluding that LDSCR and TESCR are neither available nor applicable

to Milton R. Young).

48 Id. § VI.

49 See Memorandum in Support of United States’ Petition for Dispute Resolution Under the 2006 Consent

Decree at 2, United States v. Minnkota Power Cooperative, Inc., 1:06

‐ cv

‐ 00034

‐ DHL

‐ CSM (D.N.D. May 12,

2011).

50 Order at 33.

51 Order at 23

‐ 25 (discussing the lack of vendor guarantees and general evaluations of the flue gas

characteristics when finding that North Dakota did not unreasonably conclude that SCR was not an

available technology); id. at 26

‐ 27 (discussing the unique flue gas characteristics when finding that North

Dakota did not unreasonably conclude that SCR was not an applicable technology); see also id. at 18

‐ 21

(discussing generalized flue gas characteristics when finding that North Dakota did not unreasonably

conclude that SCR was not a demonstrated technology).9 consider EPA’s view, expressed in the proposal, that locating the SCR technology downstream

of other pollution control devices could remove many offending catalyst poisons, making the

flue gas characteristics similar to the characteristics where SCR is routinely installed. 52 Nor did

the court address EPA’s view that vendor willingness or unwillingness to provide a catalyst life

guarantee had no relation to whether SCR was commercially available or feasible but rather

related to the cost of using SCR. 53



### OBJECTIONS

EPA arbitrarily and capriciously reversed its position regarding BART for controlling

NO

x emissions at Milton R. Young Units 1 and 2 and Leland Olds Unit 2, claiming that the

district court’s decision in the BACT proceeding forced its reversal. See 77 Fed. Reg. at 20898

(“In light of the court’s decision and the views we have expressed in our BART guidelines on

the relationship of BACT to BART, we have concluded that it would be inappropriate to

proceed with our proposed disapproval of SNCR as BART and our proposed FIP to impose

SCR at [Milton R. Young Units] 1 and 2 and [Leland Olds Unit] 2.”). This conclusion is

untenable for at least three reasons. First, EPA was not bound by the district court’s decision to

uphold North Dakota’s feasibility analysis as that decision was not decided under the same

standard of review that EPA must apply when reviewing a SIP and did not otherwise relieve

EPA of its obligation to ensure that the State’s Regional Haze SIP submission complies with the

Act. Second, EPA wrongly concluded that the district court decision regarding BACT, which

did not reject or rule on EPA’s reasons for finding SCR feasible, limited EPA’s own ability to

conclude that SCR is feasible for BART purposes. Finally, EPA wrongly concluded that it could

rely on the State’s BACT determination in the face of the Agency’s own conclusion that better

controls are available. For all of these reasons, the district court’s decision does not justify

EPA’s summary rejection of its proposed BART determinations. EPA must reconsider its

reversal and, at a minimum, provide a reasoned explanation for why its proposed feasibility

determination is no longer correct. Because no such reasoned explanation exists, EPA must

reject the State’s BART determinations as it did in its proposed rule.

EPA Improperly Concluded that the District Court’s Decision Mandated EPA’s I.

Change of Position.

EPA improperly concluded that the district court decision mandated a decision to affirm

North Dakota’s NOx BART determinations for Milton R. Young Units 1 and 2 and Leland Olds

Unit 2, notwithstanding EPA’s contrary conclusions in its proposal. See 77 Fed. Reg. at 20897

‐

98. Because the district court did not stand in the same position in evaluating North Dakota’s

feasibility analysis as EPA does when reviewing North Dakota’s SIP, EPA improperly based its

decision to uphold North Dakota’s BART determinations on that decision. Likewise, EPA was

not required to defer to the district court ʹ s decision as it did not cast doubt on EPA’s reasons for

proposing to reject North Dakota’s BART determinations. For all of these reasons, EPA

52 76 Fed. Reg. at 58605.

53 Id. at 58604

‐ 05.10 improperly concluded that the district court’s decision mandated its change of position.

Without an adequate rationale for its reversal, EPA’s BART determinations for Milton R. Young

Units 1 and 2 and Leland Olds Unit 2 are arbitrary and capricious.

A. EPA Has An Affirmative Obligation to Review and Reject SIP Submissions

That Do Not Comply with the Clean Air Act Irrespective of the District Court’s

Decision.

EPA improperly concluded that it was required, in light of the district court’s opinion, to

uphold North Dakota’s BACT determinations for Milton R. Young Units 1 and 2 and Leland

Olds Unit 2. EPA cannot abdicate its responsibility to evaluate North Dakota ʹ s SIP submission

by relying on a district court decision that was decided under a different, and very deferential,

standard of review. Instead, in evaluating a SIP submission, EPA has an affirmative obligation

to determine whether the SIP complies with the Clean Air Act.

EPA must review a SIP submission to ensure that the SIP complies with “all applicable

requirements” of the Clean Air Act. 42 U.S.C. § 7410(c)(3); see also Kennecott Copper Corp. v.

Costle

, 572 F.2d 1349 (9th Cir. 1978) ; Dow Chem. Co. v. Costle

, F. Supp. 315 (D. Mich. 1978), aff ʹ d

,

659 F.2d 724 (6th Cir. 1981). In undertaking this review, EPA is not a rubber stamp, but rather

must evaluate and assess the State’s submission to ensure compliance with the Act. Indeed, as

EPA itself has recognized, it cannot approve the State’s BART determination simply because the

State ostensibly considered the correct factors. 77 Fed. Reg. at 20902.

Instead, EPA has an obligation to evaluate whether the State’s determinations are

appropriate, id

., and it will not defer to the State’s decision “under the mantle of state

discretion.” Id. at 20901. As courts have consistently explained, given this affirmative duty,

EPA need not defer to a State’s technical conclusions about whether a SIP complies with Clean

Air Act requirements. For example, as the Ninth Circuit has explained,

The determination whether a particular form of emission control is feasible is

obviously a matter requiring an exercise of the Administrator ʹ s discretion. This

is true without regard to whether the alleged infeasibility rests on economic or

technological grounds. This conclusion cannot be rendered immaterial by

reliance on the finding by the State

. . . that the EPA ʹ s constant emission control

requirements were economically infeasible. Such a finding is not binding on the

Administrator

. . . As we observed in Bunker Hill, there is no more reason to bind

the Administrator to a state’s finding of infeasibility than to a state ʹ s conclusion

that its plan achieves in a timely fashion the ambient air quality standards.

Kennecott Copper Corp.

, 572 F.2d at 1354 (emphasis added); see also Montana Sulphur & Chemical

Co. v. EPA

, 666 F.3d 1174, 1189 (9th Cir. 2012); Navistar Int ʹ l Transp. Corp. v. EPA

, 941 F.2d 1339,

1347, 1350

‐ 51, 1357 (6th Cir. 1991).11 The district court did not have the same authority to review North Dakota ʹ s BACT

determination as EPA has to review North Dakota ʹ s SIP submission. The district court was

limited by a consent decree that obligated North Dakota to issue a BACT determination and

provided that a “Court shall sustain the decision by [the State] unless the Party disputing the

BACT determination demonstrates that it is not supported by the state administrative record

and not reasonable in light of applicable statutory and regulatory provisions.” Consent Decree

¶ 147(c). 54

Given this limited authority, the district court deferred to the State, resolving any

disagreement in favor of the State, and concluded that EPA had not proven that North Dakota ʹ s

BACT determination was unreasonable. Order at 33. The court never reached the question of

whether EPA ʹ s own BACT analysis, including EPA ʹ s conclusion that SCR is technically feasible,

was itself reasonable, let alone more persuasive than North Dakota’s conclusions regarding

feasibility. Similarly, the court never ruled on whether EPA ʹ s legal and technical analyses were

more consistent with the Clean Air Act. The court determined only that North Dakota ʹ s BACT

determination, including its conclusion that SCR is not technically feasible, was “not

unreasonable.” Id .; see also Order at 28 (explaining the limited scope of the court’s power as

follows: “It is important to note that the standard of review is not what the EPA would have

concluded even if a reviewing court may find EPA ʹ s view more persuasive. Instead, the

standard of review is whether North Dakota ʹ s conclusion was unreasonable.”).

Thus, notwithstanding the district court’s opinion, EPA has the authority, and the duty,

to disapprove a SIP submission if EPA rationally concludes that the submission does not meet

all applicable Clean Air Act requirements. 55 The district court’s decision did not require EPA to

reverse position in disregard of the record the Agency itself had compiled. Thus, EPA ʹ s reliance

on the district court decision in place of a reasoned basis for its reversal renders the final rule

arbitrary and capricious.

Moreover, applying the proper legal standard for acting on a SIP submission, and the

proper definition of BART, EPA should have reached the same conclusion in its final rule as it

reached in the proposed rule: SCR plus ASOFA is BART for Milton R. Young, Units 1 and 2,

and Leland Olds Unit 2. EPA found multiple legal and technical errors in North Dakota ʹ s BART

determinations, 76 Fed. Reg. at 58596

‐ 58603, and found that the technical analyses conducted by

EPA staff and outside contractors warranted the imposition of stronger BART limits in a FIP.

54 This language in the consent decree comes from Alaska Dep’t of Envtl. Conservation v. EPA

, 540 U.S. 461,

495 (2004) (in an EPA civil challenge to a state issued BACT determination, or a challenge to an EPA stop

‐

construction order, EPA bears the burden of showing that the state ʹ s BACT determination was not

reasonable). EPA ʹ s role in reviewing a SIP revision differs significantly from EPA ʹ s role in reviewing a

state

‐ issued PSD permit. Since the Clean Air Act assigns different roles to EPA in reviewing BACT

determinations as opposed to SIP submissions, courts have held EPA to different legal standards when

EPA reviews state PSD determinations and SIP submissions.

55 See, e.g., Montana Sulphur

, 666 F.3d at 1189; Virginia v. Browner

, 80 F.3d 869 (4th Cir. 1996); Michigan v.

Thomas

, 805 F.2d 176 (6th Cir. 1986); Bethlehem Steel Corp. v. EPA

, 782 F.2d 645 (7th Cir. 1986).12 Id

. at 58604

‐ 19. In the face of the Agency’s own conclusions that the State ʹ s BART determination

was technically flawed and inconsistent with the requirements of the Clean Air Act, EPA could

not permissibly defer to North Dakota ʹ s BART determination as the district court did.

B. The District Court Decision Left EPA Discretion to Disapprove North Dakota’s

BART Determinations.

EPA improperly concluded that the district court’s opinion mandated EPA’s change of

position for the further reason that the district court’s opinion does not address the key reasons

why EPA originally concluded that SCR is feasible. If an agency changes position from

proposal to final, the agency must provide a reasonable explanation lest the reversal be deemed

arbitrary and capricious. See, e.g.

, Trout Unlimited v. Lohn

, 645 F. Supp. 2d 929, 959

‐ 60, 965 (D.

Or. 2007) (holding that that the National Marine Fisheries Service had not supported its decision

to withdraw its proposal to list certain salmon species as threatened, rendering that decision

arbitrary and capricious). Where, as here, an agency adopts a position that is inconsistent with

its prior conclusions without disavowing those conclusions, and without adequate support for

the change of position, courts have found the change of position arbitrary and capricious. See

id.

Again, the district court’s role in the BACT proceeding was simply to assess whether

North Dakota’s BACT determination was “reasonable in light of applicable statutory and

regulatory provisions.” See Order at 14

‐ 16. In undertaking its review, the court did not

consider many of EPA’s reasons for concluding that SCR is a feasible technology that should be

designated as BART. Crucially, in the proposed rejection of North Dakota’s BART

determinations for Milton R. Young Units 1 and 2 and Leland Olds Unit 2, EPA asserted that the

potential need for frequent catalyst replacement relates to whether using SCR is economical, not

whether it is available or could operate on units combusting North Dakota lignite. See 76 Fed.

Reg. at 58604 (explaining that the concern over catalyst deactivation and the need for frequent

catalyst replacement relates to cost). Nowhere in its decision did the court reject or even

mention this argument. Instead, the court focused on North Dakota’s argument that the lack of

vendor willingness to guarantee the catalyst life indicated that the technology was unavailable,

and that the allegedly different flue gas characteristics of units rendered the technology

inapplicable. See Order at 23

‐ 24, 25, 18

‐ 20, 27.

In addition, the court did not consider EPA’s conclusion that the potential differences

between the flue gas characteristics at units firing North Dakota lignite and units using other

coals were irrelevant to the feasibility of LDSCR or TESCR. In proposing to reject North

Dakota’s BART determinations and find SCR feasible, EPA relied on North Dakota’s reasoning

in its initial SIP submission that LDSCR and TESCR were technically feasible because they are

located downstream of controls that remove particulates and SO 2 as well as catalyst poisons that

can arise when combusting North Dakota lignite. 76 Fed. Reg. at 58605. EPA also relied on the

Microbeam Testing that demonstrated the changed flue gas conditions downstream of pollution

controls. Id. The court’s opinion, however, does not mention that the flue gas stream varies

depending whether one tests before or after pollutant removal by other controls. Instead, the13 court simply deferred to North Dakota’s determination in the BACT proceeding that the general

flue gas characteristics of a plant firing North Dakota lignite rendered the technology infeasible.

See Order at 18

‐ 19, 24.

Because the district court decision did not reject, dismiss, or denigrate EPA’s view that

SCR is feasible when placed downstream of other pollution control technologies, regardless of

whether vendors are willing to guarantee the catalyst life, EPA was wrong to conclude that the

decision limited EPA’s ability to reject North Dakota’s feasibility analysis and BART

determinations.

Contrary to EPA’s assertion in the final rule, it would not have been inappropriate for

EPA to finalize its proposed finding that SCR is feasible given the available record evidence,

even after the district court deferred to North Dakota’s infeasibility determination in the BACT

context. As discussed above, EPA must disapprove a SIP if EPA finds that the SIP submission

will not meet the requirements of the Clean Air Act. Such decisions will be upheld where

rational. See, e.g., Montana Sulphur

, 666 F.3d at 1189 ; Virginia v. Browner

, 80 F.3d 869 (4th Cir.

1996); Michigan v. Thomas

, 805 F.2d 176 (6th Cir. 1986); Bethlehem Steel Corp. v. EPA

, 782 F.2d 645

(7th Cir. 1986).

The record is replete with information that would, and in fact did, allow EPA in its

proposed rule to rationally conclude that SCR, the most effective NOx control currently

available, is technical feasible on coal plants firing North Dakota lignite when the SCR is placed

downstream of other pollution control devices. 56 For example, the record includes:

 The Microbeam Technologies Final Report, which assessed the particulate characteristics

upstream and downstream of ESP and SO 2 scrubber (such gas a wet flue gas

desulfurization) and demonstrates the high removal efficiency of these controls and their

ability to eliminate many of the catalyst poisons of concern when firing North Dakota lignite

(sodium and potassium) (Doc. No. EPA

‐ R08

‐ OAR

‐ 2010

‐ 0406

‐ 0003);

 Information from Argillon, now Johnson Matthey Catalysts (“JMC”) that specifies the

maximum amount of sodium and potassium that can be present in the flue gas to maintain a

catalyst life guarantee, an amount that is less than the amounts that were present in the flue

gas steam per the Microbeam testing (Doc. No. EPA

‐ R08

‐ OAR

‐ 2010

‐ 0406

‐ 0013);

56 Although only Milton R. Young Unit 2 had a scrubber when the SIP was submitted, EPA both proposed

to approve and finally approved the use of wet scrubbers as BART to control SO 2 emissions at Milton R.

Young Unit 1 and Leland Olds Unit 2. See 76 Fed. Reg. at 58589

‐ 90 (proposing to approve North Dakota’s

SO 2 BART determination for Milton R. Young Unit 1—a wet scrubber); 77 Fed. Reg. at 20896

‐ 97

(finalizing the same); 76 Fed. Reg. at 58594 (proposing to approve North Dakota’s SO 2 BART

determination for Leland Olds Unit 2—a wet scrubber); 77 Fed. Reg. at 20896

‐ 97 (finalizing the same).14  JMC’s recent reiteration, in a comment submitted on February 27, 2012, that it believes

LDSCR and TESCR would be technically feasible on units firing North Dakota lignite (Doc.

No. EPA

‐ R08

‐ OAR

‐ 2010

‐ 0406

‐ 0322);

 The expert report of Dr. Ranajit (Ron) Sahu, which points to technical evidence establishing

that both LDSCR and TESCR are feasible on units firing North Dakota lignite (Doc. No.

EPA

‐ R08

‐ OAR

‐ 2010

‐ 0406

‐ 0213);

 EPA’s July 31, 2008 comments on North Dakota’s Preliminary BACT Determination to

control NOx emissions and Milton R. Young Units 1 and 2 and the Hartenstein July 2008

Expert Report supporting those comments. The Hartenstein report includes ample scientific

explanations for when sodium and potassium act as catalyst poisons, and how an SCR

system can be designed to avoid those issues. (Doc. No. EPA

‐ R08

‐ OAR

‐ 2010

‐ 0406

‐ 0046,

Enclosures 1 and 2);

 An additional Hartenstein report from October 2008 that discusses the technical feasibility

of SCR where the flue gas is rich in sodium and potassium (Doc. No. EPA

‐ R08

‐ OAR

‐ 2010

‐

0406

‐ 0047); and

 Dr. Phyllis Fox’s Revised Cost Effectiveness Analysis for TESCR at Leland Olds Unit 2. Dr.

Fox explains that catalyst deactivation will not rapidly occur at a TESCR, which is located

after control devices that have been proven to remove the majority of ash and catalyst

poisons. Dr. Fox recommends keeping the catalyst above the water dew point to prevent

deactivation. (Appendix C to the Technical Support Document supporting the proposal,

Doc. No. EPA

‐ R08

‐ OAR

‐ 2010

‐ 0406

‐ 0076).

Given this record evidence, it was arbitrary and capricious for EPA to conclude it was

constrained by the district court’s decision in the BACT action.

II. EPA ʹ s Reliance on a BACT Determination to Substitute for BART Is Improper Since

EPA Is Aware that Superior Controls Are Available.

EPA improperly relied on the BACT determination to substitute for BART where EPA

was aware that BACT was not based on the most effective available controls. EPA’s BART

Guidelines prescribe a five

‐ step process for determining BART. See 40 C.F.R. pt. 51, app. Y

§ IV.D. While normally an agency making a BART determination must follow all five steps of

the process outlined in the Guidelines, EPA permits an abbreviated analysis in two

circumstances.

First, an agency can rely on a MACT standard, or, in many cases, a NSR/PSD

determination, so long as no new, superior technologies have become available subsequent to

issuance of the MACT standard or NSR/PSD determination. Id

. § IV.C. The BART Guidelines

do not authorize either a state, or EPA when reviewing the state ʹ s proposal, to shortcut the

BART analysis by relying on a BACT determination per se

. Instead, the BART Guidelines15 suggest that “for many NSR/PSD and NSR/PSD settlement agreements,” the resulting control

can substitute for BART so long as there are no more cost

‐ effective controls that would be

considered the “best control.” Id

. Another section of the BART Guidelines permits an agency to

skip the BART analysis if either the “source has controls already in place which are the most

stringent controls available” or “if a source commits to a BART determination that consists of

the most stringent controls available.” Id

. § IV.D (Step 1)(9). In short, under the Guidelines,

BACT cannot substitute for BART if there is another technology available that is more effective

than the technology selected as BACT. 57

By approving a BART determination after EPA had found that superior, cost

‐ effective

controls are available, EPA violated its own BART Guidelines. In reversing its position in the

final approval of North Dakota’s SIP, EPA improperly relied on the State’s BACT

determination, stating that:

. . . states generally may rely on a BACT determination for a source for purposes

of determining BART for that source, unless new technologies have become

available or best control levels for recent retrofits have become more stringent.

70 FR 39164. As a general rule, the selection of a recent BACT level as BART is

the equivalent of selecting the most stringent level of control, and consideration

of the five statutory BART factors becomes unnecessary.

77 Fed. Reg. at 20897. The BART Guidelines do not permit the substitution of BACT when

BACT plainly does not represent the most stringent level of control available.

EPA has not disavowed its prior technical conclusion that SCR is a technically feasible

control that is more stringent than BACT nor could it reasonably do so given the ample record

evidence establishing that SCR is the most stringent control available. See 76 Fed. Reg. at 58610,

58613, 58619. Moreover, the district court decision did not disturb EPA ʹ s finding that SCR is the

most stringent control available. The court ʹ s narrow holding was that North Dakota ʹ s BACT

determination “is not unreasonable.” Order at 33. Finally, since North Dakota issued its BACT

determination in 2010, EPA has developed additional evidence that more stringent controls are

available. See, e.g.

, 76 Fed. Reg. 52388, 52390, 52393, 52439 (Aug. 22, 2011) (NOx BART for the

San Juan Generating Station, Units 1

‐ 4, is SCR with an emissions limit of 0.05 lbs/MMBtu,

calculated on a 30

‐ day “boiler operating day” average). This additional evidence makes it clear

57 Additionally, when relying on a MACT standard or NSR/PSD determination in lieu of following the

five

‐ step BART process, the agency must “provide the public with a discussion of whether any new

technologies have subsequently become available.” 40 C.F.R. pt. 51, app. Y, § IV.C. EPA ʹ s final rule fails

to discuss whether any new technologies have become available since North Dakota ʹ s 2010 BACT

determination. In particular, EPA ʹ s final rule fails to mention the extensive evidence EPA presented in

the proposed rule that SCR is available for the three units in question. As a result, EPA ʹ s final rule

violates the requirement to discuss new technologies that have become available since the BACT

determination upon which EPA relies.16 that “control levels for recent retrofits have become more stringent,” 77 Fed. Reg. at 20897,

further indicating that EPA erred in relying on the BACT determination.

In short, EPA ʹ s final rule violates the provision in the BART Guidelines stating that

BACT can substitute for BART only if more stringent, effective controls do not exist. 40 C.F.R.

pt. 51, app. Y §§ IV.C, IV.D (Step 1)(9). As a result, EPA ʹ s final rule violates EPA ʹ s BART

Guidelines and is arbitrary and capricious.



### CONCLUSION

For all of the reasons set forth above, petitioners respectfully request that EPA

reconsider its decision to approve North Dakota’s NOx BART determinations for Milton R.

Young Units 1 and 2 and Leland Olds Unit 2. Thank you for considering this matter. Please do

not hesitate to contact us with any questions.

Sincerely,

________________________________________ Abigail Dillen

Jocelyn D’Ambrosio

Matthew Gerhart

Earthjustice

156 William Street

Suite 800

New York, New York 10038

212

‐ 791

‐ 1881

adillen@earthjustice.org

jdambrosio@earthjustice.org

705 Second Avenue

Suite 203

Seattle, Washington 98104

206

‐ 343

‐ 7340

mgerhart@earthjustice.org

Counsel for Petitioners National Parks

Conservation Association and Sierra Club