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 ENVIRONMEN TAL PROTECTION AGENCY, Respondents. Petition for Review of Final Agency Action OPENING BRIEF OF PETITIONERS (CORRECTED) Ann Brewster Weeks Helen D. Silver 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

DATED: March 15, 2012 (corrected filing) Kevin 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 Meleah A. Geertsma 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 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 1 of 3221 ORAL ARGUMENT NOT YET SCHEDULED
UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

____________________ ________________ CENTER FOR BIOLOGICAL ) DIVERSITY, et al., ) ) Petitioners, ) v. ) Case No. 11-1101 ) (Consolidated with 11-1285, UNITED STATES ENVIRONMEN TAL ) 11-1328, and 11-1336 PROTECTION AGENCY, et al., ) ) Respondent. )
PETITIONERS’ CERTIFICAT E AS TO PARTIES, RULINGS, AND RELATED CASES Pursuant to Circuit Rules 15(c)(3) and 28(a)(1), Center for Biological Diversity, Coastal Conservation League , Conservation Law Foundation, Dogwood Alliance, Georgia ForestWa tch, Natural Resources C ouncil of Maine, Natural Resources Defense Council, and Wild Vi rginia (“Petitioners”) submit this certificate as to parties, rulings, and related cases: (A) Parties and Amici (i) Parties, Intervenors, and Amicus Curiae Who Appeared in the District Court:
These cases are consolidated petitions fo r review of final agency actions, not appeals from rulings of a district court. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 2 of 3222 (ii) Parties to the Consolidated Challenges:
Case No. 11-1101 : Petitioners are Center for Biolog ical Diversity, Conservation Law Foundation, and Natural Resour ces Council of Maine. Respondents are the United States Envi ronmental Protection Agency and Lisa P. Jackson, Administrator of EPA. Intervenors in Support of Responde nts are American Forest & Paper Association, American Wood Council, Biom ass Power Association, Corn Refiners Association, Florida Sugar Industry, Na tional Oilseed Processors Association, Rubber Manufacturers Association, Tr eated Wood Council, Renewable Fuels Association, Utility Air Regulatory Grou p, and National Alliance of Forest
Owners. Case Nos. 11-1285, 1328, 1336 Petitioners are Center for Biolog ical Diversity, Conservation Law Foundation, Natural Resources Council of Maine, Georgi a ForestWatch, and Wild Virginia (Case No. 11-1285), Natural Resources Defenses Council (Case No. 11- 1328), and Coastal Conservation Lea gue and Dogwood Alliance (Case No. 11- 1336). Respondents in all above-mentioned conso lidated cases are EPA and Lisa P. Jackson. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 3 of 3223 Intervenors in Support of Respondent s are American Forest & Paper Association, American Wood Council, Biom ass Power Association, Corn Refiners Association, Florida Sugar Industry, Na tional Oilseed Processors Association, Rubber Manufacturers Association, Tr eated Wood Council, Renewable Fuels Association, Utility Air Regulatory Grou p, and National Alliance of Forest
Owners. (iii) Amici Curiae Petitioners are aware of no amici curiae in any of these consolidated cases. (iv) Circuit 26.1 Disclosures
Petitioners’ disclosures under Circuit Rule 26.1 are in a separate disclosure statement, below. (A) Rulings Under Review These Petitions for Review challenge (1) the Environmental Protection Agency’s decision to grant a petition fo r reconsideration filed by the National Alliance of Forest Owners, as published in Deferral for CO 2 Emissions from Bioenergy and Other Biogenic Sources Un der the Prevention of Significant Deterioration (PSD) and Title V Programs: Proposed Rule at 76 Fed. Reg. 15,249 (Mar. 21, 2011) and (2) the Environmental Protection Agency’s final rule titled Deferral for CO 2 Emissions From Bioenergy and Other Biogenic Sources Under USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 4 of 3224 the Prevention of Significant Deteriora tion (PSD) and Title V Programs: Final
Rule at 76 Fed. Reg. 43,490 (July 20, 2011). (B) Related Cases Petitioners are aware of one additional case related to the EPA final actions challenged here, National Alliance of Forest Owne rs et al. v. Environmental Protection Agency (Case No. 10-1209). Pursuant to this Court’s Order of May 27, 2011, that case was severed from Coalition for Responsible Regulation et al. v. Environmental Protection Agency (Case No. 10-1073 and consolidated cases) and held in abeyance pending further order of this Court. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 5 of 3225 Respectfully submitted, this 15 th Day of March, 2012 /s/ Ann Brewster Weeks (NL) Ann Brewster Weeks Helen D. Silver 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 (NL) 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/ Kevin Bundy (NL) Kevin 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 David Doniger Meleah A. Geertsma Natural Resources Defense Council 1152 15th Street NW, Suite 300 Washington, D.C. 20005 Phone: (202) 289-2403 ddoniger@nrdc.org mgeertsma@nrdc.org /s/ Nathaniel S.W. Lawrence Nathaniel S.W. Lawrence Natural Resources Defense Council 3723 Holiday Drive, SE Olympia, WA 98501 Phone: (360) 534-9900 nlawrence@nrdc.org Counsel for Natural Resources Defense Council USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 6 of 3221 IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

____________________ ________________ CENTER FOR BIOLOGICAL ) DIVERSITY, et al., ) ) Petitioners, ) v. ) Case No. 11-1101 ) (Consolidated with 11-1285, UNITED STATES ENVIRONMEN TAL ) 11-1328, and 11-1336 PROTECTION AGENCY, ) ) Respondent. )
PETITIONERS’ RULE 26.1 DISCLOSURE STATEMENT Pursuant to Fed. R. App. P. 26.1 a nd D.C. Circuit Rule 26.1, Petitioners make the following disclosures. Center for Biological Diversity. Center for Biological Diversity, a not-forprofit organization organized under the la ws of the State of New Mexico, is focused on the preservation, protection, and restoration of biodiversity, native species, ecosystems, public lands and wa ters, and public health. Its core organizational missions include securing pr otection for species threatened by the impacts of global warming, ensuring complia nce with applicable law in order to reduce greenhouse emissions and other air pollution, and educating and mobilizing the public on global warming and air quality issues. Center for Biological Diversity has no parent companies, and no publicly held company has a 10% or greater ownership interest in Center for Biological Diversity. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 7 of 3222 Coastal Conservation League. Coastal Conservation League is a nonprofit organization organized under the laws of the State of South Carolina and incorporated under Section 501(c)(3) of the Internal Revenue C ode that works to protect the natural environment and co mmunities of the South Carolina coastal plain. Coastal Conservation League has no parent compan ies, and no pu blicly held company has a 10% or greater owners hip in Coastal Conservation League. Conservation Law Foundation. Conservation Law Foundation is a notfor-profit corporation organized under the laws of the Commonwealth of Massachusetts that uses law, science, policy, and the business market to find pragmatic, innovative solutions to Ne w England’s toughest environmental problems. Conservation Law Foundatio n has no parent companies, and no publicly held company has a 10% or great er ownership interest in Conservation Law Foundation. Dogwood Alliance. Dogwood Alliance is a nonprofit organization organized under the laws of the State of North Carolina and incorporated under Section 501(c)(3) of the Internal Reve nue Code. Dogwood Alliance works to preserve and restore native forest ecosyst ems in the southeastern United States. Dogwood Alliance has no parent companies, and no publicly held company has a 10% or greater ownership in terest in Dogwood Alliance. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 8 of 3223 Georgia ForestWatch . Georgia ForestWatch is a nonprofit organization organized under the laws of the State of Georgia and incorporated under Section 501(c)(3) of the Internal Rev enue Code that works to promote healthy forests and watersheds in national forest lands in Ge orgia. Georgia Fore stWatch has no parent companies, and no publicly held company ha s a 10% or greater ownership interest in Georgia ForestWatch. Natural Resources Council of Maine. Natural Resources Council of Maine, a not-for-profit corporation organized and existing under the laws of the State of Maine, is a membership organiza tion dedicated to preserving the quality of the air, water, forest and other natural resources of the State of Maine, for the benefit of its people and its environment. Natural Resources Council of Maine has no parent companies, and no publicly held company has a 10% or greater ownership interest in Natural Resources Council of Maine. Natural Resources Defense Council. Natural Resources Defense Council, a corporation organized and existing under th e laws of the State of New York, is a national nonprofit organization dedicated to improving the quality of the human environment and protecting the nation’ s endangered resources. The Natural Resources Defense Council has no parent compan ies, subsidiaries, or affiliates that have issued shares or de bt securities to the public. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 9 of 3224 Wild Virginia . Wild Virginia is a nonprofit organization organized under the laws of the State of Virginia and in corporated under Section 501(c)(3) of the Internal Revenue Code. Wild Virginia work s to preserve wild forest ecosystems in Virginia’s National Forests. Wild Vi rginia has no parent companies, and no publicly held company has a 10% or greater ownership interest in Wild Virginia. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 10 of 3225 Respectfully submitted, this 15 th Day of March, 2012 /s/ Ann Brewster Weeks (NL) Ann Brewster Weeks Helen D. Silver 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 (NL) 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/ Kevin Bundy (NL) Kevin 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 David Doniger Meleah A. Geertsma Natural Resources Defense Council 1152 15th Street NW, Suite 300 Washington, D.C. 20005 Phone: (202) 289-2403 ddoniger@nrdc.org mgeertsma@nrdc.org /s/ Nathaniel S.W. Lawrence Nathaniel S.W. Lawrence Natural Resources Defense Council 3723 Holiday Drive, SE Olympia, WA 98501 Phone: (360) 534-9900 nlawrence@nrdc.org Counsel for Natural Resources Defense Council USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 11 of 322i TABLE OF CONTENTS

TABLE OF AUT HORITIES ................................................................................... iv
GLOSSARY OF ACRONYMS AND ABBREVIATIONS ................................... ix
JURISDICTIONAL STATEMEN T ..........................................................................1
STATEMENT OF THE ISSU ES...............................................................................1
STATUTES AND REGULATIONS.........................................................................2
STATUTORY AND REGULAT ORY FRAMEWORK...........................................2
A. The Clean Air Act’s Construction and Operating Permit Programs...............2
1. Prevention of Significant Deteri oration Construction Permits .............2
2. Title V Opera ting Perm its .....................................................................4
3. State and Federal Pe rmitting Agen cies .................................................5
FACTUAL BAC KGROUND ....................................................................................5
A. Biogenic CO 2 Emissions and the Carbon Cycle..............................................5
B. Regulation of Greenhouse Gases from Massachusetts v. EPA to the Tailoring Ru le. ...........................................................................................................7
C. The Tailoring Rule’s Treatment of Biogenic CO 2 ..........................................8
D. The Proposed Bioma ss Exempt ion..................................................................9
E. Comments on the Propos ed Exemption ........................................................14
F. The Final Ex emption .....................................................................................16 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 12 of 322ii SUMMARY OF ARGUME NT ...............................................................................18
STANDING .............................................................................................................20
ARGUMENT ...........................................................................................................30
I. STANDARD OF REVIEW...........................................................................30
II. THE ADMINISTRATIVE NECESSIT Y DOCTRINE DOES NOT SUPPORT THE BIOMA SS EXEMPTION ............................................................30
A. The Administrative Necessity Doctrine Allows Departure From Statutory Commands Only Under Very Narrow Circumstances ............................................31
B. EPA Failed to Demonstrate that Ther e Are Impossible Burdens Associated With Regulating Biogenic CO 2 Under the Ta iloring Ru le ......................................32
C. EPA Failed to Justify Rejecting the Narrower Alternative of Ignoring Lifecycle Factors at the BA CT Stage During the Three- Year Exemption Period ..35
III. THE DE MINIMIS DOCTRINE DOES NOT SUPPORT THE BIOMASS EXEMPTION...........................................................................................................37
A. The Clean Air Act Does Not Allow a De Minimis Exemption Based on OffSite CO 2 Absorption.................................................................................................39
1. The Clean Air Act Does Not Allow Consideration of Off-Site Factors in PSD and Title V Permit Applicability Decisions......................................40
2. The De Minimis Doctrine Does Not Allow EPA to Introduce Legislatively Excluded Factors into Permit Applicability Decisions ...........46
B. EPA Has No Record Suppo rt for a Categorical De Minimis Exemption for Biogenic CO 2 Emissi ons..........................................................................................47
1. EPA May Not Base an Exemption on Speculative Future Fact-Finding About Lifecycle CO 2 Emissi ons....................................................................47 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 13 of 322iii 2. EPA Failed to Tailor its Biogenic CO 2 Exemption as Narrowly as Possibl e ..........................................................................................................48
3. EPA Did Not Demonstrate That Other Impacts Will be De Minimis .52
IV. THE ONE-STEP-AT-A-TIME DOCT RINE DOES NOT SUPPORT THE BIOMASS EXEMPTION........................................................................................54
CONCLUSIO N........................................................................................................57 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 14 of 322iv TABLE OF AUTHORITIES

CASES
*Ala. Power Co. v. Costle 636 F.2d 323 (D.C. Cir. 1979)........................ 2, 31, 35, 39, 40, 41, 46, 47, 54 Animal Legal Defense Def. Fund v. Glickman 154 F.3d 426, 444 ( D.C. Cir. 1998)..............................................................26
*Chevron v. NRDC 467 U.S. 837 (1984) .......................................................................... 40, 41, 42 *Environmental Defense Fund v. EP A 636 F.2d 1267 (DC Cir. 1980).......................................................... 31, 32, 34 Interstate Natural Gas Ass’n of Am. v. FERC 285 F.3d 18 (D.C . Cir. 2002)......................................................................... 55 Lujan v. Defenders of Wildlife 504 U.S. 555 (1 992).......................................................................................21
Massachusetts v. EPA 549 U.S. 497 (20 07).................................................................................. 7, 44 *Mova Pharmaceutical Corp. v. Shalala 140 F.3d 1060, 1074-75 ( D.C. Cir. 1998) ............................................. 26, 32 *Nat’l Ass’n of Broadcasters v. FCC 740 F.2d 1190 (D.C. Cir. 1984) .............................................................. 54, 55
*New York v. EPA 443 F.3d 880 (D.C. Cir 2006)................................................................. 39, 48 * Authorities upon which we chiefly rely are marked with asterisks USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 15 of 322v NRDC v. EPA 966 F.2d 1292 (9th Cir. 1992) ....................................................................... 48
Ober v. Whitman 243 F.3d 1190 (9th Cir. 2001) ....................................................................... 40
*Ohio v. EPA 997 F.2d 1520 (D.C. Cir. 1993)....................................................... 40, 51, 52
Permian Basin Area Rate Cases 390 U.S. 747 (1 968).......................................................................................35 Pub. Citizen Health Research Grp. v. FDA 185 F.3d 898 (D.C . Cir. 1999)....................................................................... 55 Pub. Citizen v. FTC 869 F.2d 1541 (D.C. Cir. 1998)........................................................ 32, 36, 37 Shays v. Fed. Elections Comm’n 414 F.3d 76 (D.C . Cir. 2005)......................................................................... 40
Sierra Club v. EPA 292 F.3d 895 (D.C . Cir. 2002)....................................................................... 21
Sierra Club v. EPA 499 F.3d 653 (7th Cir. 2007) ......................................................................... 24
*Sierra Club v. EPA 719 F.2d 436 (D.C. Cir. 1983).................................................... 31, 32, 34, 39
STATUTES 42 U.S.C. § 7410(a )(2)(C) .........................................................................................5 42 U.S.C. § 7410(c) ...................................................................................................5 42 U.S.C. § 7411 (a)(3).............................................................................................41 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 16 of 322vi 42 U.S.C. § 7470 ......................................................................................................26
42 U.S.C. § 7475 ........................................................................................................2 42 U.S.C. § 7475(a) .................................................................................................41 42 U.S.C. §7475( a)(1)..............................................................................................25 42 U.S.C. § 7475 (a)(3).............................................................................................53 42 U.S.C. § 7475(a )(4)...................................................................................... 23, 25 42 U.S.C. § 7475 (a)(5).............................................................................................53
42 U.S.C. § 7479 ........................................................................................................2 42 U.S.C. § 7479(1) .................................................................................................41 42 U.S.C. § 7479 (3) .......................................................................................... 24, 26 42 U.S.C. § 7503(a )(1)(A) .......................................................................................45 42 U.S.C. § 7521 (a)(1)...............................................................................................7 42 U.S.C. § 7545(o) .................................................................................................45 42 U.S.C. § 7602(g) ...................................................................................................7 42 U.S.C. § 7602 (j) ............................................................................................. 5, 42 42 U.S.C. § 7607 (b)(1)...............................................................................................1 42 U.S.C. § 7607 (b)(2)...............................................................................................1 42 U.S.C. § 7607(d )(9)(A)................................................................................ 20, 30 42 U.S.C. § 7607(d )(9)(C) ................................................................................ 20, 30 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 17 of 322vii 42 U.S.C. § 7661(2) ...................................................................................................5 42 U.S.C. § 7661a (a)........................................................................................... 4, 42
REGULATIONS 40 C.F.R. § 51.166(b)(4 ).........................................................................................43 40 C.F.R § 52.22(b) .................................................................................................57 40 C.F.R. § 51.166(a).................................................................................................5 40 C.F.R. § 51. 166(a)(7 )............................................................................................3 40 C.F.R. § 51. 166(b)(1 )............................................................................................3 40 C.F.R. § 51. 166(b)(18)........................................................................................43 40 C.F.R. § 51. 166(b)(23)........................................................................................23 40 C.F.R. § 51.166(b )(48)(ii )(a) ..............................................................................44 40 C.F.R. § 51.166(j) ...............................................................................................23 40 C.F.R. § 51. 166(j)(2)...........................................................................................23 40 C.F.R. § 51. 166(j)(3)...........................................................................................23 40 C.F.R. § 52. 21(a)(1)..............................................................................................5 40 C.F.R. § 52. 21(b)( 23)..........................................................................................23 40 C.F.R. § 52.21(j) .................................................................................................23 40 C.F.R. § 52. 21(j)(2).............................................................................................23 40 C.F.R. § 52. 21(j)(3).............................................................................................23 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 18 of 322viii 40 C.F.R. § 70.1(a) .....................................................................................................5
40 C.F.R. § 70.4 .........................................................................................................5
40 C.F.R. § 71.1 .........................................................................................................5
40 C.F.R. § 71.4 .........................................................................................................5 43 Fed. Reg. 26,380 (June 19, 1978) .........................................................................3 74 Fed. Reg. 66,496 (Dec. 15, 2009) .........................................................................7 75 Fed. Reg. 17,004 (A pr. 2, 2010) .................................................................... 4, 44 75 Fed. Reg. 25,324 (May 7, 2010) ...........................................................................8 *75 Fed. Reg. 31,514 (June 3, 2010) .................................. 4, 8, 9, 10, 25, 33, 35, 57 75 Fed. Reg. 41,173 (July 15, 2010) ........................................................................49 *76 Fed. Reg. 15,249 (Mar. 21, 2011).................. 6, 9, 10, 11, 12, 13, 14, 17, 44, 49 *76 Fed. Reg. 43,490 (July 20, 2011)....... 1, 7, 17, 30, 33, 36, 38, 48, 49, 50, 51, 54
OTHER AUTHORITIES Random House Dictionary (online edition)

................................................................................. 43 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 19 of 322ix GLOSSARY OF ACRONYMS AND ABBREVIATIONS BACT Best Available Control Technology CBD Center for Biological Diversity CERCLA Comprehensive Environm ental Response, Compensation, and Liability Act
CFI Call For Information CO Carbon Monoxide
CO 2 Carbon Dioxide EPA Environmental Protection Agency
GHG Green House Gas NAAQS National Ambient Air Quality Standards NAFO National Alliance of Forest Owners NOx Nitrogen Oxides NRDC Natural Resources Defense Council NSR New Source Review PM Particulate Matter
PM 2.5 Particulate Matter of 2.5 microns diameter PSD Prevention of Significant Deterioration RTC Response to Comments SELC Southern Environmental Law Center USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 20 of 3221 JURISDICTIONAL STATEMENT Petitioners seek review of a final ac tion of the Environmental Protection Agency (EPA) entitled Deferral for CO 2 Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs , 76 Fed. Reg. 43,490 (July 20, 2011) (“Biomass Exemption” or “Exemption”) (JA ___). The petition in No. 11-1101 was filed on April 7, 2011. The petition in No. 11-1285 was filed on A ugust 15, 2011. The petitions in Nos. 11-1328 and 11-1336 were filed on Sept. 19, 2011. All petitions for review were filed within the 60-day period provided under Clean Air Act Section 307(b)(1), which gives this Court exclusive jurisd iction over petitions to review final EPA actions of nationwide applicability. 42 U.S.C. § 7607(b)(1); see also 76 Fed. Reg. at 43,491/1 (JA ___). Pursuant to section 307(b)(2), this includes jurisdiction to review any final action de ferring performance of a nondiscretionary statutory action to a later time. 42 U.S.C. § 7607(b)(2)

STATEMENT OF THE ISSUES In the final action under review, th e Environmental Protection Agency issued a rule exempting stationary sources of biogenic carbon dioxide (CO 2 ) pollution from the construction and operati ng permit requirements of the Clean Air Act. EPA identified neither any express authority, nor any gap or ambiguity, in the USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 21 of 3222 Act that might authorize this exempti on. Rather, EPA re lied on last-resort doctrines allowing deviations from stat utory requirements in extremely narrow circumstances. This pres ents the following issues:
1. Is the exemption authorized under the administrative necessity doctrine?
2. Is the exemption permissible or authorized under the de minimis doctrine?
3. Is the exemption authorized by the “one-step-at-a-time” doctrine? STATUTES AND REGULATIONS Pertinent parts of statutes and regula tions are reproduced in an addendum to this brief. STATUTORY AND REGULATORY FRAMEWORK
A. The Clean Air Act’s Construction and Operating Permit Programs
1. Prevention of Significant De terioration Cons truction Permits The Clean Air Act’s Prevention of Si gnificant Deterioration (PSD) program requires each new or modified “major em itting facility” to obtain a construction permit showing that the facility meets sp ecific pollution cont rol requirements. Sections 165 and 169, 42 U.S.C. §§ 7475, 7479, 1 are the core provisions of the permit program. See Ala. Power Co. v. Costle , 636 F.2d 323, 352 (D.C. Cir. 1979). Section 165(a) prohibits constr uction of any “major emitting facility”

1 This brief generally refers to statutor y provisions by their Clean Air Act section numbers. Parallel U.S. Code citations are given when provisions are first mentioned. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 22 of 3223 without a permit. To obtain a permit, Section 165(a)(4) requires the facility, among other things, to meet an emission limitation reflecting the “best available control technology” (“BACT”) for “each pollutant subject to regulation under this chapter emitted from, or which results from , such facility.” S ection 165(a)(2) also requires a public hearing where interest ed persons may submit data and views about air quality impacts, control technol ogy options, alternatives to building the proposed facility, and other appropriate considerations. Section 169(1) defines a “major em itting facility” as any “stationary source[ ] ... which emit[s], or [has] th e potential to emit” more than 100 or, depending on the source type, 250 tons per year of “any air pollutant.” 2 Section 169(3) defines BACT, in pertinent part, as: an emission limitation based on the ma ximum degree of reduction of each pollutant subject to regulation under this chapter emitted from or which results from any major emitting facility , which the permitting authority, on a case-by-case basis, taking into account energy, environmen tal, and economic impacts and other costs, determines is achievable for such facility through application of production processes and available methods, systems, and techniques, including fuel cleaning, cl ean fuels, or treatment or innovative fuel combustion techniques for cont rol of each such pollutant. In 2010 EPA issued the “Tailoring Ru le” to phase in PSD permitting for sources of greenhouse gas emissions in a series of steps. 75 Fed. Reg. 31,514

2 Long-standing EPA regulations define “any air pollutant” to mean any “regulated NSR [new source review] po llutant.” 40 C.F.R. § 51.166(a)(7) and (b)(1) (requiring permits of “major stationary sources” that emit certain amounts of “regulated NSR pollutant[s]”). See, e.g. , 43 Fed. Reg. 26,380, 26,403, 26,406 (June 19, 1978). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 23 of 3224 (June 3, 2010) (JA ___). Step 1 (which ran from January 2 through June 30,
2011 3 ) covered only major emitti ng facilities that already required a permit due to their emissions of non-greenhouse gases. Under Step 1, as part of obtaining a PSD permit, these sources had to meet BA CT for their greenhouse gases if those emissions would increase by the equivalent of at least 75,000 tons of CO 2 per year. Id. at 31,523/1-2 (JA ___). In Step 2 (which began July 1, 2011) extends coverage to the largest greenhouse gas emitting sources that were not already required to get PSD permits: A new source currently needs a permit if it has the potential to emit at least 100,000 tons of greenhouse gases pe r year, and a modified source needs a permit if it will increase those emissions by at least 75,000 tons. Id. at 31,523/3 – 31,524/1 (JA ___-___). EPA also committed to further actions after Step 2 to bring additional sources into the PSD program over time.
2. Title V Operating Permits Section 502(a) of the Act prohibits the operation of any “major source” without obtaining an operating permit. 42 U.S.C. § 7661a(a). Under Section 501(2), a “major source” means “any stationa ry source (or any group of stationary sources located within a contiguous area and under common control),” and

3 In an April 2010 final rule, EPA determin ed that PSD (and Title V) requirements would begin to apply to greenhouse gases on January 2, 2011, the date on which EPA’s greenhouse gas emission standards for light-duty motor vehicles took effect. Reconsideration of Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting Programs, 75 Fed. Reg. 17,004 (Apr. 2, 2010) (JA ___), USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 24 of 3225 includes any “major stationary source” unde r Section 302(j), i.e., any source that “directly emits, or has the potential to emit ,” at least 100 tons per year of any air pollutant. 42 U.S.C. §§ 7661(2), 7602(j). The Tailoring Rule phases in the applicability of Title V to greenhouse ga s emission sources on the same schedule
as PSD.
3. State and Federal Permitting Agencies The PSD and Title V programs are mo stly implemented by state permitting authorities operating under plans approved by EPA, or as EPA’s delegates under federal plans. EPA directly implemen ts permitting programs in areas with no approved or delegated pl an, and on federal lands and in Indian country. 4
FACTUAL BACKGROUND
A. Biogenic CO 2 Emissions and the Carbon Cycle Plant life takes up CO 2 in order to grow, and therefore such “biogenic” material can be sa id to sequester CO 2 from the atmosphere while it is alive. When plant life dies, or is harvested and burned, its stored CO 2 is released, either gradually through decomposition, or i mmediately upon combustion. Center for Biological Diversity, et al. Comments (EPA-HQ-OAR-2011-0083-0350.1) (“CBD

4 See 42 U.S.C. § 7410(a)(2)(C) and 40 C.F. R. § 51.166(a) (providing for state implementation plans, including PSD programs); 42 U.S.C. § 7410(c) and 40 C.F.R. § 52.21(a)(1) (provi ding for federal implementa tion plans covering PSD). See also 40 C.F.R. §§ 70.1(a), 70.4 (state Title V permitting programs) and 40 C.F.R. §§ 71.1, 71.4 (EPA administra tion of Title V permitting programs). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 25 of 3226 Comments”) at 15-16 (JA ___-___). CO 2 released when biomass is burned has the identical heat-trapping properties of CO 2 released when fossil fuels are combusted. As EPA has recognized, once emitted to th e atmosphere, “it is not possible to distinguish between the radiative forci ng associated with a molecule of CO 2 originating from a biogenic source and one originating from the combustion of fossil fuel.” 76 Fed. Reg. 15,24 9, 15,254/1 (Mar. 21, 2011) (JA ___).
Because CO 2 from plant matter is released immediately on burning, but grown back (if at all) only over time, ther e is a “debt” period for each ton of carbon released but not yet resequester ed. This debt persists ev en if regrowth eventually catches up to the sequestration levels that would have be en reached had the biomass not been harvested but had con tinued growing. CBD Comments at 16 (JA ___); Booth Decl. ¶¶ 25, 26, 32; Natura l Resources Defense Council Comments (EPA-HQ-OAR-2011-0083-0104) (“NRDC Comments”) at 12 (JA ___). For the fastest growing biomass crops (e.g., perenn ial grasses), regrowth can be achieved in a year. But for other types of biogenic fuel (e.g., whole trees), the debt period may extend for decades or centuries. CBD Comments at 16 (JA ___). When new areas of forest or other vegetati on are harvested for fuel, total CO 2 emissions can
exceed the amount released directly from the f acility where the fuel is burned. One reason is that the soil itself stores car bon, and when trees are cut, soil carbon is released into the atmosphere as CO 2 . Id ., Exhibit 11 (JA ___-___). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 26 of 3227 The forest products industr y asserts that the net CO 2 emissions from burning any biogenic fuel are zero. See National Alliance of Forest Owners (NAFO) Comments (EPA-HQ-OAR-2011-0083-0074) at 3 (JA ___). But EPA itself has found that this claim is not supportable: while some biogenic feedstocks may resequester given amounts of CO 2 in a short period, the agency acknowledges that the scientific evidence demonstrates this is certainly not true for all biogenic fuel. Indeed, in the final rule EPA acknowle dges the possibility that burning some biomass feedstocks actually causes significant net CO 2 increases . 76 Fed. Reg. at 43,498/1, 43,499/1 (JA ___, ___).
B. Regulation of Greenhouse Gases from Massachusetts v. EPA to the Tailoring Rule. The pathway to the Biomass Exempti on starts with the Supreme Court’s holding in Massachusetts v. EPA , that CO 2 and other greenhouse gases are “air pollutants” under Section 302(g) of the Ac t, 42 U.S.C. § 7602(g), and the Court’s conclusion that EPA had to make a science-based dete rmination whether they may reasonably be anticipated to endanger pu blic health and welfare. 549 U.S. 497 (2007). In 2009, EPA made its determination that these pollutants do indeed endanger public health and welfare, and in 2010 EPA established emission standards for greenhouse gas emissions from motor vehicles under Section 202(a)(1), 42 U.S.C. § 7521(a)(1). 74 Fed. Reg. 66, 496 (Dec. 15, 2009) USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 27 of 3228 (Endangerment Finding) and 75 Fed. Reg. 25,324 (May 7, 2010) (Vehicle Standards). As described above, EPA also determined that greenhouse gases became regulated air pollutants on the effective date of the vehicle standards, triggering the PSD and Title V perm it requirements. Supra at 4, n.3. EPA also issued the “Tailoring Rule” to implement PSD a nd Title V permitting for greenhouse gas emission sources in a series of steps covering the largest emitters first. Supra at 3-
4.
C. The Tailoring Rule’s Treatment of Biogenic CO 2 The Tailoring Rule provided that all CO 2 directly emitted from a source must be counted towards the permitting thre sholds, regardless whether it originated from burning fossil fuel or biomass. 75 Fed. Reg. at 31,527/2-29/3, 31,590/1-91/1 (JA ___-___, ___-___). Thus, any source with sufficient direct CO 2 emissions needs to obtain a PSD permit and meet BACT. In the Tailoring Rule, EPA declined to adopt the suggestion by certa in industries, incl uding paper mills and private forest growers, that all biogenic CO 2 was “‘carbon neutral’ (i.e., that combustion or oxidation of such materi als would cause no net increase in GHG emissions on a lifecycle basis)” and shoul d be exempted from PSD and Title V permit applicability determinations rega rdless of their characteristics. Id. at 31,590/3 (JA ___). Nonetheless, EPA said it would seek further comment on the USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 28 of 3229 treatment of biogenic CO 2 emissions under the PSD a nd Title V programs. EPA asserted its understanding that “there is flexibility to apply the existing regulations and policies regarding BACT in ways that take into account [biomass fuels’] lifecycle effects on GHG concentrations.” Id. at 31,591/2 (JA ___).
D. The Proposed Biomass Exemption. In March 2011, EPA proposed a sharp ch ange of course. In a notice of proposed rulemaking, 76 Fed. Reg. 15,24 9 (Mar. 21, 2011) (JA ___), EPA granted a petition for reconsideration of the Ta iloring Rule from NAFO. EPA explicitly rejected the claim th at all biomass fuels are carbon neutral. See 76 Fed. Reg. at 15,261/3 (JA ___) (possibility remains th at some biomass fuels will have a significant impact on the net carbon cycle) . Nonetheless, EPA proposed a threeyear categorical exclusion of all “biogenic CO 2 emissions” from any applicability or BACT determinations re quired under the PSD and Title V permitting programs.
Id. at 15,249/3 (JA ___)

. EPA also said it intende d to undertake a subsequent rulemaking, during the three-year exemption period, on how biogenic CO 2 emissions “should be treated and account ed for in PSD and Title V permitting” after that period. Id. at 15,251/3 (JA ___). EPA opaquely asserted that, absent the proposed exemption, “there would be significant and unique complexities” re lated to “the unique characteristics and attributes of biogenic CO 2 feedstocks,” leading to “additional permitting burden in USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 29 of 32210 terms of time and resource re quirements” beyond that previously anticipated in the Tailoring Rule. Id. at 15,259/3 (JA ___). EPA did not expressly state where those asserted burdens and complexities woul d be experienced. The Tailoring Rule required no consideration of lifecycle emi ssions in applicability decisions (i.e., when determining if a source emits sufficient CO 2 to require a permit). And EPA further stated its view that “interim gui dance” on BACT determ inations “will help alleviate some of this burden.” Id. ; see also 75 Fed. Reg. at 31,591/2 (JA ___) (Tailoring Rule on consideration of bi omass lifecycle emissions in BACT for greenhouse gases). Regardless, in the proposed Exemption, EPA stated that it believed it had the authority to exempt all biogenic CO 2 emissions from PSD applicability and from BACT: “EPA believes it has the authority to exclude biogenic CO 2 emissions from the PSD and Title V requirements for th e proposed three-year deferral period and will be exploring whethe r a permanent exemption is permissible for at least some and perhaps all types of feedstoc ks.” 76 Fed. Reg. at 15,260/3 (JA ___). EPA acknowledged, however, that since the relevant provisions of the Act apply to “any air pollutant” or any “air pollutant subject to regulation,” th e terms of the [Clean Air Act] suggest that the PSD and Title V re quirements should apply to CO 2 emissions from bioenergy or other biogenic sources in the same manner as they apply to emissions of CO 2 from any other type of source, since such emissions are constituents of the regulated pollutant [greenhouse gases].
Id

. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 30 of 32211 After this decidedly brief reference to the statutory language, EPA turned immediately to the de minimis doctrine. EPA pointed to examples of prior de
minimis determinations exempting sources from PSD permit requirements on the basis that compliance would yield only triv ial benefits. In each prior example, however, the agency’s trivial benefits an alysis bore strictly on emissions coming directly from the source in question. See id . at 15,261/2 (JA ___). In this proposal, however, EPA asserted that it could consider not only the direct CO 2 emissions from biomass-burning sources, but also the absorption of CO 2 by plants growing tens or hundreds of miles away, even if controlled by some other entity. On the factual side, EPA claimed it had “sufficient information” to conclude that “at least some biomass feedstocks that may be utilized to produce energy have a negligible impact on the net carbon cycle.” Id. at 15,261/2 (emphasis added) (JA ___). As an example, EPA su ggested “residue material ( e.g., sawdust from milling operations) that would have decomposed under natural circumstances” over 10-15 years,” and asserted that “the gain fro m regulating emissions from combustion of this feedstock for bioenergy could be considered to be trivial.” Id. at 15,261/2-3 (emphasis added) (JA ___). EPA did not further describe what “sufficient information” supported this conclusion. Instead, EPA asserted that future scientific assessment might identif y other such feedstocks: It appears that the potential may exis t for EPA to determine that other types of biomass feedstocks would ha ve a negligible impact on the net USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 31 of 32212 carbon cycle impact after further de tailed examination of the science associated with biogenic CO 2 emissions. Thus, if EPA were to require all bioenergy facilities to limit emissions of CO 2 before this assessment is complete, it may later determine that such actions have yielded trivial gain.
Id. at 15,261/3 (emphasis added) (JA ___ ). Finally, EPA made clear its understanding that other biogenic feedstocks can have non-trivial impacts: [T]he possibility also remains that more detailed examination of the science of biogenic CO 2 will demonstrate that the utilization of some biomass feedstocks fo r bioenergy production will have a significant impact on the net carbon cycle , making application of the PSD program requirements to such em issions necessary to fulfill Congressional intent.
Id. (emphasis added). EPA then considered three alternativ es to continuing the Tailoring Rule without change (i.e., alternatives to counting only direct emissions when determining whether PSD perm its are required and to addressing lifecycle factors, if at all, only in the BACT stage). Firs t, the agency could “apply PSD and Title V to all facilities with biogenic CO 2 emissions that emit at or above the Tailoring Rule thresholds, but without making any effort to take into account net carbon cycle impacts.” Id . at 15,262/2 (JA ___). This would have reduced the administrative burdens of the Tailoring Ru le, by eliminating consideration of the lifecycle characteristi cs of biogenic CO 2 in BACT determinations. EPA, however, rejected this alternative because: USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 32 of 32213 we believe that it is conceivable that as a result of the scientific examination of biogenic CO 2 emissions [to be c onducted over the next three years], we could conclude th at the net carbon cycle impact for some biomass feedstocks is negligible. Accordingly, this could result in regulation that yields trivial gain as previously discussed.
Id. (emphasis added). In other words, EPA preferred exempting all biomassburning sources from permitting, however larg e the volume of their direct or net emissions, in order to avoid requiring perm its for any sources that might later be considered to have de minimis impacts based on off-site phenomena. As a second alternative, EPA said it could base permit applicability on caseby-case determinations of the lifecycle CO 2 emissions of each biomass facility, rather than its direct CO 2 emissions. See id. at 15,261/3-15,262/2 (JA ___-___). Even though this option would distinguish between biogenic feedstocks with positive and negative lifecycle CO 2 impacts, EPA asserted that it would impose too heavy an administrative burden. Here EPA mixed administrative burden and de
minimis rationales: “[G]iven the potential th at the utilization of at least some biomass feedstocks may have a negligible impact on the net carbon cycle, engaging in this type of burdensome analysis may not be an optimal use of the limited resources of PSD and Title V permitting authorities.” Id. at 15,262/2 (emphasis added) (JA ___). Even before seeking comment, EPA rej ected both of these alternatives in favor of a third option. The agency instead proposed a blanket three-year USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 33 of 32214 exemption under which no biomass-burning sources – even those with clear net adverse carbon cycle impacts – would undergo PSD or Title V permitting. Id . at 15,262/1 (JA ___).
E. Comments on the Proposed Exemption EPA received numerous comments opposi ng the proposed exemption. For example, the Center for Biological Di versity (CBD), the Natural Resources Defense Council (NRDC), and others told EPA that it lacked legal authority to create an exemption from PSD and Title V applicability based on off-site, “net” lifecycle emissions. See, e.g., CBD Comments at 6-8 (JA __-___). These and other commenters also submitted that the ex emption was scientifically unwarranted because combusting many biomass feedstocks will in fact increase CO 2 emissions, even considered on a lifecycle basis. Id . at 6, 12, 14-16 (JA ___, ___, ___-___);
see also NRDC Comments at 1, 11-14 (JA ___, ___-___). CBD stated that “the most recent and thorough of the studi es [submitted to EPA] overwhelmingly demonstrate that biomass burned for energy generation is not ‘always carbon neutral’.” CBD Comments at 12 (JA ___) . In fact, there are “greater carbon emissions per unit energy from biomass than fossil fuels,” and scientists have concluded that “‘using standing trees for bioenergy immediately transfers carbon to the atmosphere ... increasing overall [GHG] emissions for several decades.’”
Id. at 16 (JA ___). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 34 of 32215 CBD also cited studies contradicti ng EPA’s suggestion that combusting “waste” feedstocks expected to deco mpose within 10-15 years would have a de
minimis impact. Id. at 14, 22-25 (JA ___, ___-___) . NRDC and ot hers submitted that EPA currently had the tools to limit th e exemption, and that “the science does not justify” exempting feedstocks like w hole trees that “are extremely likely to increase net CO 2 emissions for more than 20 years.” See NRDC Comments at 11- 14 (JA __-___). EPA also received co mments from states undercutting the agency’s contention that a blanket exemption was needed to avoid unmanageable administrative burdens. For example, Arka nsas expected only “one or two” PSD permits “possibly involving biomass sources ” per year over the next three years, and did not anticipate a “drastic increase ” in biomass Title V permits. Arkansas Department of Environmental Qua lity Comments (EPA-HQ-OAR-2011-0083- 0033) at 2 (JA ___). Florida found it “diffi cult to predict” how many permits it would need to process. Florida De partment of Environmental Protection Comments (EPA-HQ-OAR-2011-0083-0038) at 2 (JA __). Georgia identified five pending applications, but stated that it was “uncomfortable commenting on future resource constraints; [because] it woul d be speculation only, and not based on facts.” Georgia Department of Na tural Resources Comments (EPA-HQ-OAR2011-0083-0094) at 1 (JA __). Minnesota expected only one to two applications USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 35 of 32216 over the Exemption Rule time frame, an d identified no pending applications. Minnesota Pollution Control Agency Comments (EPA-HQ-OAR-2011-0083-0102) at 1 (JA __). Oklahoma anticipated “ no significant increases or decreases” in permit applications over the next thr ee years. Oklahoma Department of Environmental Quality Comments (EPA- HQ-OAR-2011-0083- 0037) at 1 (JA __). Oregon expected only three to five biomass power plant applications over the same period. Oregon Department of Envir onmental Quality Comments (EPA-HQ-OAR2011-0083-0058) (JA __). Pennsylvania f ound itself “unable to advise EPA, at this time, of the estimated number and type of biomass sources that will be operating in Pennsylvania within the next three years.” Pennsylvania Department of Environmental Protection Comments (EPA-HQ-OAR-2011-0083-0135) at 2 (JA __). South Carolina, while currently pr ocessing four applications, nonetheless found it “impossible to predict how many bi omass applications will be received in the future.” South Carolina Department of Health and Environmental Control Comments (EPA-HQ-OAR-2011-0083-0124) at 3 (JA __).
F. The Final Exemption On July 20, 2011, EPA adopted the Bi omass Exemption as proposed, i.e.  ̧ a blanket exemption for sources burning any kind of biomass fuels, without differentiation, from all PSD or Title V permitting requi rements. 76 Fed. Reg. 43,490 (JA ___). The agency asserted once again that determining the net carbon USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 36 of 32217 cycle impact of biogenic emissions is a complex and uncerta in undertaking, and “would therefore entail extensive workload requirements by many of the permitting authorities.” Id . at 43,496/1. EPA also rest ated its belief that it has authority to undertake a future rulemaking to exempt sources of biogenic CO 2 permanently, based on lifecycle considerations. See 76 Fed. Reg. at 43,498/2 (JA ___). In addition, EPA added an argume nt that the Exemption was supported by the “one-step-at-a-time doctrine.” 5 Id. at 43,497/1 to 43,498/2 (JA ___-___). In neither the final Exemption notice nor the response-to-comments document did EPA provide any substan tial responses to the key comments highlighted above. Notably, EPA provi ded no cogent response to comments disputing the authority of permitting agencies to look beyond the direct emissions of biomass-burning sources in determini ng whether such sources require PSD or Title V permits. EPA provided no substan tive response to comments from states calling into question the seriousness of th e administrative burdens they would face addressing biomass-burning sources. A nd EPA did not provide any substantive response to comments demonstr ating the adverse lifecycle CO 2 emissions from burning various biomass feedstocks, or the adverse public health consequences of the Exemption.

5 In the proposal, EPA had specifically found this doctrine irrelevant. 76 Fed. Reg. at 15,255/3 n.13 (JA ___). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 37 of 32218 Instead, in rote fashion EPA repeat ed a boilerplate response to each substantive comment, reasserting belief in its authority and views about the complexity of the science issues involved, and saying that it would deal with all such issues in its future rulemaking. See, e.g., Summary of Public Comments and Responses (EPQ-HQ-OAR-2011-0083-0359) at 67, 68, 71, and 94. (JA ___-___, ___, and ___) Petitioners filed these petitions for review. SUMMARY OF ARGUMENT The Clean Air Act requires all new and modified sta tionary sources to obtain preconstruction and operating permits if they have th e potential to emit CO 2 or other greenhouse gases into the atmosphe re in amounts exceeding the thresholds set forth in EPA’s June 2010 Tailoring Ru le. The Biomass Ex emption challenged here creates a broad and unjustified exem ption to that requirement. Under the Tailoring Rule, a biomass-burning source w ould have triggere d PSD and Title V permitting if the facility itself emitted sufficient CO 2 . Under the Exemption, the same facility now escapes the permitting prog rams altogether. Under the Tailoring Rule, such a facility would ha ve had to meet BACT for CO 2 and any other regulated pollutant such as fine particle s or nitrogen oxides it emitted in significant amounts. Instead, these fac ilities are now exempt from BACT. And even facilities USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 38 of 32219 that trigger PSD and Title V because they emit sufficient amounts of other air pollutants no longer need to m eet BACT for their biogenic CO 2 emissions. The Exemption is contrary to law and arbitrary and capricious. EPA failed to identify any statutory authority affirm atively supporting the Exemption, nor has it identified any gap or ambiguity in th e language of the statute permitting it. Additionally, EPA failed to justify the Exemption under the doctrines on which it does rely. First, EPA invoked the “administrative necessity” doctrine, but it failed to carry its heavy burden of demonstra ting that considering biogenic CO 2 emissions in the PSD and Title V permitting pr ocesses would create administrative difficulties rising to the level of impossibility. Nor did EPA show that the Biomass Exemption was narrowly tailored to excuse statutory compliance only to the degree demanded for administrability. Second, EPA improperly invoked the de minimis doctrine in several ways. EPA did not show that a de minimis exemption from permitting based on “lifecycle” CO 2 emissions is consistent with the Clean Air Act. The agency identified no affirmative statutory author ity for subtracting distant off-site CO 2 absorption from the facility’s own CO 2 emissions when determining whether the facility needs a permit, and no statutory gap or ambiguity from which such authority could reasonably be inferred. For these reasons, a de minimis exemption USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 39 of 32220 based on lifecycle CO 2 emissions is contrary to the statute. Further, EPA exempted all biomass-burning sources, even thoug h the agency claimed to have data showing trivial lifecycle emissions for only some such sources. EPA put off all relevant scientific and factual determinations to a future rulemaking, and thus failed to demonstrate in this rulemaking that any of the emissions it exempted from the permitting programs were truly de minimis or trivial. In fact, EPA admitted that some types of biomass fuel may be significant net CO 2 emitters, e.g., fuels whose emissions when burned add to atmospheric CO 2 for decades or centuries, regardless of what countervailing o ff-site factors are considered. Third, EPA failed to show an indepe ndent basis for invoking the “one-stepat-a-time” doctrine when the ground s for administrative necessity and de minimis exemptions are lacking. For these reasons, the Biomass Exemption is “arbitrary, capricious, an abuse of discretion, and otherwise not in acco rdance with law; [a nd] ... in excess of statutory ... authority, or limitation.” 42 U.S .C. § 7607(d)(9)(A), (C). It must be vacated and remanded. STANDING Petitioners have standing to challenge EPA’s Biomass Exemption because their members’ health, recreational, a nd aesthetic interest s are harmed by the additional air pollution, forest degradation, and harm to wildlife that have occurred USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 40 of 32221 and will occur as a result of exempting biomass-burning power plants and industrial facilities from the PSD permit program, and by the loss of procedural opportunities to advocate for strong pollu tion controls and alternatives to construction of those facilities. These harms are the direct result of EPA’s decision to exempt biogenic CO 2 from greenhouse gas permitting, and so reversing the Biomass Exemption would remedy these injuries. To demonstrate Article III standing, Petit ioners must establish that at least one of their members has standing to sue in his or her own right, that Petitioners seek to protect interests that are german e to their organizational purposes, and that the participation of individual members is not needed. See Sierra Club v. EPA , 292 F.3d 895, 898 (D.C. Cir. 2002). A memb er has standing if he or she would suffer an injury-in-fact that is both fair ly traceable to EPA’s action and redressable by a favorable decision of the court. Lujan vs. Defenders of Wildlife , 504 U.S. 555, 560 (1992). Petitioners meet these requirements. They are nonprofit organizations whose purposes include protecting public health and the environment from air pollution, including air pollution from biomass-burning facilities, and preventing degradation of forest ecosystems, including deteriorati on due to the extraction of biomass fuels consumed by such facilities. See Siegel Decl. ¶¶ 4, 10-13; Lopez Decl. ¶¶ 4-5; Harwood Decl. ¶¶ 3, 9-11; Houston Decl. ¶ 6; Reed Decl. ¶¶ 5, 9-11; Quaranda USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 41 of 32222 Decl. ¶ 2; Davis Decl. ¶¶ 4-5; Hitner Decl . ¶¶ 5-6. Petitioners have associational standing on behalf of their members w ho have been, and will continue to be, injured by EPA’s action as explained belo w. The facts supporting these injuries, their traceability to EPA’s Exemption, a nd their redressability by reversing that Exemption are evident in th e record of this rulemaking and in the declarations submitted with this brief. Biomass combustion results in ha rmful air pollutants such as CO 2 , particulate matter (PM), nitrogen oxides ( NOx). While the former contributes to climate change, the latter two are associated with a host of respiratory and cardiac problems. See Sahu Decl. ¶ D.1. In additi on, increased demand for biomass feedstocks will contribute to an increas ed pressure for ha rvesting, including logging and even clearcutting. See Booth Decl. ¶¶ 16 and 32; Plantinga Decl. ¶ 7. 6 This increased logging is reasonably expected to adversely affect forest habitat and other forest-related environm ental values, Booth Decl. ¶ 17, as well as to increase

6 See also Dogwood Alliance Comments (E PA-HQ-OAR-2011-0083-0119) (“Dogwood Comments”) at 2 (JA ___) (loggi ng rates in the Southeastern United States could double in response to increased demand for biomass fuel) and 4 (JA ___ and ___); Natural Resources Defe nse Council (EPA-HQ-2011-0083-0104) (“NRDC Comments”) at 19-23 (JA __- ___) and EPA-HQ-OAR-2011-0083-0104 at 19-23 (JA ___-___) and The Wilder ness Society Comments (EPA-HQ-OAR2011-0083-0065) at 2 (JA ___); Wild Ea rth Guardians Comments (EPA-HQ-OAR2011-0083-0131) at 1-2 (JA ___-___) (In dustry information and studies based on U.S. Forest Service data similarly show that logging residues are insufficient to supply proposed biomass facilities in other regions across the country – necessitating an increase in whole-tree logging). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 42 of 32223 atmospheric CO 2 , id. ¶¶ 20-30. Both air pollution a nd forest harms will increase as a result of exempting biomass-burn ing facilities from PSD permitting. As explained above, all new or modi fied major emitting facilities must obtain preconstruction permits that comp ly with the PSD program’s BACT and public participation requirements. If a biomass plant is a major emitting facility because of its CO 2 emissions, it must comply with BACT for each other regulated pollutant, including PM 2.5 , and NO x , that it has the potential to emit above EPAestablished significance thresholds. See 42 U.S.C. § 7475(a)(4); 40 C.F.R. §§ 51.166(j), 52.21(j); see also Sahu Decl. ¶¶ D.2-3 and 8-10. EPA has established significance thresholds of 10 tons per year for fine particulate matter (PM 2.5 ) and 40 tons per year for NO x . See 40 C.F.R. §§ 51.16 6(j)(2), (3), 52.21(j)(2), (3); 51.166(b)(23), 52.21(b)(23). A typical bi omass-burning facility emitting sufficient biogenic CO 2 to require a PSD permit under the Tailoring Rule will also emit more than 10 tons per year of PM 2.5 and 40 tons per year of NO x , and thus would have required BACT for those two pollutants. See Sahu Decl. ¶¶ E.1. i and ii, E.2. Under the Exemption, however, the same facility can be constructed without BACT limits for those two pollutants a nd others. The additional pollution from such facilities harms Petitioners’ members. 7

7 Many states also issue permits under state law for new sources that do not require PSD permits. However, such permits ge nerally do not impose emission limits as stringent as BACT. Sahu Decl. ¶ 6. A facility exempted from BACT and other USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 43 of 32224 If a biomass-burning facility requires a PSD permit, it also will be subject to the public participation requirements of Section 165(a)(2), giving Petitioners’ members the opportunity to advocate for st ringent BACT limits and to press for alternatives. The alternatives analysis is a “distinct” and broader inquiry than whether a particular perm it complies with BACT. See Sierra Club v. EPA , 499 F.3d 653, 654-55 (7th Cir. 2007). Considera tion of the “need” for a facility is a proper part of the alternatives analysis. In re Prairie State , PSD Appeal No. 05-05, 13 E.A.D. 1, 31 (EAB 2006). A permitting agency thus may deny a PSD permit on the basis of public input showing the facility is not needed or th at any need can be met by a smaller plant, or that there are alternative designs or methods of operation that are better for air quality. See id

. A permitting authority also must consid er the “environmental ... impacts” of control options when determining BACT. See Section 169(3), 42 U.S.C. § 7479(3). In the case of a facility intended to burn whole trees, for example, permitting agencies must consider, and memb ers of the public ha ve the opportunity to comment on, adverse environmental imp acts to the forests from which the trees will be harvested.

PSD permit requirements unde r EPA’s Biomass Exempti on would be allowed to emit more pollution under such a state la w permit. That difference in pollution harms Petitioners’ members. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 44 of 32225 By exempting proposed biomass- burning facilities from PSD permit requirements, EPA has deprived Petitioners’ members of these procedural opportunities to advocate lack of need for a proposed facility or unacceptable environmental impacts. Members of Petitioners’ organizations live, work, or recreate in the vicinity of specific biomass-burning facilities that were permitted as minor sources but did not commence construction by July 1, 2011, 8 or were proposed after July 1, 2011 and obtained minor source permits in dir ect reliance on the Biomass Exemption, and so in each case are currently exempt from PSD permit requirements as the result of the Biomass Exemption. A non-ex clusive list of such projects is provided in the declaration of expert Ron Sahu. Sahu Decl. ¶¶ E.1 and E.2, Table 1. These members have already been harmed by th e loss of procedural opportunities to question the need for the facilities or to advocate for more effective air pollution controls. They will also be harmed by exposure to higher pollution levels if the plants are constructed without BACT. If the Biomass Exemption is reversed, of these facilities, those which have not ye t commenced construction will have to

8 As EPA explained in th e Tailoring Rule, PSD permits would be required of facilities that (a) obtained minor source perm its prior to July 1, 2011 and (b) would have the potential to emit above the gree nhouse gas thresholds for Step 2, but (c) failed to commence construction by that date. 75 Fed. Reg. at 31,594/1-2 (JA ___- ___); see also 42 U.S.C. §7475(a)(1), (4) (no majo r emitting facility may construct without a permit that complies with BA CT for each pollutant subject to regulation). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 45 of 32226 comply with PSD permit requirements they pr eviously avoided; even if the plants commence construction under the illegal Exemption, upon a reversal of the Exemption they can be required to source more sustainably grown fuel and/or comply with more stringent limits requiri ng full operation and maintenance of their pollution control equipment. This will directly redress the harms these members have suffered. 9
The member declarations demonstrate that specifi c members are currently living, working, or recreating near thes e proposed plants and are suffering harms redressable by reversal of the Exemption. See, e.g., B. Laffitte Decl. ¶¶ 8 (“Given that my farm is immediately adjacent to [the proposed Allendale plant], I am extraordinarily concerned that construction of this facility without more effective air pollution control devices will be harmfu l to my health”), and 10 (if Allendale had gone through PSD, “the plant’s air pe rmit would allow the plant to emit less PM, NOx, and CO”); Colacino Decl. ¶¶ 5-7 (lives near the Klamath Falls

9 These facts demonstrate that Petitioners’ me mbers are squarely within the zone of interest protected by the PSD program, wh ich is aimed at reducing air pollution while protecting other environmental values. See, e.g., 42 U.S.C. § 7470 (purpose of Part C is to protect public health and welfare from adverse effects of air pollution); id. at § 7479(3) (BACT requires pe rmitting authority to take into account environmental impacts); Mova Pharmaceutical Corp. v. Shalala , 140 F.3d 1060, 1074-75 (D.C. Cir. 1998) (court must “consider the purposes of the specific statutory provision that is at issue..., read in the context of the statutory scheme as a whole”); Animal Legal Defense Def. Fund v. Glickman , 154 F.3d 426, 444 (D.C. Cir. 1998) (zone inquiry is “gen erous and relatively undemanding”). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 46 of 32227 Bioenergy plant and states th at “we believe and fear that [our hiking, dog-walking, and bird-watching] activities will be dimi nished by the Klamath Falls Bioenergy plant, and that they will no longer be safe and healthy activities if the biomassburning plant is sited here without stringe nt controls”; “My wife is prone to asthma, so is especially affected by ai r pollution”; “I am concerned about the effects that additional air pollution from the Klamath Falls Bioenergy plant will have on my health...”), 11 (if the Klamat h Falls Bioenergy plant had to comply with BACT, “there would be less health-threatening po llution in my community”), and 13 (alternatives such as energy e fficiency “would reduce air pollution from burning biomass at the plant, and also from the many trucks that would drive through the community to deliver fuel to the plant.”); Ludtke Decl. ¶¶ 5 (“I suffer from asthma. My husband uses an inhale r while exercising due to reactive lung tissue.... [M]y husband and I live appr oximately 2 miles from [the proposed Concord Biomass Plant], and I am concerned that construction of this facility without the appropriate air pollution control mechanism w ill be harmful to my and my husband’s health”) and 10-12 (“I am fa miliar with air pollution issues because I, and other members of my family, ha ve engaged in endurance sporting activities for 30 years or more”; “my husband, da ughter, and I all suffer from impaired respiratory function that will be exacerba ted by additional air pollution from this USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 47 of 32228 plant.”); see also Booher Decl. ¶¶ 7, 10-15 (harms from the Wadley plant); Govus Decl. ¶¶ 5, 16-20. The declaration of expert Ron Sahu de monstrates that the exemption from BACT requirements deprives Petitioners’ members of the benefits of stringent BACT limits, notably for harmful partic ulate matter and nitrogen oxides, Sahu Decl. ¶¶ D.1 (health effects of air pollutant s) and E.1-E.2 (describing lower limits for biomass power plants permitted as mi nor sources that would likely result from PSD permitting), which will result in their exposure to higher levels of harmful pollution and restrictions on their activities. The Exemption also harms members who recreate in or enjoy the forests from which fuel for the facilities is harv ested, as they are deprived of the opportunity to raise concerns about impacts on forests and the opportunity to mitigate those impacts through alterna tives or BACT. Colacino Decl. ¶¶ 5 (describing hiking in Winema National Fo rest near Klamath Falls) and 8 (“I also am concerned that the Klamath Falls Bi oenergy Plant will harm the forests and wildlife areas that my wife and I use and enjoy” because the plant intends to source woody biomass from nearby public lands); Nowicki Decl. ¶¶ 11-17 (exemption rule will increase demand for biomass fuel s from plants in Amador, Calaveras and El Dorado Counties, resulting in more inte nsive logging and harm to forest habitat and wildlife in Eldorado, Tahoe, and Stanislaus Na tional Forests where he USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 48 of 32229 recreates); see also Booth Decl. ¶¶ 17-19 (exemption rule will increase demand for biomass fuels, resulting in more intensiv e logging and harm to forest habitat and wildlife); Plantinga Decl. ¶¶ 5-7 (exemp tion will result in decreased costs of sourcing fuel from whole trees, which in turn will result in trees being harvested earlier than without the Exemption). In particular, the Exemption prevents Petitioners’ members from seeking CO 2 BACT limits that restrict the plants to combusting only sustainably harvested bi omass feedstocks with low lifecycle carbon emissions, instead of bur ning fuel from whole trees. See Colacino Decl. ¶ 12 (if the Klamath Falls plant had to comply with BACT for CO 2 , it might have to comply with a “requirement to burn on ly more sustainably grown fuel from sources other than the forests that I and my wife use and enjoy.”) These injuries are concrete and actual or imminent: the Biomass Exemption has already allowed proposed biomass- burning facilities to avoid the public process for major sources and, if unrem edied, will allow the facilities to be constructed and opera ted (a) emitting higher levels of air pollution to which nearby members will be exposed, and (b) runnin g on fuels that degrade forests that members use and enjoy. Thes e injuries are fairly traceable to EPA’s Exemption. Were it not for the Exemption, these plan ts would be subject to BACT and the analysis of needs and altern atives. These injuries can be reduced, and are therefore redressable, by vacating or remanding the Exemption. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 49 of 32230 ARGUMENT
I. STANDARD OF REVIEW Under section 307(d)(9) of the Clean Ai r Act, this Court may reverse EPA‘s action if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” or “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right .” 42 U.S.C. § 7607(d)(9)(A), (C).
II. THE ADMINISTRATIVE NECESSI TY DOCTRINE DOES NOT SUPPORT THE BIOMASS EXEMPTION To justify the three-year Biomass Ex emption, EPA asserted that it was necessary to take a “step back” from the Tailoring Rule because considering biogenic CO 2 emissions under that rule had prove n to be more “c omplex[ ]” and “uncertain[ ]” than antic ipated. 76 Fed. Reg. at 43,496/1-3 (JA ___). But the “administrative necessity” doctrine imposes a heavy burden on EPA. It must show that complying with the statute is literally impossible , not merely complicated. EPA failed to carry its burden of s howing that the Tailoring Rule created “impossible” burdens for permitting ag encies addressing facilities emitting biogenic CO 2 . Further, the “administrative nece ssity” doctrine prohibits an agency from carving out an exemption any wider than needed to resolve the asserted impossibility. Even if EPA had dem onstrated that meeting the otherwise applicable statutory requirements was an impossibility, the exemption it created was far broader than necessa ry to address the issue. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 50 of 32231 A. The Administrative Necessity Doctrine Allows Departure From Statutory Commands Only Under Very Narrow Circumstances Categorical exemptions from express statutory requirements on grounds of “administrative necess ity” are disfavored. Ala. Power , 636 F.2d at 358. This Court has emphasized that EPA bear s a “heavy burden” to demonstrate administrative “impossibility,” lest govern ment officials “seize on a remedy made available for extreme illness and promote it into the daily bread of convenience.”
Id. at 359; see also Sierra Club v. EPA , 719 F.2d 436, 462-63 (D.C. Cir. 1983) (agency must make a ri gorous showing of administrative impossibility). This Court noted in Alabama Power that courts have upheld “streamlined” procedures only where strict statutory co mpliance “would, as a practical matter, prevent the agency from carrying out the mi ssion assigned to it by Congress,” or “when practical considerations make it impossible for the agency to carry out its mandate.” 636 F.2d at 358-359 (emphasis a dded). The Court also emphasized that “there exists no general administrative po wer to create exemptions to statutory requirements based upon the agency’s percep tions of costs and benefits.” Id. at 357. Later decisions have confirmed the extremely limited scope of “administrative necessity” exemptions and the heavy burden EPA bears. In Environmental Defense Fund v. EPA , the agency failed to show that it “[could not] carry out” relevant “statutory commands” to regulate an entire cl ass of sources of USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 51 of 32232 polychlorinated biphenyls, and thus could not sustain an exemption for low concentrations on “administrative nece ssity” grounds. 636 F.2d 1267, 1283 (D.C. Cir. 1980); see also Sierra Club v. EPA , 719 F.2d at 462-63 (predictions that plume rise determinations would be “difficu lt” and fell “far short”). Moreover, the doctrine does not allow an agency to de viate from the statute any more than the minimum extent necessary. See, e.g., Pub. Citizen v. FTC, 869 F.2d 1541, 1556 (D.C. Cir. 1998) (administrative necessity doctrine creates only a “narrow range of inherent discretion in an agency to create case-by-case exceptions in order to come within the practical limits of feasibility ” (emphasis original)) ; see also Mova Pharm. Corp. , 140 F.3d at 1069 (agency faulte d for “embark[ing] upon an adventurous transplant operation in response to blemishes in the statute that could have been alleviated with more modest corrective surgery”). EPA has entirely failed either to carry its initial burden to show administrative impossibility or to fashi on the narrowest exemption necessary to preserve the statute’s administrability.
B. EPA Failed to Demonstrate that Ther e Are Impossible Burdens Associated With Regulating Biogenic CO 2 Under the Tailoring Rule EPA failed to show that treating facilities emitting biogenic CO 2 just like other CO 2 -emitting sources under the Tailoring Rule created “impossible” burdens for permitting agencies. While claimi ng that complexity and uncertainty associated with accounting for lifecycle CO 2 emissions from biomass fuels would USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 52 of 32233 “entail extensive workload requirements by many of the permitting authorities,” 76 Fed. Reg. at 43,496/1 (JA ___), EPA did not specify where exactly in the permitting process the feared complexity a nd uncertainty would come into play. Nevertheless, the Agency promulgated a broad exemption from the phrase “subject to regulation,” affecting PSD applicabilit y (decisions about which sources required permits) for plants burning all kinds of bi omass. This runs counter to both the Tailoring Rule and 30 years of practice in implementing the PSD program, under which applicability decisions are made st rictly on the basis of a source’s own emissions and without regard to the lifecycle emissions of its fuel. EPA also noted in the Tailoring Rule that it believed that for sources burning biomass “there is flexibility to apply th e existing regulations and policies regarding BACT in ways that take into account their lifecycle effects on GHG concentrations.” 75 Fed. Reg. 31,591/2 (JA ___). Yet in the Biomass Exemption EPA now backs away even from this alte rnative approach in favor of a broad exemption from PSD applicability. EPA’s argument boils down to an assertion that regulating sources of biogenic CO 2 emissions, including having to ma ke BACT determ inations taking into account lifecycle fuel characteristics would paralyze the permitting agencies. The record, however, severely undercuts EPA’s contentions. A number of state permitting agencies – the very permitting authorities EPA wishes to spare from USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 53 of 32234 paralysis – said in comments that they expected only a small number of new and modified biogenic CO 2 sources to require PSD permits under the Tailoring Rule, and that they could handle the load. Othe r state agencies offered no projections of the number of such permits they anticipated or reasons why they could not
manage. See supra at 15-16. No state agency asserted that it faced an impossible task in considering plants over the Ta iloring Rule thresholds with biogenic emissions. Mere assertions that the bur den of permitting biogenic CO 2 sources has increased are patently insufficient to establish administrative impossibility. Sierra Club , 719 F.2d at 462-63; Envtl. Def. Fund , 636 F.2d at 1283. A rational assessment of that burden must addre ss two components: How difficult would the required BACT determinati ons be, were a PSD perm it required, and how many such determinations must be made. EP A provided no data on either component. EPA did not quantify its statements about the difficulty of making individual BACT determinations for biogenic CO 2 emissions, or explain how and why this changed between the Tailori ng Rule and the Biomass Exemption. Nor did EPA address whether the number of bioma ss sources presenting themselves for permitting had increased or decreased. Without such information, EPA could make no rational assessment of the ove rall burden, let alone demonstrate USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 54 of 32235 impossibility. Without such analysis, there is no record showing that proceeding under the Tailoring Rule approach w ould result in “impossible” burdens. EPA’s thin factual assertions in this rulemaking concerning the burden of permitting biomass-burning sources stand in stark contrast to the agency’s robust showing in the Tailoring Rule regardi ng the burdens of permitting tens of thousands – or even millions – of additional sources. See Final Tailoring Rule, 75 Fed. Reg. 31,534/3-41/2 (det ailed, quantitative examination of the number of new sources, workload hours, and dollar costs associated with immediately requiring PSD and Title V permits for all greenhouse gas sources above statutory thresholds, and for less inclusive alternatives) (JA ___- ___). Likewise, EPA’s showing here is a far cry from the “thousands” of cas e-by-case determinations that the Alabama
Power Court found persuasive in backing up a claim of administrative necessity. 636 F.2d

. at 358 (citing Permian Basin Area Rate Cases , 390 U.S. 747, 777 (1968)).
C. EPA Failed to Justify Rejecting the Narrower Alternative of Ignoring Lifecycle Factors at th e BACT Stage During the Three-Year Exemption Period Even if EPA had validly establishe d the administrative impossibility of making BACT determina tions for biogenic CO 2 emissions sources under the original Tailoring Rule, the agency would not have been justified in issuing a blanket exemption that excused all biogenic CO 2 emissions from counting towards USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 55 of 32236 permit applicability. As noted above, th e administrative necessity doctrine does not allow agencies to hack out broad exemptions from statutory commands but rather tolerates deviations from the statut e only to the extent necessary to avoid the identified administrative impossibility. See Pub. Citizen v. FTC , 869 F.2d at 1556. Here, EPA acknowledged that it could have resolved any administrative overload simply by carrying out PSD and Title V permitting for biomass-burning sources “without making any effort to take into account net carbon cycle impacts” at either the applicability or BACT stages. 76 Fed. Reg. 43,496/3 (JA at ___). The agency offered no legally adequate reason for rejecting this option. EPA said only that “this [alternative] c ould result in regulation of sources with trivial or positive impacts on the net carbon cycle” during EPA’s three-year analytical period. Id. There is no case law allo wing EPA to upgrade a weak showing of administrative burden into a demonstration of impossibility by claiming that some sources – even though administratively feasible to cover – may in the end have de minimis impacts. In other words, EPA hacked a total exemption from the Act because it feared that some regulation under this alternative might have little benefit – a cost-benefit approach this Court has expressly prohibited. Pub. Citizen , 869 F.2d at 1556. Moreover, EPA did not even consider the competing evil of its sweeping categorical exemption – namely, that it gives complete regulatory immunity to all USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 56 of 32237 biogenic CO 2 sources, including those with adverse impacts on the net carbon cycle. Nowhere did EPA pr ovide factual support for its assertions that requiring PSD permits for some potentially trivial net CO 2 emitters would be more harmful than exempting biomass-burning sources that in fact increase atmospheric carbon pollution. Nor did EPA assert that there is any statutory barrier to the narrow option of ignoring lifecycle factors in the PSD process during the three-year period. Absent a statutory conflict, EPA lacked authority to reject the narrower statutory deviation in favor of the broader one that EPA selected. The Biomass Exemption excuses all biogenic CO 2 sources from PSD permitting in order to avoid even potential regulation of some as-yet-undetermined class of sources with speculatively “trivial” effects. This is even more egregious than the Federal Trade Commission’s ov erbroad exemption of all promotional goods from the requirement to carry tob acco warning labels, which this Court struck down in Public Citizen because it was not tailored to the few promotional goods the agency had shown were too small to bear a warning, but rather extended

to all such items no matter their size. 869 F.2d at 1556. The administrative necessity doctrine does not authorize the Biomass Exemp tion, and the Court must vacate it.
III. THE DE MINIMIS DOCTRINE DOES NOT SUPPORT THE BIOMASS EXEMPTION USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 57 of 32238 In addition to relying on administrativ e necessity, EPA also makes frequent reference to a second last-resort doctrine, the de minimis doctrine. Making sense of the agency’s jumble of statements about the de minimis doctrine is no easy task. EPA repeatedly used the phrase de minimis to describe a category of emissions it hypothesizes contribute little or no “net” CO 2 to the atmosphere, once off-site sequestration of CO 2 in growing biomass is taken into account. 76 Fed. Reg. 43,498/2-43,499/1 (JA ___–___). As Petitioners show be low, however, the Clean Air Act does not authorize EPA to take off-site CO 2 absorption into account in determining whether sources require PSD and Title V permits, and EPA lacks authority to change the statutory framework under color of making a de minimis exemption, even on a temporary basis. Moreover, in addition to explaining the three-year exemption for all biogenic CO 2 in the current rule, EPA also presented a
de minimis rationale to justify future perman ent exemptions for some or all biogenic CO 2 : EPA believes it has the authority to exclude biogenic CO 2 emissions from the PSD and Title V requirements, if scientific analysis supports conclusions about the nature of biogenic CO 2 in question that in turn support such an exclusion; the agen cy will be using the three-year deferral period to better understa nd the science associated with biogenic CO 2 emissions and to explore whether or not a permanent exemption is permissible for at least some and perhaps all types of feedstocks. 76 Fed. Reg. 43,498/2 (JA ___). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 58 of 32239 In this opaque discussion, EPA has left it quite unclear whether it is relying on the de minimis doctrine to support the present Biomass Exemption, or whether it is only advertising that doctrine as the ba sis for a future rulemaking. If the Court finds that EPA did not rely on the de minimis doctrine in making the present exemption, then it need not determine in this case the limits on EPA’s authority to make future exemptions. If, however, th e Court finds that EPA did rely on the de
minimis doctrine to support the present Exemp tion, then the Court must decide now whether EPA has legal authority to do so, and whether EPA set forth a rational basis on this record fo r invoking the doctrine.
A. The Clean Air Act Does Not Allow a De Minimis Exemption Based on OffSite CO 2 Absorption As with exemptions borne of admini strative necessity, an agency bears a heavy burden to justify a categorical de minimis exemption. “Determination of when matters are truly de minimis naturally will turn on the assessment of particular circumstances, and the agen cy will bear the burden of making the required showing.” Ala. Power , 636 F.2d at 360; see also Sierra Club , 719 F.2d at 462-463 (agency must make a rigorou s showing with regards to the de minimis doctrine). A de minimis exemption likewise must be no broader than necessary. New York v. EPA , 443 F.3d 880, 888 (D.C. Cir. 2006) (an agency relying on the de
minimis doctrine may “ diverge from the plain meaning of a statute only so far as is necessary to avoid its futile application”). See also Shays v. Fed. Elections USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 59 of 32240 Comm’n , 414 F.3d 76, 114 (D.C. Cir. 2005) (“situations covered by a de minimis exemption must be truly de minimis ”). As EPA itself acknow ledges, 76 Fed. Reg. 43,498/3 (JA ___), the de minimis doctrine does not allow EPA to take actions “contrary to the express terms of the statute.” Ober v. Whitman, 243 F.3d 1190 (9th Cir. 2001); see also Ohio v. EPA, 997 F.2d 1520, 1534-35 (D.C. Cir. 1993). The Clean Air Act, as shown below, unambiguously provides that whether a source needs a PSD or Title V permit turn s on the amount of regulated pollutants that the source itself emits. Nowhere does EPA identify a gap or ambiguity in the statute that would make it reasonable for the agency to give the source a credit for off-site CO 2 absorption, offsetting its own emissions. The de minimis doctrine does not provide EPA w ith authority to “exercise a ‘revisory power’” to change the statute. Ala. Power , 636 F.2d at 361. As this Court has held, the de minimis doctrine does not allow EPA to change the statute’s meaning based on a view that the costs of carrying out the statute exceed its benefits or based on other factors that are not relevant to the underlying statute. Id.
1. The Clean Air Act Does Not Allow Consideration of Off-Site Factors in PSD and Title V Permit Applicability Decisions Nowhere in the proposed or final rule notices did EPA identify either any statutory language that permits it, under either Step 1 or 2 of Chevron v. NRDC to reach beyond the borders of a source to consider lifecycle emissions when determining whether the source requires a PSD or Title V permit. As shown USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 60 of 32241 below, all of the relevant statutory term s – “major emitting facility,” “stationary source,” “emits,” “potential to emit,” “any air pollutant,” “subject to regulation,” “directly,” or “from” – require EPA to count the amount of emissions that the source itself emits when determining if a biomass-burning source needs a PSD or Title V permit. 467 U.S. 837 (1984). No ne of those terms is in any way ambiguous, leaving no room for considering off-site CO 2 absorption in permit applicability decisions. Analysis begins with the term “major emitting facility.” Under Section 165(a)(1), “n o major emitting facility” ma y be constructed without a PSD permit. 42 U.S.C. § 7475(a). Sect ion 169(1) defines a “major emitting facility,” in relevant part , as a “stationary source[ ] of air pollutants which emit [ s ], or [ has ] the potential to emit ,” certain amounts of any air pollutant “ from ” the source. 42 U.S.C. § 7479(1) (emphasis adde d). The term “stationary source” itself is defined in Section 111(a)(3) as “any build ing, structure, facility, or installation which emits or may emit any air pollutant.” 42 U.S.C. § 7411(a)(3) (emphasis added). These terms do not admit of the far-ranging inquiry into off-site uptake of
CO 2 invoked by EPA. Both this Court and the Supreme Cour t have held that EPA may define “stationary source” and “major emitting fac ility” as broadly as an industrial plant as a whole, defined as a set of geographica lly contiguous or adjacent facilities that are under common ownership and control. See Ala. Power, 636 F.2d at 396 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 61 of 32242 (“facility” and “installation” may be de fined “broadly enough to encompass an entire plant.”); Chevron , 467 U.S. at 861-62 (same for “ building, structure, facility, or installation”). Thus, the statutory te rms permit EPA or state agencies to count the contemporaneous emission increases a nd decreases within a given industrial plant when determining, on net, whethe r a construction project has caused a sufficient emissions increase to trigger the requirement to obtain a PSD permit. But nothing in these statutory terms, or the Courts’ decisi ons, allows EPA to stretch the maximum geographi c ambit of “major emitting facility” to reach sites far distant from the facility in question, let alone under the ownership and control of other entities. The same analysis holds for Title V operating permits. Under Section 502(a), each “major stationary source” requi res an operating permit. 42 U.S.C. § 7661a(a). “Major stationary source” is defined in Section 302(j) as “any stationary facility or source of air pollu tants which directly emits, or has the potential to emit” specified levels of “any pollutant.” 42 U.S.C. § 7602(j). EPA has never before asserted authorit y for sources to “net out” of PSD or Title V permitting by taking into account di stant, off-site, and later emissions decreases, let alone by taking into account distant off-site CO 2 absorption from the atmosphere. To the contrary, EPA has long held that “secondary emissions” – “emissions which occur as a result of ... th e operation of a major stationary source USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 62 of 32243 or modification, but do not come from the major stationary source or major modification itself ” – “do not count in determining the potential to emit of a stationary source.” See 40 C.F.R. § 51.166(b)(4), (18) (emphasis added). Whether they increase or decrease, these distant emissions “occur[ing] as result of” the source do not count in determining whet her the source needs, or does not need, a permit. Id. § 51.166(b)(18). It would be an even greater stretch to count CO 2 absorption during the growth of trees or cr ops on wholly separate and distant sites, owned or operated by unrelated entities, when determining how much pollution a biomass-burning source emits or has the potential to emit. The terms “emit” and “potential to emit” are also equally clear. “Emit” means “to send forth; discharge” or “give forth or release.” Emit Definition , Dictionary.com, http://dictionary.reference.com/browse/emit?s=t (last visited Mar. 14, 2012). “Potential to emit” means a source’s theoretical maximum emissions “under its physical and operational design.” See, e.g., 40 C.F.R. § 51.166(b)(4). The plain meaning of “emit” or “potentia l to emit” does not encompass anything off-site. There certainly is no ambiguity th at allows for reasonably interpreting the terms to encompass carbon absorption during plant growth extrinsic to the emitting

source. EPA’s final rule implements the Biomass Exemption by excluding CO 2 emissions resulting from the combustion of any type of biomass from the mass of USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 63 of 32244 the greenhouse gas emissions that must be tallied to determine PSD applicability, so that such “biogenic CO 2 ” is excluded from the st atutory phrase “any air pollutant subject to regulation.” See, e.g. , Id . § 51.166(b)(48)(ii)(a). But that phrase’s component terms do not allow such an interpretation. The Supreme Court decided in Massachusetts v. EPA that CO 2 and other greenhouse gases are unambiguously “air pollutants.” 549 U.S. at 528-29, 532. And as EPA itself recognizes, greenhouse gases (including CO 2 ) became a pollutant “subject to regulation” for PSD permitti ng purposes at the very latest when EPA’s motor vehicle standards took effect in January 2011. 75 Fed. Reg. 17,004 (Apr. 2, 2010)( JA ___). As EPA acknowledged in the proposal, “s ince the relevant provisions of the Act apply to ‘any air polluta nt’ or any ‘air pollutant subject to regulation,’ the terms of the [Act] suggest that the PSD and Title V requirements should apply to
CO 2 emissions from bioener gy or other biogenic sources in the same manner as they apply to emissions of CO 2 from any other type of source, since such emissions are constituents of the regulated pollutant [greenhouse gases].” 76 Fed. Reg. at 15,260/3 (JA ___). In fact, the unambiguous statutory terms do more than “suggest” this result; they require it. The limitations in the terms in S ections 169, 165, and 502 become more evident when looking at other provisions of the Act. When Congress has intended USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 64 of 32245 EPA to take “lifecycle greenhouse gas em issions” into account in the Clean Air Act, it has provided so expressly. The renewable motor fuels program in Section 211(o) expressly directs the Administrator to ensure that the “lifecycle greenhouse gas emissions” associated with various re newable motor fuels will be equal to, or less than, the “baseline lifecycle gree nhouse gas emissions” of conventional petroleum-based fuels. See Section 211(o), 42 U.S.C. § 7545(o). There is nothing like this authority to take lifecycle emissi ons into account in the Act’s PSD or Title V provisions for stationary sources. Similarly, Congress was e xplicit when it wished EPA to take into account off-site emissions decreases in stationary source permitting decisions. Section 173 of the Act provides that to obtain a permit to construct in a nonattainment area (an area where pollutant concen trations already exceed a national ambient air quality standard), a new or modified major stationary source must obtain emission reduction offsets, which the statute expressly provides may come from other

sources in the same region. See 42 U.S.C. § 7503(a)(1)(A) (source must obtain “sufficient offsetting emissions reductions ... such that total allowable emissions from existing sources in the region, from new or modified sources which are not major emitting facilities, and from the pr oposed source[,] will be sufficiently less than total emissions from existing sources ... so as to represent ... reasonable further progress”). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 65 of 32246 In sum, there is no statutory authority and no statutory ambiguity or gap that allows consideration of lifecycle CO 2 emissions in PSD and Title V permit applicability determinations.
2. The De Minimis Doctrine Does Not Allow EPA to Introduce Legislatively Excluded Factors into Permit Applicability Decisions As noted above, the de minimis doctrine is not a roving license to consider factors that are irrelevant under the te rms of the statute. At most, the de minimis doctrine allows EPA to move away fro m the statutory terms only when full compliance with them would produce nothing but trivial benefits. For example, Alabama Power concluded that Section 165 by its terms required EPA to issue permits for modifications that resulted in any emissions increase from a source. The Court then held that EPA could exclude emissions increases so small that regulating them would “yield a ga in of trivial or no value.” Ala. Power, 636 F.2d at 361. But the Court also made clear that EPA may not “e xercise a ‘revisory power’” to change what an “emissions increase” means. Id. Thus , while EPA may treat very small emissions incr eases from a source itself as de minimis , it has no authority to excuse the source’s own subs tantial emissions increases because of off-site emissions decreases or off-site CO 2 absorption. In short, the de minimis doctrine does not allow EPA to change what the statute tells it to measure in the course of determining wh ether the amount emitted is de minimis. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 66 of 32247 Indeed, using the de minimis doctrine as EPA does here makes a mockery of the doctrine itself. The doctrine exists to permit agencies to ignore genuine trifles. But here EPA claimed authority to fabricate “net trifles” by pairing very large source-specific emissions increases with hypothesized major offsets in far distant forests or fields that might occur, if at all, at some other time. Creating a huge loophole on that basis is well beyond th e limited exemption that this Court recognized in Alabama Power.

. B. EPA Has No Record Suppo rt for a Categorical De Minimis Exemption for Biogenic CO 2 Emissions. EPA’s record simply does not support reliance on the de minimis doctrine to create a categorical exemp tion for all biogenic CO 2 . First, EPA cannot reasonably base a current categorical exemption on the possibility that a future analysis and a future rulemaking may provide the factual s upport for it. Second, like the agency’s overbroad administrative necessity rationa le, EPA cannot base an exemption for all biogenic CO 2 emissions on the possibility that EPA may eventually decide that

some such emissions are de minimis. Third, EPA utterly neglected other statutorily relevant effects of the exemption it creat ed, including criteria pollutant emissions increases and forest harms.
1. EPA May Not Base an Exemption on Speculative Future Fact-Finding About Lifecycle CO 2 Emissions USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 67 of 32248 Even assuming it had authority to do so , EPA has failed to show that the benefits of requiring biomass-burning so urces to obtain PSD and Title V permits are trivial. Instead of a demonstration of present facts, EPA offered only fainthearted speculation that future analysis may show some biomass feedstocks may – or may not – prove to yield trivial benefits. EPA “ believe[s] that it is conceivable that as a result of the scientific examination of biogenic CO 2 emissions, we could conclude that the net carbon cycle impact for some biomass feedstocks is trivial, negative, or positive.” 76 Fed. Reg. at 43,496/3 (JA ___) (empha sis added). But, the de minimis doctrine does not allow EPA to ma ke an exemption in advance of demonstrating the basis for it. See NRDC v. EPA , 966 F.2d 1292, 1306 (9th Cir. 1992) (“Because of the lack of data, we cannot know whether [EPA’s exemption] will indeed have only a de minimis effect.”).
2. EPA Failed to Tailor its Biogenic CO 2 Exemption as Narrowly as Possible Further, EPA lacks authority to exempt all biomass feedstocks now on the basis of future scientific analysis and a subsequent rulemaking that it speculates may show trivial regulatory benefits for some such feedstocks. 76 Fed. Reg. at 43,496/3, 43,498/3-43,499/1-2 (JA ___, ___-___). The de minimis doctrine requires EPA to demonstrate that trivial benefits attend the entire category being exempted, not just part of that category. An exemption may not be any broader than needed to avoid futile regulation. See New York , 443 F.3d at 888. Far from USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 68 of 32249 tailoring the Biomass Exemption as narrowl y as possible, the agency extended its breadth as far as possible. See 76 Fed. Reg. at 43,493/1 (defining “biogenic CO 2 emissions” as including those from “combustion or decomposition” of all “biologically based materials other than fossil fuels and mineral sources of carbon,” including the “biological fraction” of tires and other solid wastes) (JA ___). EPA acknowledged that different t ypes of biomass have very different lifecycle carbon profiles. Some feedstock t ypes, the agency asserted, may later be shown to have “a negligible impact on th e carbon cycle.” 76 Fe d. Reg. at 15,261/2 (JA ___). Other feedstock types, the record shows, remain net CO 2 emitters over very long time periods – decades or more. See supra 15. And for some types – for example, because of the loss of carbon stor ed in soils converted from forest to agriculture, or simply clea r cut – re-growth may never fully recapture the emissions lost to the atmosphere, keeping them from being carbon neutral over any timeframe. CBD Comments at 16, 24-25 (JA __, ___-___); Wild Virginia, et al. Comments (EPA-HQ-OAR-2010-0560-0455) at 18 (JA ___). 10 And, as the agency

10 See also Booth Decl. ¶¶ 17, 19, and 26 (citing Michael Ryan, et al., A Synthesis of the Science on Forests and Carbon for U.S. Forests, Ecological Society of America: Issues in Ecology, Report No. 13 (Spring 2010) at 7). These studies were among many submitted in response to EPA’ s “Call for Information on Greenhouse Gas Emissions Associated with Bioener gy and Other Biogenic Sources,” 75 Fed. Reg. 41,173 (July 15, 2010) (“CFI”), Do cket No. EPA-HQ-OAR-2010-0560. This information has been on record before th e Agency at least si nce the Fall of 2010, and has been incorporated into th e record for this proceeding. See Incorporation by Reference (EPA-HQ-OAR-2011-0083-0003) (JA ___). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 69 of 32250 also stated: “[t]he possibility also remain s that ... the utilization of some biomass feedstocks for bioenergy production will have a significant impact on the net carbon cycle, making application of the PSD program requirements necessary to fulfill congressional intent.” 76 Fe d. Reg. at 43,499/1-2 (JA ___). Moreover, the record demonstrates th at for the same usable energy output (e.g., megawatt-hours of electricity), the direct emissions of CO 2 from combusting at least some forms of bi omass are greater than CO 2 emissions from burning fossil fuels. Some biomass fuels burn less effi ciently than fossil fuels because they contain more moisture, and energy must be expended evaporating that water. For example, the record reveals that a s ource burning chipped-up whole trees and residues produces almost four times more CO 2 per megawatt-hour of electricity than a comparably sized natura l gas plant, and twice the CO 2 emissions per megawatt-hour of a comparab ly sized coal plant. See CBD Comments at. 11 In comments on the proposed three-y ear exemption, certain petitioners reminded EPA of its duty to set the narrowest possible exemptions, and demanded that EPA restrict any exemption to only a subcategory of biomass feedstocks that the agency could then demonstrate has clearly trivial carbon cycle impacts. See,

11 See, e.g., Clean Air Task Force Comments, et al. on CFI (CFI Docket Nos. EPAHQ-OAR-2010-0560-0066.2, EPA-HQ- OAR-2010-0560-0157.1, and EPA-HQOAR-2010-0560-0564432.1) (co mment submittals covering recent peer reviewed studies demonstrating that all biomass does not provide carbon benefits, particularly in the near term) (JA __). USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 70 of 32251 e.g., NRDC Comments at 23 (JA __) (noting that only “biomass feedstocks that will not add to net carbon emissions going forward from the present time,” could be the subject of a current de minimis exemption). In short, the record demonstrates , and EPA acknowledged, that not all biomass energy facilities produce tr ivial or inconsequential CO 2 emissions on a net lifecycle basis. Thus even if some facility-fuel pairings were eventually shown to be carbon neutral, EPA’s record w ould still not support a three-year de minimis exemption from PSD permitting for all sources of biogenic CO 2 emissions. This situation is in complete contrast to Ohio v. EPA , a CERCLA case cited by EPA to support the Exemption. See 76 Fed. Reg. 43,498/3 (JA ___).
In Ohio , the agency could claim, on the basis of detailed studies, that regulating would mean reviewing sites wh ere as little as “a single molecule of hazardous material” remained. 997 F. 2d at 1534. Here, in contrast, EPA has only just begun studying the issue, and admits th e distinct possibility that the effect of exempting all major sources of biomass CO 2 now will be to exempt sources whose
CO 2 emissions actually are significant on a life-cycle basis. 76 Fed. Reg. at 43,499/1-2 (JA ___). Further, in Ohio EPA did not create an exemption for all sites based on findings that only some had de minimis quantities of hazardous materials remaining. Rather, the rule upheld in Ohio exempted only those few sites where the remaining amount of h azardous material was deemed “safe” under USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 71 of 32252 health-based standards, i.e., the site was fit for unlimited and unrestricted public use. 997 F.2d at 1534. Instead of supporting the Biomass Exception, Ohio shows how thoroughly short of the de minimis mark it falls.
3. EPA Did Not Demonstrate That Other Impacts Will be De Minimis As badly as EPA failed to show that the CO 2 impacts of the Biomass Exemption will be de minimis , it failed even to assess the impact on emissions of
criteria pollutants from biomass-burning plants . The record before the agency demonstrates that sources burning some biomass fuels produce not only more CO 2 per megawatt-hour than sources burning coal or natural gas, but also more criteria pollutants – including PM 2.5 , and NO x , and carbon monoxide (CO) . Partnership for Policy Integrity Comments (EPA-HQ-OAR- 2011-0083-0357) at slides 40-44 (JA ___-___). As explained above , when a biomass-burning facility is subject to PSD and requires a permit because of its CO 2 emissions, then it must also comply with BACT for its other regulated pollutants. See supra 3. But under the Exemption, these facilities can be constructed and ope rated for their entire lifetimes without meeting BACT for those pollutants. Additionally, under Section 165(a)(3) a nd (a)(5), these facilities would have to meet other PSD requirements, includi ng a demonstration that their criteria pollutant emissions will not cause or contri bute to exceedances of relevant healthbased national ambient air quality standa rds (NAAQS) or the maximum allowable USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 72 of 32253 pollution increases (“increments”) allowed in PSD areas. 42 U.S.C. § 7475(a)(3), (5). Under the Exemption, however, biomass-burning facilities with significant criteria pollutant emissions can be constructed without making these health protection demonstrations. EPA had ample evidence that the health risks – including risks of early death – from these extra PM 2.5 and NO x emissions are not de minimis

. See, e.g ., Dogwood Comments at 3 (JA ___)

. 12 EPA failed even to assert, let alone demonstrate, that the consequences of these emissions will be trivial or of no benefit. EPA simply dismissed these c oncerns about health impacts in some instances as mere “form letters” in “general opposition” to EPA’s rule and therefore not meriting detailed response. See generally , Response to Comments (EPA-HQ-OAR-2011-0083- 0359) (RTC) at 146, 13 178, 14 and Appendix A at A-9 and Appendix B (JA __, ___, and __ and ____).

12 See also Dr. William Blackley Comments (E PA-HQ-OAR-2011-0352)April 30, 2011 (noting serious concerns about the increas ed health risks of particulate matter associated with biomass combustion) (J A ___), and CBD Comments at 57 (EPA’s proposal will result in non-trivial increases in conventional air pollution emissions that threaten human health) (JA ___). 13 Offering no direct response to evidence submitted in CBD Comments that EPA’s proposal will result in non-trivial increases in conventional air pollution emissions that threaten human health. 14 Offering only that EPA is “studying the question” of biogenic CO 2 emissions, in response to Petitioner Dogwood Alliance’s c oncerns about the health impacts of increases in non-CO 2 air pollution as a result of the Exemption. USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 73 of 32254 EPA similarly failed to show that the Biomass Exemption will produce de minimis impacts on forest resources. Petitione rs Dogwood Alliance and Center for Biological Diversity, et al., pointed out significant risks to forests from biomassburning facilities constructed or modified during the three-year exemption period.
See Dogwood Comments at 1-3 (JA ___), CBD Comments at18-22 (JA ___-___). Rather than address these “particular circumstances,” in Alabama Power , EPA said only that it will “keep [the comments] in mind,” and that “the Agency is proceeding as expeditiously as possible. ” 636 F.2d at 360; RTC at 63, 117-18 (JA ___, ___-___). EPA provided no evidence wh atsoever that impacts of the Biomass Exemption on forest resources will be trifling or inconsequential.
IV. THE ONE-STEP-AT-A-TIME DOCTRINE DOES NOT SUPPORT THE BIOMASS EXEMPTION EPA mistakenly tries to bolster its case for the Biomass Exemption by relying on what it “call[s] the ‛ one-step-at-a-time’ doctrin e.” 76 Fed. Reg. at 43,494/1 (JA ___); see also id. at 43,497/1-43,498/2 (JA ___-___). The agency misconstrues the reach of this doctrine, wh ich applies to how an agency exercises the discretion Congre ss has conferred. See, e.g. Nat’l Ass’n of Broadcasters v.
FCC , 740 F.2d 1190, 1207-08 ( D.C. Cir. 1984) (condoning stepwise use of congressionally conferred di scretion). The doctrine simp ly does not give agencies more discretion than that. In the contex t of the administrativ e necessity doctrine, and others that authorize agencies to de part from a statute’s express terms, oneUSCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 74 of 32255 step-at-a-time may apply to the way they exercise the limited discretion the departure doctrine allows. The doctrin e, however, does not by itself justify exempting otherwise regulated entities from th e requirements of a statute. Nor can EPA use this doctrine to expand th e limited authority conferred by the administrative necessity and de minimis doctrines, without vitiating the strict limits courts have imposed. The Court has recognized that Congress may write statutes that deal with matters incrementally. See, e.g., Williamson v. Lee Optical of Okla. , 348 U.S. 483, 489 (1955) (“reform may take one step at a time, addr essing itself to the phase of the problem which seems most acu te to the legislative mind”); see also Pub. Citizen Health Research Grp. v. FDA , 185 F.3d 898, 903 (D.C. Cir. 1999) (this Court noting that “Congress may, of course, approach matters one step at a time”). This Court also has recognized that agen cies may regulate incrementally where Congress entrusts an agency with broad authority to exercise its judgment in a given area. See, e.g. Nat’l Ass’n of Broadcasters , 740 F.2d at 1207-08 (noting that the challenged agency rules “are not a statutory requirement” and upholding their exemption of one class of businesses ag ainst the argument that the agency’s rationale applied equally to ot her, unexempted, businesses); Interstate Natural Gas Ass’n of Am. v. FERC , 285 F.3d 18, 29, 35 (D.C. Cir. 2002) (reviewing rate setting USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 75 of 32256 required by statute to be “just and reas onable” and finding “the Commission is free to undertake reform one step at a time”)

. But where a statute, as here, prohi bits facilities from constructing or operating without a permit and limits agency discretion to make exemptions based on off-site emission reductions or absorpti on, the “one-step” doctrine does not by itself create latitude for an agency to di verge from its clear statutory mandate. Here, having failed to offer any positive statutory authority for the Biomass Exemption, or that either the administrative necessity or de minimis doctrines warrant exempting biogenic sources wholesale, the agency adds nothing by asserting that it can proceed one-step-at-a-time. EPA did not show that the Bioma ss Exemption was an administrative necessity (as it did for the Tailoring Rule) or warranted under the de minimis doctrine, and the agency here did not rely on the absurd results doctrine. Thus, there is no basis for proceeding one step at a time. Having failed to identify a legitimate source of discretion for a bla nket exemption, EPA cannot rely on the one-step-at-a-time doctrine as authority fo r the piecemeal exercise of discretion that it does not actually have. Allowing an agency to use the one-ste p-at-a-time doctrine this way would largely render the administrative necessity, de minimis , and absurd results doctrines dead letters. All three doctrines are tightly circumscribed to ensure that USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 76 of 32257 agencies do not flout congressional direction. If agencies could conjure up discretion to stray from the explicit language of a statute simply by asserting that they were proceeding one step at a time, there would never be any need to prove administrative necessity or the other condi tions, and there would be no requirement to tailor the exemption or deviation from statutory text as narrowly as possible. This rulemaking contrasts sharply w ith the Tailoring Rule. There EPA applied the one-step-at-a-time doctrine in a manner consistent with the strict limitations of the other doctrines it invoke d, namely administrative necessity and absurd results. EPA primarily grounded the Tailoring Rule in those doctrines, making a detailed, record-based analysis of what would constitute the very least amount of non-compliance necessary. See, e.g., supra 35 (calculations to assess and alleviate administrative burden). EPA then used the one-step-at-a-time doctrine to buttress its stepwise appr oach to full implementation, making enforceable commitments to a schedule for continuing to evaluate compliance down to the statutory thresholds. See, e.g., 75 Fed. Reg. at 31,607/1-2 (promulgating new 40 C.F.R § 52.22(b) setting out additional steps toward implementing the statutory thresholds) (J A ___). No comparable record exists here. And with the failure to justif y either administrative necessity or de minimis regulatory benefits, EPA lacks a basi s for invoking the one-step doctrine. CONCLUSION USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 77 of 32258 Because EPA did not show that the Biomass Exemption was either needed to avoid an impossible administrative burde n or would have only trivial effects, and the agency lacked any other authorit y for the Exemption, the Exemption was not adopted in accordance with law and was in excess of the agency’s statutory authority and/or limitations, and should be vacated on that basis.

Respectfully submitted, this 15 th Day of March, 2012 USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 78 of 32259 /s/ Ann Brewster Weeks (NL) Ann Brewster Weeks Helen D. Silver 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 (NL) 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/ Kevin Bundy (NL) Kevin 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 David Doniger Meleah A. Geertsma Natural Resources Defense Council 1152 15th Street NW, Suite 300 Washington, D.C. 20005 Phone: (202) 289-2403 ddoniger@nrdc.org mgeertsma@nrdc.org /s/ Nathaniel S.W. Lawrence Nathaniel S.W. Lawrence Natural Resources Defense Council 3723 Holiday Drive, SE Olympia, WA 98501 Phone: (360) 534-9900 nlawrence@nrdc.org Counsel for Natural Resources Defense Council USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 79 of 3221 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 13,576 words, as counted by counsel’s word processing system.

DATED: March 15, 2012 SIGNED: /s/ Nathaniel S.W. Lawrence USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 80 of 322CERTIFICATE OF SERVICE I hereby certify that the foregoing Opening 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: March 15, 2012 SIGNED: __/s/ Nathaniel S.W. Lawrence __ [printed name] USCA Case #11-1101 Document #1364134 Filed: 03/16/2012 Page 81 of 322