ORAL ARGUMENT NOT YET SCHEDULED

IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT COALITION FOR RESPONSIBLE REGULATION, ) et al

. , ) Petitioners, ) ) v. ) No. 09-1322 (and ) consolidated cases) UNITED STATES ENVIRONMENTAL ) PROTECTION AGENCY, ) Respondent. )

________________________ _____________________ ) ) COALITION FOR RESPONSIBLE REGULATION, ) INC., et al., ) Petitioners, ) ) v. ) No. 10-1073 (and ) consolidated cases) UNITED STATES ENVIRONMENTAL ) PROTECTION AGENCY, ) Respondent. )

________________________ _____________________ ) ) COALITION FOR RESPONSIBLE REGULATION, ) et al

. , ) Petitioners, ) ) v. ) No. 10-1092 (and ) consolidated cases) UNITED STATES ENVIRONMENTAL ) PROTECTION AGENCY, ) Respondent. )

________________________ _____________________ ) Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 1______________________________ _______________ ) SOUTHEASTERN LEGAL FOUNDATION, ) INC., et al., ) Petitioners, ) ) v. ) No. 10-1131 (and ) consolidated cases) UNITED STATES ENVIRONMENTAL ) PROTECTION AGENCY, ) Respondent. )

________________________ _____________________ )

EPA’S RESPONSE TO MOTIONS TO STAY

IGNACIA S. MORENO Assistant Attorney General

OF COUNSEL THOMAS A. LORENZEN J OHN HANNON JON M. LIPSHULTZ ELLIOTT ZENICK ANGELINE PURDY DAVID ORLIN PERRY ROSEN STEVEN SILVERMAN DAVID GUNTER BRIAN DOSTER ERIC HOSTETLER CAROL HOLMES KIM SMACZNIAK HOWARD HOFFMAN U.S. Department of Justice Office of General Counsel Envir onment & Natural Resources Div. U.S. Environmental Protection Environmental Defense Section Agency 1200 Pennsylvania Ave., NW Washington, D.C. 20460 P.O. Box 23986 Washington, D.C. 20026-3986 October 28, 2010 (202) 305-0733

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 2i TABLE OF CONTENTS

BACKGROUND .......................................................................................................... .............. 6 I. Statutory Background ..................................................................................................... ...... 6 A. Statutory Prov isions Related to Vehicles ............................................................... 6

B. Clean Air Act Provisi ons Related to Stationary Sources ..................................... 7 1. The PSD Program ............................................................................................ ... 7

2. Title V of the Clean Air Act .............................................................................. . 9 3. Implementation of CAA Requirements for Stationary Sources ................... 9 II. EPA Rules and Actions Challenged and Implicated in This Action ........................... 10

A. The Endangerment Find ing and the Denial of Reconsideration of the Endangerment Finding – Challenged in Case No. 09-1322 ............................. 10

B. The Vehicle Rule – Challenged in Case No. 10-1092 ......................................... 12 C. The Timing Decision – Challenged in Case No. 10-1073 ................................. 14

D. The Tailoring Rule – Challenged in Case No. 10-1131 ...................................... 16 E. Proposed Implementation Process ....................................................................... 18

ARGUMENT ...................................................................................................................... ........ 19

I. STANDARD FOR GRANTING A STAY ..................................................................... 19

II. MOVANTS FAIL TO MAKE THE REQUIRED STRONG SHOWING THAT THEY ARE LIKELY TO SU CCEED ON THE MERITS ........................... 20 A. Movants Are Not Likely to Establish that the Endangerment Finding Should be Deemed Invalid ................................................................................. 20 Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3ii 1. EPA Properly Constr ued and Applied the Legal Framework for the Endangerment Finding ................................................................... 22

2. EPA Exercised Its Own Judgment and Appropriately Relied on Assessments Prepared by the IPCC and Other Bodies as the Primary Scient ific Basis for the Enda ngerment Finding ...................... 30 3. “Climategate” does not undercut the reliability of the IPCC Report........................................................................................................... 32 4. The Record Supports EPA’s Scientific Conclusions ............................. 35 5. EPA Reasonably Defined the Releva nt “Air Pollution” and “Air Pollutant” to Be a Mix of Six Greenhouse Gases .................................. 39 B. Movants Are Not Likely to Establish that the Vehicle Rule Should Be Deemed Invalid ............................................................................................. ......... 40 1. EPA Did Not Err by Promulgati ng Standards That It Had a Nondiscr etionary Duty to Promulgate ...................................................... 41 2. EPA Appropriatel y Considered All Required Impacts ........................... 44 C. The PSD and Title V Progr ams of the Clean Air Act Apply to Greenhouse Gas Emissions from Stationary Sources .................................... 47 1. The Emission of “Any Pollutant” May Subject a Source to PSD............................................................................................... ................ 48 2. The Act Imposes PSD Permit Requirements in All Areas That Are “Attainment” or “Unclassifiable” For Any Pollutant ...................................................................................................... 50

3. PSD Permits Must Address All Pollutants Regulated Under the Act ................................................................................................... ..... 53 Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4iii 4. The PSD “Trigger” For Gree nhouse Gas Regulation Is Based Solely Upon EPA Decisi ons That Are Now Beyond Challenge ...... 56 5. Congress Intended EPA to Ap ply the Act to New Pollutants ......... 57

6. Movants Do Not Se riously Challenge EPA’s Inclusion of Greenhouse Gases in The Ti tle V Permitting Program ...................... 59 D. The Tailoring Rule Is a Valid Exercise of EPA’s Authority ......................... 60

1. The Absurd Result s Doctrine Was Properly Invoked ........................ 61 2. EPA Properly Invoked the Administrative Necessity and Step-at-a-Time Doctrines ....................................................................... 64

III. MOVANTS HAVE NOT ESTABL ISHED THAT THEY WILL SUFFER IRREPARABLE HARM PENDING FINAL RESOLUTION OF THEIR CLAIMS ABSENT A STAY ....................................................................................... 66

A. The Alleged Harm to Regulated Industries and Other Non-State Movants is Not Concrete, Imminent, or Irreparable ...................................... 67

B. Speculative Concerns Rega rding Implementation of Permitting Programs Do Not Esta blish Irreparable Harm .............................................. 73

1. The Initiation of Administrative Processes to Administer Permitting for Greenhouse Gas Emissions Does Not Constitute Irreparable Harm ................................................................................... ....... 73

2. There Need Be No De Facto “Construction Moratorium” in Texas ............................................................................................................... 74 3. Movants’ Challenges to th e Workability of EPA’s Implementation Process Are Speculative and Demonstrably Untrue ............................... 77 4. Movants’ Arguments Regarding the Legality of EPA’s Implementation Plans Are Meritless ......................................................... 82

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5iv 5. Texas Has No Sovereign Right That Will be Irreparably Harmed........................................................................................................... 88 C. Movants’ Purported Harm Will Not Be Redressed by a Properly Issued Stay ......................................................................................................... ..... 91 IV. THE PUBLIC INTEREST AND IMPACTS TO OTHER PARTIES DISFAVOR A ST AY ....................................................................................................... 93

CONCLUSION .................................................................................................................... ...... 100

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6v TABLE OF AUTHORITIES

CASES A.O. Smith Corp. v. FTC , 530 F.2d 515 (3d Cir. 1976) ............................................. 72, 73 Ala. Mun. Distributors Group v. FERC , 312 F.3d 470 (D.C. Cir. 2002) ....................... 69

*Alabama Power v. Costle , 636 F.2d 323 (D.C. Cir. 1979) ....... 49, 51, 53, 54, 55, 62, 64 Allied Local & Reg’l Mfrs. Caucus v. EPA , 215 F.3d 61 (D.C. Cir. 2000) ..................... 47 Am. Road & Transp. Builders Ass’n v. EPA , 588 F.3d 1109 (D.C. Cir. 2009), cert. denied , No. 09-1485, 2010 WL 383433 6 (Oct. 4, 2010) .................................. 56

Am. Water Works Ass’n v. EPA , 40 F.3d 1266 (D.C. Cir. 1994) .................................... 61 Am. Trucking Ass'ns v. EPA , 283 F.3d 355 (D.C . Cir. 2002) .......................................... 32 Appalachian Power Co. v. EPR , 249 F.3d 1032 (D.C. Cir. 2001) ................................. 87

Ass’n of Civilian Technicians v. FLRA , 22 F.3d 1150 (D.C . Cir. 1994) ......................... 41 Astellas Pharma US, Inc. v. FDA , 642 F. Supp. 2d 10 (D.D.C. 2009) ........................... 68 Bennett v. Spear , 520 U.S. 154 (1997) .................................................................................. 86 Biovail Corp. v. FDA , 519 F. Supp. 2d 39 (D.D.C. 2007) ................................................ 68 CSX Transport, Inc. v. Surface Transp. Bd. , 584 F.3d 1076 (D.C . Cir. 2009) .............. 87 Cablevision Sys. Dev. Co. v. Motion Picture Ass’n of Am. , 836 F.2d 599 (D.C. Cir. 1988) ...................................................................................... 62 Cement Kiln Recycling Coal. v. EPA , 255 F.3d 855 (D.C . Cir. 2001) ............................ 47 Chaplaincy of Full Gospel Churches v. England , 454 F.3d 290 (D.C. Cir. 2006) ........ 67

________________________ *Authorities chiefly relied upon are marked with an asterisk.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7vi Chevron USA Inc. v. NRDC , 467 U.S. 837 (1984) .................................. 48,57, 58, 61, 63 Citizens to Save Spencer County v. EPA , 600 F.2d 844 (D.C. Ci r. 1979) ........ 89, 90, 97 City of Portland v. EPA , 507 F.3d 706 (D.C. Cir. 2007) .................................................. 87 Coal. of Battery Recyclers Ass’n v. EPA , 604 F.3d 613 (D.C . Cir. 2010) ............... 32, 35 Cobell v. Kempthorne , 455 F.3d 301 (D.C. Cir. 2006) ..................................................... 92 Comm. in Solidarity with Peopl e of El Salvador v. Sessions , 929 F.2d 742 (D.C. Cir. 1991) ......................................................................................................... ...... 69

Commissioner v. Brown , 380 U.S. 563 (1965) .................................................................... 61

Conn. v. Am. Elec. Power Co. , 582 F.3d 309 (2d Cir. 2009), petition for cert. filed , 79 U.S.L.W. 3092 (Aug. 2, 2010) (No. 10-174) ................................................ 68 Ctr. for Biological Diversity v. DOI , 563 F.3d 466 (D.C . Cir. 2009) .............................. 75 Cuomo v. U.S. Nuclear Reg. Comm’n , 772 F.2d 972 (D.C . Cir. 1985) .......................... 95 Davis v. Pension Benefit Guaranty Corp. , 571 F.3d 1288 (D.C. Cir. 2009) .................. 67 Diamond Shamrock Corp. v. Costle , 580 F.2d 670 (D.C . Cir. 1978) ............................. 69

Environmental Defense Fund v. EPA , 636 F.2d 1267 (D .C. Cir. 1980) ........................ 64 *Ethyl Corp. v. EPA , 541 F.2d 1 (D.C. Cir. 1976) ...................................................... 23-27 FDA v. Brown & Williamson Tobacco Corp. , 529 U.S. 120 (2000) ............................... 58 Grand Canyon Air Tour Coal. v. FAA , 154 F.3d 455 (D.C . Cir. 1998) ......................... 65

Hodel v. Va. Surface Mini ng & Reclamation Ass’n, Inc. , 452 U.S. 264 (1981) ............. 89 In re Knauf Fiber Glass, GMBH , 8 E.A.D. 121 (E.A .B. 1999) ....................................... 58 In re Trans Alaska Pipeline Rate Cases , 436 U.S. 631 (1978) ......................................... 61

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8vii Indep. U.S. Tanker Owners Comm. v. Dole , 809 F.2d 847 (D.C. Cir. 1987) ............... 93 Indus. Union Dep’t, AFL-CIO v. Am. Petroleum Inst. , 448 U.S. 607 (1980) .............. 26

Lead Indus. Ass’n v. EPA , 647 F.2d 1130 (D.C . Cir. 1980) ............................................. 25 Longshoremen v. Boyd , 347 U.S. 222 (1954) ..................................................................... 78

Mass. v. Mellon , 262 U.S. 447 (1923) ................................................................................... 75

Mass. v. EPA , 415 F.3d 50 (D.C. Cir. 2005) rev’d , 549 U.S. 497 (2007) ........................ 26

*Mass. v. EPA , 549 U.S. 497 (2007) ................................................... 1- 5, 10, 21, 23-26, 28, 42-44, 53, 57, 58, 63, 65, 95 Mazurek v. Armstrong , 520 U.S. 968 (1997) ....................................................................... 19 *Motor & Equip. Mfrs. Ass’n v. EPA , 627 F.2d 1095 (D.C . Cir. 1979) ......................... 45 *Mova Pharm. Corp. v. Shalala , 140 F.3d 1060 (D.C. Cir. 1998) ............................. 61, 63 Mylan Pharm., Inc. v. Shalala , 81 F. Supp. 2d 30 (D.D.C. 2000) .............................. 68, 69 N.C. ex rel. Cooper v. Tenn. Valley Auth. , 615 F.3d 291 (4th Cir. 2010) ...................... 69

NRDC v. Browner , 57 F.3d 1122 (D.C . Cir. 1995) ........................................................... 89 Nat’l Ass’n of Homebuilders v. Corps of Eng'rs , 417 F.3d 1272 (D.C. Cir. 2005) ......................................................................................................... ...... 20

Nat’l Lime Ass’n v. EPA , 233 F.3d 625 (D.C. Cir. 2000) ................................................. 69 Nat’l Mining Ass’n v. DOI , 70 F.3d 1345 (D.C . Cir. 1995) ............................................. 56 Nat’l Park Hospitality Ass’n v. Dep’t of Interior , 538 U.S. 803 (2003) .......................... 69 Negusie v. Holder , 129 S. Ct. 11 59 (2009) .......................................................................... 62

*Nken v. Holder , 129 S. Ct. 1749 (2009) ...................................................................... 20, 93

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9viii P&V Enterprises v. Corps of Eng'rs , 516 F.3d 1021 (D.C . Cir. 2008) ........................... 86 Sampson v. Murray , 415 U.S. 61 (1974) .............................................................................. 67

Steinhorst Assocs. v. Preston , 572 F. Supp. 2d 11 2 (D.D.C. 2008) ................................ 93

Texas v. United States , 523 U.S. 296 (1998)........................................................................ 78

Tozzi v. EPA , 148 F. Supp. 2d 35 (D.D.C. 2001) .............................................................. 47

U.S. Telecom Ass’n v. FCC , 359 F.3d 554 (D.C . Cir. 2004) ............................................ 31 United States v.Am. Trucking Ass’ns , 310 U.S. 534 (1940) ............................................ 61 United States v. Bryan , 339 U.S. 323 (1950) ....................................................................... 61 United States v. Cinergy Corp. , No. 09-3344, 2010 WL 4009180 (7th Cir. Oct. 12, 2010) ................................................................................................. . 84 United States v. Haggar Apparel Co. , 526 U.S. 380 (1999) .............................................. 59 United States v. Oakland Cannabis Buyers' Coop. , 532 U.S. 483 (2001) ....................... 94 United States v. Students Challenging Regulatory Agency Procedures , 412 U.S. 669 (1973) ...................................................................................................... .. 94

United Steelworkers of Am. v. Marshall , 647 F.2d 1189 (D.C. Cir. 1980) .............. 31, 32 Vantico Holdings S.A. v. Apollo Mgmt. , 247 F. Supp. 2d 437 (S.D.N.Y. 2003) .......... 77 Vermont Yankee Nuclear Power Corp. v. NRDC , 435 U.S. 519 (1978) ....................... 36 Virginia v. Browner , 80 F.3d 869 (4th Cir. 1996) ............................................................... 89 Whitman v. Am. Trucking Ass'ns , 531 U.S. 457 (2001) ...................................................... 7 Williamson v. Lee Optical of Okla., Inc. , 348 U.S. 483 (1955) ........................................ 65

*Winter v. NRDC , 129 S. Ct. 36 5 (2008) ............................................................................ 67

*Wis. Gas Co. v. FERC , 758 F.2d 669 (D.C. Cir. 1985) ......................... 67, 72, 73, 78, 91

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10ix FEDERAL STATUTES Clean Air Act, 42 U.S.C. §§ 7401-7671q: 42 U.S.C. § 7401(b)(1) ........................................................................................................ ..... 94 42 U.S.C. §§ 7408-7409 ........................................................................................................ .... 7 42 U.S.C. § 7408 .............................................................................................................. .......... 8 42 U.S.C. § 7408(a)(1) ........................................................................................................ ..... 28 42 U.S.C. § 7408(a)(2) ........................................................................................................ ..... 28 42 U.S.C. § 7409 ........................................................................................................... 8, 25, 28 42 U.S.C. § 7410 ............................................................................................................. .......... 9 42 U.S.C. § 7410(a) ........................................................................................................... ....... 87 42 U.S.C. § 7410(a)(2)(C) ..................................................................................................... .. 89 42 U.S.C. § 7410(c) ........................................................................................................... ......... 9 42 U.S.C. § 7410(c)(1) ........................................................................................................ ..... 79 42 U.S.C. § 7410(i) ........................................................................................................... ........ 88 42 U.S.C. § 7410(k)(1) ........................................................................................................ ....... 9 42 U.S.C. § 7410(k)(1)(A) ..................................................................................................... .... 9 42 U.S.C. § 7410(k)(5) ................................................................................... 10, 79, 86, 87, 88 42 U.S.C. § 7410)( l ) ................................................................................................................ 87 42 U.S.C. § 7411(a)(4) ........................................................................................................ 8, 49 42 U.S.C. § 7411(b)(6) ....................................................................................................... .... 55

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11x 42 U.S.C. §§ 7470-7492 (PSD) ................................................................................................ 2 42 U.S.C. § 7470(1) ........................................................................................................... .. 7, 94 42 U.S.C. § 7470(4) ........................................................................................................... ......... 5 42 U.S.C. § 7471 ................................................................................................ 7, 9, 50, 59, 62 42 U.S.C. § 7475 ..................................................................................................... 4, 49, 5 2, 75 42 U.S.C. § 7475(a) .............................................................................................. 50, 51, 52, 84 42 U.S.C. § 7475(a)(1) ............................................................................................ 8, 51, 79, 84 42 U.S.C. § 7475(a)(3)(C) .................................................................................................... .. 55 42 U.S.C. § 7475(a)(4) .................................................................................................. 8, 53 , 55 42 U.S.C. § 7476 .............................................................................................................. . 52, 54 42 U.S.C. § 7479(1) .................................................................................. 8, 48, 49, 51, 52, 60 42 U.S.C. § 7479(1)(C) ....................................................................................................... ... 49 42 U.S.C. § 7479(2)(C) ....................................................................................................... ..... 8 42 U.S.C. § 7479(3) ....................................................................................................... 8, 58, 72 42 U.S.C. §§ 7501-7515 ..................................................................................................... 8, 84 42 U.S.C. § 7507 .............................................................................................................. ... 7, 14 42 U.S.C. §§ 7521-7590 (Title II) ............................................................................................ 6 42 U.S.C. § 7521(a) ............................................................................................ 1, 6, 11, 39, 40 42 U.S.C. § 7521(a)(1) ..................................................................................... 6, 12, 22, 23, 41 42 U.S.C. § 7521(a)(2) ....................................................................................... 2, 6, 12, 29, 45

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 12xi 42 U.S.C. § 7543(a) ........................................................................................................... ......... 6 42 U.S.C. § 7543(b) ........................................................................................................... ........ 7 42 U.S.C. § 7545 .............................................................................................................. . 47, 49 42 U.S.C. § 7545(a) ........................................................................................................... ....... 50 42 U.S.C. § 7576 .............................................................................................................. ........ 83 42 U.S.C. § 7576(e) ........................................................................................................... ....... 54 42 U.S.C. § 7602(g) ........................................................................................................... ....... 40 42 U.S.C. § 7602(h) .......................................................................................................... ...... 59 42 U.S.C. § 7602(j) ........................................................................................................... ... 9, 60 42 U.S.C. § 7607(b) ........................................................................................................... ...... 56 42 U.S.C. § 7607(d)(7) ...................................................................................................... 2 0, 87 42 U.S.C. § 7617(e) ........................................................................................................... ....... 47 42 U.S.C. §§ 7661-7661f (Title V) ........................................................................................... 9 42 U.S.C. § 7661(2) ........................................................................................................... .. 9, 60 42 U.S.C. § 7661a.............................................................................................................. ....... 10 42 U.S.C. § 7661a(a) .......................................................................................................... ...... 60 42 U.S.C. § 7661a(b), (d) ..................................................................................................... ... 89 42 U.S.C. § 7661b ............................................................................................................. 82, 89 42 U.S.C. § 7661b(6)-(9) ...................................................................................................... ... 63 42 U.S.C. § 7661b(c) .......................................................................................................... ..... 82 42 U.S.C. § 7661c(a) .......................................................................................................... ........ 9

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 13xii Energy Policy and Conservation Act, 49 U.S.C. § 32902 ................................................... 3 49 U.S.C. § 32902(a) .......................................................................................................... ........ 7 49 U.S.C. § 32902(b)(1) ....................................................................................................... ..... 7 49 U.S.C. § 32902(c) .......................................................................................................... ........ 7

FEDERAL REGULATIONS

40 C.F.R. Pt. 50 .............................................................................................................. ............ 8 40 C.F.R. § 51.166 ............................................................................................................ .. 9, 85 40 C.F.R. § 51.166(a)(6) ...................................................................................................... .... 83 40 C.F.R. § 51.166(a)(6)(i) ................................................................................................... ... 85 40 C.F.R. § 51.166(b)(12) ..................................................................................................... .. 72 40 C.F.R. § 51.166(b)(49)(iv) ................................................................................................. .. 8 40 C.F.R. § 52.21(a)(1) ....................................................................................................... ....... 9 40 C.F.R. § 52.21(b)(1), (b)(2), (b)(50)(iv), (j)(2)-(3) ........................................................... 15 40 C.F.R. § 52.21(b)(12) .................................................................................................... 8 , 72 40 C.F.R. § 52.21(b)(50)(iv) .................................................................................................. .... 8 40 C.F.R. § 52.21(i)(2) ....................................................................................................... ...... 51 40 C.F.R. § 70.5(a)(1) ........................................................................................................ ...... 82 40 C.F.R. Pts. 70, 71 ......................................................................................................... ....... 10 40 C.F.R. Pt. 70, App. A ...................................................................................................... ... 10

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 14xiii STATE REGULATIONS Cal. Code Regs. Tit. 13, § 1961.1 .......................................................................................... 14

FEDERAL REGISTER 45 Fed. Reg. 52,676 (Aug. 7, 1980) ................................................................... 49, 50, 53, 55 67 Fed. Reg. 80,186 (Dec. 31, 2002) ..................................................................................... 84 74 Fed. Reg. 24,007 (May 22, 2009) ..................................................................................... 12 74 Fed. Reg. 32,744 (July 8, 2009) ........................................................................................ 13 74 Fed. Reg. 18,886 (Aug 24, 2009) ......................................................................... 29, 38, 39 74 Fed. Reg. 66,496 (Dec. 15, 2009) (End angerment Finding) ............... 10, 11, 20-31, 34 36, 39, 40, 95, 96 75 Fed. Reg. 17,004 (Apr. 2, 2010) (PSD Reconsideration) ............. 15, 47, 48, 55, 59, 60 75 Fed. Reg. 25,324 (May 7, 2010) (V ehicle Rule) .............................. 12-14, 29, 42-47, 99 75 Fed. Reg. 31,514 (June 3, 2010) (Tailori ng Rule) ............. 11, 15-18, 46, 47, 50, 51, 60 62, 64, 73, 81, 85, 96, 97 75 Fed. Reg. 49,556 (Aug. 13, 2010) ........................... 12, 20, 21, 30, 33, 34, 35, 37, 38, 39 75 Fed. Reg. 53,882 (Sept. 2, 2010) (FIP Rule) ...................................................... 19, 76, 78 75 Fed. Reg. 53,892 (Sept. 2, 20 10) (SIP Call) .......................................... 19, 78, 79, 80, 87

EXECUTIVE ORDERS Exec. Order No. 12,898 ........................................................................................................ . 47 Exec. Order No. 13,211 ........................................................................................................ . 47

LEGISLATIVE MATERIALS 136 Cong. Rec. S2107 (M ar. 5, 1990) ................................................................................... 63

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 15xiv H.R. Rep. No. 95-294 (1977), reprinted in 1977 U.S.C.C.A.N. 1121 ............................. 26

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 16xv GLOSSARY

PARTIES

Movants : the Petitioners that filed the Mo tions to Stay, including the National

Association of Manufacturers and 7 other Petitioners (“NAM Mot.”); the Coalition for Responsible Regulation, In c. and its co-Petitioners along with

Petitioners from four other Petitions (“CRR Mot.”); and the State of Texas, which filed one motion to stay solely the Tailoring Rule (“Texas Tailoring Mot.”) and another to stay three other EPA actions (“Texas Mot.”). EPA also refers herein to stay briefs filed as “Responses” to the Stay Motions by: Peabody Energy (“Peabody Resp.”); American Farm Bureau Federation (“Farm Bureau Resp.”); and Utility Air Re gulatory Group (“UARG Resp.”).

THE CHALLENGED EPA RULES AND ACTIONS Endangerment Finding : “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act; Final Rule,” 74 Fed. Reg. 66,496 (December 15, 2009)

Vehicle Rule : “Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule,” 75 Fed. Reg. 25,324 (May 7, 2010) Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 17xvi Timing Decision : “Reconsideration of Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Pe rmitting Programs,” 75 Fed. Reg. 17,004 (April 2, 2010) Tailoring Rule : “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,” 75 Fed. Reg. 31,514 (June 3, 2010)

RELATED PROPOSED RULES

FIP Rule : “Action to Ensure Authority to Issue Permits under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Federal Implementation Plan,” 75 Fe d. Reg. 53,883 (Sept. 2, 2010)

SIP Call : “Action to Ensure Authority to Issue Permits under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SI P Call,” 75 Fed. Reg. 53,892 (Sept. 2, 2010)

TERMS

Act : Clean Air Act, 42 U.S.C. §§ 7401-7671q

BACT : Best Available Control Technology

CAA : Clean Air Act, 42 U.S.C. §§ 7401-7671q

CAFE : Corporate Average Fuel Economy

CO 2 e : Carbon dioxide equivalent

EPCA : Energy Policy and Conserva tion Act, 49 U.S.C. § 32902

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 18xvii FIP : Federal Implementation Plan

GHG : Greenhouse gas

GWP : Global Warming Potential

IAC : Climate Change Assessments: Review of the Processes and Procedures of the IPCC (InterAcademy Council, 2010)

IPCC : United Nations Intergovernmental Panel on Climate Change NAAQS : National Ambient Air Quality Standards

NHTSA : National Highway Traffi c Safety Administration

PSD : Prevention of Significant De terioration, 42 U.S.C. §§ 7470-7492

RTC : Response to Comments

RTP : Response to Petitions to Reconsid er the Endangerment and Cause or Contribute Findings for Gree nhouse Gases under Section 202(a) of the Clean Air Act

SIP : State Implementation Plan

TITLE V : 42 U.S.C. §§ 7661-7661

TSD : Endangerment and Cause or Contribu te Findings for Greenhouse Gases Under Section 202(a) of the Cl ean Air Act: Technical Support Document (December 7, 2009)

TPY : Tons per year

USGCRP : United States Global Change Research Program

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 191 Movants seek to stay a regulatory pro cess, and its statutory consequences, that Congress ordered in the Clean Air Act and th at the Supreme Court set inexorably in

motion in Massachusetts v. EPA , 549 U.S. 497 (2007). There, the Court held that greenhouse gases are “air pollutants” under the plain language of the Clean Air Act.

Id. at 529. Per the Court’s express instru ction, EPA’s Administrator was therefore required to determine whether, in her judgme nt, greenhouse gas emissions from new

motor vehicles cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare. Id. at 533. The Act obligates EPA to regulate

such emissions from new motor vehicles if an “endangerment finding” is made. Id. Once motor vehicle regulations take eff ect, the express provisions of the Act automatically subject stationary sources of greenhouse gases to corresponding regulation under separate provisions of the statute. Thus, once an endangerment finding is made, this chain of consequenc es is unavoidable under the clear regime Congress created in the Clean Air Act.

EPA has taken four distinct actions re lated to greenhouse gases. The first two – EPA’s Endangerment Finding and its Ve hicle Rule – are governed by section 7521(a) 1 of the Act, which covers emissions of pollutants from new motor vehicles and new motor vehicle engines; these two actions flow directly from the Supreme

Court’s directive in Massachusetts that EPA determine if endangerment results from greenhouse gases and from the statutory requirement that EPA regulate such

1 Statutory references are to Title 42 of the United States Code, unless noted.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 202 emissions if endangerment is found. Base d on an exhaustive review and analysis of the science, in late 2009 the Administrator exercised her judgment to conclude that emissions of greenhouse gases from new mo tor vehicles contribute to air pollution that is reasonably anticipated to endanger pu blic health and welfare, due to the effects of greenhouse gases on climate. This Endangerment Finding led directly to promulgation of the Vehicle Rule, in whic h EPA set standards for the emission of greenhouse gases for new motor vehicles built for model years 2012-2016. By statute,

those emissions standards are set after consid ering two factors: the time necessary to develop and apply the requisite technology to meet the standard, and the cost to the automobile industry of complying within the set time period. § 7521(a)(2). The

indirect effects of such regulation – such as th e “triggering effect” such regulations may have with respect to stationary source perm itting requirements under the Act – do not alter EPA’s statutory obligation to decide en dangerment and to issue the standards if endangerment is found. The other two EPA actions – EPA’s Timing Decision and its Tailoring Rule – are governed by sections 7470-7492 and by Ti tle V of the Act, which establish the twoprincipal CAA permitting programs for stationary sources: the prevention-ofsignificant-deterioration (“PSD”) preconstr uction permit program, and the Title V operating permit program. Unlike the En dangerment Finding and the Vehicle Rule,

these two actions do not flow directly from the Supreme Court’s instruction in

Massachusetts . Rather, they reflect EPA’s efforts to define and cabin the timing and

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 213 breadth of stationary source regulation th at would otherwise automatically ensue, purely by operation of statute, once green house gases become subject to regulation under the Act through any means. Both are palliative actions: they reduce the regulatory burdens on stationary so urces and permitting authorities by delaying the date on which sources will be subject to the Act’s permitting requirements and by limiting , at least for a time, the number and size of the sources that must obtain permits. Movants vehemently oppose any regulation of greenhouse gas emissions from stationary sources under the Act, fearing the possibility that even some stationary sources will be required to address gree nhouse gas emissions in construction and operating permits. Thus, they flail variousl y at EPA’s four actions in an attempt to halt that which is imposed by operation of statute. But their efforts are for naught: their objection, at bottom, is not really to EPA’s actions; rather, it is to the decisions Congress made and to the strict requirement s Congress itself imposed on sources of air pollution. These limits are plain and significant. For instance, while the Supreme Court recognized in Massachusetts that the Administrator ultimately must exercise her judgment in determining whether endangerment ex ists, and that this entails discretion,

her reasons for exercising her judgment “must c onform to the authorizing statute.” 549 U.S. at 533. Thus, in determining whether atmospheric concentrations of greenhouse gases may endanger public health or welfare, the Administrator must rest

her decision on the science and facts. Id. at 533-34. “Policy judgments” – such as

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 224 those Movants raise in their Stay Motions re garding the difficulty, inconvenience, or cost of stationary source permitting – “h ave nothing to do with whether greenhouse gas emissions contribute to climate change.” Id. Thus, they may not be considered. Similarly, while EPA may have some “latitude as to the manner, timing, content, and coordination” of its motor vehicle regula tions if endangerment is found, id. , the statute does not permit EPA to decline to issue standards under section 7521 on the grounds that such regulati on would implicate stationary source permitting. EPA’s discretion with respect to stationary source permitting is similarly limited by Congress’ express direction. Under sect ion 7475, once a pollutant is subject to regulation under the Act, that pollutant must be addressed in PSD permits. EPA’s discretion is limited to determining when a pollutant should be considered “subject to regulation” under the Act. Thus, in the Timing Decision, EPA had discretion to decide that greenhouse gases would be “subject to regula tion” when the Vehicle Rule begins to apply to new vehicles (on Janu ary 2, 2011). But EPA had no discretion to decide that section 7475 does not apply at all to stationary sources’ greenhouse gas emissions. Similarly, while EPA in its Tailo ring Rule raised the numerical thresholds that would trigger permitting requirements under section 7475 (and similar provisions under Title V) for greenhouse gases, it raised them only as much as necessary, and only as long as necessary, to avoid an absurd result – permit gridlock as a result of overwhelmed permitting authorities – and for reasons of administrative necessity. EPA lacked discretion to raise those thresholds any more than absolutely necessary to effectuate

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 235 congressional intent, and it certainly lacked discretion after prom ulgating the Vehicle Rule to decline to regulate greenhouse gases under the PSD program. Movants cast a wide net in their argument s. They ignore a well-settled principle of administrative law – that every agency ac tion is to be measured against the statutory provisions applicable to it and reviewed on the basis of its own record – and attack EPA’s Endangerment Finding, Vehicle Rule, Timing Decision, and Tailoring Rule as if they were a single, monolithic agency action, rather than four unique actions addressing separate and distinct statutory requirements. 2 They attempt as well to relitigate the fundamental issue that the Supreme Court resolved in Massachusetts : whether greenhouse gases can be regulated at all under the Clean Air Act. In their zeal to challenge any possible underpinning of EPA’s actions, Movants even seek to stay the Tailoring Rule – a rule intended to alleviate , for literally millions of stationary sources, the very regulatory burdens Movant s abhor. Regarding the relief they seek, one group of Movants takes an extraordinary tack: they concede that the Endangerment Finding and the Vehicle Rule should not be stayed, but ask that the Court stay the Vehicle Rule’s “triggering effect” for stationary source regulation. NAM Mot. 12. In short, they essentially se ek to stay the Clean Air Act itself. The Court, however, cannot stay the Cl ean Air Act, and Movants cannot meet the high standards for issuance of a stay of any of EPA’s actions pending review.

2 EPA maintains that the distinct EPA acti ons are best adjudicated by separate panels and opposes coordination of all four actions, as set forth in EPA’s crossmotion for partial consolidation. See Dkt. 1265175.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 246 Movants cannot establish any – let alone all – of the elements required for issuance of a stay: that movants are likely to succeed on the merits; that they will be irreparably harmed absent a stay; that a stay would re dress the harms of which they complain; and that these factors clearly outweigh the subs tantial harms to others and to the public interest that will occur if a stay is issued . The Motions for Stay should be denied.

BACKGROUND I. Statutory Background A. Statutory Provisio ns Related to Vehicles Title II of the CAA, §§ 7521-7590, establishes a regulatory framework for controlling pollution from motor vehicles and other mobile sources. Under section 7521(a)(1), EPA “shall” prescribe regulations establishing standards for “the emission of any air pollutant from any class or cl asses of new motor vehicles or new motor vehicle engines, which in [EPA’s] judgment cause, or contribute to, air pollution which may reasonably be anticipated to enda nger public health or welfare.” Once EPA makes such an “endangerment finding,” the Act requires EPA to issue corresponding emission standards, taking in to account specified technological and cost considerations. § 7521(a)(2). Standa rds promulgated under section 7521(a) take effect only “after such period as the Ad ministrator finds necessary to permit the development and application of the requ isite technology, giving appropriate consideration to the cost of comp liance within such period.” Id. States are preempted from adopting their own new motor vehicle standards, § 7543(a), but EPA

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 257 may waive preemption for California standards that are, in the aggregate, at least as protective as federal standards and otherwise consistent with the CAA. § 7543(b) Other States may adopt California standards for which a waiver has been granted. §

7507. Separately, the Energy Policy and Conservation Act (“EPCA”) directs the Secretary of Transportation to prescribe corporate average fuel economy standards for specified categories of vehicles. 49 U.S.C. § 32902(b)(1). The Secretary has delegated that authority to NHTSA. CAFE standards “shall be the maximum feasible average fuel economy level that the Secret ary decides the manufacturers can achieve in [a] model year.” 49 U.S.C. § 32902(a).

B. Clean Air Act Provisio ns Related to Stationary Sources 1. The PSD Program The purpose of the prevention of significant deterioration program, adopted in 1977, is “to protect public health and welf are from any actual or potential adverse effect which in the Administrator’s judgment may reasonably be anticipate[d] to occur from air pollution ... notwithstanding attainment and maintenance of all national ambient air quality standards.” § 7470(1). 3 Under PSD, a “major emitting facility”

3 One of EPA's responsibilities under th e Act is to promulgate national ambient air quality standards, or “NAAQS,” for certain air pollutants that may endanger public health or welfare. §§ 7408-7409; Whitman v. Am. Trucking Ass'ns , 531 U.S. 457, 462 (2001). EPA has established NAAQS for six pollutants: nitrogen dioxide, ozone, sulfur dioxide, coarse and fine particulate matter, carbon monoxide, and lead. §§

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 268 may not initiate construction or major mo difications of its facility without first obtaining a construction permit. §§ 7475(a )(1), 7479(1)&(2)(C). The Act defines a “major emitting facility” as a stationary so urce that emits or has the potential to emit 100 or 250 tons per year (“tpy”) (dependi ng on the type of source) of “any air pollutant.” § 7479(1). 4 A modification of an existing major emitting facility is defined as a physical change or change in the method of operation that results in an increase in the amount of “any air pollutant” emitted by that source. §§ 7479(2)(C), 7411(a)(4). To receive a PSD permit, an applic ant seeking to construct or make a modification to a major emitting facility must implement “best available control technology [‘BACT’] for each pollutant subj ect to regulation under [the Act].” § 7475(a)(4). In pertinent part, the Act defines BACT as: [A]n emission limitation based on the maximum degree of reduction of each pollutant subject to regulation under this chapter [the CAA] emitted from or which results from any maj or emitting facility, which the permitting authority, on a case-by-case basis , taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such facility through application of production processes and available methods, systems, and techniques ... for control of each such pollutant. § 7479(3) (emphasis added). See also 40 C.F.R. § 52.21(b)(12).

7408, 7409; 40 C.F.R. Pt. 50. Areas that do not meet the NAAQS for a particular pollutant are designated “nonattainment areas.” 4 See also 40 C.F.R. § 52.21(b)(50)(iv) (explaining that the PSD permit requirement is triggered by emissions of a “Regulated NSR Pollutant,” including “[a]ny pollutant that otherwise is subject to regulation under the Act.”); 40 C.F.R. § 51.166(b)(49)(iv) (applying PSD to “[a]ny pollutant that is otherwise subject to regulation under the Act.”).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 279 2. Titl e V of the Clean Air Act Title V of the Act, §§ 7661-7661f, establishes an operating permit program covering stationary sources of air pollutants. It applies to, among others, any “major source” within the meaning of section 7661(2) , including stationary sources that emit or have the potential to emit 100 tpy or more of “any air pollutant .” § 7602(j). Unlike PSD, Title V does not impose substantive pollution control requirements. Instead, Title V operating permits assure complia nce with emissions limits and other applicable requirements of the CAA. § 7661c(a).

3 . Implementation of CAA Requi rements for Stationary Sources While Congress and EPA establish the standards to be achieved in the PSD program, the States predominantly manage the program to achieve these standards through state implementation plans (“SIPs”). See §§ 7410, 7471; 40 C.F.R. § 51.166 (criteria for EPA approval of a state PS D program). A SIP is a set of statepromulgated (and EPA-approved) regulations that provides for implementation and enforcement of emissions standards under the various CAA programs administered by EPA. The standards set by States may be no less stringent than the CAA and EPA’s implementing regulations. § 7410(k)(1 )(A). In the event a State is unable or unwilling to design its program to obtain EPA approval of its SIP, EPA will issue federal regulations in the form of a Fede ral Implementation Plan (“FIP”) that will apply within that State until a SIP is approved. § 7410(c); 40 C.F.R. § 52.21(a)(1).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 2810 EPA can instruct a State to revise its SI P where it is inadequate to meet the requirements of the CAA (commonly referred to as a “SIP Call”). See § 7410(k)(5). Similar to SIPs, each State has its ow n approved Title V program, listed at 40 C.F.R. part 70, App. A. Title V sets out the minimum requirements for a Title V permit program and for permits, requires St ates to develop programs in accordance with those requirements, and authorizes EPA to promulgate, administer and enforce a federal Title V program in various circumstances, including where a State does not have an EPA-approved program. § 7661a; 40 C.F.R. parts 70, 71. II. EPA Rules and Actions Challeng ed and Implicated in This Action A. The Endangerment Finding and th e Denial of Reconsideration of the Endangerment Finding – Challenged in Case No. 09-1322 In 1999, EPA received a request that it regulate new motor vehicles, pursuant to section 7521(a), because greenhouse gas emissions from motor vehicles contributed to air pollution which may reas onably be anticipated to endanger public health or welfare. EPA denied that request in 2003, resulting in the Supreme Court’s

decision in Massachusetts v. EPA , 549 U.S. 497 (2007), in which that Court concluded that greenhouse gases are “air pollutants” within the meaning of the Act and directed EPA to make an endangerment determinati on or explain why it could not do so. Acting in accordance with the Suprem e Court’s instructions, EPA published the Endangerment Finding on December 15, 20 09. 74 Fed. Reg. 66,496. EPA began by defining the “air pollution” referenced in section § 7521(a) to be the atmospheric

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 2911 mix of six long-lived and directly-emi tted greenhouse gases: carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF 6 ). Id. at 66,497, 66,516-22. 5 EPA then found that this air pollution may, in fact, be “reasona bly be anticipated both to endanger public health and to endanger public welfare.” Id. at 66,497, 66,523-36. The Administrator then made findings pe rtaining to the “cause or contribute” criterion in section 7521(a). EPA defined the relevant “air pollutant” as “the aggregate group of the same six long-l ived and directly-emitted greenhouse gases ....” 74 Fed. Reg. at 66,536. See also id. at 66,499. EPA then found that emissions of this “air pollutant” from new motor vehicles and new motor vehicle engines “contribute” to the “air pollution” for which the endangerment finding was

made. Id. at 66,499, 66,537-45. Subsequently, EPA received ten pe titions seeking administrative reconsideration of the Endangerment Findin g. Generally speaking, these petitions challenged the scientific basis underlying the Endangerment Finding, largely based on

the content of certain e-mail communicati ons among various climate scientists, alleged errors on the part of the United Nations Intergovernmental Panel on Climate

5 These gases have different heat-trapping capacities and atmospheric lifetimes and thus are measured under the pollutant denominated as “greenhouse gases” based on their global warming potential (“GWP”), which is measured in carbon dioxide equivalents (“CO 2 e”). 75 Fed. Reg. at 31,519. For example, one ton of carbon dioxide equals one ton of CO 2 e; one ton of methane equals 21 tons of CO 2 e; and one ton of sulfur hexafluoride equals 23,900 tons of CO 2 e

. Id.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3012 Change, and certain additional technical stud ies that the petitioners believed to be pertinent. On July 29, 2010, EPA denied the petitions, fully explaining why the technical and science-related arguments pres ented by the petitioners did not warrant reconsideration. 75 Fed. Reg. 49,556, 49,557-58, 49,563-78, 49,584 (Aug. 13, 2010).

B. The Vehicle Rule – Challenged in Case No. 10-1092 Because sections 7521(a)(1) & (2) requ ire EPA to issue regulations for motor vehicles once it makes the specified enda ngerment and contribution findings, EPA issued greenhouse gas emission standards fo r cars and light trucks for model years 2012-2016. 75 Fed. Reg. 25,324 (May 7, 2010). In accordance with a carefullydesigned federal policy, 6 the Vehicle Rule was promulgated as part of a joint rulemaking with NHTSA, which simultaneous ly promulgated CAFE standards for the

same vehicles. EPA and NHTSA first devel oped a joint technical analysis of (among other things) available technologies an d their costs and effectiveness. Id. at 25,348– 96. Each agency then developed standards un der its separate statutory authorities. EPA’s Vehicle Rule requires each manuf acturer to meet its own fleet-wide emission standard for cars, and separately , light trucks, based on the vehicles it chooses to produce each year. Id. at 25,405. Manufacturers may earn credits toward

6 In May 2009, the Administration annou nced a National Fuel Efficiency Policy (“the National Program”) with the goal of establishing consistent, harmonized, and streamlined federal and state requirements that would reduce greenhouse gas emissions and improve fuel eco nomy for all light-duty vehicles sold in the United States, while allowing automakers to sell a si ngle fleet of vehicles nationally. 75 Fed. Reg. 25,326/2; 74 Fed. Reg. 24,007 (May 22, 2009).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3113 meeting their fleet-wide standards by improv ing air conditioning systems to increase system efficiency and reduce hydroflu orocarbon refrigerant leakages. Id. at 25,424-31. The Rule also sets separate standards to cap tailpipe nitrous oxide and methane

emissions. Id. at 25,421-24. EPA’s greenhouse gas emission standards are consistent with, but separate from, CAFE standards. EPA’s standards are projected to result in significantly greater greenhouse gas emission reductions than the corresponding CAFE standard as a result of certain differences between the CAA and EPCA. For example, EPA’s standards encompass reductions in greenho use gases that can be achieved by airconditioning system improvements, which NHTSA had no statutory authority to

address. Id. at 25,342. Conversely, EPCA, unlike the CAA, allows a manufacturer to pay a fine in lieu of meeting CAFE standards. Id. at 25,342. The result is that projected CO 2 e emissions avoided under EPA’s stan dards, during the useful life of model year 2012-2016 vehicles , will be 962 metric mil lion tons, whereas projected

CO 2 emissions avoided under the CAFE standard s, during the same useful life, will be 655 million metric tons. Thus, EPA st andards are projected to result in 47 percent

greater reductions. Id. at 25,636, Table IV.G.1-4, and 25,4 90, Table III.F.1-2. In 2004, the State of California appr oved state greenhouse gas standards for new light-duty vehicles for model years 200 9 through 2016. On June 30, 2009, EPA granted California’s request for a waiver of federal preemption for those standards under the CAA. 74 Fed. Reg. 32,744 (July 8, 2009). Thirteen States and the District

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3214 of Columbia, comprising approximately 40 percent of the U.S. light-duty vehicle market, have adopted California’s standards, as they are permitted to do by section 7507. In accordance with the National Prog ram, California revised its state program to make clear that compliance with the EP A Model Year 2012-2016 light-duty vehicle greenhouse gas standards is deemed to be compliance with California’s greenhouse gas standards. 75 Fed. Reg. at 25,327-28. Accordingly, so long as the Vehicle Rule remains effective, automakers will be able to meet California standards by complying

with EPA’s standards. If EPA’s federa l greenhouse gas program was no longer an alternative compliance option for meeting th e California standards, automakers would instead have to comply with California standards (in both California and the other States that have adopted them), which are not aligned with the CAFE standards. Among the differences, California standards are absolute and uniform. They are not expressed as manufacturer-specific standard s determined by a manufacturer’s choice of which vehicles to produce. Cal. Code Re gs. Tit. 13, § 1961.1 (Ex. 1); 75 Fed. Reg. 25,329. Thus, without an alternative co mpliance option, each auto manufacturer would be faced with the costly prospect of manufacturing at least two fleets of vehicles for domestic sale, one that meets bo th California standards and less stringent CAFE standards for sale in the States that have adopted California standards, and a separate fleet that just meets the CAFE standa rds for sale elsewhere. 75 Fed. Reg. at 25,326. C. The Timing Decision – Challenged in Case No. 10-1073

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3315 In 2008 EPA issued its “PSD Interpre tive Memo,” also called the “Johnson Memo.” The PSD Interpretive Memo provid ed EPA’s interpretation of a pre-existing definition in its PSD regulations delineating the “pollutants” that are taken into account in determining whether a sour ce must obtain a PSD permit and the pollutants each permit must control. EPA had previously defined the pollutants that

must be taken into account for both of these purposes to include “[a]ny pollutant that otherwise is subject to regulation under th e Act.” 40 C.F.R. § 52.21(b)(1), (b)(2), (b)(50)(iv), (j)(2)-(3). In the PSD Interpre tive Memo, EPA explained that monitoring and reporting requirements under the Act were insufficient to make a pollutant “subject to regulation” and that a pollutant is not “regulated” unless it is covered by an EPA regulation that requires actual control of emissions. In the 2010 Timing Deci sion, EPA reaffirmed this interpretation of the term “subject to regulation,” and refined its interpretation regarding exactly when “regulation” of a pollutant begins, for pu rposes of both PSD and Title V permits.

EPA then concluded that the Vehicle Rule would require actual control of greenhouse gas emissions on January 2, 2011 – the first date on which model year 2012 cars subject to the greenhouse gas emission lim itations in the Vehicle Rule may be introduced into commerce. Thus, greenho use gas emissions would be “subject to regulation” for PSD and for Title V purposes on that date. 75 Fed. Reg. at 17,019/3, 17,023. EPA subsequently codified this appr oach as part of the Tailoring Rule. 75 Fed. Reg. at 31,606-07.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3416 D. The Tailoring Rule – Challenged in Case No. 10-1131 The purpose of the Tailoring Rule is to establish an effective administrative process by which PSD and Title V permit requirements for greenhouse gases can be phased in after January 2, 2011, once t hose requirements are triggered under the statute by the Vehicle Rule. EPA recogniz ed that immediately implementing PSD and Title V permit requirements for all sources meeting the statutory thresholds of 100/250 tpy for greenhouse gas emissions would “overwhelm [ ] the resources of permitting authorities and severely impair [ ] the functioning of the program [ ].” 75 Fed. Reg. at 31,514. 7 Following consideration of extensive public comments, EPA adopted a series of steps by which PSD an d Title V permit requirements could be phased in, starting with the largest sources of greenhouse gas emissions. During Step I, which begins on January 2, 2011, no source will be subjected to PSD permitting solely by virtue of its greenhouse gas emissions. Instead, only a

source that already requires a PSD permit by virtue of its potential to emit non

-

7 For example, EPA estimated that wit hout the Tailoring Rule, PSD permit applications would increase nationwide from 280 per year to over 81,000, a 300-fold increase, requiring state permitting aut horities to add almost 10,000 full-time employees and incur additional cost s of $1.5 billion per year. Id. at 31,535-40, 31,554. EPA’s analysis further showed that Title V permit applications would jump from 14,700 per year to 6.1 million as a result of application of Title V to greenhouse gases, a 400-fold increase. When EPA assumed just a 40-fold increase in applications – onetenth of the actual increase – and no incr ease in employees to process them, the processing time for Title V permits would jump from 6-10 months to ten years

. Hiring the nearly 230,000 full-time employees necessary to address the actual increase in permitting functions would result in an increase in Title V administration costs of $21 billion per year. Id. at 31,535-40, 31,577.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3517 greenhouse gases covered by the PSD pr ogram must address its greenhouse gas emissions, and even then only if its new cons truction or modification project will have the potential to emit 75,000 tpy on a carbon-dioxide-equivalent (CO 2 e) basis of net greenhouse gases. 75 Fed. Reg. 31,5 23-24. Greenhouse ga s emissions are not considered in determining whether a source needs to obtain a PSD permit until Step II, which begins on July 1, 2011. After this date, a so urce will be subject to PSD permitting requirements if: (a) it meets the st andards established in Step I (a so-called “anyway” source); or (b) the source has the potential to emit the statutory thresholds of greenhouse gases (100/250 tpy) on a mass basis and also has the potential to emit 100,000 tpy on a CO 2 e basis (or 75,000 net tpy CO 2 e for a modification project). Id. Similar thresholds apply under Title V. Id. The Tailoring Rule also lays out a specific process for considering further reductions in these thre sholds (and consequent expansion of the permit program), as de termined to be a ppropriate following additional study and consideration of the im plementation of Steps I and II during the initial years of the program. See id. at 31,525, 31,586-88. These phased measures will alleviate the administrative burden on state permitting authorities (and greatly reduce the costs to both permitting authorities and sources), while having comparatively littl e impact on the volume of greenhouse gas emissions subjected to regulation under the pr ograms. For example, even at Step II, only about 550 additional sources will require PSD or Title V permits due solely to their emissions of greenhouse gases. Id. at 31,540. At the same time, however, the

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3618 Step II requirements will still reach fully 86% of the greenhouse gas emissions that would be covered using the statutory 100/250 tpy thresholds. Id. at 31,571. Thus, the Tailoring Rule will assure that the lion ’s share of the environmental benefits of full statutory implementation are secured, while preserving the integrity of the permit system and saving billions of dollars in administrative and compliance costs. 8 This tailoring of the statutory thres holds is effectuated through EPA’s revision of the definition “subject to regulation” in a way that li mits the reach of the terms “major source,” “major emitting facility,” and “major modification” in EPA’s PSD and Title V regulations. Id. at 31,580-81. Because PSD is administered through SIPs or a FIP, implementation plans may need to be amended to apply the revised definitions established in the Tailoring Rule , as may state programs under Title V. E. Proposed Im plementation Process Recognizing that the provisions of certa in States’ SIPs might not allow them to automatically apply these revised definiti ons without amending their SIP, EPA has issued two proposed rules which ensure that if a given State is not in a position to implement the permitting requirements fo r greenhouse gases by January 2, 2011, EPA can perform that task for that State, unti l the State is able to revise its SIP.

8 EPA estimated that application of the Step II thresholds would result in combined increased permitting costs to all state authorities of about $105 million per year, as compared to combined permitting costs of $22.5 billion per year when applying the statutory threshold. 75 Fed. Re g. at 31,540. The Step II measures will also relieve permit applicants (the stationary sources themselves) of nearly $50 billion per year in Title V compliance permitting costs under the tailored thresholds and another $5.5 billion under the PSD program. Id. at 31,597-99.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3719 Specifically, on September 2, 2010, EPA issued a proposed “SIP Call” to 13 States to

amend their SIPs to ensure that their PS D programs cover greenhouse gases and do

so at the levels established in the Tailo ring Rule. 75 Fed. Reg. 53,892. Also on September 2, 2010, EPA issued its Proposed FIP Rule. 75 Fed. Reg. 53,883 Under this Rule, if any State is unable to – or refuses to – amend its SIP, EPA will, as required under section 7410(c), issue a FIP for that State under which “EPA will be responsible for acting on permit applications for only the GHG portion of the permit , and the State will retain responsibility for the rest of the permit.” Id. at 53,890 (emphasis added). EPA is taking similar steps to ensu re that state Title V permitting programs are able to permit greenhouse gas sources consistent with the thresholds of the Tailoring Rule. 9

ARGUMENT

I. STANDARD FOR GRANTING A STAY A stay is an “extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing , carries the burden of persuasion.” Mazurek v. Armstrong , 520 U.S. 968, 972 (1997). In order to grant such extraordinary relief, the

Court must determine: (1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably

9 All of these proposed rules and contem plated procedures are intended to alleviate the concerns of permitting authorities. They are, however, not final and, therefore, not challenged in any petition for review. Desp ite this, Movants attack both their effectiveness and validity here. See Part II,B,2, infra

.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3820 injured absent a stay; (3) whether issu ance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

Nken v. Holder , 129 S. Ct. 1749, 1761 (200 9) (citation omitted). Here, Movants seek to stay four separate and independent agency actions. Though some Movants attempt to stay al l EPA actions based on alleged flaws in some, the standard under which agency acti ons are reviewed remains individualized:

each must be reviewed based on its own administrative record and based on the statutory factors applicable to that action. See CAA § 7607(d)(7); Nat’l Ass’n of Homebuilders v. Corps of Eng’rs , 417 F.3d 1272, 1282 (D.C. Cir. 2005) (“on APA review, [Corps’ permitting] action necessarily stands or falls on that administrative record and its statutory permitting authority under the CWA”). II. MOVANTS FAIL TO MAKE THE REQUIRED STRONG SHOWING THAT THEY ARE LIKELY TO SUCCEED ON THE MERITS A. Movants Are Not Likely to Establish that the Endangerment Finding Should be Deemed Invalid In the Endangerment Finding, the Admi nistrator determined that greenhouse gases in the atmosphere may reasonably be an ticipated to endanger public health and welfare. 74 Fed. Reg. at 66,497/2. A weal th of scientific information “compellingly supports” this finding. Id. That greenhouse gases slow the loss of Earth’s heat is a “basic scientific fact,” over which there is no dispute. See 75 Fed. Reg. at 49,564/1-2. Nor is there any real dispute that atmos pheric greenhouse gas levels are increasing, that this increase is driven largely by human activity, and that increased greenhouse

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 3921 gases in the atmosphere have an eff ect known as “radiative forcing.” Id . at 49,564/2- 65/1; see also Massachusetts , 549 U.S. at 504 (noting that “well-documented” increase in global temperatures has coincided with a si gnificant increase in the concentration of carbon dioxide in the atmosphere). 10 Multiple lines of evid ence indicate that average temperatures are increasing, climate change is occurring, and greenhouse gases are the primary driver of that change. 74 Fed. Reg. at 66,517/2-18/3; 75 Fed. Reg. at 49,564/1-67/1. The Administrator evaluate d this evidence and determined that both current and projected impacts of climate change may reasonably be anticipated to endanger public health and welfare. 74 Fe d. Reg. at 66,524/3-26/2, 66,530/3-35/3. In making the Endangerment Finding, the Administrator “[gave] careful

consideration to all of the scientific and te chnical information in the record.” 74 Fed. Reg. at 66,510/3. She relied primarily on thorough assessments of climate change science prepared by the Intergovernmenta l Panel on Climate Change, the United States Global Change Research Program, and the National Research Council, as the scientific and technical basis for the Endangerment Finding. Id. As EPA explained, these assessments: (1) comprehensively address the scientific issues the Administrator had to examine; (2) represent the current st ate of knowledge on those issues; and (3) underwent “rigorous and exacting...peer revi ew by the expert community, as well as

10 “Radiative forcing” refers to a change in the energy balance of the planet, and is not the same thing as climate ch ange. 75 Fed. Reg. at 49,565/1.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4022 rigorous levels of U.S. government review and acceptance.” Id . at 66,510/3-11/1. 11 This review process offered EPA “strong a ssurance” that the underlying research

material “has been well vetted by both the climate change research community and by the U.S. government,” and that these asse ssments “essentially represent the U.S. government’s view of the state of know ledge on greenhouse gases and climate change.” Id . at 66,511/1; see also RTC 1-14 (Ex. 2) (discussing IPCC development process). Movants nibble at the edges of the En dangerment Finding and the science on which it is based, flyspecking isolated pu rported deficiencies that, Movants contend, render that Finding unsupportable. These weak attacks cannot stand against the vast body of record evidence supporting the Admi nistrator’s conclusions. Movants have thus failed to demonstrate that they are likely to succeed on the merits of their challenge to the Endangerment Finding. 1. EPA Properly Cons trued and Applied the Legal Framework fo r the Endangerment Finding Section 7521(a)(1) directs EPA to determine whether the “air pollution” in question – the concentration of six well-mi xed greenhouse gases in the atmosphere –

11 Movants argue that EPA was not entitled to rely on these assessments because they allegedly were not crafted using “the s ame rules of decision that govern valid rulemaking in this country.” CRR Mot. 27; see generally id. at 26-27; Texas Mot. 15. Neither the IPCC nor any other body on whos e assessment the Administrator relied made any decisions concerning the Endangerme nt Finding. It is EPA’s job as the decisionmaker, not that of the IPCC or any other independent body, to follow applicable “rules of d ecision” – and EPA did so.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4123 “may reasonably be anticipated to endang er public health or welfare.” If EPA answers this question in the affirmative, then the Administrator’s task is to determine whether or not emissions of an “air pollu tant” – here, the aggregate group of these same six greenhouse gases – from new motor vehicles or engines “in [her] judgment cause, or contribute to” this “air pollution.” Id. The Act calls for the Administrator to make an endangerment finding when, in her judgment, she reasonably determines the statutory criteria are met, even if th ere are “varying degrees of uncertainty” in some of the underlying scientific and technical issues. See 74 Fed. Reg. at 66,505-06;

see also Massachusetts , 549 U.S. at 533-34. Movants’ legal argument focuses largely on the first part of this standard, i.e., whether greenhouse gases “may reasonably be anticipated to endanger public health or welfare.” Purporting to rely principa lly on this Court’s seminal decision in Ethyl Corp. v. EPA , 541 F.2d 1 (D.C. Cir. 1976) (en ba nc), Movants argue that to address this issue, EPA first must quantitatively defi ne specific risk factors Movants believe to be determinative of the endangerment question. 12 They then argue that EPA may only find that an endangerment exists if th e Agency analyzes the extent to which “car emissions contribute anything meaningful to the present level of GHGs in the atmosphere.” CRR Mot. 31; see also Texas Mot. 10-11.

12 See CRR Mot. 30: “What levels of te mperature, precipitation, or wind ‘endanger,’ and why? What is a ‘safe’ globa l temperature? Based on what criteria, for what populations, in what locations? What is a ‘safe’ ambient concentration of GHGs? Why? Most fundamentally, what level of GHG yields acceptable climate conditions?” See also id. at 31.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4224 Movants’ argument not only conflicts with the action-forcing instruction from the Supreme Court in Massachusetts , 13 but also stands Ethyl completely on its head, as the very point of Ethyl was to reject a similar attempt to throw up a string of empirical hurdles for EPA to clear before making an endangerment finding. In essence, Movants argue that the statute requir es a type of definitive factual finding – rather than an informed exercise of judgme nt – regarding endangerment, but this very argument has already been reje cted by this Court. Ethyl , 541 F.2d at 20-29. As EPA recognized, Ethyl emphasized that endangerment determinations in CAA provisions like this are properly regarded as “precautionary” in nature. 74 Fed. Reg. at 66,506-07. As such, “[r]egulatory action may be taken be fore the threatened harm occurs; indeed, the very existence of such precautionary legislation would seem to demand that regulatory action precede, and, optimally, prevent, the perceived threat.” Ethyl , 541

F.2d at 13. The Court thus stressed that in reviewing the Administrator’s endangerment determination “we will not demand rigorous step-by-step proof of cause and effect” (as petitioners in that case advocated). Id. at 28. Instead, the Court will uphold the determination as long as it is “rationally justified.” Id.

13 In Massachusetts , the Supreme Court made clear that EPA cannot decline to make an endangerment finding merely becaus e there is “some residual uncertainty;” only uncertainty that is “so profound that it precludes EPA from making a reasoned judgment as to whether greenhouse gases c ontribute to global warming” could justify such inaction. 549 U.S. at 534. Neither can the Administrator consider policy matters that “have nothing to do with” her ex ercise of judgment on the science of endangerment. Id. at 533-34.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4325 Movants’ argument that there can be no rational basis to find endangerment

unless EPA first defines the circumstances that would constitute a lack of endangerment is inconsistent with Ethyl . The Court there was explicit: that endangerment is a fact-specific case-by-ca se determination, with no specific minimum

threshold for either risk or severity of harm to show endangerment. Ethyl , 541 F.2d at 18-20; see also 74 Fed. Reg. at 66,509. Instead, EPA is to judge both the likelihood of harm occurring and the severity of the ha rm if it were to occur, as varying

combinations of risk and harm could all amo unt to endangerment. 541 F.2d at 18-20. Likewise here, EPA does not need to define the myriad possible combinations of risk of harm and severity of harm, covering the very wide range of climate and environmental circumstances involved, that would not constitute endangerment before it can make a fully rational judgment that the specific facts and circumstances here do in fact amount to endangerment. 14 As the Supreme Court noted in Massachusetts , Congress in the 1977 CAA amendments revised several “endangerment” provisions (including the provision at issue here) to replace the former “will en danger” language with the present “may reasonably be anticipated to endanger” lang uage for the express purpose of embracing Ethyl ’s precautionary, preventative approach and rejecting the type of empirical

14 Cf. Lead Indus. Ass’n v. EPA , 647 F.2d 1130, 1161-62 (D.C. Cir. 1980) (In determining the ambient level of an air pollu tant that is requisite to protect public health with an adequate margin of safety, under section 7409, EPA is not required to first define a protective ambient level and th en determine a margin of safety from that point.). Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4426 burden of proof advocated by the petitioners in that case (and in this one). See

Massachusetts , 549 U.S. at 506 n.7 (“Congress amend ed [§ 7521(a)(1)] in 1977 to give its approval to the decision in [Ethyl , 541 F.2d at 25], which held that the Clean Air Act ‘and common sense . . . demand regulatory action to prevent harm, even if the regulator is less than certain that harm is otherwise inevitable.’”). 15 In sum, EPA properly rejected the same arguments, advan ced by Movants here, that the Agency is required to define what is not endanger ment or is required to make specific, quantitative determinations of the risk of harm before making an endangerment finding, or, similarly, that the Agency must find that some defined minimum quantum of harm is likely to occur or actually occurring before it may find endangerment. 74 Fed. Reg. at 66,508-09. 16 Similarly, there is no merit to Mova nts’ suggestion that EPA cannot make an endangerment finding under section 7521(a) (1) unless it can also show that the emission standards resulting fr om such a finding would “fruitfully attack[]” the risk of

15 The House Committee Report accompanying the 1977 CAA Amendments, cited in Massachusetts , provides extensive discussion of Ethyl and Congress’ intent to endorse that decision by amending the Act’ s various “endangerment” provisions. See H.R. Rep. No. 95-294, at 43-51, reprinted in 1977 U.S.C.C.A.N. 1121-29. See also Massachusetts v. EPA , 415 F.3d 50, 76-77 (D.C. Cir. 2005) (Tatel, J., dissenting) (discussing this same legislative history), rev’d , 549 U.S. 497 (2007). 16 Movants cite Industrial Union Dept., AFL-CIO v. American Petroleum Institute , 448 U.S. 607 (1980), in support of thei r argument that EPA failed to provide an adequate record for review because it di d not adequately explain its decision. See CRR Mot. 35. But that case involved the ra tionality of the actual regulatory standard adopted by OSHA, not the type of threshold determination of risk and endangerment involved here.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4527 harm that is the basis for the finding. See CRR Mot. 34 (citing Ethyl , 541 F.2d at 31 n.62). This argument is based, almost en tirely, on one misleading quote from one footnote in Ethyl . When this quote is read in proper context, and in conjunction with the governing statutory provisions here, it clearly refutes rather than supports Movants’ argument. See 74 Fed. Reg. at 66,507-08. In the portion of Ethyl cited by Movants, the Court was specifically addressing ar guments that EPA’s endangerment finding should only have considered the incremental effects on public health of lead from fuel additives, not the cumulative effects of such lead comb ined with lead from other sources. The Court’s main point was that it believed the incremental approach advocated by petitioners there was in appropriate for gauging whether an endangerment was posed by lead-containing fuel additives. 17 By contrast, the Court pointed out (in the text quoted by Movants) that the incremental effect of lead from

fuel additives could be a relevant consideration in deciding what control requirements might later be appropriate to address that endangerment under the provisions of section 7545 in place at that time. 18 Thus, read in proper c ontext, the snippet of text on which Movants rely simply states that while the efficacy of potential regulatory

17 See Ethyl , 541 F.2d at 30-1 (stating that “Congress understood that the body lead burden is caused by multiple sources” and that “[i]t did not mean for ‘endanger’ to be measured only in incremental terms”). 18 Ethyl , 541 F.2d at 3 n.62 (“While the increm ental effect of lead emissions on the total body lead burden is of no practi cal value in determining whether health is endangered, it is of value, of course, in deciding whether the total lead exposure problem can fruitfully be attacked th rough control of additives.”); see also 74 Fed. Reg. at 66,508 (discussing this aspect of Ethyl ). Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4628 approaches may be relevant to the selection of control requirements under the CAA provision at issue in that case, it has no relevance to determining the threshold question of whether or not the air polluti on endangers public health or welfare. As EPA explained, under the provisions of the statute applicable here, Congress has separated the criteria governing the endangerment and contribution findings from the factors governing th e establishment of corresponding emission

standards. See 74 Fed. Reg. at 66,507. And as the Supreme Court made clear in

Massachusetts , the endangerment and contribution criteria are limited to the determination of whether greenhouse gas con centrations in the atmosphere constitute “air pollution” that may reasonably be anti cipated to endanger public health or welfare, and whether vehicle emissions cause or contribute to that air pollution. Id. (citing Massachusetts , 549 U.S. at 532-34). Questions regarding the effectiveness of any particular set of control strategies that may be applied to new motor vehicles are simply “not relevant to deciding whethe r air pollution levels in the atmosphere endanger” or “whether emissions of gree nhouse gases from new motor vehicles contribute to such air pollution.” 74 Fed. Reg. at 66,508. 19

19 This separation between the endangerme nt determination and the setting of standards is reflected in other “endangermen t” and standard-setting provisions in the Act, particularly those relevant to the establishment of NAAQS. The “endangerment” finding under section 7408(a )(1) can lead to the listing of an air pollutant, which leads to the development of “air quality criteria” under section 7408(a)(2), and then to establishment of a NAAQS under section 7409 at the level that is “requisite” to protect public health and welfare (the former with an “adequate

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4729 Moreover, even when EPA adopts corresponding emission standards, the statute does not require EPA to set such stan dards at a level that eliminates as much of the “endangerment” as possible, without consideration of other factors, and it does not spell out any minimum level of effect iveness for such standards in terms of alleviating the air pollution problem in questi on. Instead, the statute directs EPA to

set emission standards at a level that is reasonable overall in light of applicable environmental, cost and technology considerations. § 7521(a)(2); see also 75 Fed. Reg. 25,324, 25,403-04 (May 7, 2010) (dis cussing application of these standards in establishing vehicle emissions st andards for greenhouse gases). Movants’ approach would not only conflict with the statutory design, but

would also be unworkable in practice. In essence, it wo uld require EPA, at the time of the endangerment finding, to project th e result and effectiveness of “perhaps not one, but even several, futu re rulemakings stretching over perhaps a decade or decades.” 74 Fed. Reg. at 66,508. Contrary to Movants’ argument, there is nothing in the statute or applicable judicial preceden t that supports, let alone compels, such an irrational and unwieldy approach. 20

margin of safety”). EPA is not required to know the results of the subsequent NAAQS standard-setting to make the endangerment finding under section 7408(a)(1). 20 As noted, CRR faults EPA for no t answering the question whether “ car emissions contribute anything meaningful to the present level of GHGs in the atmosphere.” CRR Mot. at 31. EPA, how ever, made the only determination called for by Congress – whether such emissions from new motor vehicles cause or contribute to the air pollution that en dangers. CRR does not contest EPA’s contribution determination.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4830 2. EPA Exercised Its Own Judgme nt and Appropriately Reli ed on Assessments Prepared by the IPCC and Other Bodies as the Primary Scientific Basi s for the Endangerment Finding EPA did not in any way delegate its judgment by relying on the thorough assessments prepared by the IPCC, the USGCRP, and others as the primary scientific and technical basis for the Endangerment Find ing. 74 Fed. Reg. at 66,510/2-12/1; 75 Fed. Reg. at 49,581-82. In EPA’s view , these assessments were the best source materials for determining the state of science with regard to climate change. 74 Fed. Reg. at 66,511. The assessments synthesi ze a broad body of scientific studies, and ultimately demonstrate the broad scientific consensus on how greenhouse gases affect the climate, as well as the impact of pres ent and projected future climate changes on human health, society, and the envir onment. 75 Fed. Reg. at 49,581/2. EPA did not simply rubber-stamp these a ssessments. RTP 3-2 (Ex. 3); 75 Fed. Reg. at 49,581/1-82/1. In fact, EPA eval uated the assessments and their conclusions in several ways: by reviewin g the process employed to develop them, by reviewing their substantive content in light of in-house expertise, by taking into consideration the depth of scientific consensus the asse ssments represented, and by considering trends in the science. RTP 3-2 (Ex. 3). In addition, both EPA’s proposed

conclusions on the state of the science and its rationale for relying primarily on these assessment reports underwent notice and comme nt. 74 Fed. Reg. at 18,886, 18,894 (Aug. 24, 2009). A lengthy technical suppor t document detailing the scientific basis

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 4931 for the Endangerment Finding was twice subjected to public review, and was modified as warranted in response to commen ts. 74 Fed. Reg. 66,510/2-3. As this Court has stated frequently, an agency does not improperly delegate its authority or judgment merely by using wo rk performed by outside parties as the factual basis for its decision making. See U.S. Telecom Ass’n v. FCC , 359 F.3d 554, 568 (D.C. Cir. 2004); 21 United Steelworkers of Am. v. Marshall , 647 F.2d 1189, 1216- 17 (D.C. Cir. 1980). Consistent with thes e authorities, althou gh the IPCC assessment and other scientific assessments compile d and reviewed by EPA provided the principal source materials for EPA’s action, EPA exer cised its own judgment both regarding the state of the science and in finding endangerment based on this science. 22

In United Steelworkers , this Court rejected an argument that an agency had improperly relied on outside consultants where the petitioning party “[could not] buttress its general allegation of excessive reliance with any specific proof that the Assistant Secretary failed to confront personally the essential evidence and arguments” at issue. 647 F.2d at 1217. As the Court elaborated, “unsupported

21 In U.S. Telecom Ass’n , the D.C. Circuit concluded that an agency had acted unlawfully by expressly sub-delegating its decision-making authority to state commissions. 359 F.3d at 565. Movants do not allege that EPA expressly delegated its Section 7521 (a) authorit y, nor did EPA do so. 22 See, e.g. , 74 Fed. Reg. at 66,497/2 (“The Administrator has determined” that the body of scientific evidence compellingly supports an endangerment finding; major assessments by USGCRP, IPCC, and others “serve as the primary scientific basis supporting the Administrator’s endangerment finding”); see generally id. at 66,497/2- 99/2; RTP 3-2 (Ex. 3) (describing numerous “actions taken that evidence EPA’s comprehensive and in-depth exercise of judgment”).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5032 allegation[s]” could not “overcome the pres umption that agency officials and those who assist them have acted properly.” Id. Movants’ conclusory assertion that the Administrator did not exercise her own judgment, see, e.g . CRR Mot. 24-26, Texas Mot. 12-15, is not only “unsupported” by “specific proof,” but it is directly contradicted by the record. Neither do Mo vants cite any legal authorities to support their argument that an independent exercise of judgment required EPA to re-examine the thousands of studies reviewed, analyzed, and synthesized by the IPCC, the USGCRP, and others (see CRR Mot. 25; Texas Mot. 12) – in other words, to expend vast resources re-doing work already done by highly-qualified bodies, carefully reviewed by EPA, and subjected to public comment. Movants’ contention that EPA erred in relying on assessment reports without placing the underlying studies in the admini strative record is equally meritless. See Texas Mot. 17; CRR Mot. 29. This Court ha s flatly rejected this argument in prior

cases under the Act. See Coalition of Battery Recyclers Ass’n v. EPA , 604 F.3d 613, 622-23 (D.C. Cir. 2010); American Trucking Ass’ns v. EPA , 283 F.3d 355, 372 (D.C. Cir. 2002) (“requiring agencies to obtain an d publicize the data underlying all studies on which they rely ‘would be impractical and unnecessary’”)(citation omitted). 3. “Climategate” does not undercut the reliability of the IPCC Report

Trying to shore up their allegation th at EPA erroneously relied on the IPCC assessment reports, Movants point to alleged deficiencies in the IPCC’s assessment of climate change science and the so-called “Climategate” e-mails. CRR Mot. 27-29;

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5133 Texas Mot. 16-17. Movants have not, howeve r, demonstrated that minor and isolated errors undermine the weight of scientific authority on which the Administrator relied in making the Endangerment Finding. See supra at 20-22; see generally 75 Fed. Reg. at 49,557/1-58/2 (reviewing “Climategate” allegations and concluding that the scientific findings underlying the Endang erment Finding remain “robust, credible, and appropriately characterized by EPA”). Movants point first to an acknowledged misstatement concerning the projected rate at which Himalayan glaciers are receding. 23 CRR Mot. 27; Texas Mot. 16 n.2. As EPA explained when this issu e was raised in the petitions for reconsideration, this particular statement was one error in one study out of a multi-volume assessment containing thousands of pages of findings and conclusions. RTP 2-2 (Ex. 4); see also 75 Fed. Reg. at 49,558/1, 49,576/2-77/1. 24 More importantly, EPA did not rely on this projection in the Endangerment Finding. Id. An isolated error concerning the projected rate of recession in Himalayan glaciers does not undermine the overall climate change findings, nor does it have any meaningful implication for the

Administrator’s determination that elev ated atmospheric concentrations of

23 CRR erroneously claims that flaws in the IPCC assessment process led India to withdraw from the IPCC. CRR Mot. 27. CRR cites a comment submitted with a petition for reconsideration, in response to which EPA demonstrated that petitioners had mischaracterized the quoted Indian of ficial’s position. RTP 2-23 (Ex. 4); see generally 75 Fed. Reg. at 49,578/1-79/2. 24 Even then, the error went only to the projected rate at which Himalayan glaciers are receding, not to the fact that they are receding. See RTP 2-2 (Ex. 4). Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5234 greenhouse gases may reasonably be anticipate d to endanger public health and welfare

in the United States . Id. at 49,558/1-2; 74 Fed. Reg. 66,514. CRR also cites a single e-mail from Dr . Phil Jones, a co-author of some IPCC assessment reports, as purported evidence th at “IPCC’s assessment of climate science was neither transparent nor objective.” C RR Mot. 28. The full e-mail demonstrates only that Dr. Jones personally disapproved of the quality of certain studies (which were, in any event, ultimately included in the IPCC assessment). RTP 2-27 (Ex. 4).

EPA’s conclusion that this isolated incide nt does not undermine the validity of the

IPCC’s assessment is similar to that reache d separately by the Independent Climate Change E-Mails Review Investigation. 25 Id. at 58. Texas points to the August 30, 2010 InterAcademy Council’s independent report to the United Nations as supposedly identifying significan t flaws in the IPCC review process. Texas Mot. 15-17. The Council’s Re port postdates even EPA’s decision on the petitions for reconsideratio n, and thus it cannot be part of the

administrative record or a basis for review in this matter. To the extent that the Court deems the report relevant, however, it is important to note that while the Council

drew no conclusions about the scientific vali dity of the IPCC assessment reports, it recognized that “many scientists noted th at neither the leaked e-mails nor the IPCC

25 This Review was called for by the University of East Anglia following the publication of e-mails from that Universi ty’s Climatic Research Unit. Although funded by the University, the Review’s work and findings are wholly independent. See http://www.cce-review.org/About.php (last visited October 26, 2010).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5335 errors undermined the principal scientific findings regarding human contributions to climate change.” IAC 7-8 (Ex. 5). 26 With regard to the IPCC assessment process, the

Council concluded that while there was room for improvement, the existing process

“has been successful overall and has served society well.” IAC 51 (Ex. 5). Movants have, in sum, failed to demonstrate that a bare handful of insignificant, isolated errors in the exhaustive IPCC assessment delegiti mize the vast bulk of the scientific statements and findings contained in that and other assessments, or rendered EPA’s decision to rely on those assessments unre asonable, arbitrary or capricious. See 75 Fed. Reg. at 49,558/1-2; Co alition of Battery Recyclers , 604 F.3d at 623-24.

4. The Record S upports EPA’s Scientific Conclusions There is no real dispute over most of the scientific underpinnings of the Endangerment Finding. See supra at 20-21. CRR’s attack is directed primarily at a single point: EPA’s assessment of the exte nt to which climate change observed to date is caused by the undisputed human-i nduced increase in atmospheric greenhouse gases. CRR Mot. 38-42. CRR’s limited and scattered attack on the extensive evidence

26 The Council does point to the “weak evidentiary basis” for one conclusion regarding the potential economic cost associated with sea level rise. See Texas Mot. 17. The Council made this statement b ecause the IPCC based this conclusion on a small number of unpublished studies. IAC 33 (Ex. 5). There are, however, many well-documented physical and ecological impact s from sea level rise discussed in the TSD for the Endangerment Finding. See TSD at 35-38 (Ex. 6). The Administrator relied on this evidence, not on the IPCC’s c onclusions on potential economic costs, in making the Endangerment Finding.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5436 supporting EPA’s conclusions regarding climat e change is, however, rebutted by the

vast administrative record.

CRR contends that EPA created a “false dilemma” by allegedly evaluating only a single cause of climate change. 27 CRR Mot. 38-39. The record demonstrates, however, that EPA considered multiple potential influences on climate. 74 Fed. Reg. at 66,517/2-518/3. Neither was EPA’s determination based on the simplistic assumption that “[t]he entire climate syst em... is... controlled by a thermostat having only one knob.” CRR Mot. 42. EPA acknowledged that both natural and anthropogenic factors have contributed to observed global warming over the past 50 years. 74 Fed. Reg. at 66,518/2. EPA’ s ultimate conclusion that anthropogenic greenhouse gas emissions have caused most of the past half century of warming is based on multiple lines of evidence. The first line of evidence arises from our basic physical understand ing of the effects of changing concentrations of [greenhouse gases], natural factors, and other human impacts on the climate sy stem. The second line of evidence arises from indirect, historical estimates of past climate changes that suggest that the changes in global surface temperature over the last several decades are unusual.... The third line of evidence arises from the use of computerbased climate models to simulate th e likely patterns of response to the climate system to different forcing mechanisms (both natural and anthropogenic).

27 CRR appears to argue that EPA was required to evaluate not only known possible causes of climate change, but also unknown factors that might affect the global climate. See CRR Mot. 39-40. EPA was not, however, required to invent (and then eliminate) endless possible ca uses of climate change. Cf . Vermont Yankee Nuclear Power Corp. v. NRDC , 435 U.S. 519, 551 (1978) (“common sense” suggested that NEPA statement of alternatives was not want ing “simply because the agency failed to include every alternative device and thou ght conceivable by the mind of man”).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5537 RTC 3-3 (CRR Mot. Ex. 11). The May 2010 assessment of the science of climate change by the National Research Council of the National Academies of

Science is a clear affirmation of EPA’s sc ientific judgment. 75 Fed. Reg. at 49,558/1-2. CRR also points to short-term stretche s of ten years or less during which increases in greenhouse gas leve ls do not correlate to increases in temperature. CRR Mot. 38-39. As EPA explains in the same response to comments that CRR cites, however, the relationship between warm ing and greenhouse gas emissions “is complex and non-linear.” RTC 3-4 (CRR Mot. Ex. 11). Precisely because greenhouse gas emissions are not the only determinant of temperature change, examining trends over five to ten years provides only li mited insight into the long-term trend in temperatures (and in fact may be misleading on that point). Id. 28 CRR further argues that because ther e are uncertainties regarding some influences on climate, EPA cannot reasonabl y link recent warming to anthropogenic greenhouse gas emissions. 29 CRR Mot. 40-42. This argument reflects a fundamental

28 CRR mischaracterizes EPA’s position as “warming is evidence of global warming, and lack of warming is evidence of global warming.” CRR Mot. 39. EPA did not cite short-term temperature stabilit y as evidence of warmin g. It stated only that the existence of short periods during which average temperatures remain stable, or even drop, does not demonstrate that there is no cause-and-effect relationship between greenhouse gas concentrations an d long-term global temperature trends. RTC 3-4 (CRR Mot. Ex. 11). 29 CRR errs in stating that the three “primary climate drivers,” CRR Mot. 41, identified by the IPCC are listed in or der of importance. The IPCC makes no claim about the relative importance of these factor s. CRR’s claim that “there is substantial

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5638 misunderstanding of the science of climate ch ange. First, the fact that the percentage of carbon dioxide in the atmosphere appears to be low (and the proportion attributable to anthropogenic emissions ev en lower) does not mean anthropogenic greenhouse gas emissions have not caused r ecent warming. As EPA explained, a gas that composes only a small percentage of th e atmosphere can nonetheless have a large radiative effect. RTC 2-19 (Ex. 7). In addition, the best estimates of natural external

climate forcers over the last several decades (e.g., solar activity and volcanoes) are that they have had a cooling, not warming, effect . TSD at 50 (Ex. 6); RTC 3-23 (Ex. 8). The pattern of observed warming is consiste nt with warming from greenhouse gases, but inconsistent with warming from natural forcings. TSD at 49-50 (Ex. 6); RTC 3-23 (Ex. 8); 75 Fed. Reg. at 49,566. It is th erefore unlikely that there can be a purely natural explanation for the recent and signific ant warming. 75 Fed. Reg. at 49,566. Indeed, observed warming can only be reproduced with models that contain both natural and anthropogenic forcings. Id. Neither did EPA “summarily reject,” C RR Mot. 39, evidence conflicting with EPA’s conclusions. EPA’s proposed judg ment on the science and on endangerment was subjected to public comment. 74 Fed. Reg. at 18,898. Before issuing the final Endangerment Finding, the Agency reviewed and considered all comments received, and it produced an eleven-volume response a ddressing all significant science, legal,

uncertainty about the influence of the two mo st important” climate drivers, CRR Mot. 41, is thus inaccurate.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5739 and policy issues raised by commenters. Id. Where evidence or hypotheses contrary to EPA’s conclusions were rejected, it was because they were not consistent with the “deep body of science that has been built up over several decades and the direction it points in,” 75 Fed. Reg. at 49,558, not du e to any lack of analysis on EPA’s part. 5. EPA Reasonably Defined the Releva nt “Air Pollution” and “Air Pollutant” to Be a Mix of Six Greenhouse Gases Section 7521(a) authorizes EPA to prescr ibe regulations establishing standards for “the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in [E PA's] judgment cause, or contribute to, air pollution which may reasonably be expected to en danger public health or welfare.” (emphasis added.) Texas’ attack on EPA’s de termination that both the “air pollution” and “air pollutant” at issue consist of a mix of six greenhouse gases even though motor vehicles emit only four of those gase s, Texas Mot. 18-19, is wholly unfounded. In the Endangerment Finding, EPA defined the “air pollution” that may reasonably be anticipated to endanger public health and welfare as “the combined mix of six key directly-emitted, long-lived and we ll-mixed greenhouse gase s.” 74 Fed. Reg. at 66,516/3. Together, these six greenhou se gases “constitute the root cause of human-induced climate change and the resulting impacts on public health and

welfare.” Id. This is true regardless of whether new motor vehicles emit these gases. EPA further defined the “air pollutant” that contributes to endangerment to be an “aggregate group of the same six . . . greenhou se gases.” 74 Fed. Reg. at 66,536/3.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5840 This was reasonable for several reasons, incl uding that these gases are all directlyemitted, long-lived, and have well-understood radiative forcing effects. 74 Fed. Reg. at 66,537/1. Defining an air pollutant as a mix of compounds wi th related properties is also consistent with past EPA practice under the Act. Id. at 66,540/3-41/3. 30

The fact that motor vehicles do not emit all of the six greenhouse gases included in the definitions of “air polluti on” and “air pollutant” does not undermine

the reasonableness of those definitions. 31 See 74 Fed. Reg. at 66,541/1 (fact that six

substances share common relevant attributes “is true regardless of the source category being evaluated for contribution”). As EP A explained, moreover, the Administrator

would have made the same contribution find ing even if the Agency had defined the air pollutant as a group of the four comp ounds that Texas acknowledges are emitted by Section 7521(a) sources. 74 Fed. Reg. at 66,541/2; Texas Mot. 18-19. In sum, Movants have failed to demons trate that they are likely to succeed on the merits of their challenge to the Endangerment Finding. B. Movants Are Not Likely to Establish that the Vehicle Rule Should Be Deemed Invalid

30 “Air pollutant” is statutorily defined as “any pollution agent or combination of such agents ...which is emitted into or otherwise en ters the ambient air.” § 7602(g)(emphasis added). 31 Texas asserts that EPA “acknowledge d in the Endangerment Finding that emissions of [nitrous oxide and methane] do not endanger the public health or welfare.” Texas Mot. 18-19 . Texas cites the Vehicle Rule, not the Endangerment Finding – and in neither did EPA state that these two gases do not endanger public health and welfare.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 5941 Movants do not challenge any substantiv e aspect of the Vehicle Rule. Their various Vehicle Rule merits arguments boil do wn to either the untenable position that EPA acted unlawfully by promulgating st andards that Congress directed EPA to promulgate, or an improper effort to relitig ate issues already decided by the Supreme

Court in Massachusetts . Neither position holds any likelihood of success. 1. EPA Did Not Err by Promulgating Standards That It Had a Nondiscretionary Duty to Promulgate CRR and Texas argue that EPA – having made an Endangerment Finding – should have declined to promulgate green house gas emission standards because, in Movants’ view, the standards do not do enough to prevent global climate change. See CRR Mot. 43-45; Texas Mot. 22-24. But no thing in section 7521 allows EPA to refuse to promulgate standards – much less compels EPA to refuse to do so – on grounds that vehicle standards will not by themselves cure global climate change. To the contrary, section 7521 plainly requires EPA to promulgate standards for air pollutants that contribute to an endangerment, regardless of how much of the endangerment can be ameliorated through such standards. Section 7521(a)(1) provides in relevant part that EPA “ shall by regulation prescribe . . . standards” for any air pol lutant from new motor vehicles that contributes to an endangerment. (emphasi s added.) The word “shall” indicates a

command that admits of no discretion on the part of the person instructed to carry

out the directive. Ass’n of Civilian Technicians v. FLRA , 22 F.3d 1150, 1153 (D.C.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6042 Cir. 1994). Put simply,“[i]f EPA makes a finding of endangerment, the Clean Air Act requires the agency to regulate em issions of the deleterious pollutant from new motor

vehicles.” Massachusetts , 549 U.S. at 533. Moreover, contrary to Movants’ characterizations, the Vehicle Rule will materially address the threat of climate ch ange. As the Supreme Court acknowledged

in Massachusetts , “the United States transportation sector emits an enormous quantity of carbon dioxide into the atmosphere,” an d “[j]udged by any standard, U.S. motorvehicle emissions make a meaningful contribution to greenhouse gas

concentrations... .” Id. at 524-25. The Vehicle Rule wi ll produce huge reductions in greenhouse gas emissions. EPA project s that the Rule will generate CO 2 e reductions

of 962 million metric tons over the lifeti me of model year 201 2-2016 vehicles. 75 Fed. Reg. at 25,490, Table III.F.1-2. Assu ming the standards continue through later model years, by 2050 the CO 2 e reductions will cons titute a 22.8 percent reduction

from the levels of CO 2 e estimated to be emitted from the U.S. transportation sector without the rule, a 6 percent reduction of CO 2 e emitted from all domestic activities over the same period without the ru le, and a 0.8 percent reduction of CO 2 e emitted

from the entire world’s activities over the same period without the Rule. 75 Fed. Reg. at 25,489, Table III F.1-1. The Rule will result in measurab le reductions in atmospheric

CO 2 concentrations, global mean surface temperature, sea level rise, and ocean acidifying effects. 75 Fed. Reg. at 25,496, Table III.F.3-1.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6143 The Vehicle Rule also will produce substantial non-climate-change related environmental and energy security benefits. It will significantly reduce emissions of non-greenhouse gas pollutants and will re duce petroleum imports, thus reducing financial and strategic risks caused by potenti al supply disruptions. 75 Fed. Reg. at 25,497, 25,531-34, Tables III.G-1, III.H.8-1 -2. EPA assessed the monetary benefits of the Rule and found its net present value (i .e., benefits minus costs) to be over $643 billion and maybe as much as $2 trillion. 75 Fed. Reg. at 25,536-37, Table III.H.10-3. But regardless of the scope of the Rule’s benefits, EPA di d not err by promulgating standards that it had a nondiscretionary duty to promulgate. CRR and Texas’ related argument – that EPA should have declined to regulate greenhouse gas emissions from motor vehicles in view of NHTSA’s separate authority to set fuel efficiency stan dards – similarly fails. See CRR Mot. 45-46; Texas Mot. 23- 24. This argument was specifically c onsidered and rejected in Massachusetts , where EPA contended (as CRR and Texas do now) that it had discretion to decline to regulate greenhouse gas emissions from mo tor vehicles given NHTSA’s authority to adopt fuel economy standards under EPCA. The Supreme Court disagreed, explaining: [T]hat [NHTSA] sets mileage standards in no way licenses EPA to shirk its environmental responsibilities. EPA has been charged with protecting the public’s “health” and “welfare,” 42 U.S.C. § 7521(a), a statutory obligation wholly independent of [NHTSA’s] mandate to promote energy efficiency. The two obligations may overlap, but there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6244 549 U.S. at 532. Movants ca nnot distinguish Massachusetts , and they do not even try. Further, CRR and Texas mischaracterize the Vehicle Rule to the extent they suggest that EPA standards do not accompli sh anything beyond what is accomplished by CAFE standards. There are, in fact , important differences arising from the agencies’ respective authorities under the CAA and EPCA. See supra at 6-7. For example, EPA’s standards encompass reductions in greenhouse gases that can be achieved by air-conditioning system im provements, which NHTSA had no statutory authority to address. In addition, manufac turers may opt to pay a fine in lieu of meeting CAFE standards, an option not available under EPA’s program. 75 Fed. Reg. at 25,342. The upshot is that EPA st andards are projected to result in 47 percent greater reductions – many hundreds of mil lions of tons – than projected under the

CAFE standards over the lives of model year 2012-2016 vehicles. 75 Fed. Reg. 25,636, Table IV.G.1-4; 75 Fed. Reg. 25,490, Table III.F.1-2. 2. EPA Appropriately Considered All Required Impacts

NAM and Texas contend that EPA had an obligation, in establishing standards under section 7521, to assess compliance cost s that might be incurred by stationary sources indirectly under other statutory programs (i.e., the PSD and Title V programs). NAM Mot. 33-40; Texas Mo t. 20-22. They are mistaken. Nothing requires EPA, upon promulgating section 7521 standards, to assess costs to stationary sources arising indirectly under other statutory provisions.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6345 As noted, section 7521(a)(2) provides: Any regulation prescribed under para graph (1) of this subsection . . . shall take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period. The “cost of compliance within such pe riod” phrase refers to the costs to vehicle manufacturers subject to regulation under section 7521, and to the period of time vehicle manufacturers need to develop technology to meet vehicle standards. 32 Although EPA had no duty to consider indirect stationary source costs, EPA did, in fact, consider such costs in the context of deciding whether it should delay setting standards. See 75 Fed. Reg. at 25,402; Vehicle RTC 7-67 to 7-68 (Ex. 9). EPA identified compelling reasons in support of its decision to promulgate standards now. EPA explained first that although it had some discretion with respect to the timing of standards, its discretion was not unlimited , and that three years had already passed since the Supreme Court had directed EPA to take appropriate actions under section 7521. 75 Fed. Reg. at 25,402. EPA explai ned further that any additional delay in setting standards would frustrate impl ementation of the National Program for regulation of motor vehicles, resulting in substantial prejudice to vehicle

32 See Motor & Equip. Mfrs. Ass’n v. EPA , 627 F.2d 1095, 1118 (D.C. Cir. 1979) (“Section [7521's] ‘cost of compliance’ co ncern, juxtaposed as it is with the requirement that the Administrator prov ide the requisite lead time to allow technological developments, refers to the economic costs of motor vehicle emission standards and accompanying enforcement procedures,” and does not encompass indirect costs incurred by the automotive parts and services industry.).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6446 manufacturers and consumers. Instead of be ing able to comply with one consistent set of federal greenhouse gas and fuel economy standards under the CAA and EPCA, vehicle manufacturers would be compelled to comply with three separate federal and state regulatory regimes: NHTSA’s CAFE standards, California’s greenhouse gas standards (in California and all States that have adopted them), and EPA’s greenhouse gas standards (when later promulgated). As a result, automakers would be unable to sell a single fleet nationally. 75 Fed. Re g. at 25,326. EPA further explained that consideration of indirect stationary source costs has no relevance to the issue of the appropriate level at which to set vehicle emission standards. Vehicle RTC 5-456 (Ex. 9). EPA additionally explained that it intended to address concerns about burdens associated with stationary source permitti ng in other EPA actions focused specifically on implementation of the PSD program, and EPA subsequently did just that, in the Tailoring Rule. Indeed, in that rulemakin g EPA extensively assessed impacts to both permitting authorities and stationary sources arising from the application of PSD and Title V programs, including specific projecti ons of costs, permit application burdens and economic impacts. 75 Fed. Reg. at 31,533-41, 31,595-602. In short, EPA provided compelling reasons in support of its decision not to further delay vehicle standards that it had a nondiscretionary duty to promulgate. NAM and Texas’ citation to the Regula tory Flexibility Act (“RFA”) is also unavailing. See NAM Mot. 35-36; Texas Mot. 21. This Court “has consistently

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6547 rejected the contention that the RFA applies to small businesses indi rectly affected by the regulation of other entities.” Ce ment Kiln Recycling Coalition v. EPA , 255 F.3d 855, 869 (D.C. Cir. 2001). To the extent th at small entities must comply with PSD permitting program requirements after gree nhouse gas regulations for motor vehicles go into effect, such complia nce is imposed by section 7475 and not by the Vehicle

Rule. See Vehicle RTC at 5-454-55 (Ex. 9). 33

C. The PSD and Title V Pr ograms of the Clean Air Act Apply to Greenhouse Ga s Emissions from Stationary Sources In the Timing Decision, EPA concluded that the Vehicle Rule automatically “triggers” application of PSD and Title V for greenhouse gases in two ways: it requires sources to take greenhouse gases into account in determining whether they need to obtain PSD and Title V permits, and it requires that certain PSD permits contain limits on greenhouse gas emissions. 34 EPA did not have discretion to avoid

33 Similarly, NAM’s scattershot arguments (NAM Mot. 36-37) regarding the Unfunded Mandates Reform Act (“UMRA”) , the Paperwork Reduction Act (“PRA”), CAA Section 317, and Executive Orders 12898 and 13211 lack any merit. See Allied Local & Reg’l Mfrs. Caucus v. EPA , 215 F.3d 61, 81, n.22 (D.C. Cir. 2000) (failure to prepare UMRA cost-benefit analysis may not be a basis for invalidating rule); Tozzi v. EPA , 148 F. Supp. 2d. 35, 47 (D.D.C. 2001) (f ailure to comply with PRA not subject to judicial review) ; § 7617(e) (prohibiting judicial re view); Exec. Order Nos. 12898 and 13211 (specifying they do not create any ri ght of judicial review). Moreover, EPA fully documented its compliance with thes e provisions and executive orders in promulgating the Vehicle Rule. See, e.g. , 75 Fed. Reg. at 25,531-34, 25,539-43; Vehicle RTC 5-456; Ch. 8 of Draf t Regulatory Impact Analysis. 34 Unless otherwise indicated, the phrase “Timing Decision” in this section refers both to EPA’s PSD Reconsideration action, see 75 Fed. Reg. 17,004, and the portions of the Tailoring Rule that codify that action, see 75 Fed. Reg. at 31,606-07. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6648 or delay this conclusion based upon poten tial implementation problems: “Once EPA has determined to regulate a pollutant in some form under the Act and such regulation is operative on the regulated acti vity, the terms of the Act make clear that the PSD program is automatically applicable .” 75 Fed. Reg. at 17,020/2-3; see also id. at 17,023/2-3 (similar conclusion for Title V). Movants can only prevail in their attack on the Timing Decision if they can persuade the Court to read limits into the Ac t’s provisions that are not present in its language, with respect to both applicability to covered sources and the pollutants that a permit must control. Movants’ arguments must fail under step one of Chevron USA Inc., v NRDC for the reasons below. 467 U.S. 837, 843-44 (1984). Even if the Court reaches step two of a Chevron analysis, however, Movants’ obligation is not satisfied simply by showing that their re ading of the statute has some “advantage” over EPA’s reading. See CRR Mot. 55. Rather, Movants must show that EPA’s reading is unreasonable . Here, it is Movants’ proposed alternative reading, not EPA’s, that is an unreasonable interpretation of the Act.

1. The Emission of “Any Pollutant ” May Subject a Source to PSD The PSD program applies, by the express terms of the Act, to the construction or modification of each stationary source that “emit[s], or has the potential to emit, [a specified quantity] per year or more of any air pollutant .” §§ 7475, 7479(1) (emphasis added). Movants would give a narrow readin g to this broad language, arguing that a source is subject to PSD only if it emit s “a particular NAAQS pollutant [in] a

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6749 sufficient amount

. ” NAM Mot. 20. But this Court effectively rejected this very argument years ago, holding that a source may be a major emitting facility (and therefore potentially subject to PS D) by reason of its emission of “ any air pollutant . . . even though the air pollutant . . . may not be a pollutant for which NAAQS have been promulgated.” Alabama Power v. Costle , 636 F.2d 323, 352 (D.C. Cir. 1979) (emphasis added). EPA subsequently prom ulgated a regulation effectuating this holding, which has been in place for more than 30 years. See 45 Fed. Reg. at 52,676, 52, 710/3-11/1 (Aug. 7, 1980) (Ex. 10); see also id. at 52,711/2. 35 EPA’s interpretation is “required by Alabama Power and sections [7475(a)] and [7479(1)] of the Act,” id. at 52,711/1; it is not an exercise of EPA’s discretion. The “modification” provision of Sect ion 7479 also shows how a source may be included in the PSD program by virtue of its emission of non-NAAQS pollutants. The type of “modification” that may require a PSD permit under § 7475(a) is defined in section 7479(1)(C) to include any “modif ication” described in section 7411(a). That section, in turn, defines a “modific ation” as a change “which increases the

amount of any air pollutant. ” § 7411(a)(4) (emphasis added). Thus, in determining the

35 NAM argues that section 7479(1) “ca nnot be read literally,” NAM Mot. 20, because EPA announced in 1980 that it would apply PSD to a source only if the source emits a sufficient quantity of any po llutant “subject to regulation.” This longstanding refinement does not support NAM’s conclusion, however, because there is no reasonable interpretation of section 7479(1) that would exclude pollutants actually regulated under the Act from the definition of “any polluta nt.” Even if EPA’s historical reading of section 7479(1) is a depart ure from the meaning of the text, NAM proposes an even greater departure.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6850 applicability of the PSD program to sour ces, the Act itself re quires EPA to look beyond the statutory provisions establishing PSD to provisions that are not limited to NAAQS pollutants. 36 Movants essentially ignore these applic ability provisions, deriding them as

mere definitions of “no substantive cons equence.” NAM Mot. 20, CRR Mot. 50. Setting aside the purely semantic question of whether a definition is “substantive,” EPA and the Court cannot ignore the clear st atutory requirement that if a source is a major emitter of any regulated pollutant, it is subject to the PSD program.

2. The Act Imposes PSD Permit Requirements in All Areas That Are “Attainment” or “Unclassifiable” For Any Pollutant A source described above – i.e., a major em itter of “any air pollutant” that will

be constructed or modified – must obtain a PSD permit if it will be located in an “area to which this part applies.” § 7475(a). “This part” refers to Title I, part C of the Act, which establishes the PSD program and includes requirements for all areas that are designated as “attainment” or “unclassi fiable” for any NAAQS pollutant. § 7471.

EPA thus determined in 1980 that a source must obtain a PSD permit if it will be located in an area designated “att ainment” or “unclassifiable” for any NAAQS pollutant, regardless whether it emits more than the threshold quantity of that same

36 Movants’ omission of any reference to this modification provision is particularly salient in the context of thei r stay motion, as the majority of new PSD permit requirements would result from modifications. See 75 Fed. Reg. at 31,538/1.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 6951 pollutant. 45 Fed. Reg. at 52,710/3-11/1 (Ex. 10). 37 NAM and Texas argue that this longstanding interpretation of the Act ca nnot be correct because, regardless of whether a source meets the definition of “major emitting facility,” it is subject to PSD only if it will be located in an area design ated as “attainment” or “unclassifiable” for a specific NAAQS pollutant that the source emits at levels above the statutory

threshold. See NAM Mot. 17-19; Texas Mot. 25-27. The Act, however, contains no such limi tations. Section 7475(a) takes the set of “major emitting facilities” identified in section 7479(1) and further defines which of those sources must obtain a PSD permit, but it is the “area,” not the pollutant, that

determines whether “thi s part applies.” See § 7475(a). Under EPA’s interpretation, “this part applies” to all areas of the country (because every area is designated “attainment” or “unclassifiable” for at least one NAAQS pollutant), but this is a necessary consequence of a liter al reading of the Act. See 45 Fed. Reg. at 52,711/1-2 (Ex. 10). It is therefore irrelevant whethe r an area can be designated “attainment” or “unclassifiable” for greenhouse gases per se. See NAM Mot. 17, Texas Mot. 26-27. 38

37 NAM admits that EPA first took this position years ago and claims it was “unlawful.” NAM Mot. 19. However, EP A has consistently applied this position since that time, without giving rise to challenges. See 75 Fed. Reg. at 31,561/3-62/1. This not only makes the position presumptively reasonable, see id. at 31,562/1, but any challenge to it is also now time-barred. See infra pp. 56-57.

38 NAM claims, see Mot. 18-19, that this approach ignores Alabama Power . In that case, this Court held that “this part” does not “apply” to sources located “outside of clean air areas.” 636 F.2d at 367; see id. at 364-65. EPA’s regulations comply with this holding, exempting sources that are located in a non-attainment area for a

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7052 Any remaining ambiguity on this point disappears when section 7475(a) is read in conjunction with section 7479(1), which provides that the PSD program applies to any source that is a major emitter of “any pollutant.” Although the broad definitions in section 7479(1) cannot expand the scope of the PSD permit requirement in section 7475(a), neither should section 7475(a) be read to make the broad definition of “major emitting facility” in section 7479(1) superfluous. Under Movants’ strained reading, such a facility would be subject to section 7475(a) due to its emission of “any pollutant,” but this would have absolutely no effect unless that source also emitted a NAAQS pollutant at or above the statutory threshold and was located in an

“attainment” or “unclassifiable” area for that same pollutant. If Congress intended to limit the PSD program as Movants suggest, it chose unusually obscure language by which to do so, when it could easily have defined “major emitting facility” as a source emitting NAAQS pollutants, instead of “any pollutant,” at sufficient levels. NAM argues, and UARG agrees, that the PSD applicability provisions cannot apply to greenhouse gases because the PS D program is concerned primarily with local air quality. NAM Mot. 25; UARG Resp. 15- 17. Citing section 7471, these parties

would insert the word “local” into sections 7475 and 7476, where it does not appear. In contrast, Congress dem onstrated its concern for interstate air quality in the PSD

pollutant from PSD permit requir ements for that pollutant. See 40 C.F.R. § 52.21(i)(2). Even if this carve-out is n ecessary for an area’s nonattainment pollutants, however, the PSD program may still “apply” to that area for all other pollutants because it is designated “attainment” or “unclassifiable” for some pollutant.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7153 program. See § 7470(4). Congress may not have ex plicitly addressed air pollutants of global effect, but the language Congress did use simply does not limit the program to pollutants of local effect. See infra pp. 57-59

3. PSD Permits Must Address All Pollutants Regulated Under the Act In addition to reading limits that do not exist into the source-specific and geography-specific provisions of the statut e, Movants would limit the plain language of the Act that defines which pollutants ar e subject to control. PSD permits must require BACT for “each pollutant subject to regulation under this chapter .” § 7475(a)(4) (emphasis added). “This chapter” re fers to Title 42, chapter 85 of the U.S.

Code – the entire Clean Air Act. Greenhouse gase s are a “pollutant,” Massachusetts , 549 U.S. at 532, and the Vehicl e Rule imposes actual cont rols on greenhouse gases. Thus, under the express terms of the statute, PSD permits must contain BACT for greenhouse gases. This Court has already held that the phrase “subject to regulation under this chapter” is a clear statement that “w ould not seem readily susceptible to misinterpretation.” Alabama Power , 636 F.2d at 404. Ind eed, within section 7475, Congress itself distinguished pollutan ts subject to regulation under “this chapter ” from areas that are affected by “this part ,” § 7475(a), (a)(4) (em phasis added). See also § 7576(e) (describing the even narrower set of air pollutants “for which a [NAAQS] has been established”). EPA’s regulations since Alabama Power have recognized that pollutants subject to control under any provision of the Act are covered under the Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7254 PSD program. See 45 Fed. Reg. at 52,722/2 (Ex. 10). Although EPA recognizes some ambiguity regarding the meaning of th e statutory term “subject to regulation,”

see generally 75 Fed. Reg. at 17,007-14, it is unambiguous that it must at least encompass “each pollutant” that is currently subject to actual control under the Act. Despite the statutory language, the case law, and decades of regulation applying this interpretation, Movants posit an altern ative, “whole-statute” reading that would require controls only for pollutants that are subject to a NAAQS. See CRR Mot. 49- 52; Texas Mot. 25-27. Under their variou s interpretations, the PSD provisions “can rightly be understood” to apply only to th e six pollutants mentioned in sections 7473 and 7476, CRR Mot. 49-51, or at least only to “conventional pollutants,” NAM Mot. 24-26. They also claim that , under section 7476, the establishment of a NAAQS is the exclusive means by which a pollutant b ecomes regulated under the PSD program.

Id. at 51. Thus, reading limitations into the Act where none are present, Movants would read section 7475(a)(4) to impose cont rols upon each pollutant “subject to regulation under section 7409 of the Act, for which a NAAQS has been established and a designation has been made .” Section 7476 does not bear the weight that Movants place upon it. See CRR Mot. 51-52. This Court has already rejected the argument that the scope of the BACT requirement in section 7475 “is qualified by section [7476];” those sections simply

have a “different focus.” Alabama Power , 636 F.2d at 405-06. Section 7476 directs EPA to promulgate regulations addressing other NAAQS pollutants, but that section Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7355 cannot defeat the separate, explicit requ irement that a PSD permit must include BACT “for each pollutant subject to regulation under this chapter [i.e. , the entire Act].” § 7475(a)(4) (emphasis added). It also ca nnot defeat the requirement in section 7475(a)(3)(C) that PSD permits ensure compliance with any other applicable “emission standard” and “standard of perf ormance” under the Act as a whole. § 7475(a)(3)(C). 39 Both of these provisions show that the scope of PSD permitting requirements is broader than NAAQS pollutants only. Additional clear evidence against Movant ’s interpretation is found in the 1990 amendments to section 7412 of the Act, which lists hazardous air pollutants and provides for emission controls for those pollutants. In section 7412(b)(6), Congress provided that “[t]he provisions of Part C of this subchapter [i.e., PSD] shall not apply to pollutants listed under this section.” Th e only possible explanation for this express exclusion is that Congress in 1990 be lieved that the PSD program otherwise would include the non-NAAQS pollutants listed under section 7412. The various provisions of the Act, including the PSD program, can therefore only be rationalized as this Court has alread y done: “The language of the Act does not limit the applicability of PSD only to on e or several of the pollutants regulated

under the Act....” Alabama Power , 636 F.2d at 404. EPA did not “ignore” this

39 NAM attempts to interpret section 7475(a)(3)(C) to mean only that a PSD permit may not be issued to a source that is already violating a standard under the Act. NAM Mot. 17 n.11. This reading fails to recognize that Section 7475(a)(3)(C) also applies to construction permits for new sources that have not yet been built, and that therefore cannot already be violating a standard.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7456 Court’s ruling in Alabama Power , see NAM Mot. 19; rather, EPA adopted the very approach “ required by Alabama Power .” 45 Fed. Reg. at 52,711 (emphasis added) (Ex. 10). It is Movants who ignore the fa ct that the Court in Alabama Power rejected the very BACT argument they now advance.

4. The PSD “Trigger” For Greenhouse Ga s Regulation Is Based Solely Upon EPA Decisions That Are Now Beyond Challenge As the foregoing sections show, the “t riggering” aspect of the Timing Decision was the ineluctable result of the application of statutory text, EPA’s regulatory interpretations of that text, and a seminal opinion of this Court to a newly regulated pollutant. To the extent Movants challeng e the application of those regulations to greenhouse gases, their arguments are barre d. Review of regulations promulgated under the CAA is available only within 60 days of the relevant Agency action. § 7607(b). Although NAM claims that the application of the existing statutory interpretation to greenhouse gases is “new grounds” to challenge those regulations,

see NAM Mot. 19 & n.15, this Court has mad e clear that “new grounds” cannot be based on substantive arguments that could have been made as a challenge to the underlying agency action. See Nat’l Mining Ass’n v. DOI , 70 F.3d 1345, 1350 (D.C. Cir. 1995); Am. Road & Transp. Builders Ass’n v. EPA , 588 F.3d 1109, 1112-13 (D.C. Cir. 2009), cert. denied , No. 09-1485, 2010 WL 38343 36 (Oct. 4, 2010). Movants

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7557 could have, and were required to, challenge EPA’s regulations at the time they were promulgated. 40

5. Congress Intended EPA to Appl y the Act to New Pollutants Despite the plain language of the Act, and assuming that their challenges are timely, Movants try to forge a Chevron step two argument. The foregoing discussion demonstrates that EPA’s interpretations, even if not compelled by the Act, are at least reasonable and indeed are superior to Mo vants’ alternative readings. However, Movants also argue that EPA cannot reasonably apply PSD requirements specifically to greenhouse gases because Co ngress could not have so intended. NAM Mot. 24-26. This argument is contrary to the Su preme Court’s decision in Massachusetts

. There, the Supreme Court rejected EPA’s ar gument “that Congress did not intend it to regulate substances that contribute to cl imate change,” holding that “[t]he statutory text forecloses EPA’s reading.” 549 U.S. at 528. The Court considered it irrelevant that Congress had no specific intent wi th respect to greenhouse gases: While the Congress that drafted [§ 7521(a)(1)] might not have appreciated the possibility that burning fossil fuels could lead to global warming, they did understand that without regulatory flexibility, changing circumstances

40 This issue is currently before the Court in Am. Chemistry Council v. EPA , No. 10-1167, in which various petitioners have challenged regulations from 1978, 1980, and 2002 that, together, automatically require PSD permitting to take into account any pollutant regulated under the Act. EPA ha s moved to dismiss those challenges as time-barred. See Respondent’s Motion to Dismiss (S ept. 10, 2010). No petitioner moved to stay those regulations pending revi ew. Even if the Court were to stay the Timing Decision itself, those longstanding regulations would continue to require that the Act be applied as EPA announced in th e Timing Decision. As a result, a stay cannot remedy Movants’ alleged harm.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7658 and scientific development would soon render the Clean Air Act obsolete. The broad language of [§ 7521(a)(1)] reflects an intentional effort to confer the flexibility necessary to forestall such obsolescence.

Id. at 532. There is no meaningful di fference between the language the Supreme Court considered and the language of th e PSD provisions of the Act. Movants’ demand for “very explicit ev idence” of Congress’ intent with respect to greenhouse gas regulation, CRR Mot. 55, is an attemp t to bypass the deference due to EPA under

the Chevron standard and the Court’s Massachusetts holding. 41 There is also no merit to Movants’ argument that adopting BACT for greenhouse gases is somehow different from adopting BACT for conventional pollutants. See NAM Mot. 26. While BACT for ot her pollutants often includes “addon” control technologies, the statute call s for a broader assessment of “production processes and available methods, systems, an d techniques... for control of each such pollution.” § 7479(3). EPA has long recogn ized that this phrase encompasses both add-on controls and inherently lowe r-polluting proces ses. See, e.g. , In re Knauf Fiber Glass, GMBH , 8 E.A.D. 121, 129 (E.A.B. 1999). Thus, even if Movants are correct that “mandated energy efficiency” is likely to be the only available BACT for the control of greenhouse gases, the use of a mo re efficient process or design to reduce pollution is consistent with both the statute and with EPA’s practice.

41 NAM, Mot. 26, cites FDA v. Brown & Williamson Tobacco Corp. , 529 U.S. 120, 133 (2000), to suggest that Congress woul d not delegate regulatory authority over greenhouse gases to EPA. But see Massachusetts , 549 U.S. at 530-32 (distinguishing Brown & Williamson and finding it without app lication in the greenhouse gas context). Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7759 As the Supreme Court suggested in Massachusetts , the question is not which pollutants Congress may have had in mind wh en it enacted the PSD provisions of the Act. Rather, it is whether the Act’s provisions must apply, or can reasonably apply, to new pollutants (including greenhouse gases) consistently with the text and purpose of

the statute. See § 7470(1) (purposes of the PSD program); see also § 7602(h) (noting that “effects on welfare” in statutory purpose provisions include, inter alia , effects on climate). This question is left to EPA, which must “use its discretion to determine how best to implement the policy in those cases not covered by the statute’s specific terms.” United States v. Haggar Apparel Co. , 526 U.S. 380, 393 (1999). 6. Movants Do Not Seriously Ch allenge EPA’s Inclusion of Greenhouse Gases in Th e Title V Permitting Program EPA’s analysis of the triggering effect of the Vehicle Rule applied not only to the requirements for preconstruction permits under the PSD program, but also to the requirements for operating permits under Titl e V of the Act. The purpose of Title V is to collect all regulatory requirements applicable to, inter alia , a major source of air pollutants and to assure compliance with such requirements. 75 Fed. Reg. at 17,023. Since 1993, EPA has interpreted Title V as requiring a permit for a major source of any pollutant that is “subject to regulation under the Act.” Id. at 17,022-23. Movants’ arguments against greenhouse gas regulation based on the provisions of the PSD program simply have no application to Title V. Title V has no provisions comparable

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7860 to the PSD provisions on which Movants re ly, NAM Mot. 7, and nothing in Title V attaches its requirements only to NAAQS pollutants. . CRR argues that if this Court were to invalidate the regulation of greenhouse gas emissions under PSD, then Title V could not apply to greenhouse gases because there would be no applicable requirements to include in a Title V permit. CRR Mot. 57. However, under the CAA, each sour ce that is a “major source” for any air pollutant, including greenhouse gases, must obtain a Title V permit. See §§ 7661a(a) (permit requirement for major sources); 7661(2)(definition of major stationary source); 7602(j); 75 Fed. Reg. at 17,022-23 (noting that EPA applies this requirement to each source that is a major source of any air pollutant that is otherwise subject to regulation). Even if PSD did not impose any greenhouse gas requirements, a source’s greenhouse gas emissions could still make it a “major source,” required to obtain an operating permit that assures compliance with other applicable requirements under the Act. Nearly every source newly subject to Ti tle V will be subject to some applicable requirements (and EPA intends to consider further how to address permits that would contain no applicable requirements). See 75 Fed. Reg. 31,566/2-3. D. The Tailoring Rule Is a Va lid Exercise of EPA’s Authority Although EPA’s application of the absurd results, administrative necessity, and step-at-a time doctrines reduces Movants’ harm by orders of magnitude, Movants nonetheless move for a stay of the Tail oring Rule on the grounds that EPA has improperly applied each of these doctrine s. Texas Tailoring Mot. 7-13; NAM Mot.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 7961 27-33. Other than complaining that these doctrines are not often utilized, Movants clearly fail to carry their burden of show ing a likelihood of success on the merits.

1. The Absurd Results Do ctrine Was Properly Invoked

Movants assert that under Chevron Step I, the meaning of the statutory threshold in sections 7479(1) and 7602(j) of the CAA, which describe a “major emitting facility” or “major stationary so urce” as one that emits 100/250 tons per year of any pollutant, is clear, and therefore EP A cannot tailor that threshold to a different number, in this case 100,000 tpy. Yet, as this Court explained, “where a literal reading of a statutory term would lead to absurd results, the term simply ‘has no meaning ... and is the proper subject of construction by EPA and the courts.” Am. Water Works

Ass’n v. EPA , 40 F.3d 1266, 1271 (D.C. Cir. 1994) . This situation is not at all unusual, as the “case law is replete with ex amples of statutes the ordinary meaning of which is not necessarily what the Congress intended.” Id ; see also United States v. American Trucking Ass’n , 310 U.S. 534, 543-44 (1940). Although termed “absurd results,” the name is somewhat misleading because this doctrine allows an agency to depart from the literal meaning of a statute where “‘acceptance of that meaning wo uld lead to absurd results ... or would thwart the obvious purpose of the statute.’” In re Trans Alaska Pipeline Rate Cases , 436 U.S. 631, 633 (1978)(emphasis added), quoting Commissioner v. Brown , 380 U.S. 563, 571 (1965). See also United States v. Bryan , 339 U.S. 323, 338 (1950). These cases are

consistent with Chevron , which states that “the court, as well as the agency, must give

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8062 effect to the unambiguously expressed intent of Congress,” thus requiring fidelity to actual congressional intent, not necessarily the literal language of the statute. 467 U.S. at 842-43 (emphasis added). Indeed, under a Chevron Step One inquiry, the Court must look not “only at the plain language of a statute... [but also] to its object and policy.’” Mova Pharm. Corp. v. Shalala , 140 F.3d 1060, 1067- 68 (D.C. Cir. 1998). The method by which an agency may best effectuate congressi onal intent in the face of conflicting literal language is through implementation of the statute in a manner

that cleaves to that intent. As this Court explained: When Congress delegates a function to an agency, we believe that an important element of congressional purpose is that the function be carried out sensibly and efficiently. Congress recognizes that it can only legislate, not administer, so it nece ssarily relies on agency action to make “common sense” responses to problems that arise during implementation, so long as those re sponses are not inconsistent with congressional intent. Cablevision Syst. Dev. Co. v. Motion Picture Ass’n of Am. , 836 F.2d 599, 612 (D.C. Cir. 1988); see also Negusie v. Holder , 129 S. Ct. 1159, 117 1 (2009)(Stevens, J., concurring in part). The Tailoring Rule effectuated a “comm on sense” administration of the CAA. The Rule captures sources that emit fully 86% of the greenhouse gas emissions that would be captured if the literal 100/250 tp y statutory threshold were applied, thus staying true to the central purposes of the PSD and Title V permitting programs. Moreover, the Tailoring Rule seeks to contro l emissions from pollutants that have the potential to harm public health and welfare, § 7470(1), while focusing initially on the

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8163 large emitters that are, as Congress intend ed, more “financially able to bear the substantial regulatory costs imposed by the PSD provisions.” Alabama Power , 636 F.2d at 353-54; 75 Fed. Reg. at 31,552 (cit ing similar intent related to Title V). Finally, the Rule does so while implementing Congress’ express requirement that these permitting programs be admi nistered expeditiously so as “to avoid a logjam of permit applications ... [to] ensure that permitting pr ocess will work with a minimum of disruption and delay.” 136 Cong. Rec. S2 107 (Mar. 5, 1990) (emphasis added); see

also §§ 7661a(b)(6)-(9). Thus, the Tailoring Ru le is precisely the type of “deviat[ion] from the statute tha[t] is needed to pr otect congressional intent.” Mova Pharm. , 140

F.3d at 1068. In an argument that exalts labels over substance, Movants assert that because

EPA relied on the “absurd results” doctri ne to tailor the threshold, EPA must concede that its own interpretation that the PSD provision even covers greenhouse gases is absurd and cannot be upheld. NAM Mot. 20-24, CRR Mot. 18, 48, Texas

Mot. 27. 42 First, this argument assumes it is necessary to reach a Chevron Step Two analysis, which, as outlined in part II.C, supra , is not the case. Even applying Chevron Step Two, it is Movants’ interpretation (no coverage of greenhouse gases under PSD) rather than EPA’s interpretation (tailored coverage) that is the greater deviation from

42 Movants also assert that EPA could (a nd presumably must) avoid “absurdity” by interpreting the general term “pollutant” not to include greenhouse gases. Texas Tailoring Mot. 11; CRR Mot. 18; UARG Resp. 10-20. But the Supreme Court has foreclosed that possibility by holding that the term “air pollutant” plainly encompasses greenhouse gases. Massachusetts , 549 U.S. at 532.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8264 congressional intent. EPA may not interpret the subject statutory provisions so as to

avoid absurd results in their implementation , if to do so eviscerates Congress’ intent (reflected in the flexible manner in wh ich it structured the CAA, Massachusetts , 549 U.S. at 532) to cover any pollutant that potentially endangers public health and welfare. EPA’s Tailoring Rule hews as closely as possible to congressional intent, but does

so in a manner that avoids the absurd resu lts in implementation that Congress clearly

could not have intended.2. EPA Properly Invoked the Administrative Necessity and Step-at-aTime Doctrines As EPA explained, although the doctrine s upon which it relies to deviate from the literal statutory thresholds can be appl ied in an interrelated manner, each also stands on its own as a separate and independen t basis to affirm the Tailoring Rule. 75 Fed. Reg. at 31,516. Thus, even were the ab surd results doctrine not itself a complete and valid basis for issuing the Tailoring Rule , the administrative necessity and step-ata-time doctrines would still authorize EPA’ s multi-stepped treatment of the 100/250 tpy threshold to achieve statutory compliance over time. Under the administrative necessity do ctrine, “an agency may depart from the requirements of a regulatory statute ... ‘to cope with the administrative impossibility of applying the commands of the substantiv e statute.’” Envtl. Def. Fund v. EPA , 636 F.2d 1267, 1283 (D.C. Cir. 1980)(citation om itted). Even where the agency is not

authorized to create a de minimis exemption, “administrative necessity may be a basis Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8365 for finding implied authority for an administra tive approach not explicitly provided in the statute” where applying the commands of the substantive statute “would, as a practical matter, prevent the agency from carrying out the mission assigned to it by Congress.” Alabama Power , 636 F.2d at 358 (explaining application of this and related doctrines in interpreting PSD applicability). EPA undoubtedly has a heavy burden to establish that carrying out the

mandate of the literal terms of the statute is administratively impossible. Yet that

burden is met in this case – a conclusion reinforced by Movants’ claims. Here, EPA performed a comprehensive study of the processes, costs, manpower, expertise, and resources available to state permitting authorities to provide full and timely compliance with the statutory requirements necessary to process the 82,000 PSD and 6.1 million Title V permit applications that would result from application of the literal thresholds. EPA concluded that the applicati on of “the specified [s tatutory] levels of emissions at the present time – in adva nce of the development of streamlining methods and greater permitting authority expertise and resources – would create undue costs for sources and impossible ad ministrative burdens for permitting authorities.” 75 Fed. Reg. at 31,547. The four-step process created in the Ta iloring Rule is precisely the type of

solution the courts look to in cases of impossible admi nistrative burdens. As the Supreme Court stated in Massachusetts , “[a]gencies, like legisl atures, do not generally resolve massive problems in one fell re gulatory swoop” and thus can implement

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8466 regulation “‘one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind.’” 549 U.S. at 524, quoting Williamson v. Lee Optical of Okla., Inc. , 348 U.S. 483, 489 (1955); see also Grand Canyon Air Tour

Coal. v. FAA , 154 F.3d 455, 478 (D.C. Cir. 1998). While Texas asserts that EPA may not utilize such a process unless it is desi gned to result in fu ll compliance with the statutory requirements, Texas Tailoring Mo t. 12, other Movants’ arguments belie Texas’ concern. See, e.g. , NAM Mot. 10 (explaining that EPA will conduct rulemakings in Steps III and IV to expand coverage “potentially all the way down to the statutory thresholds of 100 or 250 tpy”). It is unnecessary for EPA to presen t in response to the Stay Motions its detailed explanation of how EPA and the Stat es will be administratively unable to meet the overwhelming burdens resulting fr om application of the literal 100/250 tpy threshold, because nowhere do Movants dispute EPA’s conclusions. Indeed, Movants contend that even utilizing the tailored thre shold of 100,000 tpy, it is essentially impossible to implement PSD and Title V for greenhouse gases in an expeditious manner (an assertion with which EPA disagr ees). NAM Mot. 47-50; CRR Mot. 62-

64. 43 Movants thus fail to make the requisite strong showing that they will prevail on

the merits.

43 Movants’ assertion that the agency must fi rst try literal application before it can utilize administrative necessity is inapposit e here where, in contrast to the cases Movants rely upon, EPA has already studie d the administrative burdens and Movants do not contest EPA’s conclusions that those burdens are overwhelming. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8567 III. MOVANTS HAVE NOT ESTABLISHED THAT THEY WILL SUFFER IRREPARABLE HARM PENDING FINAL RESOLUTION OF THEIR CLAIMS ABSENT A STAY Movants’ allegations of harm, collect ively, break down into two broad categories: (1) economic harm to businesses and industry from the direct and indirect costs associated with greenhouse gas regulati on of stationary sources; and (2) harm to States, like Texas, primarily in the form of increased regulatory responsibilities and associated costs. These allegations, however, are wholly insufficient to meet the very rigorous showing of the type of concrete an d irreparable injury necessary to warrant a stay. Winter v. NRDC , 129 S. Ct. 365, 374 (2008). 44 A. The Alleged Harm to Regulated Indus tries and Other Non- State Movants Is Not Concre te, Imminent, or Irreparable 45 Industry Movants claim they will suffer irrepa rable injury as a result of the costs of having to comply with PS D and Title V for greenhouse gases, including a so-called “uncertainty tax” that purportedly results from EPA’s regulation of greenhouse gases. CRR Mot. 61-7; NAM Mot. 40-51. For numerous reasons, none of the injuries they allege withstands scrutiny.

First : Economic loss does not constitute irreparable harm. “Mere injuries, however substantial, in terms of money, ti me, and energy necessarily expended in the

44 See also Chaplaincy of Full Gospel Churches v. England , 454 F.3d 290, 297 (D.C. Cir. 2006); Davis v. Pension Benefit Guar. Corp. , 571 F.3d 1288, 1296 (D.C. Cir. 2009) (Kavanaugh, J., concurring) . 45 For clarity, EPA has divided its argume nts into harm alleged by the non-state movants, collectively referred to herein as “Industry Movants,” and harm alleged by Texas (and any other states), even though EPA recognizes there is some overlap.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8668 absence of a stay are not enou gh.” Wis. Gas Co. v. FERC , 758 F.2d 669, 674 (D.C. Cir. 1985); see also Sampson v. Murray , 415 U.S. 61, 90 (1974). Instead, “[r]ecoverable monetary loss may constitute irreparable harm only where the loss threatens the very existence of the movant’s business.” Wis. Gas , 758 F.2d at 674 (emphasis added). This rule applies ev en where movants challenge government regulation and monetary damages are not ava ilable in the event they ultimately prevail. See, e.g. , Astellas Pharma US, Inc. v. FDA , 642 F. Supp. 2d 10, 22 (D.D.C. 2009); Biovail Corp. v. FDA , 519 F. Supp. 2d 39, 48-49 (D .D.C. 2007); Mylan Pharms., Inc.

v. Shalala , 81 F. Supp. 2d 30, 42 (D .D.C. 2000). Although varied in type, all of the harm alleged by Industry Movants is econo mic harm emanating from application of the challenged EPA actions, which cannot support a stay.

Second : Industry Movants allege that the uncertainty caused by EPA’s actions triggers a long chain of economic harms to various industries and then to the public, NAM Mot. Ex. 19 (Thorning Dec.) ¶¶ 5,19; CRR Mot. Ex. 22 (Peelish Dec.) ¶ 11; and

that the threat of these harms will lead in dustries to move their operations abroad where regulatory burdens are less. Plants may close, jobs may be lost, and the national economic recovery may be impacted , they say. NAM Mot. 42-45; CRR Mot.

2. Even if these were accurate predictions (which they are not), they are allegations based on wholly hypothetical events. 46 Creason Dec. (Ex 11) ¶ 8. Allegations of

46 Movants’ speculative harm extends to cont entions that interest groups will use the Endangerment Finding to support variou s types of administrative petitions and

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8769 harm based on speculation, no matter how poten tially large, do not establish the type of irreparable harm necessary to justify a stay. 47

Third : Industry Movants’ entire irreparable harm argument is based on an incorrect premise: that a stay will provide their constituent members with greater certainty. In fact, the opposite is true : the existence of EPA’s regulations decreases the uncertainty surrounding the greenhouse gas- related requirements industry will face

under the Act. As the Fourth Circuit re cently stated: “Without a single system of permitting [promulgated by EPA], it woul d be virtually impossible to predict the

judicial challenges. CRR Mot. 66. Many of the examples Movants cite (such as common law nuisance suits) were filed we ll before the Endangerment Finding was made, thus making it impossible to say that the Endangerment Finding triggered such suits. In fact, many industry parties are them selves relying on EPA's ability to regulate greenhouse gas emissions under the Clean Air Act in court filings arguing that federal common law of nuisance has been “displaced” in this context, including in cases predating the Endangerment Finding. See, e.g. , Conn. v. Am. Elec. Power Co., 582 F.3d 309, 371-88 (2d Cir. 2009), petition for certiorari filed , 79 U.S.L.W. 3092 (Aug. 2, 2010)(No. 10-174). In any event, it is well-s ettled that the mere possibility of adverse precedent is not, by itself, enough to constitu te “injury” sufficient to confer standing (see, e.g., Ala. Mun. Distributors Group v. FERC , 312 F.3d 470, 473 (D.C. Cir. 2002); Nat’l Lime Ass’n. v. EPA , 233 F.3d 625, 636 (D.C. Cir. 2000)), let alone irreparable harm. 47 See, e.g. , Comm. in Solidarity with Peopl e of El Salvador v. Sessions , 929 F.2d 742, 745-746 (D.C. Cir. 1991) (“Injunction s ... will not issue to prevent injuries neither extant nor presently threatened, but only merely ‘feared’”); Mylan Pharms., Inc. v. Shalala , 81 F. Supp. 2d at 42-43 (listing case s) (“[c]ourts within the Circuit have generally been hesitant to award injuncti ve relief based on assertions about lost opportunities and market share,” finding su ch injury too speculative to establish irreparable harm.). See also Nat’l Park Hospitality Ass’n v. Dep’t. of Interior , 538 U.S. 803, 811 (2003) (“Mere uncertainty as to the validity of a legal rule” not a hardship for purposes of the ripeness an alysis); Diamond Shamrock Corp. v. Costle , 580 F.2d 670, 673 n.1 (D.C. Cir. 1978) (unc ertainty because of regulation’s pending effect is not harm for purposes of ripeness analysis).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8870 standard for lawful emissions ....” N.C. ex rel. Cooper v. Tenn. Valley Auth. , 615 F.3d 291, 306 (4th Cir. 2010) (internal quotations omitted). The Timing Decision resolves uncertain ty over exactly when greenhouse gases (and other pollutants) become “subject to regulation” under the Clean Air Act, and the Tailoring Rule provides certainty by cl arifying for numerous entities potentially covered for the first time by the PSD and Ti tle V stationary source permit provisions when and under what circumstances they will face regulation, at least through 2016. Indeed, issuing a stay will strip away th e certainty for thousands (for PSD) and potentially millions (for Titl e V) of entities that are not regulated under the Tailoring Rule, and that are rightfully relying on th at Rule in their business planning. Any supposed uncertainty caused by the possi bility that the Tailoring Rule may be invalidated (which is present in any challenge to any regulation) cannot be alleviated by a stay, because that uncertainty will remain until the Court issues its final decision.

Fourth : Industry Movants’ alleged harms ar e both exaggerated and built on incorrect assumptions. NAM alone among the Movants attempts to quantify nationwide harm, asserting that the greenhous e gas PSD rules will lead to a chain of economic events ending in the same amount of losses as the recent recession . NAM Mot. 43. NAM makes no attempt, ho wever, to identify the period over which these alleged losses will occur. It never even attempts to identify, much less quantify, the amount of the alleged harm that will occur during the stay period – that is, during this litigation. Creason Dec. (Ex 11) ¶¶ 3-4. The most glar ing defect in this argument, however, is

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 8971 NAM’s premise: it assumes that EPA’s stationary source rules – which by their terms affect only a very small sector of the U.S. economy – will have the same overall cost as the recent cap-and-trade legislative effo rts, which would have affected almost the entire economy. Creason Dec. ¶¶ 4-5. From this, NAM piles incorrect assumption upon incorrect assumption, leading to an outrageously inaccurate and unsupported conclusion. Creason Dec. ¶¶ 9-10; Evans Dec. (Ex. 12) ¶¶ 4, 8.

Fifth : Industry Movants cannot show that any alleged rise in investment costs, loss in demand, or subsequent loss of market sh are or profits is directly caused by the challenged EPA regulations, as opposed to the many other present uncertainties in the markets. Creason Dec. ¶ 7. Movants’ own declarants acknowledge that: (i) various factors affect business decisions rega rding expansion and operations, including changing technology, access to new ener gy resources, and market dynamics, NAM Mot. Ex. 23 (Isakower Dec.) ¶ 18; (ii) cu rrently, industry faces massive uncertainty from, among other things, the expiration of tax cuts and changes in health care, NAM Mot. Ex. 20 (Huether Dec.) ¶ 12; and (iii) “uncertainty, from whatever the cause , increases the risk of an investment and ra ises the ‘hurdle rate’ that a project must earn.” NAM Mot. Ex. 19 (Thorton Dec.) ¶ 19 (emphasis added). It simply is impossible to determine, without pure specul ation, that uncertainty about regulation of greenhouse gases is the specific motivati on that has caused specific businesses to refrain from investing in a new facility or major modifications, rather than just prudence in light of the present economic en vironment or a host of other factors – or

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9072 that delaying a decision on the merits for a number of months will motivate such entities to go forward with invest ments in plant infrastructure.

Sixth : Industry Movants’ claims that the PSD BACT requirement for greenhouse gases will cause irreparable harm are self-contradictory. NAM asserts that

BACT will cause “dramatic” harm to its members, NAM Mot. 46, but simultaneously asserts that BACT costs are uncertain, contributing to their “uncertainty injury.” NAM Mot. 42. Not only are these assertions contradictory, each is also overstated.

Movants have not demonstrated that BACT co sts will rise to the level of irreparable

harm because BACT is decided on a case-b y-case basis and is dependent on many factors, including costs and energy, enviro nmental, and economic impacts. § 7479(3); 40 C.F.R. §§ 51.166(b)(12), 52.21(b)(12) . Importantly, since BACT must be achievable considering costs an d economic impacts, the statute precludes EPA from inflicting the degree of economic harm that Movants must show to obtain a stay of EPA’s action. In any event, many BACT decisions are expected to be based on energy efficiency, which many companies already implement to reduce operating costs. McCarthy Dec. (Ex. 13) ¶ 100. 48

48 Even Movants concede that BACT requir ements will cause essentially no harm until at least Step 2 commences in July 2011 because until then, BACT only applies to sources already subject to PSD permitting. NAM Mtn. 23-24 (explaining that Step 1, which continues past July 2012, “adopts Mova nt's result”). This concession not only evidences a lack of imminent harm, it also admits that at least some application of BACT for greenhouse gases is appropriate , i.e., permissible under the statute.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9173 Seventh : Industry Movants allege that th e costs of obtaining PSD and Title V permits will irreparably harm regulated sources, NAM Mot. 45-46, CRR Mot. 62-63, but these allegations also fail on multiple grounds. This amounts to little more than concern about the potential burdens faced by any regulated entity at the nascency of a new regulation, which without more, simply does not constitute irreparable harm.

Wis. Gas Co. , 758 F.2d at 674. See also, e.g. , A.O. Smith Corp. v. FTC , 530 F.2d 515, 528 (3d Cir. 1976).

EPA estimates that the costs of obtaini ng a PSD permit average about $84,500 and a Title V permit about $46,400. 75 Fe d. Reg. at 31,534. Nothing before the

Court indicates such a cost “threatens th e very existence of” Movants’ members, Wis.

Gas Co. , 758 F.2d at 674, or imposes extrem e hardship on Petitioners’ operations.

See A.O. Smith Corp. , 530 F.2d at 515 (“These are no t ‘small’ corporations; there is no contention that compliance ... would render any appellee unable to meet its debts as they come due. Nor is there any conten tion that the cost of compliance would be so great vis-à-vis the corporate budget that significant changes in a company's operations would be necessitated.”) Indust ry Movants’ speculation that permitting authorities will face long delays in issuing PSD or Title V permits, CRR Mot. 62-64, is just that – speculation, and, as discussed immediately below, inconsistent with the actual facts. Evans Dec. ¶ 5. B. Speculative Concerns Regardin g Implementation of Permi tting Programs Do Not Establish Irreparable Harm Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9274 1. The Initiation of Administrative Pr ocesses to Administer Permitting for Greenhouse Gas Emissions Does Not Constitute Irreparable Harm Texas asserts that it will suffer irrepa rable harm from having to develop an expanded permitting process and then, if Te xas is successful on the merits, having to undo that process. Texas Mot. 35-38. Te xas, however, bluntly stated in submissions to EPA that it has absolutely no intention of administering PSD and Title V for greenhouse gases. Ex. 14 Thus, it cannot su ffer the harm it alleges.

Even if Texas were to reverse course and decide to administer PSD and Title V for greenhouse gases, it still would suffer no irreparable ha rm. Texas claims it lacks funding to administer an expanded permitti ng program. Texas Mot. 38-39. But this is true of almost every public body that is required to implement a new program, which generally is funded only to meet pr esent obligations. Like Movants’ argument about the “uncertainty” result ing from challenged regulati ons, this argument is the

victim of its own excess: if the normal ac tivities that accompany a new regulatory effort are irreparable harm, then every chal lenged federal regulation would per se be deemed to create irreparable harm. In any event, the costs Texas alleges it will incur are greatly exaggerated: more

than half of Texas’ averred costs would result only after full impl ementation of Title V. As explained below, implementation of Title V would not likely require major outlays during the pendency of this litigation . McCarthy Dec. ¶¶ 108,117,123. This is particularly telling because Texas does little to estimate its costs during the relatively

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9375 short period it will take the Court to resolve these cases on the merits and does not consider such factors as the actual perm it schedule requirements. Finally, Texas’ assertions that it will be irreparably harmed simply by having to expand its existing PSD and Title V administrative procedur es to cover greenhouse gases are not credible, as most other States are doing the same without sign ificant problems.

2. There Need Be No De Facto “Construction Moratorium” in Texas Texas next asserts that EPA’s actions “threaten to impose a permit moratorium,” and indeed goes so far as to insist (with no support whatsoever) that “a de facto construction ban is already in place.” Texas Tailoring Mot. 2, 4. As Movants correctly point out, section 7475 prohibits a source from constructing or modifying a facility without a PSD permit issued in accordance with CAA requirements. According to Texas, because it will not have in place by January 2, 2011 a revised SIP that covers greenhouse gases, a business in Texas will be unable to obtain a construction permit after that date – hence, a “ de facto construction moratorium.” Texas Tailoring Mot. 14. Texas’ assertions do not establish irrepa rable harm for several reasons. First, Texas has no standing to assert as a basi s for a stay, harm that may accrue to businesses in the State resulting from a lapse in permitting authority. 49 Second, the

49 See, e.g. , Mass. v. Mellon , 262 U.S. 447, 485-86 (1923), explaining that while the doctrine of parens patriae allows states to bring suit on behalf of their citizens in certain circumstances by asserting a “quasi-sovereign interest,” a State may not sue the federal government as parens patriae because it is the United Stat es, and not the State, that

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9476 very rules Texas cites to support its argume nt that a permitting lapse will occur

establish the exact opposite : no such lapse need occur and Texas can affirmatively take steps to avoid such a lapse. As EPA explains in the proposed FIP Rule, “ absent further action by EPA , those States’ affected sources confront the risk they may have to put on hold their plans to construct or modify ....” 75 Fed. Reg. at 53,890 (emphasis added). That is precisely

the reason that EPA will issue a FIP: to ensure that ther e is an effective permitting program in each State, so that no de facto “construction moratorium” need occur. Id. at 53,885-86; see also 75 Fed. Reg. at 53,892 (propos ed SIP Call). Indeed, Texas readily admits that EPA can, and is prepared to, act to prevent a lapse of permitting authority in any willing State, by handling the greenhouse gas portion of the permitting process pending the State’s deve lopment of an appropriate SIP. Texas Tailoring Mot. 5. 50 At bottom, Texas’ complaint is with Texas. Texas asserts that its legislature will not act swiftly enough or that its administ rative processes grind too slowly. Texas Tailoring Mot. 17-18. Even if Texas is for some reason unable to accelerate this represents the people as parens patriae in their relations to the federal government. See also Ctr. for Biological Diversity v. DOI , 563 F.3d 466, 476-78 (D.C. Cir. 2009). 50 Texas argues that because EPA allo ws a State to accept delegation of enforcement of the FIP, “this indicated th at EPA lacks capacity to process permit applications.” Texas Mot. 40. On the contrary, EPA allows States to accept delegation of a FIP, so long as they agree and have th e resources to properly administer it . Texas’ assertion that EPA lacks the resources to implement th e FIP in Texas (or in other states) is not supported by evidence of any kind. In fact , EPA expects to have adequate resources to administer a FIP. McCarthy Dec. ¶ 61.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9577 process (which it has not established), it can alternatively take the easier path of simply accepting EPA’s offer to implemen t the greenhouse gas portion of the State’s permitting programs through a FIP, while it amends its SIP, as many other States have done or intend to do. And, if Texas accepts a FIP to avoid a lapse in permitting authority, it can nevertheless retain control by accepting a delegation, as some of the FIP States have, which will then allow it to issue the greenhouse gas permits and

retain much discretion in how it does so. McCarthy Dec. ¶¶ 57-60. If Texas chooses not to take any of these paths, it ca nnot then claim irreparable harm from EPA’s actions. To state the obvious, a movant “ca nnot rely on its own actions to create the risk of irreparable injury which it then se eks to avoid by the issuance of a preliminary injunction.” Vantico Holdings S.A. v. Apollo Mgmt. , 247 F. Supp. 2d 437, 454 (S.D.N.Y. 2003). 3. Movants’ Challenges to the Workability of EPA’s Implementation Process Are Speculative and Demonstrably Untrue

In the absence of an actual mora torium, all Movants (and “Responding” Petitioners) conjure up an administrative quagmire, speculating that EPA’s proposed procedures will not succeed, so that by Januar y 2, 2011, some states will not have a permitting authority, which will lead to a de facto “construction ban.” They assert that many of the rest of the States will be unable to incorporate the Tailoring Rule thresholds into their SIPs by January 2, 2011, and so will face a flood of permit applications from small sources, which will th en clog the system and thereby lead to a

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9678 de facto “ construction ban” in those States, too. NAM Mot. 48-49; CRR Mot. 62-64. All of this is based on utter speculati on about how the implementation process anticipated by future rulemakings will proc eed or, at best, on incomplete information about the status of state implementation of greenhouse gas permitting. See, e.g. , Peabody Resp. 16-18. Therefore, it can hard ly be considered the type of “concrete” and “imminent” harm that justifies a stay. Wis. Gas , 758 F.2d at 674. 51 Moreover, Movants misapprehend (or mischaracterize) th e regulatory process to be followed by

EPA. In fact, EPA is developing a comp rehensive implementation process for greenhouse gas permitting and, based on a recent survey of each state and many local districts, in all States – with the possible ex ception of just Texas – the mechanisms are in place (or soon will be) for routine greenh ouse gas permitting beginning January 2, 2011. McCarthy Dec. ¶¶ 4-5, 98, Att. 1. EPA’s implementation process divides the States into three groups for PSD permitting purposes, depending on the SIP status of each State. The first group includes th e seven States and various territories and localities whose PSD programs are already implemented through a FIP, which means

51 Cf. Texas v. United States , 523 U.S. 296, 301 (1998) (“A claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.”) (quoting Longshoremen v. Boyd , 347 U.S. 222, 224 (1954)(“[d]etermination of th e scope ... of legislation in advance of its immediate adverse effect in the context of a concrete case involves too remote and abstract an inquiry for the proper exerci se of the judicial function.”)).

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9779 that EPA regulations, including the tailored th resholds, already govern. 75 Fed. Reg. at 53,888 n.7; id. at 53,898 n.11; McCarthy Dec. ¶¶ 28-30. The second group is represented by 12 States and four localities that operate under an EPA-approved SIP but whose PSD program does not currently apply to greenhouse gases. McCarthy Dec. ¶¶ 34, 55 . Texas is part of this second group, needing to take action to have authority to cover greenhouse gases and to do so at the tailored thresholds. Absent EPA’s implementation plan, come January 2, 2011, sources in these states that need a perm it for their greenhouse gas emissions under section 7475(a)(1) will not have a permitti ng authority available to issue one, and therefore could be unable to proceed with construction. EPA’s implementation plan for these states is found in its September 2, 2010, proposed SIP Call, in which EPA proposed to find that these SIPs are “substantially inadequate” because they do not apply PSD to greenhouse gases, to require these

States to submit a corrective SIP revision applying PSD to greenhouse gases, and to

establish a deadline for their SIP revision. 75 Fed. Reg. at 53,892. This deadline must, by statute, be a reasonable period not to exceed 18 months. § 7410(k)(5). Here,

EPA has established a 12-month deadline but has further allowed the states to agree to an earlier deadline, as early as Decembe r 22, 2010. 75 Fed. Reg. at 53,901. EPA expects to finalize the SIP Call by Decem ber 1, 2010. McCa rthy Dec. ¶ 52. If a State fails to submit its propos ed SIP revision by its deadline, EPA must then issue a FIP for that State, which, in this case, EPA intends to do immediately

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9880 upon a State’s failure to act by its deadline. 75 Fed. Reg. at 53,897, 53,904 (citing § 7410(c)(1)). Thus, any State – including Texas – may avoid a lapse in permitting authority either by (i) submi tting a SIP revision that EPA can approve prior to January 2, 2011, or (ii) allowing EPA to set a D ecember 22, 2010 deadline for its SIP revision so that EPA can promulgate a FIP in th at State on December 23, 2010 (while the

State simultaneously proceeds with the preparation of its SIP amendments). Id. at 53,904/3-05/1. In other words, each of these States, including Texas, has the full

power to ensure that a lapse in permitting authority does not occur, simply by asking for an early SIP revision deadline that will allow prompt implementation of a FIP. In fact, most of the States and other jurisdic tions have adopted this FIP approach, and the rest are expected to have approved SIP revisions by or very close to January 2,

2011. 52 The third and final group is the 30 Stat es and six localities that have an approved SIP that already covers greenhou se gases but at the statutory levels (100/250 tpy). These States need to amend their SIPs to incorporate the tailored thresholds to ensure that they will not be obligated to enforce PSD for greenhouse

52 Of the jurisdictions subject to the SIP Call, EPA expects that by January 2, 2011, seven States and one locality will be subject to a FIP, and two States and one locality will have approved SIPs. McCarthy Dec. ¶ 55. Of the rest, two States and one locality are expected to have an approv ed SIP revision or FIP in the first quarter of 2011, and one locality is expected to have an approved SIP in the first half of 2011. Id. The gaps in these states are not exp ected to present any meaningful difficulty because of the brief period of time involved or lack of sources needing permits during that short period of time. Id.

Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 9981 gases at the statutory levels. Recognizing that some of these States will not have approved SIP revisions by January 2, 2011, EPA and these States have been working cooperatively to ensure that sources below the Tailoring Rule thresholds nevertheless will not be covered by PSD under either fede ral or state law as of January 2, 2011, or very shortly thereafter. EPA will rescind its previous approval of each of these State’s SIPs to the extent they apply PSD to so urces emitting greenhouse gases under the Tailoring Rule thresholds of 75,000/100,00 0 tpy. 75 Fed. Reg. at 31,579. EPA proposed this solution in the Tailoring Rule an d expects to finalize it by the end of the year. Id. at 31,579; McCarthy Dec. ¶¶ 73 -74, 90. This will eliminate the Federal law requirement that greenhouse gas sources be low the Tailoring Rule thresholds obtain permits. At the same time, the States are revising (or interpreting) their own statutes or regulations to eliminate the same requirement under state law even before these States have approved SIP revisions. Twenty-three of the thirty States in this category and three localities will revise (or can interpret) their state law so that it applies only to sources above the Tailoring Rule thresholds by January 2, 2011; five States and three localities anticipate that the state law changes will be in place by February 2, 2011; and one additional State anticipates that state la w changes will be in place by mid-February 2011. McCarthy Dec. ¶ 97. Thus, notwith standing Petitioners’ dire forecasts of “debilitating uncertainty,” the oncoming “train wreck,” and the “glorious mess” associated with the States’ purported inab ility to apply EPA’s proposed processes, Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10082 Farm Bureau Resp. 2; Peabody Resp. 3, 20; CRR Mot. 56, for all practical purposes by January 2, 2011 or very soon thereafter, greenhouse gas permitting requirements for PSD sources, as limited by the Tailoring Rule to just the largest sources, will essentially be fully implemented throughou t the country. There is, therefore, no reason to expect any lapse in permitting au thority or long permitting delays. As detailed supra , while Title V generally is not implemented through SIPs, it follows a basically parallel track to PSD in applying federal Title V requirements through state programs approved by EPA or, in lieu thereof, through a federal Title V program. EPA intends to take steps similar to those outlined for PSD to ensure that all state Title V programs cover greenhouse ga ses and do so at the tailored thresholds. McCarthy Dec. ¶¶ 112-115. Neverthele ss, unlike PSD (which prohibits a source from constructing or modifying its facility without a permit issued in compliance with federal law, § 7475), in States where the ap proved Title V program does not apply to sources which are “major” only as a result of greenhouse gas emissions, such a source may continue to operate its facility without even applying for a permit generally until up to one year following the date the state Titl e V requirements are amended to apply to such sources or federal requirements are issu ed in lieu thereof. § 7661b. Because a source generally has up to a year after beco ming subject to Title V to submit its permit application, § 7661b(c), 40 C.F.R. § 70.5(a)(1), EPA does not anticipate that any source will have to submit Title V applic ations solely as a re sult of being “major” for greenhouse gas emissions under Title V, or that States will have to act on such Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10183 applications, until sometime in 2012. See McCarthy Dec. ¶¶ 117, 123. By that time, these cases will have been decided, so there is no imminent, irreparable harm justifying issuance of a stay. 4. Movants’ Arguments Regarding the Legality of EPA’s Implemen tation Plans Are Meritless In a series of arguments that are opaque at best, Movants assert that even if EPA’s implementation process runs smoothl y, that process may not be utilized because it violates certain pr ovisions of the CAA or EPA ’s regulations that “require” States be given three (or five) years to amend their SIPs so as to cover greenhouse gases. CRR claims that section 7576 imposes a five-year period for SIP revisions that implement a PSD program to control a new pollutant, and until then, PSD does not apply. CRR Mot. 52. UARG and Texas claim that 40 C.F.R. § 51.166(a)(6) gives States three years to amend their SIPs to address greenhouse gases. Texas Tailoring Mot. 14, UARG Resp. 7. These timing argu ments (which go only to PSD, not to Title V) are misplaced on several levels. First, Movants’ arguments do not even a pply to 38 states. As outlined above, for eight States (category 1 above), PSD already is applied to greenhouse gases through a FIP, so provisions regarding the ti me allowed to amend a SIP are irrelevant. As further outlined above, for thirty addi tional States (category 3 above), their SIPs already apply PSD to greenhouse gases because they broadly apply to any “pollutant Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10284 subject to regulation.” These States are amend ing their SIPs only to ensure that such application occurs at the tailored thresholds rather than the statutory thresholds. Second, Movants’ argument that in the remaining twelve states, EPA’s regulations, including the Tailoring Rule, impose a construction ban unless the sates revise their SIPs, UARG Resp. 9-10, is fl atly wrong. It is based on the wholly incorrect premise that absent a SIP amendment in those States, sources located there can obtain construction permits without havi ng to address greenhouse gases until the State amends its SIP to affirmatively cover these pollutants. In fact, the opposite is true. As discussed above, since the beginning of the statutory PSD program, EPA has interpreted section 7475(a) as directly prohibiting construction or modification of a stationary source unless it obtains a PSD permit, which covers any regulated pollutant, including newly-regulated pollutants. This obligation on a source is independent of the obligation on states to have a PSD SIP th at conforms with the statute, including covering newly regulated pollutants. See 67 Fed. Reg. at 80,186, 80,240 (Dec. 31, 2002) (“The PSD program applies automatically to newly regulated NSR pollutants”). Accordingly, if a SIP fails to comply with this requirement to cover newly-regulated pollutants, and the state therefore lacks au thority to issue perm its covering a new pollutant, such as greenhouse gases, without a FIP the source will be unable to obtain a permit covering all pollutants “subject to regulation” and the source will be prohibited from construction, by operation of section 7475(a)(1). Thus, even if the

twelve States could take up to three years to amend their SIP, it is unclear why they Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10385 would want to, since it would deprive source s in their States a permitting authority from which to obtain the permit still required by statute , not by a SIP. 53 Third, Movants mischaracterize the Ta iloring Rule as amending 40 C.F.R. § 51.166 to impose the requirement that PSD a pply to greenhouse gases. CRR Mot. 14, 59-60, Texas Tailoring Mot. 14, UARG Resp. 4-10. In arguing that EPA itself requires a three-year SIP review period, Mo vants cite 40 C.F.R. § 51.166(a)(6)(i), which provides that “[a]ny Stat e required to revise its [SIP] by reason of an amendment to this section [51.166] ... shall adopt and submit such plan revision to [EPA] ... no later than three years after such amendment.” (Emphasis added). But it is not the Tailoring Rule that required States to revise their SIP PSD program to cover any newly regulated pollutants, including greenhouse gases. It is the st atute, confirmed by EPA’s long-standing requirement and reiterated in the 2002 regulatory revisions to the PSD program, that leads to the necessity (not even a requirement) fo r twelve states to amend their SIPs. The Tailoring Rule is deregulatory : it ameliorates impacts that result

53 In a recent decision the 7 th Circuit, mistakenly citing to PSD provisions when the issue before the court involved the separate and different non-attainment provisions of §§ 7501-7515, concluded that sources could continue to abide by permitting requirements in an existing SIP until amended, even if that SIP does not comport with the law. United States v. Cinergy Corp. , No. 09-3344, 2010 WL 4009180 (7 th Cir. Oct. 12, 2010). (See Ex. 15 at 14-15, Petition ers’ brief, explainingthat the dispute was based on non-PSD provisions.) In stark contrast to the nonattainment provisions actually at issue in Cinergy – which are not self-executing and must therefore be enforced through a SIP – PSD is self-executing; it is the statute (§ 7475), not just the SIP, that prohibits a source from constructing a project without a permit issued in accordance with the Act. Thus, until an applicable implementation plan reflects the statutory requirements of the CAA, a source subject to PSD cannot construct its project. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10486 from the operation of the statute, which is what requires PSD to be applied to greenhouse gases. 54 Thus, 40 CFR § 51.166(a)(6)(i) has no applicability here. In fact, the only EPA action even arguab ly “requiring” the twelve states to amend their SIPs is occurring through the proposed SIP Call. As outlined above, EPA is calling for amendments to the variou s SIPs pursuant to section 7410(k)(5). Under the express terms of that section, “[ t]he Administrator shall notify the State of the inadequacies [done through the SIP Call ], and may establish reasonable deadlines ( not to exceed 18 months after the date of such notice) for the submission of such plan

revisions.” Id. (Emphasis added.) Here, the Admi nistrator issued the SIP Call with a

reasonable deadline of 12 months. Movants question the validity of the procedure outlined by EPA in the proposed SIP Call as well as th e proposed FIP Rule, see, e.g. , CRR Mot. 8, but neither of these, nor other related proposed or cont emplated procedures Movants question, is

54 Movants mischaracterize EPA’s stat ements in the Tailoring Rule as requiring states to interpret their “subject to regula tion” provisions to incorporate the Tailoring Rule thresholds and avoid a SIP revision. CRR Mot. 60-61, Texas Tailoring Mot. 13. The Tailoring Rule does not require this interpretation; it says that States may be able to do so, and in fact, eight are doing so. 75 Fed. Reg. at 31,581; McCarthy Dec. ¶ 95. UARG argues that it is unlawful for stat es to apply the Tailoring Rule thresholds through an interpretation of existing SIP language. See UARG Resp. 10. However, UARG ignores the fact that many states “intend their [PSD] rules to apply in the same manner as EPA's counterpart rules.” 75 Fed. Reg. at 31,581/3. Accordingly, thesestates can interpret “subject to regulation” to automatically include any newlyregulated pollutant in their PSD permitting program in a manner similar to EPA – and, in the case of greenhouse gases, by in corporating the applicability thresholds that EPA established in the Tailoring Rule, as a component of the “subject to regulation” provision -- without having to take additional regulatory action. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10587 yet final agency action. A petitioner cannot challenge a non-final action of an agency. Bennett v. Spear , 520 U.S. 154, 177-78 (1997); P&V Enters. v. Corps of Eng’rs , 516 F.3d 1021, 1026 (D.C. Cir. 2008). Not surpri singly, no Petitioner has filed a petition for review of those proposed actions. If Movants believe EPA’s implementation procedures as detailed in the SIP Call and FIP Rule are illegal, they must first seek to address their concerns to EPA throug h the administrative process. Movants’ reliance on other provisions to mandate some multi-year time period is similarly misplaced. Movants rely on s ection 7410(a), which is inapplicable here, where section 7410(k)(5) is being utilized, bu t in any event this provision specifically declares that SIP amendments may be required “within 3 years ( or such shorter period as the Administrator may prescribe ).” § 7410(a) (emphasis added). CRR separately claims that EPA’s regulatory process violates section 7410( l ), which requires a State to subject any SIP revisions to prior noti ce and comment. CRR Mot. 58-59. But nothing EPA has done forecloses this proce ss; in fact, EPA has afforded the States a full year to complete their SIP revision processes. 75 Fed. Reg. at 53,896/1. 55 CRR

55 CRR further asserts the processes EPA is following for implementation of the tailored thresholds were not fully explained in the proposed Tailoring Rule and, therefore cannot be incorporated in the fi nal Tailoring Rule. CRR Mot. 59. While certain definitions changed in the final rule , those changes were a logical outgrowth of the original proposal. CSX Transp ., Inc. v. Surface Transp. Bd. , 584 F.3d 1076, 1079- 80 (D.C. Cir. 2009); City of Portland v. EPA , 507 F.3d 706, 715 (D.C. Cir. 2007). Moreover, CRR was required to file an administ rative petition for reconsideration if it wanted to challenge this issue, which it has not done. See § 7607(d)(7); Appalachian Power Co. v. EPA , 249 F.3d 1032, 1065 (D.C. Cir. 2001). The procedures that Movants actually assert to be improper are those in the proposed SIP Call and FIP Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10688 also asserts that under section 7476, EPA cannot require a State to regulate a new pollutant until 21 months after EPA issues a rule announcing the existence of this new pollutant. CRR Mot. 60. This prov ision, however, applies only to certain NAAQS pollutants, not other pollutants “s ubject to regulation,” like greenhouse gases. See supra 54-56 (discussing inapplicability to section 7476 to non-NAAQS pollutants and why, in any event, it does not impose a 21-month deadline for covering a new NAAQS pollutant). Finally, UARG cites section 7410(i) , which states that except for certain enumerated actions, which include both SIP revisions and FIPs, “no ... action modifying any requirement of an applicable implementation plan may be taken with respect to any stationary source by the State or by the Administrator.” This provision does not apply to the SIPs that automatic ally update to apply PSD to greenhouse gases because for them, “no ... action modify ing any [SIP] requirement ... [is being] taken,” nor does it apply to SIP amendment s required under a different subsection of 7410, subsection (k)(5), which expressly pr ovides that EPA may issue a SIP Call requiring a SIP revision and may call for the revision to be submitted at any time the

Administrator deems reasonable. 5. Texas Has No Sovereign Righ t That Will be Irreparably Harmed

rule, which, as noted, are not final. EP A accepted comments on those until October 4, 2010. 75 Fed. Reg. at 53,883, 53,892. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10789 Texas acknowledges that EPA’s proposed FIP would effectively relieve Texas of its administrative burdens and of any hypo thetical lapse of permitting authority.

Because this concession would otherwise defe at its stay motion, Texas asserts that a FIP would somehow deprive Te xas of its sovereign right to manage and protect its

own clean air resources. Texas Tailoring Mot. 16. See also CRR Mot. 60-61. However, no such sovereign right exists. Al though the CAA directs States to prepare implementation plans subject to EPA’s approv al and oversight, it is replete with provisions that permit EPA to direct the st ate to meet federal standards or withdraw that State’s authority to implement the Act in appropriate circumstances. A State’s PSD and Title V permitting programs must comport with all EPA regulations and requirements and must be approved by EPA. §§ 7661a(b),(d); 7410(a)(2)(C). If EPA determines that the state program fails to meet all requirements, EPA is specifically authorized to “eliminate[] the state’s ability to manage its own pollution control re gime.” Virginia v. Browner , 80 F.3d 869, 874, 882-84 (4 th Cir. 1996) (State’s sovereign rights are not infringed when EPA exercises its right to enforce Title V). If a State does not comply with EPA regulations, that State is subject to multiple levels of sanc tions by EPA and to im position of a FIP.

NRDC v. Browner , 57 F.3d 1122, 1123-24 (D.C. Cir. 1995). Ultimately, if a State decides that it does not wish to comply with the requirements that EPA establishes, it may refuse to submit a SIP. The full bu rden of enforcing federal regulations then Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10890 reverts to the federal government. See, e.g. , Hodel v. Va. Surface Mining and Reclamation Ass’n, Inc. , 452 U.S. 264, 288 (1981). Moreover, the State’s authority to admini ster its SIP is even more restricted with regard to EPA’s PSD requirements. See Citizens to Save Spencer County v.

EPA , 600 F.2d 844, 868 (D.C. Cir. 1979) (“Congress clearly prescribed a somewhat larger role for the federal government in the formulation of PSD requirements than in some other aspects of the Act ....”). Thus, while the state-federal partnership remains vibrant, “[t]he Act nevertheless does pr ovide for an aggressive federal role in rescinding or modifying a state plan in the case of a breach by the state of federallymandated air pollution standards and implementation procedures.” Id. at 852 n.9. Even if Texas is correct that EPA’s regulations somehow infringe its sovereign rights, Texas has not explained how that constitutes irreparable harm. As noted above, Texas may exercise its rights as a State by taking up to a year to amend its SIP: a FIP will merely be in place to ensure ag ainst any lapse in permitting authority while Texas exercises that “right.” During th is time Texas would continue to be the permitting authority for non-greenhouse gas emissions; the FIP would cover only greenhouse gas emissions. Even with a FIP, Texas may be assured that it has substantial control over the permitting process by accepting a delegation from EPA of the authority to administer

the FIP. It is true that under these circumstances, Texas would need to act in accordance with requirements contained in EPA’s regulations – the most important Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 10991 of which are the BACT requirements – bu t those requirements are similar to the requirements already in Texas’ SIP fo r other pollutants. Thus, Texas would experience little difference in issuing green house gas permits acting as a delegatee

under the FIP than it would were it to ac t under its own approved SIP. McCarthy Dec. ¶ 59. In particular, because the BACT provision is inherently discretionary,

Texas would have substantial discretion in administering that requirement. Thus, Texas is not irreparably harmed. 56 C. Movants’ Purported Harm Will Not Be Redressed by a Properly Issued Stay Even if one were to assume that Movants could establish that they are harmed by application of PSD and Title V to gree nhouse gases, their Motions for a stay must still fail because the relief they seek, a stay of each of the challenged rules, will not afford them the desired relief, a fa ct that dooms their motion. Wis. Gas , 758 F.2d at 674 (requiring that a stay movant “show that the alleged harm will directly result from the action which the movant seeks to enjoin”). Most of the Movants’ arguments unjustifiably lump all the challenged EPA actions into one basket, claiming they are

56 Texas complains that it may have to revi se state laws to address Title V permit fees and suggests that sources would be requir ed to pay Title V permits fees as a result of their greenhouse gas emissions. Texas Mot. 32-35. Notably, its declarant does not state that Texas is authorized to collect fe es based on emissions of greenhouse gases. Furthermore, as noted above, if the Titl e V program in Texas does not apply to sources solely as a result of greenhouse gase s emissions then such sources will not be subject to Title V at all until such time as the program is amended or federal requirements are promulgated. In any even t, a rise in fees charged to permit applicants is neither irreparable harm nor harm that can be asserted by Texas. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11092 harmed by all. 57 In fact, however, no Movant has alleged any direct harm from greenhouse gas regulation of mobile source s through the Endangerment Finding and Vehicle Rule. A stay of either of those two mobile source actions solely to address alleged harms resulting from stat ionary source regulation of greenhouse gases is completely unwarranted. The triggering effect that mobile source regulation of greenhouse gas emissions has with respect to stationary source regulation of such emissions is a product of the statute, not of EPA’s regulations, an d there is no basis to stay an otherwise proper rule solely on the basis of its collatera l, and unavoidable, statutory implications. A stay of the two stationary source acti ons also will fail to provide Movants with the relief they seek. As Movants recognize, this Co urt’s stay of a regulation pending review preserves the status quo that existed prior to the promulgation of the regulation. NAM Mot. 1, 11 (citing Cobell v. Kempthorne , 455 F.3d 301, 314 (D.C. Cir. 2006)). As detailed supra , the Timing Decision affi rms and refines EPA’s preexisting interpretation of the underlying statutes, clarifying the date on which PSD and Title V will apply to greenhouse gases. A stay of the Timing Decision would not

eviscerate EPA’s 1980 and 2002 rulemakin gs or its 2008 interpretation (the Johnson Memo), or the separate 1993 memorandum fo r Title V, in which EPA established that the PSD program and Title V apply automatic ally to each pollutant (not merely NAAQS pollutants) subject to regulation under the Act. See supra pp. 57-59.

57 Here, Movants seek to stay, in various combinations, each of the four EPA actions being challenged. See Texas Tailoring Mot. 2; CRR Mot. 2; NAM Mot. 2. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11193 Similarly, all of the alleged harm Mo vants describe, i.e., the economic effects and administrative burdens related to the PSD and Title V process and the uncertainty that occurs with having to address a new re gulatory regime, will be reduced by orders of magnitude by the Tailoring Rule. Indeed, Movants cite at length to the harm that

will occur without the Tailoring Rule, in support of their assertion that EPA has not established the proper process for SIP approval of the tailored thresholds by the States. See, e.g. , NAM Mot. 7 n.3, 9 n.7, 48-51. When a court finds upon full review of the merits that an agency has improperly promulgated a rule, it may remand it to the Agency or, if necessary, vacate it. Indep. U.S. Tanker Owners Comm. v. Dole , 809 F.2d 847, 8 54 (D.C. Cir. 1987);

Steinhorst Assocs. v. Preston , 572 F. Supp. 2d 112, 1 25 (D.D.C. 2008). The Court should not exercise more expansive powers , i.e., order an agency to refrain from enforcing a statute or to refrain from applying interpretations in preexisting regulations not being challenged here, me rely because Movants also seek a stay.

IV. THE PUBLIC INTEREST AND IMPACTS TO OTHER PARTIES DISFAVOR A STAY 58

Astonishingly, Movants assert that no one will be harmed by a stay of EPA’s actions. See, e.g. , Texas Tailoring Mot. 6 (“There is no possibility that a stay would injure any party.”); CRR Mot. 11 (“A Stay sacrifices none of the alleged benefits – there are none ....”). First, any stay of a federal regulation necessarily impinges upon

58 In a request for a stay, the analysis of harm to others and impact on the public interest merge. Nken , 129 S. Ct. at 1762. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11294 an important public interest. As the Supr eme Court explained in addressing a request to stay an agency order, “the parties and the public, while entitled to both careful review and a meaningful decision, are also generally entitled to the prompt execution of orders that the legisl ature has made final.” Nken , 129 S. Ct. at 1757. Environmental regulations in particular serv e an important public interest, one that cannot be quantified in typical terms of costs or lost opportunities. See United States v. Students Challenging Re gulatory Agency Procedures , 412 U.S. 669, 702 (1973). Thus, a stay in this case, by definition, im pinges upon an important public interest. That is particularly true here, give n the statute and actions involved. As outlined supra , the very purpose of the CAA is to “to protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare and the productive capacity of its population.” § 7401(b )(1). This critical public interest is specifically repeated in the PSD provisions of the Act, which were enacted “to protect public health and welfare from any actual or potential adverse effect which in the Administrator’s judgment may reasonably be anticipated to occur from air pollution ... notwithstanding attainment and maintenan ce of all [NAAQS].” § 7470(1). A stay

of any of the rules at issue here – whether such stay is limited just to regulation of stationary sources (as sought by NAM), or extends to the regulation of mobile sources as well (as sought by Texas and CRR) – clashes with this vital and congressionallyidentified public interest. On this grou nd alone, the public interest easily bests Movants’ speculative claims of harm to themse lves, as well as their claims that no one Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11395 will be harmed if a stay is issued. See, e.g. , United States v. Oakland Cannabis Buyers’ Coop. , 532 U.S. 483, 497 (2001). The Endangerment Finding, moreover, provides a veritable roadmap of the many ways in which a stay of EPA’s actions – or of the statutory permitting programs for stationary sources – would harm the public interest. The Administrator determined that greenhouse gas emissions th reaten both public health and welfare, detailing impacts that include, inter alia , direct temperature effects, air quality effects, the potential for changes in vector-borne di seases, and the potential for changes in the severity and frequency of extreme weather ev ents. 74 Fed. Reg. at 66,496, 66,523-30. These impacts in turn affect food prod uction and agriculture, forestry, water resources, energy, infrastructure, settlemen ts, ecosystems and wildlife, as well as national security. Id. at 66,496, 66,530-35. Because Congress delegated to EPA the authority and the obligation to assess the im pacts of pollutants on public health and welfare, the Court should give substantial weight to the Administrator’s determinations in weighing the impacts of a stay on the public interest. See Cuomo v. U.S. Nuclear Reg. Comm’n , 772 F.2d 972, 978 (D.C. Cir. 1985) (affording special weight to NRC views on the public interest because “Con gress, the elected representatives of the entire nation ... decreed [that NRC] should be responsible for the ‘national security, public health, and safety’ concerns associ ated with nuclear power”). Moreover, the Supreme Court has recognized the important public interests affected by greenhouse Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11496 gases, including harm unique to States as opposed to just the interests of their citizens.

Massachusetts , 549 U.S. at 521-27. Stationary sources are the primary source of U.S. anthropogenic greenhouse gas

emissions. 59 Thus, even Movants’ own expert concedes that the regulation of greenhouse gas emissions is “good public policy [and] I support regulation of greenhouse gas emissions from motor vehicles and stationary sources as a prudent approach to reducing the risks of globa l climate change ....” NAM Mot. Ex. 17 (Graham Dec.) ¶ 3 (emphasis added). Movants weakly attempt to minimize the harm to the public by asserting that a stay would affect only the short term, wherea s climate change occurring as a result of greenhouse gas emissions is a process that occurs over decades. Movants’ own

submissions demonstrate the flaw in this lo gic. For example, a single state, Texas, estimates that 161 large facilities will be su bject to PSD permitting over the first year of the program. Texas Tailoring Mot., Hagl e Aff. at 11. If enforcement of the PSD program is stayed even for just the next year while the parties address the merits, those facilities in Texas – and many more in the other States and territories – will escape the statutory requirement of a PSD permit that requires greenhouse gas controls in perpetuity (unless they undert ake a subsequent modification that triggers

59 While mobile sources contribute over 23% of total domestic greenhouse gas emissions, electricity generati on alone contributes 34% and the industrial sector an additional 19% percent, making stationary sources by far the largest class of greenhouse gas emitters. 74 Fed. Reg. at 66,496, 66,537-40; 75 Fed. Reg. at 31,519. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11597 PSD). This is because PSD is a pre- construction permitting program: a source that is built without having to obtain a permit, wi th its attendant emission controls, may operate indefinitely without those controls. Because many of these facilities – especially the largest emitters among them , coal-fired power plants – will likely operate for many decades, and because gree nhouse gases remain in the atmosphere with their heat-increasing properties for de cades to centuries, 75 Fed. Reg. at 31,519, the effect of even one year ’s worth of these entities es caping regulation will have essentially an effect that will be felt for hu ndreds of years. This long-term effect is

not one that has been lost on this Court. See, e.g. , Spencer County , 600 F.2d at 860 (in addressing the precise date on which application of PSD should begin, Court explains that “the rate of deterioration of air quality in various regions will be determined by the resolution of this question”). Movants contend the benefits from regulating greenhouse gas emissions are speculative “because BACT is not yet know n.” NAM Mot. 56. Of course, if the

environmental benefits of BACT limitati ons are too speculative to weigh on the public interest side of the ledger, then su rely so are the economic harms that Movants assert from having to comply with BACT. See supra at 72. In any case, when assessing the public benefits of a regulatory program, those benefits do not have to be quantified with exactitude. The fact that newly constructed sources will have to

include BACT instead of no c ontrols at all indicates that the application of the PSD program to greenhouse gases will contro l those sources’ potential emissions. Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11698 Movants characterize their own increased costs as an important public interest because of loss of jobs or increased consumer costs for their products. Central among their arguments is the “phenomenon” of “carbon leakage”: they contend that because of EPA’s regulation of greenhouse gases, sources will “escape” U.S. regulation and move their facilities to countries like China, India and Brazil, where they can pollute unabated, and that this harm s the public interest. NAM Mot. 56-57. First, this is an oft-repeated threat, firs t made when the CAA was enacted and again at every major amendment, and it has never come to pass. Indeed, many businesses recognize the benefits of structuring their business strategy around compliance with greenhouse gas regulation, not running away from it. Creason D ec. ¶ 7 n.2 (citing corporate study). Second, Movants’ argume nts about the extent of “leakage” are based on estimates from the proposed eco nomy-wide cap-and-trade legislation;

movants have made no estimates about the im pact, if any, that the much narrower PSD regulations would have. Id at ¶ 11. Third, Movants’ conclusion that emissions will actually increase if PSD applies to greenhouse gases (NAM Mot. 56-57), assumes that most businesses subject to regulation in th e United States will flee the country. It does not account for the vast majority of businesses, which undoubtedly will choose

not to flee the country and, therefore, wi ll reduce their greenhouse gas emissions in compliance with the Act’s requirements, or fo r the fact that power plants – the largest domestic emitters of greenhouse gases – cannot relocate to “pollution-friendly” environs. Finally, Movants’ pr emise is wholly speculative because it assumes that the Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 11799 countries they identify will not implemen t controls for greenhouse gases emissions from stationary sources. Finally, Movants assert that a stay should be granted because regulation of greenhouse gases is an issue better handled by Congress. CRR Mot. 14, 22, 69. While that may or may not be true, the Supreme Court settled this matter in Massachusetts , and EPA has no authority to ignore the exis ting Congressional mandates of the CAA. Certainly, this Court may not grant a stay based on the possible chance that Congress

may enact a law that may somehow impact compliance with the specific provisions of

the CAA here at issue. Separately, staying the Vehicle Rule will result in substantial prejudice and harm to the auto industry and consumers of ve hicles. To support the National Program,

California has revised its standards such th at compliance with the Vehicle Rule is deemed to be compliance with California’s st andards. 75 Fed. Reg. at 25,328. If the Vehicle Rule were stayed, EPA’s federal gr eenhouse gas regulations would no longer be an alternative compliance option for me eting the California standards. Without such an alternative compliance option, auto makers would instead have to comply with California standards (in both California and th e other States that have adopted them), which are not aligned with NHTSA’s fuel economy standards (see supra at 14). This would present myriad problems for the auto industry in terms of product planning and vehicle distribution. Not surprisingly then, the auto industry has intervened in

support of EPA’s Vehicle Rule and opposes a stay . California has likewise intervened Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 118100 and opposes a stay, as have many other states. A stay of the Vehicle Rule would also

lead to a loss of emissions reductions from Model Year 2012 vehicles that would be sold during the pendency of a stay, with th e emission losses occurring over the full life

time of the vehicles. Movants cannot establish that the speculative harm they claim they will face absent a stay outweighs the substantial harms to others and to the public interest that will occur – immediately and wi th consequences lasting centuri es – if a stay is issued.

CONCLUSION For the foregoing reasons, all motions to stay in these actions should be denied. Respectfully submitted, DATED: October 28, 2010 IGNACIA S. MORENO Assistant Attorney General /s/ THOMAS A. LORENZEN OF COUNSEL THOMAS A. LORENZEN J OHN HANNON JON M. LIPSHULTZ ELLIOTT ZENICK ANGELINE PURDY DAVID ORLIN PERRY ROSEN STEVEN SILVERMAN DAVID GUNTER BRIAN DOSTER ERIC HOSTETLER CAROL HOLMES KIM SMACZNIAK HOWARD HOFFMAN U.S. Department of Justice Office of General Counsel Envir onment & Natural Resources Div. U.S. Environmental Protection Environmental Defense Section Agency 1200 Pennsylvania Ave., NW Washington, D.C. 20460 P.O. Box 23986 Washington, D.C. 20026-3986 (202) 305-0733 Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 119CERTIFICATE OF SERVICE I hereby certify that the foregoing EPA’S Response to Motions to Stay, was electronically file d with the Clerk of the Court using the CM/ECF system, which

will send notification of said filing to the attorneys of record, who are required to have registered with the Court’s CM/ECF system.

Date: October 28, 2010 /s/ Thomas A. Lorenzen Thomas A. Lorenzen Counsel for Respondent EPA Case: 10-1131 Document: 1274376 Filed: 10/28/2010 Page: 120